Delhi High Court - Orders
Sh. Bhushan Kumar Jain vs Assistant Commissioner Of Income Taxt ... on 24 July, 2024
Author: Yashwant Varma
Bench: Yashwant Varma
$~33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 590/2023
SH. BHUSHAN KUMAR JAIN .....Appellant
Through: Dr. Rakesh Gupta, Mr. Somil
Agarwal & Mr. Dushyant
Agarwal, Advs.
versus
ASSISTANT COMMISSIONER OF INCOME TAXT CIRCLE
- 33(1) .....Respondent
Through: Mr. Gaurav Gupta, SSC with
Mr. Shivendra Singh, Mr. Yojit
Pareek, JSCs & Mr. Namit
Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
ORDER
% 24.07.2024
1. Having heard Dr. Gupta, learned counsel for the appellant and Mr. Gupta, learned counsel for the respondent and on going through the orders passed by the Commissioner of Income Tax (Appeals)1 and the Income Tax Appellate Tribunal2, we find that the following issues would merit further consideration.
2. We note insofar as the additions made under Section 68 of the Income Tax Act, 19613 are concerned, the CIT (A) in its order had observed as follows: -
"7.4 As per the provisions of section 68 if there is any credit in the books of account of the appellant, onus is upon the appellant to establish identity, creditworthiness and genuineness of the 1 CIT(A) 2 Tribunal 3 Act This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 21:43:00 transaction. The appellant has proved the identity of the depositor by providing commercial license issued by Dubai Govt. which mention the name of the proprietor and appellant has also filed the passport copy of the proprietor. The genuineness of the transactions was proved as the same was done through banking channel. The money has been transferred from the account of the creditor directly to the account of the appellant and appellant has filed his bank statement alongwith the bank advises for the remittance and FIRC issued by the bank for the remittances. The appellant has proved the creditworthiness of the deposits through his bank account and total debit transactions and credit transactions works out to more than Rs.334 Crore. The appellant has provided the bank statement of the full year from the creditor. In Dubai there is no income tax on income earned by any organization thus figures stated in the bank statement are more authenticated. Thus appellant has brought evidences on record to establish identity, creditworthiness and genuineness of the transactions.
7.5 The appellant has discharged the onus as laid out in section 68 of the Act. Once the appellant has discharged the initial onus lay on it in terms of section 68 of the Act for proving the identity of the persons and creditworthiness alongwith genuineness of the transaction, then it is on revenue to disprove the same and shift the onus on the appellant. The AO has outrightly rejected the evidences furnished by the appellant without establishing falsity of these documents. The personal identity of the investor was proved beyond any doubt and AO has not disputed about the identity of the creditor. The appellant has duly satisfied genuineness of loan transaction by submitting bank statements. Thus AO is not justified treating the unsecured loan received by the appellant during the year under consideration as unexplained cash credit u/s 68. In the case of CIT vs. Dwarkadhish Investment Pvt. ltd. (2010) 194 taxmann 43 (Del.) Hon'ble Delhi High Court held that "In any matter, the onus of proof is not a static one. Though in section 68 proceedings, the initial burden of proof lies on the assessee, yet once he proves the identity of the creditors/share applicants by either furnishing their PAN numbers or income-tax assessment numbers and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the revenue. Just because the. creditors/share applicants could not be found at the address given, it would not give the revenue the right to invoke section 68. One must not lose sight of the fact that it is the revenue which has all the powers and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the 'source of source."
This is a digitally signed order.
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3. When the matter reached the Tribunal, it formed the opinion that the issue had not been dealt with adequate care and detail by the CIT (A). This become evident from a reading of paragraph 14 of the order dated 31 July 2023 which is impugned before us and is extracted hereinbelow: -
"14. On logical analysis of the stand and allegation of the Assessing Officer and basis taken by the ld. CIT (A) we clearly note that ld. CIT (A) has deleted the addition by adopting a very casual approach and without dislodging and controverting the allegations of the Assessing Officer based on logical analysis of the facts and circumstances of the case. The Id. CIT(A) has only considered the passport and bank statement of assessee which establish the identity of creditor. We are unable to see any evidence substantiating the financial capacity and position of lender who, as per assessee has undertaken transactions of more than Rs.334 crore during relevant financial period we are unable to see any balance sheet or any audited or unaudited accounts of the creditor establishing his financial capacity and creditworthiness to extend interest free loan of Rs. 4,50,68,325/- which has not been repaid till date. It is worth to mention that on being asked by the bench the Id. AR could not show us any documentary evidence or prove regarding payment of interest to the creditor and repayment of loan by the assessee to the creditor till date and he fairly accepted that the assessee has neither paid any interest on the unsecured loans nor has repaid the loan till date. Therefore, we hold that the ld. CIT (A) has granted relief to the assesseee without controverting and dislodging the basis and allegation of the Assessing Officer as precisely noted in the para 9 of this order thus, we are not in agreement with the basis and conclusion drawn by the ld. CIT (A) and hence, we reverse the same by restoring the assessment order and addition made therein. Accordingly, grounds of revenue are allowed."
4. In order to examine the nature of the evidentiary material which had been placed before the authorities insofar as the financial capacity and creditworthiness of the concerned Dubai entities is concerned, we request the appellant to place the necessary documentation on the record.
5. Let the aforesaid be done within a period of four weeks. Let the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 21:43:01 appeal be called again on 23.09.2024.
YASHWANT VARMA, J RAVINDER DUDEJA, J JULY 24, 2024/sk This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 21:43:02