TMI Blog2020 (3) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... SIDHU, JM Revenue has filed the present appeal against the impugned order dated 30.6.2010 passed by the Ld. CIT(A)-VII, New Delhi relating to assessment year 2006-07. 2. The facts relating to issue in dispute are that the assessee filed its return of income for the assessment year 2006-07 on 28.11.2004 declaring income at Rs. NIL after adjusting the brought forward losses of A.Y. 2000-01 to the extent of ₹ 3,18,801/-. The return of income of the assessee was taken up for scrutiny assessment and notice u/s. 143(2) of the Income Tax Act, 1961 (in short Act ) was issued on 05.10.2007. The assessment proceedings were completed under section 143(3) of the Act on 19.12.2008 determining the total income at ₹ 3,04,98,629/- by making the addition of ₹ 3,07,00,000/- on account of unsecured loans under section 68 of the Act vide assessment order dated 20.01.2009. Against the assessment order dated 20.1.2009, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 30.6.2010 has partly allowed the appeal of the assessee. Aggrieved with the impugned order dated 30.6.2010, the Revenue is in appeal before the Tribunal. 3. At the time of hearing, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of money and if the assessee fails to rebut the said evidence the same can be used against him by holding that it was a receipt of income as held in the case of Sumati Dayal Vs. CIT (1995) 214lTR 801(SC). it was held by the Hon'ble Apex Court: It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within the exemption provided by the Act lies upon the assessee .... But in view of section 68 of the Income-tax Act, 1961, where any sum is found credited in the books of the assessee for any previous year it may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut the said evidence, it can be used against him by holding that it was a receipt of an income nature. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o credited may be charged to income-tax as the income of the assessees of that previous year. The expression the assessees offer no explanation means where the assessees offer no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessees. It is true the opinion of the Assessing Officer for not accepting the explanation offered by the assessees as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion. 5.9 On these facts and circumstances of the case and in the light of the case laws mentioned above, it is observed that the assessee has duly discharged its onus of proving the identity and creditworthiness of the persons and genuineness of the transactions by furnishing the confirmation letters, assessment particulars including PAN and copy of I.T. return, balance-sheet P L account, Bank statement to show that the payments have been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments/ loans have been duly disclosed in its Balance Sheet. 5.11 It is also noted that that the directors of the five loan creditors companies, namely, M/s Shekhawati Finance Pvt Ltd, M/s Dreamland Solutions Pvt Ltd, M/s Ganga lnfin Pvt Ltd., M/s Meghdoot Express Pvt Ltd. and M/s Garg Finvest Pvt Ltd.( whose names are appearing at serial nos. vi, vii,viii, ix and x respectively in para 5.10 above) appeared before the assessing Officer in response to summons issued under section 131 of the Act during the remand proceedings and their statements were recorded and in their statements, they have confirmed having advanced loans to the assessee. In the case of Shri Surjeet Multani alias Bawa who has advanced loan of ₹ 55,00,000/-, it is observed that he is a resident of Los Angeles, USA and he does not have Permanent Account umber which also implies that he is not assessed to income-tax. However, the perusal of copy of bank statement relating to the bank account maintained by him with State Bank of India, New Delhi reveals it is a Current on-resident account wherein there are sufficient funds/balances to the extent of ₹ 1,50,07,666/- available so as to enable the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciple of natural justice. Reliance is placed on the decision of Hon'ble Supreme Court in case of Prakash Chand Nahta v. Union of India [2001] 247 ITR 274 in support of the proposition that cross-examination of the witness is must, before the A.O. relies on the statement of the witness for making addition. Reliance is also placed on the decision of the jurisdictional High Court i.e. Delhi High Court in Commissioner of Income-tax Vs. Pradeep Kumar Gupta and Vijay Gupta(2008) 303 ITR 95(Delhi) wherein it was held that reopening of assessment is not permissible on mere adverse statements from others. Such statement by itself does not constitute 'information, unless the Assessing Officer has made enquiries thereon and inferred understatement of income, I am therefore inclined to agree with the submissions made on behalf of the appellant to the effect that statement recorded behind back of the assessee without being subjected to cross-examination cannot be fully admitted as evidence against the assessee. 5.14 In view of the discussion made above, I am of the considered view that the A.O. was not justified in making addition on account of unsecured loans to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
