TMI Blog2021 (2) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... n on account of amount received from Shri Ankush Gupta - HELD THAT:- Assessee received a sum from Shri Ankush Gupta through banking channel and the source of source was explained by the assessee by furnishing the documentary evidences to prove the credit worthiness of Shri Punit Gupta and Shri Akash Bansal from whom Shri Ankush Gupta received the amount. The said documents revealed that the amount of ₹ 32,00,000/- was received by Shri Ankush Gupta from his brother Shri Puneet Gupta who is the NRI and settled in UK. The said amount was transferred from the NRE account. The Assessee also explained the source of another amount of ₹ 9,50,000/- received by Shri Ankush Gupta from his cousin Shri Akash Bansal by furnishing the copy of bank account of Shri Akash Bansal, therefore the addition made by the A.O. was not justified and the Ld. CIT(A) rightly deleted the same particularly when the assessee proved the identity and creditworthiness of depositor as well as genuineness of transaction. Addition on account of the transaction with M/s Shree Radha Commodity Services - CIT- A delete the addition - HELD THAT:- As decided in own case [ 2019 (10) TMI 1404 - ITAT CHANDIGARH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income on 21/09/2013 declaring an income of ₹ 1,28,240/- which was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as Act ). Subsequently the case was selected for scrutiny. During the course of the assessment proceedings, the A.O. noticed that in the capital account of Smt. Swaran Kanta partner, a sum of ₹ 20,50,000/- was credited as per following details: 29/06/2012 Cheque No. 858646 8,00,000/- 26/07/2012 Cheque No. 858647 50,000/- 11/08/2012 Cheque No. 858648 7,00,000/- 13/08/2012 Cheque No. 858649 5,00,000/- Total 20,50,000/- The A.O. asked the assessee to furnish the explanation for the said addition. According to the A.O. the assessee did not file the evidence, he therefore treated the said amount as unexplained income of the assessee and made the addition. 5. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2016 on which date the case was adjourned to 26.02.2016. From the order sheet entries your honor will find that no show cause notice has been issued to the assessee before making any additions on accounts of unexplained credits in the name of Smt. SwaranKanta which violates the Principles of Natural Justice and additions based on this issue should be deleted and assessment should be quashed. 5.1 The aforesaid submission were forwarded to the A.O. by the Ld. CIT(A) for the remand report. In response the A.O. submitted as under: Kindly refer to reply filed by the counsel of the assessee dated 26.09.2017 addressed to you. 2. In this regard, it is submitted that assessment in the case was completed u/s 143(3) of the Income Tax Act, 1961 on 23.03.2016 at an income of ₹ 4,51,50,218/- against the returned income of ₹ 1,28,240/- by making following additions :- I. Unexplained partner's capital 20,50,000/- II. Unexplained credit of Sh. Ankush Gupta 40,50,000/- III. Unexplained credit of M/s ShriRadha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rking in U.K. and he has maintained NRE account with CITI Bank, Ludhiana and the photocopy of the bank statement is placed in the paper book at page number 8 which may please be referred. It is further submitted that ₹ 50,000/- has been introduced in the capital account from the saving account number 6010007210393 with State Bank of India, Aggar Nagar, Ludhiana on 26.07.2012 from the balance outstanding in her saving account. The photocopy of bank saving account is placed in the paper book at page number 7 which may please be referred. It may be mentioned here that the A.O. in his remand report has mentioned that the amount of ₹ 20.50,000/- has been received from NRE Saving account of Sh. Puneet Gupta but the correct facts are that ₹ 20,00,000/- was received from NRE Saving account by the partner Smt. SwaranKanta. The only allegation made by the A.O. in his remand report that the source of income of Sh. Puneet Gupta was not produced before the then A.O. In this connection it is submitted that he is working in U.K. and Sh. Puneet Gupta has transferred the funds from U.K. in his saving account and thereafter he has transferred through RTGS to saving account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further submitted as under: Written submissions dated 12.02.2018 Sh. Puneet Gupta, NRE has also given the following documents to prove that the amounts were sent by him from relation Foreign Exchange department being confirmation of transactions done by Sh. Puneet Gupta and the complete details are being given as under: a) The first transaction is dated 26.06.2012 of 9000 GBP and the conversion rate is 88.45 and Indian ₹ 796050 which was transferred by Sh. Puneet Gupta, NRE from London, Barclays Bank, PLC, Canary Wharf, London as per photocopy of the document attached. b) The second transaction is dated 06.08.2012 of 14000 GBP and the conversion rate is 85.80 and Indian ₹ 1201200 which was transferred by Sh. Puneet Gupta, NRE from London, Barclays Bank, PLC, Canary Wharf, London as per photocopy of the document attached. c) The next transaction is dated 24.10.2012 of 14000 GBP and the conversion rate is 85.55 and Indian ₹ 1197700 which was transferred by Sh. Puneet Gupta, NRE from London, Barclays Bank, PLC, Canary Wharf, London as per photocopy of the document attached. d) The next transaction is dated 12.11.2012 of 14000 GBP an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neet Gupta. In this statement on 12.11.2012, 14000 GBP were transferred to Rational Foreign Exchange (FX) Department for transfer of amount of ₹ 1218700/- in his NRE Account maintained in India. 5. The copy of bank statement with Barclays Bank in the name of Sh. Puneet Gupta. In this statement on 22.03.2013, 15000 GBP were transferred to Rational Foreign Exchange (FX) Department for transfer of amount of ₹ 1231500/- in his NRE Account maintained in India. The documents are being attached and your honor will find that all the transactions were carried out by Sh. Puneet Gupta from his bank accounts or through his company in which he was having 100% share holding. These bank statements were received by Sh. Puneet Gupta through Barclay Bank on 13.02.2018 as per copies of bank statements received through email by the family members of Sh. Puneet Gupta. This proves the source of source. It is requested and prayed to accept the contention of the assessee since the complete source of source has been established and even the funds have been transferred from U.K. from the bank accounts of Sh. Puneet Gupta. 6. The Ld. CIT(A) after considering the submissions of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has again been submitted that the assessee firm has given complete explanation to the Assessing Officer along with documentary evidence but the Assessing Officer has made impugned addition in the hands of the assessee firm without considering the fact that the amount belongs to Smt. Swarnkanta and if at all any addition was to be made it should have been made in the hands of Smt. Swarnkanta. It has again been submitted that the Assessing Officer has not given any show cause notice before making the addition under reference which violates the principles of natural justice. On careful consideration of the rival contentions, I am of the opinion that the assessee firm has explained even the source of source in respect of the capital introduced in the capital account of Smt. Swarnkanta by producing copy of NRE account of Sh. Puneet Gupta. On perusal of the bank accounts of Sh. Puneet Gupta and Smt. Swarnkanta, I am convinced that the capital has been introduced by Smt. Swarnkanta out of explained sources. When asked to prove the source of Sh. Puneet Gupta, the learned AR of the assessee also placed on record the documents which prove beyond doubt that the amount in his NRI account has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical issue the Hon'ble Jurisdiction High Court in the case of ITO Vs. Nahar Singh Sadhu Singh (supra) held that the partner had the requisite amount to invest towards the capital account of the firm. Since no evidence had been pointed out against that finding the amount could not be assessed as income from undisclosed sources of the firm. 10.1 Similarly the Hon'ble M.P High Court in the case of CIT Vs. Metachem Industries (supra) held as under: Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee is over. Whether that person is an income-tax payer or not and where he had brought this money from, is not the responsibility of the firm. The moment the firm gives a satisfactory explanation and produces the person who has deposited the amount, then the burden of the firm is discharged and in that case that credit entry cannot be treated to be the income of the firm for the purposes of income-tax. 11. We therefore by keeping in view the aforesaid discussion and the ratio laid down by the Hon'ble High Courts in the aforesaid referred to cases are of the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19.11.2012 has been received from his brother Sh. Puneet Gupta . Further ₹ 7,00,000/- dated 20.12.2012 has been given by Ankush Gupta to Swaran Fastner . Further ₹ 2,00,000/- is the correct figure instead of ₹ 8,00,000/- and the correct date is 28.12.2012 instead of23.12.2012 which has also been given to Swam Fastners. 13.3 The A.O. however was not satisfied from the submissions of the assessee and made the addition of ₹ 40,50,000/- by observing as under: I have considered the reply of the assessee . He has stated that the creditor received the amounts from Puneet Gupta and Aakash Bansal , but no evidence for the same is filed. Further no source of amounts of ₹ 7,00,000/- and 2,00,000/- deposited on 20.12.2012 and 28.12.2012 has been filed. The assessee, vide questionnaire dated 9.03.2016 was again asked to produce evidence of sources of amounts advanced by Sh. Ankush Gupta, but again the same were not filed. The assessee simply stated vide reply dated 14.03.2016 that the same were already filed on 17.11.2015 ( wrongly mentioned as 17.11.2015 in place of 27.11.2015) whereas in that reply no evidence is filed. As such the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough RTGS. out of which ₹ 4 lakh was given by Sh. Ankush Gupta on 31.10.2012 and the amount of ₹ 6 lakh was given to SwaranFastners on 01.11.2012. These facts can be verified from the paper book page no. 12 being saving account with State Bank of India of Sh. Ankush Gupta. Sh. Ankush Gupta further received the amount of , ₹ 4 lakh, ₹ 1.50 lakh, ₹ 4 lakh from Sh. AkashBansal on 14.11.2012. The saving accounts of Sh. AkashBansal with State Bank of India, Account No.30784612826, (Jaitu) Faridkot from where the amount of ₹ 1.50 lakh was received by Sh. Ankush Gupta. The saving passbook is placed in the paper book page no. 19 and 20. Further Sh. Akashbansal is also maintaining saving bank account No.30343633939 with State Bank of India, Jaitu (Fardkot) and this saving account is placed at paper book page no. 21 and 22. From the saving account of Sh. AkashBansal, the amount of ₹ 4 lakh was received by Sh. Ankush Gupta in the saving account and this amount is reflected in the saving account of Sh. Ankush Gupta at paper book page no. 12. Further Sh. Akash Bansal is maintaining saving account with HSBC Bank, Gurgaon from where he gave amount of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2016. From the order sheet entries your honor will find that no show cause notice has been issued to the assessee before making any additions on accounts of unexplained credits in the name of Sh. Ankush Gupta which violates the Principles of Natural Justice and additions based on this issue should be deleted and assessment should be quashed. 2. The assessee has discharge the onus by producing the following documents in the case of Smt. SwaranKanta and Sh. Ankush Gupta: a) The confirmed copy of account showing the complete names and addresses, PAN No. of the persons from whom the loan has been received b) The copies of bank statements from where the amounts were received by the assessee firm along with explanation in brief. c) The complete details where the assessees are being assessed from whom the loans have been received. Even Smt. SwaranKanta Jain was being assessed by the same A.O., hence once the onus is discharged by the assessee it becomes the duty of the A.O. to prove that the amounts are in- genuine. d) The A. O. has not further gone to verify the amounts received from such persons to come to the conclusion that these amounts introduced as capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence of source of corresponding deposits in the bank account of the creditor i.e. source of deposits in the bank account of Ankush Gupta in SBI. In this regard, the assessee filed reply dated 14.03.2016(copy enclosed), but no complete details have been filed. Hence, credit of ₹ 40,50,000/- in the books of the assessee, in the name of ShriAnkush Gupta was treated as not explained and the same was treated as income of the assessee by my predecessor even after considering the reply filed by the assessee dated 27.11.2015 in which the assessee; has stated that the creditor received the amounts from Puneet Gupta and AakashBansal, but no evidence for the same was filed. Further no source of amounts of ₹ 7,00,000/- and ₹ 2,00,000/- deposited on 20.12.2012 and 28.12.2012 has been filed. 14.2 The aforesaid remand report was forwarded by the Ld. CIT(A) to the assessee firm for its counter comments. In response the assessee submitted as under: 1. Unexplained credit of Sh. Ankush Gupta ₹ 41,50,000/-: The next issue raised by the A.O. in his remand report in para 3 on page 2 of the remand report shows the credits received from Sh. Ankush Gupta S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the firm to Ankush Gupta and amount was deposited in the saving account number 912010063667577 with Axis Bank, Aggar Nagar, Ludhiana. Further, The A.O. has not considered the amount of repayment of ₹ 8,00,000/- dated 10.12.2012 paid by the firm to Ankush Gupta and amount was deposited in the saving account number 912010063667577 with Axis Bank, Aggar Nagar, Ludhiana. Sh. Ankush Gupta has given ₹ 7,00,000/- from the Axis Bank on 20.12.2012 and ₹ 2,00,000/- dated 28.12.2012 out of the amounts received back from SwaranFastners which have been credited in his saving account. The photocopy of saving bank account number 00000030037410900 being maintained with State Bank of India placed in paper book from page number 10 to 14 and saving account number 912010063667577 being maintained with Axis Bank placed in paper book at page number 15 and saving account number 5-102915-161 with CITI Bank of Puneet Gupta NRE, his real brother who is working in U.K. is placed in paper book from page number 16 to 18. Further, the saving account number 30784612826 with State bank of Sh. AkashBansal is placed in the paper book at page number 19 and 20. Further the saving account number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for clarification of written submission given by the assessee vide letter no.ITO/ward(2)/Ldh/l718/485 dated 13.10.2017 and letter no. ITO/ward(2)/Ldh/1718/540 dated 13.11.2017 and the undersigned attended and clarified each and every issue on the issue of introduction of Cash Credit by Sh. Ankush Gupta. The photocopies of the enquiries letter issued by the A.O. are also attached for your kind reference. The A.O. has not uttered a single word about the amounts received by Sh. Ankush Gupta from his brother who is living and working in U.K. and has transferred the funds through RTGS from his NRE account. Further he has received the amounts from Sh. AkashBansal and against the sale of property. The complete clarification was given to the A. O. at the time of attending his office during enquiries against remand report and this was accepted by him during discussions but he has not mentioned the same in his remand report. This proves the source of source of Sh. Ankush Gupta. In view of the above facts it is requested and prayed to deleted the addition of ₹ 41,50,000/- in the hands of the firm under the wrong notion of law. 15. The Ld. CIT(A) after considering the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice. On careful consideration of the rival contentions, I am of the opinion that the assessee firm has explained even the source of source in respect of the amount received from Sh. Ankush Gupta by producing copy of NRE account of Sh. Puneet Gupta and copies of bank account of Sh. AkashBansal. On perusal of the bank accounts of Sh. Puneet Gupta, Sh. Akash Bansal and Sh. Ankush Gupta, I am convinced that the amount which Sh. Ankush Gupta has given to the assessee firm is out of explained sources. When asked to prove the source of Sh. Puneet Gupts, the learned AR of the assessee also placed on record the documents which prove beyond doubt that the amount in his NRI account has been transferred by Sh. Puneet Gupta from his own explained sources and that too in Pounds. Under such circumstances, the action of the Assessing Officer in making an addition of ₹ 40,50,000/- in this case on account of unexplained credit balance in the account of Sh. Ankush Gupta cannot be said to be justified and as such the addition of ₹ 40,50,000/- made by the Assessing Officer in this case on account of unexplained credit balance in the case of Sh. Ankush Gupta is, therefore, directed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction with M/s Shree Radha Commodity Services. 21. As regards to this issue the Ld. Counsel for the Assessee at the very outset stated that an identical issue having similar facts was involved for the A.Y. 2008- 09 in ITA No. 728/Chd/2018 in the Departmental appeal, in assessee s own case which has been adjudicated by this Bench of ITAT vide order dt. 03/10/2019 and the addition of ₹ 2,26,30,000/- received from the same creditor M/s Shree Radha Commodity Services was held to be genuine and the deletion of the said addition by the Ld. CIT(A) was confirmed vide aforesaid order dated 03/10/2019 (copy of the said order was furnished which is placed on the record). 22. In his rival submissions the Ld. CIT DR strongly supported the order of the A.O. and submitted that the assessee preplanned the activity of introducing the cash in the name of M/s Radha Commodity Services and the said amount was shown as outstanding under the head Sundry Creditors in the balance sheet while the amount received by the assessee was a loan. 23. In his rejoinder the Ld. Counsel for the Assessee submitted that in the similar circumstances the case of M/s Radha Commodity Services was reopened for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration assessment in the case of M/s Shree Radha Commodities Services was reopened under section 147 of the Act under identical facts and the reassessment was completed under section 143(3) read with section 147 of the Act vide order dt. 23/03/2016, however no addition on account of cash deposits were made and the A.O. came to the conclusion after verifying the books of accounts that the cash deposited was found to be explained. The said observation of the Ld. CIT(A) was not rebutted. In the present case when the cash deposited in the bank account of M/s Shree Radha Commodities Services was accepted and considered to be genuine while framing the assessment under section 143(3) r.w.s 147 of the Act vide order dt. 23/03/2016 then the amount received by the assessee through banking channel out of the said cash deposited in the bank account of M/s Shree Radha Commodities Services cannot be considered as unexplained or non genuine in the hands of the assessee. We therefore do not see any valid ground to interfere with the findings given by the Ld. CIT(A). So, respectfully following the aforesaid referred to order in assessee s own case, we do not see any merit in this ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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