Income Tax Appellate Tribunal - Chandigarh
Smt. Priya Arora, Chandigarh vs Acit, Cc-Ii, Chandigarh on 26 March, 2021
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "एकल सद यीय', च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH
BENCH 'SMC' CHANDIGARH
ीमती दवा संह, या#यक सद य
BEFORE: SMT. DIVA SINGH, JM
आयकर अपील सं./ ITA No. 153/CHD/2020
नधा रण वष / Assessment Year : 2011-12
Shri Jagjit Singh, The ITO,
Village - Sherpur Kalan, Ward - 1,
Jagraon. Jagraon.
थायी लेखा सं./PAN No: CMCPS9544M
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri Sudhir Sehgal, Advocate
राज व क ओर से/ Revenue by : Smt. Kusum Bansal, Addl. CIT
सन
ु वाई क तार$ख/Date of Hearing : 18.03.2021
उदघोषणा क तार$ख/Date of Pronouncement : 26.03.2021
Hearing conducted via Webex
आदे श/ORDER
The present appeal has been filed by the assessee wherein the correctness of the order dated 21.11.2019 of CI T(A)-3, Ludhiana pertaining to 2011-12 assessment year is assailed on the following grounds :
1. That the Ld. CIT(A) has erred in confirming the action of the Assessing Officer with regard to reopening of the case u/s 148 and also on merits.
2. That the Ld. CIT(A) has erred in holding the proceedings u/s 148 as valid even though there were no reasons to believe that the income of the assessee as escaped assessment under such section, to the tune of Rs. 24 lacs and further belief has been formed on the basis of factually wrong reasons and thus the assessment deserves to be quashed.
ITA 153/CHD/2020 A.Y. 2011-12 Page 2 of 6
3. That the Ld. C1T(A) has erred in holding the proceedings u/s 148 as valid even though the approval for initiating proceedings under section 147 given by the POT/JOT- Ludhiana has been given in mechanical manner without application of mind.
2. The assessee has also moved an application for raising additional ground in order to challenge the assumption of jurisdiction by the AO on the grounds of non application of mind. Referring to the facts of the case, it was his submission that addition of Rs. 24 lacs was made vide order u/s 144 of the Act by the AO invoking Section 69A. Th e CI T(A) considering the facts and the remand report of the AO agreed that the amount of Rs. 12 lacs had been added twice by mistake and thus, granted part relief, however, addition of Rs. 12 lacs was sustained. The repeated explana tion advanced on behalf of the assessee before the CI T(A) which was confronted by way of remand back to the AO and relied upon in the reply to the remand report again by the assessee, however, was not accepted.
3. Aggrieved the assessee is in appeal before the Tribunal.
4. Both the parties have been heard.
5. A perusal of the submissions made on behalf of the assessee as extracted in page 4 of the impugned order are extracted hereunder for ready reference :
"The assessee has made time deposits of only Rs. 12,00,000/- on 29-11-2010 out of funds taken as a loan from Sh. Rajesh Aggarwal for the purpose of showing the sufficient funds in his account for his Visa Application with ITA 153/CHD/2020 A.Y. 2011-12 Page 3 of 6 U.S.A embassy. The assessee availed Overdraft limit against the above said FDR on the same date i.e. 29-11-2010 and the unsecured loan from Sh. Rajesh Aggarwal was repaid immediately on 29-11-2010"
5.1. As observed, the CI T(A) confronted the same to the AO and sought a remand report from him. The AO's objections as conveyed through the re mand report is extracted at page 6 pa ra 7.1 which reads as under:
"7.1......In the reply dated 21.08.2019 by the assessee, he has submitted a copy of bank statement of account Ko.652710310000162 of Bank of India in which the assesse has received on transfer a sum ofRs,12 lakhs on 29.11.2010. The assessee made FDR of this amount on the same date from the same bank. He took a loan of 10,80,000/- against this FDR and returned it to Sh. Rajesh Aggarwal from whom he had taken loan of Rs.12 lakhs. The assessee has neither submitted PAN nor Submitted copy of bank statement of Sh. Rajesh Aggarwal for verification"
(emphasis supplied) 5.2 The assessee's objections to the remand report extracted in para 7.3 at pages 6 to 7 are extracted hereunder for ready reference :
7.3 In response to the remand report of the A.O. the Ld. Counsel of the appellant has filed rejoinder which are as under:-
The assessee have received the remand report dated 23.09.2019 on 11.11.2019, wherein the assessing office has clearly admitted that entry of Rs. 12,00,000/- has been taken twice, resulting to an addition of Rs.
24,00,000/- to the income of assessee during the year under consideration.
The assessee has mentioned in his reply dated 21.08.2019 that amount o f R s . 12,00,000/- was taken from Mr. Rajesh Aggarwal through his bank account maintained with Bank of India (account statement of saving bank account no. 652710310000162 has already been filed in earlier replies). t is evident and clear that no cash has been deposited and all transactions have been made through banking channels. The assessee made FDR with the loan amount on the same date from the same bank. Thereafter he took loan of Rs. 10,80,000/- against the FDR and repaid it to Mr. Rajesh Aggarwal.
The sole motive of taking the loan was that, the assessee applied for an American VISA and for showing sufficient funds to the embassy, the ITA 153/CHD/2020 A.Y. 2011-12 Page 4 of 6 assessee took an unsecured loan from Mr. Rajesh Aggarwal. The amount was credited through bank transfer from account maintained by Mr. Rajesh Aggarwal.
The assessee has already submitted details of office address and residential address of Sh. Rajesh Aggarwal. The profession of Sh. Rajesh Aggarwal is Chartered Accountant. It was also mentioned in earlier replies that assessee is unable to generate third party information with respect to PAN and bank statement of Sh. Rajesh Aggarwal due to privacy and integrity issues in bank. The assessee has already requested the assessing officer to call for information relating to Sh. Rajesh Aggarwal on their own as requisite details relating to address of Sh. Rajesh Aggarwal were shared in reply filed with the assessing officer. The assessing officer has not acted judiciously as the assessing officer has all powers under the act to call for the statement of Sh. Rajesh Agagrwal from bank as well as from the client and know the true facts of the case. This way the assessing officer could easily see that no addition is called for.
The assessee has somehow been able to locate PAN of Sh. Rajesh Aggarwal which is ABAPA1510E and managed to generate screenshot of the transactions of lending loan of Rs. 12,00,000/- to the assessee. It is clear from the statement that Sh. Rajesh Aggarwal has transferred Rs. 12,00,000/- to the assessee on 29.11.2010 and Rs. 10,80,000/- were transfer to Sh. Rajesh Aggarwal on the same date i.e. 29.11.2010. 5.3. In these circumstances, part relief was granted by the ld. CI T(A) holding a s under :
"8.3 After careful consideration of all the facts and material available on record in my considered view the assessee deserves to get relief of duplicate entries of Rs. 12,00,000/- as per Individual transaction statement with the Department , wherein the amount of Rs. 12,00,000/-, has been taken twice resulting into addition of Rs. 24,00,000/- instead of Rs. 12,00,000/- . However the assessee does not deserve any relief on account of his claim that the assessee has received unsecured loan from Shri Rajesh Aggarwal on 29/11/2010 .against which the assessee has made FDR and has taken a Loan of Rs. 10,80,000/- against this amount and returned it to Shri Rajesh Aggarwal very speedily on same day itself on 29/11/2010, from whom he had taken loan of Rs. 12,00,000/- . The entire transaction and claim of appellant is doubtful, as it is claim of appellant only , of having received amount of Rs. 12,00,000/- from Shri Rajesh Aggarwal C.A., from a transfer entry of a bank , and returning the amount of Rs. 10,80,000/- , on the same day it self, by transfer. The assessee has completely failed to prove the identity genuineness and creditworthiness of Shri Rajesh Aggarwal and discharge his onus .
ITA 153/CHD/2020 A.Y. 2011-12 Page 5 of 6 Accordingly the disallowance of Rs. 12,00,000/- is upheld. With the result these grounds of appeal stands partly allowed."
5.4. The ld. AR submitted that there were some issues with the C.A. Shri Rajesh Aggarwal on account of which the relations deteriorated and he consequently failed to provide the bank account details and also did not confirm the transactions and the tax authorities insisted that the assessee give the necessary information which was beyond the assessee's capacity. 5.5 The ld. Sr.DR was required to address as to why in the face of the repeated arguments that the amount of Rs. 12 lacs was by way of a transfer entry and again was repaid back to the named person Shri Rajesh Aggarwal, C.A. vide cheque, what stopped the department to look into the transfer entries within the bank in the face of the assessee's inability to require his erstwhile C.A. to co-operate. If the information was deemed to be so necessary to verify that the specific amount was transferred from Shri Rajesh Aggarwal and returned back again to Shri Rajesh Aggarwal it could have easily been done. A perusal of the above extract shows that information infact has not been doubted. The department has insisted on Shri R.Aggarwal's PAN which details again could have been with the Bank. The assessee has been crying hoarse a ll along the factual position which remains unrebutted on record. The insistence that the assessee given the PAN details and the bank account details, in these ITA 153/CHD/2020 A.Y. 2011-12 Page 6 of 6 circumstances, is casting an impossible burden on the assessee who repeatedly admits failed communication links with the C.A. after the repayment of the loan. The fa ct that the amount was repaid on the very same date again re mains unrebutted. The reason for obtaining the loa n also stands unrebutted on record. In these peculiar facts and circumstances, I find no valid reason to sustain the addition. I find on facts that the explanation offered by the assessee is valid and justifiable on facts. The addition is directed to be deleted. Said order was pronounced at the time of virtual hearing itself in the presence of the parties via Webex.
6. In the result, the appeal of the assessee is allowed.
Order pronounced on 26 t h March,2021.
Sd/-
( दवा संह ) (DIVA SINGH) या#यक सद य/Judicial Member "पन ू म"
आदेश क ितिलिप अ ेिषत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु / CIT
4. आयकर आयु (अपील)/ The CIT(A)
5. िवभागीय ितिनिध, आयकर अपीलीय आिधकरण, च डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar