TMI Blog2022 (7) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- in the legal profession of more than 40 years as well as the proof of agricultural land holding of the assessee is not an excessive claim and therefore, in the absence of any contrary material or fact brought by the Assessing Officer, the denial of this claim of past savings and restricting the same to Rs. 6,00,000/- as against Rs. 8,03,900/- is not justified Thus ignoring the facts and circumstances of legal practice of the assessee for such a long period as well as evidence produced for agricultural land holding, the additions sustained by the CIT(A) on the ground that no evidence could be furnished, is not justified. Accordingly, the addition made by the Assessing Officer and confirmed by the CIT(A) is deleted. Addition denying the claim of loan taken from the relatives as source of deposits in the bank account of the son - HELD THAT:- As in the facts and circumstances of the case as well as the settled proposition of law, the addition sustained by the CIT(A) ignoring the evidence produced by the assessee to prove the identity, creditworthiness of the creditors and genuineness of the transaction by furnishing their identity proof, their source of income and confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on record. 6. The observation of the learned A.O. in Para 4 of assessment Order dt.27.12.2017 is wrong and misleading that no reply was filed by any of the 6 parties, to whom notices u/s. 133(6) were issued, ignoring the vital fact that reply by Kalpnath Singh, Manish Singh and Samrath Singh admitting advance of loan to assessee were duly filed before the A.O on 27.12.2017, the date of Assessment Order. The learned CIT(A) also erred in not accepting the loan from these 3 parties relying upon the incorrect and misleading observation made by A.O. in Assessment Order - without verifying the fact on record that on 27.12.2017, the date of assessment order the replies filed in compliance to notice u/s. 133(6) by the aforesaid three parties were on assessment record the A.O. 7. Because the observation of the learned A.O. in Para 3 of the remand report that the assessee filed letter dated 17.11.2017 merely stating name of alleged lenders that too with incorrect address, is patiently not only wrong but also untrue as the notices issued under 133(6) by A.O. were duly complied with on 27.12.2017 by 3 parties and the other 3 parties alongwith aforesaid 3 parties also filed affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000 Surjeet Singh 20.12.2017 21.12.2017 1.1.2018 26.12.2017 1,00,000 Yogesh Singh 20.12.2017 21.12.2017 1.1.2018 26.12.2017 1,00,000 Samrath Singh 13.12.2017 14.12.2017 - 20.12.2017 11. The assessee filed affidavit of notary public sworn by all the 6 persons who gave loan to assessee before the learned CIT(A). The issue for all the 6 parties were identical and a common format was prepared by the assessee himself being on advocate in which the following blank space / were left filled in by hand writing: (1) Name and Address (2) Whether PAN Card or not (3) Source of income agriculture or service (4) Amount of Advance (5) Bank A/c available or not (6) Agriculturist or Serviceman The learned CIT(A), without examining the deponents or contents of the affidavit, is not correct in stating that sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income of the assessee. The assessee challenged the action of the Assessing Officer before the CIT(A) and submitted that the Assessing Officer ignored the confirmation letters of three persons containing the information as required by the Assessing Officer submitted and the confirmation letter of the rest three persons were ready to file but the order was passed by the Assessing Officer before the said information was to be submitted. Thus, the assessee contended that the Assessing Officer has not given the sufficient time to the assessee or to the loan creditors to submit the information. The CIT(A) was not impressed with submissions of the assessee and confirmed the additions made by Assessing Officer. 3. Ground no. 3 is regarding the addition of Rs. 2,03,900/- on account of past savings of the assessee. The learned AR of the assessee has submitted that the assessee is in legal practice as an Advocate since 1976-77 and also having a substantial income from agricultural operations. He has pointed out that the assessee has submitted the proof of agricultural land holding and income therefrom during the assessment proceedings and the Assessing Officer accepted the agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore, it cannot be denied that he is having no savings. The Assessing Officer then observed that in the absence of any credible evidence, the past savings was accepted at Rs. 6,00,000/-. It is pertinent to note that the Assessing Officer has not given any basis for acceptance of past savings at Rs. 6,00,000/- when the assessee in in the legal profession for last more than 40 years as well as having the agricultural land holding and agricultural income. Therefore, the estimation of the Assessing Officer without any basis at Rs. 6,00,000/- as against the claim of Rs. 9,03,900/- is arbitrary and unjustified. Even otherwise the savings of Rs. 8,00,000/- in the legal profession of more than 40 years as well as the proof of agricultural land holding of the assessee is not an excessive claim and therefore, in the absence of any contrary material or fact brought by the Assessing Officer, the denial of this claim of past savings and restricting the same to Rs. 6,00,000/- as against Rs. 8,03,900/- is not justified. The CIT(A) has not given any finding except sustaining the addition summarily in para 6 as under:- As regards addition of Rs. 2,03,900/-, no evidence could be furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduce the evidence during the assessment proceedings because the Assessing Officer has not given the sufficient time to the loan creditors or to the assessee to produce the relevant details and information called by the Assessing Officer while issuing the notice under section 133(6) of the Act. He has pointed out that the Assessing Officer has issued the notice under section 133(6) at the fag end of the limitation period of framing the assessment leaving no time to comply with within the due date given by the Assessing Officer. Further, when these informations were ready to be submitted before the Assessing Officer, he passed the assessment order on 27th December, 2017. Some of the notices were issued on 21st December, 2017 and therefore, passing the order on 27th December, 2017 itself shows that the Assessing Officer has not given sufficient opportunity and time to furnish the requisite details and information called by the Assessing Officer vide notice issued under section 133(6) of the Act. Thus, he has submitted that when the assessee produced all these relevant evidence and details during the appeal proceedings before the CIT(A), the same ought to have been admitted and verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same is added into the total income of the assessee. 9. The Assessing Officer has stated in the assessment order that enquiry letter under section 133(6) of the Income Tax Act were sent to the address of the persons as provided by the assessee calling for information regarding the amount and mode of payment, bank account etc,. The Assessing Officer further stated that no response was received from any of them and consequently the Assessing Officer rejected the explanation and made the addition. It is pertinent to note that the Assessing Officer issued the notices under section 133(6) dated 13.12.2017 and 20.12.2017. The details of the date of notices, dispatch of the notices and due date of compliance is given by the assessee in ground no. 10 itself which is again reproduced as under:- Amount Borrowed (Rs.) Name of Lenders Date of Notice Dispatch date of Notice Service Date of Notice Due Date of Compliance 1,50,000 Manish Singh 13.12.2017 16.12.2017 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the date of compliance stated in those notices. Therefore, without ascertaining the service of notices before the due date of compliance or before passing the assessment order, the assessee cannot be blamed for non receipt of response by the Assessing Officer before the assessment order was passed on 27th December, 2017. In view of this fact that the Assessing Officer has not given sufficient time to the loan creditors to furnish the requisite details and information, the assessee furnished all those details alongwith confirmation in the shape of affidavits of the loan creditors during the appeal proceedings before the CIT(A). The CIT(A) though called for a remand report from the Assessing Officer however, the Assessing Officer has objected to the admission of the additional evidence in the remand report which is reproduced by the CIT(A) at pages 5 and 6 of the impugned order as under:- 1) Appeal memo/written submission, containing brief facts and grounds of appeal, on which comments are sought, is not signed by the appellant and therefore deserve to be rejected out rightly being a non-entertainable piece of document. 2) Two additions have been made by the AO and bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural land paper and ID of lenders before the AO. No such evidence were filed before the AO. Even the claim of lenders being agriculturist was never made before the Assessing Officer, neither in the reply dated 17/11/2017 nor in the response of alleged lenders dated 27/12/2017 in compliance of notice u/s 133(6) of the I-T Act. 9) The second addition of Rs. 2,03,900/- made by the AO after assuming past saving of assessee Rs. 6 lakhs was more than reasonable and assessee deserves no relief on this addition. 10) Before parting with the matter and in addition to the submission made above, it is further submitted that if your good self arrive at the conclusion of genuineness of the cash loans, after through examination of the alleged lenders, then the assessee may be proceeded for penalty u/s 271D of the I-T Act, as he had accepted cash loan in contravention of provisions of section 269SS of the I-T Act. The condition of both, lenders and borrower, being farmer and having no income other than agriculture income is not satisfied. In the remand report, the Assessing Officer instead of examining the evidence furnished by the assessee or examining the loan creditors h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the source of deposit in the bank account then the onus is shifted to the Assessing Officer to dispute the correctness of the explanation of the assessee. The assessee has given a plausible explanation by producing the details of the loan creditors who are non other than relatives of the assessee and the Assessing Officer could not conduct a proper enquiry due to the paucity of the time as the notice under section 133(6) were issued at the fag end and the same were not even served on the loan creditors before the assessment order was passed. Therefore, it is a case of no enquiry conducted by the Assessing Officer to contradict the explanation of the assessee. Even otherwise the assessee submitted the requisite information and evidence before the CIT(A) but instead of examining and verifying the correctness of the evidence produced by the assessee, the same was rejected out rightly. This conduct of the Assessing Officer as well as CIT(A) is not in accordance with the procedure ought to have been adopted by the quasi-judicial authority. There is no dispute that the Assessing Officer can also bring the material to counter the evidence and explanation furnished by the assessee but in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was entitled to assume that the income-tax authorities were satisfied with the affidavit as sufficient proof on this point. If it was not to be accepted as sufficient proof either by the Income-tax Officer or by the Appellate Assistant Commissioner of Income-tax or by the Income-tax Appellate Tribunal, the assessee should have been called upon to produce documentary evidence, or, at least he should have been cross-examined to find out now far his assertions in the affidavit were correct. In this connection, Shri Pathak has drawn our attention to a decision of the Supreme Court of India in Parikh and Co. v. Commissioner of Income-tax, Bombay, 1956-30 ITR 181 : ((S) AIR 1956 SC 554) (A). In that case, their Lordships of the Supreme Court, in very similar circumstances, held that the rejection of an affidavit filed by an assessee was not justified unless the assessee had either been cross-examined or called upon to produce documentary evidence in support of the affidavit sworn by him. Their Lordships held: No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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