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ACIT, Circle-23, Kolkata Versus Sri Rakesh Bhartia

2016 (4) TMI 861 - ITAT KOLKATA

Addition u/s. 69C towards unexplained expenditure for house hold expenses - Held that:- We find that the assessee has shown total drawings of ₹ 35,38,395/-, which included the amounts incurred towards personal expenses of the assessee. This includes withdrawals made by the assessee by cheques for his personal expenses towards rent paid amounting to ₹ 13,80,000/- for residential accommodation and telephone expenses etc. We also find that sum of ₹ 2,82,728/- has been treated as p .....

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addition by invoking the provisions of section 69C of the Act. We also find that the ld.AO had not brought any material/evidence on record to prove that the assessee had personal expenses over and above the disclosed sum of ₹ 35,38,395/- towards drawings. We also find that the ld.AO had also not brought any material/evidence to prove that the cash withdrawals made from said Axis Bank, Mumbai have been spent elsewhere by the assessee thereby the said cash is not available to remain as clos .....

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ransactions reflected in the bank statement of the loan creditor. Hence, the basic allegation that the assessee has laundered his unaccounted income is not prima facie proved by the ld. AO even during the remand proceedings when the ld.AO got the second opportunity to make necessary verification by using his statutory powers vested on him and provided to him in the statute. We find that the facts of the case clearly proved that the assessee had completely discharged his onus by filing all the do .....

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ecided against revenue - ITA No. 428/Kol/2012 - Dated:- 29-2-2016 - Shri Mahavir Singh, Judicial Member, and Shri M. Balaganesh, Accountant Member For The Appellant : Shri Niloy Baran Som, JCIT, ld.Sr.DR For The Respondent : Shri D.S. Damle, FCA, ld.AR ORDER SHRI M.BALAGANESH, AM This appeal of the revenue arises out of the order of the Learned CIT(A)-XIV, Kolkata in appeal no. 326/CIT(A)-XIV/08-09 dated 27-12-2011 for the assessment year 2008-09 against the order of assessment framed by the ld. .....

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make any cash withdrawals for meeting his household expenses. The ld. AO also found that the assessee had withdrawn ₹ 50,000/- from his another bank account ( no. 75952) with the Axis Bank, Mumbai, which was lying as closing cash balance at the end of the year. In these circumstances, he chose to make an addition of ₹ 6 lakhs towards unexplained expenditure for meeting the household expenses u/s.69C of the Act. On 1st appeal, the ld. CIT(A) after considering the submissions of the a .....

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re up his explained capital by utilyising unexplained cash for his actual family expenses. 4. The ld.DR vehemently supported the order of the ld.AO and argued that it is very unlikely that the assessee has not incurred any expenditure towards his personal expenses. Accordingly, the ld.AO was justified in making the impugned addition on this issue. In response to this, the ld.AR vehemently supported the order of the ld. CIT(A) and argued that the ld.CIT(A) had made detailed observation about the .....

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roved by the ld.AO himself. 5. We have heard the rival submissions and perused the materials available on record including the paper book filed by the assessee. We find that the assessee has shown total drawings of ₹ 35,38,395/-, which included the amounts incurred towards personal expenses of the assessee. This includes withdrawals made by the assessee by cheques for his personal expenses towards rent paid amounting to ₹ 13,80,000/-for residential accommodation and telephone expense .....

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s as reported by the assessee (stated supra). Hence, there cannot be any addition by invoking the provisions of section 69C of the Act. We also find that the ld.AO had not brought any material/evidence on record to prove that the assessee had personal expenses over and above the disclosed sum of ₹ 35,38,395/- towards drawings. We also find that the ld.AO had also not brought any material/evidence to prove that the cash withdrawals made from said Axis Bank, Mumbai have been spent elsewhere .....

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Act in the facts and circumstances of the case. 7. The brief facts of this issue are that the assessee was in receipt of interest free loan of ₹ 2.50 crores from M/s. Bright Impex and Agencies (P) Ltd during the assessment year 2008-09. The assessee furnished the name, address and income-tax particulars of the said loan creditor together with balance sheet and return acknowledgements of the loan creditor to explain the identity, creditworthiness and genuineness of the transactions before .....

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st appeal, the ld.CIT(A) after considering the submissions of the assessee deleted the impugned addition on this issue. Aggrieved, the revenue is in appeal before us on the following ground:- 2. In the facts and circumstances of the case the Ld. CIT-(A) erred in law and facts in deleting the addition of ₹ 2,50,00,000/- made by A.O. on account of unexplained cash credit u/s. 68 of the Income Tax Act, 1961. The CIT(A)'s Order in treating the lender company as a genuine lender and the loa .....

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ross income to justify the credit worthiness of the lender while in reality the net income of the lender was a loss of ₹ 2,89,917/-. d) The CIT(A) has totally overlooked the most important fact that the lender company did not receive any interest on such a huge loan and neither did it offer any reasonable explanation for not receiving the same. e) The CIT(A) has ignored the debits and credits of crores in the account of the lender company which have no connection with any business transact .....

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ion 68 of the Act namely, identity of the creditor, genuineness of the transaction and creditworthiness of the creditor have been duly proved by filing/submitting necessary evidences by the assessee, which is beyond doubt. The ld.AR of the assessee has also pointed out to the factual errors committed by the ld.AO by mentioning that the lender company has got paid up capital of ₹ 25,00,000/- as against the actual paid up capital of ₹ 3,25,85,000/-. Similarly, the Reserves and Surplus .....

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on the impugned order of the ld.CIT(A) in deleting the addition made by the AO on this count. 9. We have heard the rival submissions and perused the material available on record including the detailed paper book containing the statement of computation of total income for the AY 2008-09 & salary certificate to this effect in page 1-5 of the assessee s paper book, assessee s personal balance sheet as at 31.03.2008, Capital A/c & Income & Expenditure A/c in page 6-8 of the paper book, C .....

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vt. Ltd in page 33 of the assessee s paper book and copy of ld.AO s Remand report in pages 35-36 of the assessee s paper book. On perusal of the aforesaid papers, we find that the lending company, M/s. Bright Impex & Agencies Pvt. Ltd has got paid up capital of ₹ 3,25,85,000/- as on 31-03-2008 and Reserves & Surplus of ₹ 26,87,67,396/- as on 31-03-2008. We also find that the said lending company, M/s. Bright Impex & Agencies Pvt. Ltd is a registered Non Banking Financial .....

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diately before issuing the cheques to the assessee. We also find that the entire loan of ₹ 2.5 crores have been paid by the loan creditor by 3 account payee cheques drawn on Syndicate Bank, Esplanade Branch, Kolkata. These facts have been cleared through banking channels. We also find that the entire loan has been repaid by the assessee in May- June 2009 by account payee cheques, which was also confirmed by the loan creditor. We find that the assessment has been completed in this case on 2 .....

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ain factual errors committed by him with regard to the status and creditworthiness of the loan creditor that it is assessee s own money, which has been laundered and found it is way back to his own coffers in the garb of loan from M/s. Bright Impex & Agencies Pvt. Ltd . From the facts and material available on record, we find that the assessee has duly proved his complete onus with regard to the identity of the creditor, genuineness of the transaction and creditworthiness of the creditor and .....

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