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TMI Blog2015 (2) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered properly. 3. That the Worthy Commissioner of Income-tax (Appeals) has erred in not considering that the confirmation from the creditors, permanent account number, copy of the Income-tax return and copy of bank account pertaining to the creditors had been filed before the Assessing Officer and, as such, the addition was confirmed on assumption and presumption. 4. That the Commissioner of Income-tax (Appeals) has also erred in not considering that M/s. Satyam Commodities Prop. Ankit Garg (from whom creditors earned income by way of trading in commodities) is regular Income-tax assessee and his assessment for the relevant year, viz., assessment year 2008-09 was also made by the same Assessing Officer, i.e., Income-tax Officer, Range-IV (3), Malerkotla under section 143(3) of the Income-tax Act and during the assessment of M/s. Satyam Commodities, the Assessing Officer has accepted his books of account and also has accepted nature of business done by him as genuine. 5. That the Commissioner of Income-tax (Appeals) has also e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and copy of the assessment order is filed at page 136 where only the nominal addition has been made and returned income has been accepted. Thus, the assessee has clearly proved the three ingredients, i.e., (i) name of the lender, (ii) genuineness of the transaction, and (iii)source of the credit. Even the persons from whom loans were taken were presented before the Assessing Officer wherein they have confirmed the loans. In any case, the Tribunal in the similar circumstances has deleted the addition in the case of Shri Seva Ram v. ITO in I. T. A. No. 327/Chd/ 2011, copy of the order is filed on record. 7. On the other hand, the learned Departmental representative supported the order of the Commissioner of Income-tax (Appeals) and the Assessing Officer. He further pointed out that the hon'ble Supreme Court in the case of CIT v. P. Mohanakala [2007] 291 ITR 278 (SC) has clearly observed that once credit entry was found in the books of the assessee then the same may be charged to tax if the explanation offered by the assessee in the opinion of the Assessing Officer is not satisfactory. 8. We have considered the rival submissions carefully and find that in identical circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,325.00 8,69,651.00 31.3.2007 To amount of TDS 8,907.00 . . . 8,60,744.00 Total 1,29,301.00 9,90,045.00 Credit balance as on 31.3.2007 : 8,60,744.00 The above clearly shows that during the year Sewa Ram Hindu undivided family has further given four cheques amounting to Rs. 36,466, Rs. 48,200, Rs. 60,200 and Rs. 101,300 on September 28, 2006, October 13, 2006, November 3, 2006, January 30, 2007. Out of these last three cheques, i.e., Rs. 48,200, Rs. 60,200 and Rs. 101,300 have been doubted by the Assessing Officer on the basis that these amounts have been received as profit from the commodity transac tions. First of all once if there was any doubt regarding profit it should have been examined in the hands of the individual or Hindu undivided family and not in the hands of the assessee who has simply taken this amount as loan and the loan transaction is supported by copy of account, confirmation, Income-tax return, bank statement and sources of funds from commodity transactions. Therefore, as far as burden under section 68 is concerned, the same stands discharged. It is settled position of law that in case of cash credits thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer is that since income of various family members was lower and that is why it cannot be accepted and it must have been earned by the assessee. This objection is not correct because there is no finding that such individual family members were acting as benamidar of the assessee. The family members are regular Income-tax assessees and even similar income from commodity transactions was accepted in the hands of such family members in the immediately previous year also. The fourth serious objection raised is irregularity in the filing of registration forms but the Assessing Officer has not pointed out what is the irregularity. Only thing which has been pointed out is that Shri Vijay Kumar, i.e., son of the assessee was interacting with M/s. Satya Narayan Online Trading P. Ltd., Ludhiana on behalf of the family members. This itself cannot be called an irregularity because it is common practice that whenever some financial transactions are entered into by family members even with outsiders only one member of the family, does the interactions. A copy of the registration form placed at page 129 in case of Sewa Ram Hindu undivided family, does not show any discrepancy or inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieu of the gifts made by him. The letters according to the Assessing Officer suggest that Sampath kumar reserved his right to receive suitable compensation from the respondents-assessees. The Assessing Officer in the circumstances came to the conclusion that the gifts though apparent are not real and accordingly treated all those amounts credited in the books of the assessees as the income of the assessees.' The additions were confirmed by the learned Commissioner of Income-tax (Appeals). The matter travelled to the Tribunal where there was a difference of opinion between the two Members, there fore, the matter was referred to the senior Vice-President who concurred with the findings of the Assessing Officer. In this back ground the court referred to various decisions including the decision of Sumati Dayal v. CIT [1995] 214 ITR 801 (SC) and made various observations including observations in para 24 which reads as under (page 288 of 291 ITR) : 'It is true that even after rejecting the explanation given by the assessees if found unacceptable, the crucial aspect whether on the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bser vation is interpreted in this manner then nobody would be allowed to rebut the findings of the Assessing Officer by any evidence howsoever strong it may be. In any case the hon'ble Supreme Court has itself mentioned in this observation that the same is rebuttable and we again highlight the observation, 'such opinion formed itself constitutes a prima facie evidence against the assessees, viz., the receipt of money, and if the assessees fail to rebut the said evidence the same can be used against the assessees by holding that it was a receipt of an income nature'. Whereas in case before us the assessee had discharged its onus by clearly filing copy of account, permanent account number, Income-tax return, bank statement, source of funds regarding loan to discharge burden envisaged under section 68 of the Act. The above observations are definitely in the context of gift received in that case and cannot be made applicable in all the cases of cash credits. In any case, it has not been shown before us how reply of the assessee is not satisfactory. As pointed out earlier that in case of loan transaction only three ingredients, i.e., identity of the creditor, genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts were routed through cheque. We would like to point out that it was strongly contended by learned counsel of the assessee that similar profits were received by the same family members in the earlier years and copy of contract notes for such profits are placed in the paper book at pages 162 to 163 were accepted by the Department. Therefore, even in this year without pointing out any defect in such amounts or without recording the finding of such profit was bogus, same could not have been added to the income of the assessee. In these facts and circumstances of the case we set aside the order of the learned Commissioner of Income-tax (Appeals) and deleted the addition of Rs. 17,21,100." 9. In the above noted paras even the decision of the hon'ble Supreme Court has been considered in detail. In fact, if the Assessing Officer has suspicion that commodity profit was not genuine in the hands of various family members, the same could have been added in their assessments by reopening the same but the same cannot be assessed in the hands of the assessee because such persons have confirmed the transactions of loans and has filed the relevant papers. Therefore, in our opinion the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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