ACIT, Faridabad v. M/s ASB Constructions Pvt. Ltd.,, Faridabad

ITA 2257/DEL/2009 | 2005-2006
Pronouncement Date: 19-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 225720114 RSA 2009
Assessee PAN AAECA3954A
Bench Delhi
Appeal Number ITA 2257/DEL/2009
Duration Of Justice 9 month(s) 23 day(s)
Appellant ACIT, Faridabad
Respondent M/s ASB Constructions Pvt. Ltd.,, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 19-03-2010
Date Of Final Hearing 24-02-2010
Next Hearing Date 24-02-2010
Assessment Year 2005-2006
Appeal Filed On 26-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.2257/DEL./2009 (ASSESSMENT YEAR : 2005-06) ACIT RANGE II VS. M/S ASB CONSTRUCTIONS PVT. LT D. FARIDABAD. VATIKA RESTAURANT BUILDING EROS GARDEN SURAJ KUND ROAD FARIDABAD. (PAN/GIR NO.AAECA3954A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P. GARG CA REVENUE BY : MS. PRATIMA KAUSHIK SR.DR ORDER PER A.K. GARODIA AM THIS IS A REVENUES APPEAL DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FARIDABAD DATED 31.3.2009 FOR AY 2005-06. GROUND NOS.1 & 2 ARE INTER CONNECTED WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 7 98 595/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTM ENT IN PURCHASE OF THE VOLVO EXCAVATOR AND ALSO ALLOWING RELIEF OF RS.1 14 603/- ON ACCOUNT OF INTEREST PAID AS EXPENSES IN THE PROFIT & LOSS ACCO UNT DISREGARDING THE FACT THAT THE ASSESSEE HAD FAILED TO FURNISH ANY EXPLANA TION REGARDING THE PAYMENT AT AN INFLATED FIGURE OF RS.15 45 000/- AND THE LD. CIT(A) ALSO ERRED IN ALLOWING RELIEF OF RS.9 13 198/- AS AGAINST ADDITIO N MADE AT RS.7 98 595/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.11 95 600/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTM ENT IN VOLVO EXCAVATOR DISREGARDING THE FACT THAT THE ASSESSEE HAD FAILED TO FURNISH ANY EXPLANATION REGARDING THE INVESTMENT MADE IN VOLVO EXCAVATOR. 2. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN PA RAS.4 & 5 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS PURCHASED ONE VOLVO EXCAVATOR AND THE PURCHASE PRICE SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT IS RS.42.91 LAKH. IT IS FURTHER NOTED BY THE AO THAT THE ITA NO.2257/DEL./2009 (AY : 2005-06) 2 ASSESSEE HAS OBTAINED LOAN FROM MAGMA LEASING & FIN ANCE LTD. DELHI FOR THIS VOLVO EXCAVATOR. IT IS FURTHER NOTED BY THE AO THAT THE AMOUNT FINANCED BY THE FINANCER IS ACTUALLY RS.2573405/- AND THE OUTSTANDING AMOUNT AT THE YEAR END COMES TO RS.746905/- .THE ASSESSEE HAS SHOWN OUTSTANDING LOAN AMOUNT AT RS.15 45 500/-. THE AO MAE ADDITION OF RS.798 595/- BEING THE DIFFERENCE BETWE EN RS.15 45 500 AND RS.746 905/-. IT IS FURTHER NOTED BY THE AO THAT ALTHOUGH THE ASSESS EE HAS SHOWN THE COST OF PURCHASE OF THIS VOLVO EXCAVATOR AT RS.42.91 LAKHS BUT ACTUAL V ALUE OF THIS EXCAVATOR IS RS.54 87 600/- AS PER THE STATEMENT OF THE FINANCIE R I.E. MAGMA LEASING & FINANCE LTD. THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE HAD NOT DISCLOSED THE FULL INVESTMENT IN THIS EXCAVATOR TO THE TUNE OF RS.11 95 600/- AND TH E SAME WAS ALSO ADDED BY THE AO. 3. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL AGAINST BOTH THESE ADDITIONS. IT WAS HELD BY THE CIT(A) THAT AGAINST THE DIFFERENCE IN OUTSTANDING LOAN AMOUNT WORKED OUT BY THE AO AT RS.746905/- THE ACT UAL OUTSTANDING LOAN AMOUNT IS RS.12 73 729/- AND HENCE THE ADDITION CAN BE MADE O N THIS ACCOUNT TO THE EXTENT OF RS.271721/- BUT THE ASSESSEE HAS TO BE ALLOWED DED UCTION ON ACCOUNT OF INTEREST ON THIS LOAN OF RS.386324/- WHICH WAS CAPITALIZED BY THE AS SESSEE IN THE COST OF THE ASSET AND NOT CLAIMED IN THE P&L A/C AS EXPENSES AND HENCE THE CI T(A) HAS DELETED THE ADDITION OF RS.798595/- AND ALLOWED DEDUCTION OF THE BALANCE AM OUNT OF RS.114603/- BEING DIFFERENCE OF (RS.386324-271721). THE SECOND ADDIT ION OF RS.11 95 600 WAS ALSO DELETED BY THE CIT(A) ON THE BASIS THAT THIS ADDITION WAS M ADE BY THE AO ON MISTAKEN BASIS BECAUSE THE COST OF RS.54 87 600/- WAS THE COST TO THE ORIGINAL PURCHASER AND NOT TO THE ASSESSEE. NOW THE REVENUE IS IN APPEAL BEFORE US A GAINST THE ORDER OF THE CIT(A) REGARDING BOTH THESE ADDITIONS. 4. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT ON PAGE 6 OF THE PAPER BOOKS IS THE WORKING GIVEN BY M/S MAGMA LEASING & FINANCE LTD. ON ACCOUNT OF AMOU NT FINANCED BY THEM AGAINST VOLVO EXCAVATOR. IT IS POINTED OUT THAT AS PER THE SAME THIS COMPANY HAS FINANCED A NET AMOUNT OF RS.2573405/- AND AFTER ADDING THE INTERES T AMOUNT OF THE PERIOD OF 22 MONTHS OF RS.517595/- THE TOTAL OUTSTANDING AMOUNT OF LOA N WAS RS.30.91 LAKH. HE HAS ALSO POINTED OUT THAT IN ADDITION TO THIS LOAN AN AMOUN T OF RS.12 LAKH WAS PAID BY THE ASSESSEE TO SHRI M.P. SINGH THE ORIGINAL PURCHASER OF THIS EXCAVATOR AND THE TOTAL AMOUNT OF COST ITA NO.2257/DEL./2009 (AY : 2005-06) 3 OF THIS ASSET WAS ACCOUNTED FOR BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AT RS.42.91 LAKH AS PER THE COPY OF LEDGER ACCOUNT OF M/S MAGMA LEASING & FINANCE LTD. APPEARING ON PAGE 7 OF THE PAPER BOOK AND ALSO AS PER COPY OF LEDGER ACCOUNT OF VOLVO EXCAVATOR AS APPEARING ON PAGE 10 OF THE PAPER BOOK. HE STRONGL Y SUPPORTED THE ORDER OF CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD AND HAVE GONE THOUGH THE ORDERS OF THE AUTHO RITIES BELOW. WE FIND THAT AS PER THE DOCUMENTS AVAILABLE IN THE PAPER BOOK THE VOLVO EX CAVATOR WAS PURCHASED BY SHRI MAHIPAL SINGH ON 7.8.2002 AT A COST OF RS.54 87 600 /- AS PER THE SALE BILL AVAILABLE ON PAGE 9 OF THE PAPER BOOK. THE SAME VOLVO EXCAVATOR WAS PURCHASED BY THE ASSESSEE FORM SHRI MAHIPAL SINGH IN THE PRESENT YEAR AND THE ASSESSEE HAS MADE DIRECT PAYMENT OF RS.12 LAKHS TO SHRI MAHIPAL SINGH AND THE BALANCE A MOUNT WAS FINANCED BY MAGMA LEASING & FINANCE LTD. TO THE ASSESSEE AS PER THE S TATEMENT OF MAGMA LEASING & FINANCE LTD. AVAILABLE ON PAGE 6 OF THE PAPER BOOK. THE AM OUNT FINANCED BY THEM TO THE ASSESSEE IS OF RS.25 73 405/- AND HENCE THE COST OF THIS EXC AVATOR TO THE PRESENT ASSESSEE IS RS.37 73 405/- BUT THE ASSESSEE HAS CLAIMED DEPREC ATION ON ACCOUNT OF THIS ASSET ON THE BASIS OF COST OF THIS ASSET ACCOUNTED FOR BY THE AS SESSEE IN ITS BOOKS OF ACCOUNT AT RS.42.91 LAKH AND THE AMOUNT OF DEPRECIATION CLAIME D BY THE ASSESSEE OF THIS ASSET IS RS.1072750 AS PER THE DEPRECIATION CHART AS PER THE INCOME-TAX ACT AVAILABLE ON PAGE 28 OF THE PAPER BOOK. THE CORRECT AMOUNT OF DEPRECIATI ON ALLOWABLE TO THE ASSESSEE IN THE PRESENT YEAR ON ACCOUNT OF THIS ASSET IS ONLY RS.9 43 351/- BEING 25% OF RS.37 73 405/- BEING THE ACTUAL COST OF THIS ASSET IN THE HANDS OF THE ASSESSEE. HENCE AN EXCESS DEDUCTION HAS BEEN ALLOWED TO THE ASSESSEE ON ACCOU NT OF DEPRECATION TO THE EXTENT OF RS.129399. THE CIT(A) HAS DECIDED THIS ISSUE REGAR DING ADDITION MADE BY THE AO OF RS.798595/- ON THE BASIS THAT ADDITION ON ACCOUNT O F DIFFERENCE IN THE OUTSTANDING AMOUNT OF LOANS AMOUNT CAN BE MADE OF RS.271721/- ONLY BU T AT THE SAME TIME DEDUCTION HAS TO BE ALLOWED TO THE ASSESSEE OF RS.386324/- ON ACCOUN T OF INTEREST WHICH IS ALLOWABLE TO THE ASSESSEE BUT NOT CLAIMED BY THE ASSESSEE BECAUSE TH E ASSESSEE HAS CAPITALIZED THE INTEREST IN THE COST OF ASSET. WHEN CIT(A) IS ALLOWING DEDU CTION ON ACCOUNT OF SUCH CAPITALIZED INTEREST THE AMOUNT OF DEPRECATION ALLOWED TO THE ASSESSEE HAS TO BE REDUCED CONSEQUENTLY. ON THIS ACCOUNT WE FIND MISTAKE IN THE ORDER OF THE CIT(A) BECAUSE THE ASSESSEE ITSELF HAS AGREED REGARDING ADDITION OF RS .271721/- ON THIS ACCOUNT OF DIFFERENCE ITA NO.2257/DEL./2009 (AY : 2005-06) 4 IN CLOSING BALANCE OF THE LOAN ACCOUNT AND SINCE IN TEREST WAS CAPITALIZED BY THE ASSESSEE AND NOT DEBITED TO P& L A/C DEDUCTION WAS RIGHTLY ALLOWED BY THE CIT(A) ON ACCOUNT OF INTEREST BUT HE HAS NOT MADE CONSEQUENT REDUCTION I N DEPRECIATION ALLOWED TO THE ASSESSEE. HENCE WE MODIFY THE ORDER OF CIT(A) TO THE EXTENT O F REDUCING THE DEPRECIATION ALLOWED TO THE ASSESSEE ON ACCOUNT OF THIS ASSET BECAUSE TH E SAME IS CONSEQUENTIAL BECAUSE WHEN DEDUCTION IS ALLOWED TO THE ASSESSEE ON ACCOUNT OF INTEREST SUCH INTEREST CAPITALIZED BY THE ASSESSEE HAS TO BE REDUCED FROM THE CAPITAL COS T OF THE ASSET AND ONLY ON THE ACTUAL COST OF THE ASSET DEPRECIATION IS ALLOWABLE TO THE ASSESSEE. WE THEREFORE DIRECT THE AO THAT HE SHOULD REDUCE THE DEPRECIATION ALLOWABLE TO THE ASSESSEE AS PER INCOME-TAX ACT BY THE AMOUNT OF RS.1 29 399/-. HENCE IN PLACE OF NET RELIEF TO THE ASSESSEE ALLOWED BY THE CIT(A) OF RS.114602/- THERE SHOULD BE ADDITION OF R S.14 796/- BEING DIFFERENCE OF (RS.129399-114603). IN OTHER WORDS AS AGAINST THE ADDITION MADE BY THE AO OF RS.798595/- THE ADDITION TO THE EXTENT OF RS.14 79 6/- STANDS CONFIRMED. GROUND NO.1 OF THE REVENUE STANDS PARTLY ALLOWED. 6. REGARDING NO.2 OF THE REVENUE WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) BECAUSE THE COST OF EXCAVATOR IN THE HANDS O F THE PRESENT ASSESSEE IS ONLY 37 73 405/- AND THE COST OF RS.54 87 600/- CONSIDER ED BY THE AO FOR MAKING THIS ADDITION IS NOT THE COST OF THE PRESENT ASSESSEE BUT IT IS THE COST OF THE FIRST PURCHASER I.E. M.P. SINGH AND HENCE NO ADDITION OF THIS ACCOUNT OF THIS DIFFERENCE IS CALLED FOR IN THE PRESENT CASE. GROUND NO.2 OF THE REVENUE IS REJECTED. 7. REGARDING GROUND NO.3 IT IS NOTED BY THE AO THA T IN PARA 6 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN TO HAVE AVAILED O F UNSECURED LOAN OF RS.14 48 500/- FROM ONE SMT. MAYA DEVI WIFE OF SHRI SATYA PRAKASH ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE AO HAS MADE ADDITION OF THIS LOAN AMOUNT AS PER THE FINDING GIVEN BY THE HIM IN PARA 6 OF THE ASSESSMENT WHICH IS REPRODUCED BELOW: THE ASSESSEE HAS SHOWN TO HAVE AVAILED OF UNSECURE D LOAN OF RS.14 48 500/- FROM ONE SMT. MAYA DEVI IS THE WIFE OF SHRI SATYA PRAKASH ONE OF THE TWO DIRECTORS. THE RETURN OF INCOME FILED BY SMT. MAYA DEVI FOR ASSESSMENT YEAR 2005-06 (SHE HAS NEITHER DATED IT NOR THE PLACE COL UMN HAS BEEN FILLED IN POINTING OUT TO THE RETURN HAVING BEEN FILED IN A HURRY) WHE REIN SHE HAS DISCLOSED TOTAL ITA NO.2257/DEL./2009 (AY : 2005-06) 5 INCOME OF RS.104 500/- AS INCOME FROM STITCHING AND EMBROIDERY CLASSES. THIS RETURN TOO WAS FILED FOR THE FIRST TIME SIMULTANEOU SLY WITH THE RETURN OF THE ASSESSEE COMPANY. THE BANK ACCOUNT THROUGH WHICH T HE LOAN AMOUNTS HAVE BEEN SHOWN TO HAVE BEEN TAKEN INTO THE BUSINESS OF THE A SSESSEE IS A SAVINGS BANK ACCOUNT IN THE JOINT NAMES OF SRI SATYAPRAKASH AND SMT. MAYA DEVI SB A/C NO.1053 IN BANK OF MAHARASHTRA DAYAL BAGH FARIDAB AD. SHRI SATYA PRAKASH IS THE MAIN DIRECTOR OF THE COMPANY. THERE IS TOTAL D EPOSIT OF RS.83 93 469/- IN THE BANK A/C DURING THE YEAR (CREDIT SUMMATION). IT IS NOT ASCERTAINABLE WHERE FROM THESE AMOUNTS HAVE BEEN RECEIVED AND IN WHOSE ACCOU NT SHRI SATYA PRAKASHS OR IN THE ACCOUNT OF HIS WIFE. HIS WIFE THE LENDER O F RS.14 48 500/- IS ONLY HAVING INCOME OF ABOUT RS.8708/- A MONTH (104 500) DIVIDEN D BY 12) IF ANY AT ALL. MOREOVER THE BANK NARRATION IN THE ACCOUNT WHEN EV EN SOME AMOUNT IS TRANSFERRED FROM THIS ACCOUNT TO THE ASSESSEE COMPA NYS ACCOUNT WHICH IS CLAIMED BY THE ASSESSEE TO BE AS UNSECURED LOANS IS TO TR F CA 35. SUCH NARR4ATION IS ALSO SEEN AGAINST MANY OTHER TRANSFERS FORM THIS BA NK ACCOUNT. THEREFORE THE CREDITS APPEARING IN THE BOOKS OF ACCOUNTS OF THE A SSESSEE VIS--VIS THE UNSECURED LOAN TAKEN FROM SMT. MAYA DEVI REMAINS UNEXPLAINED. THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY TO SUBSTANTIATE ITS UNSECURED LOA N BY WHATSOEVER EVIDENCE AND WITNESS IT CHOSE TO PRODUCE INCLUDING SMT. MAYA DE VI HERSELF ON ANY DAY DURING WORKING HOU54RS WITHIN 15-20 DAYS. THE ASSESSEE RA THER CHOSE TO REMAIN 3EVASIVE AND NONCOMMITTAL. LEFT WITH NO OPTION AN D FOR NOT BEING SATISFIED ABOUT THE GENUINENESS OF THE TRANSACTION AS WELL AS THE C REDITWORTHINESS OF THE LOAN CREDITOR SMT. MAYA DEVI WHICH BORDERS ON ABSURDIT Y THE AMOUNT OF RS.14 48 500/- IS TREATED AS CASH CREDIT U/S 68 OF THE INCOME-TAX ACT AND ADDED TO THE RETURNED INCOME OF THE ASSESSEE COMPANY. 8. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDITION AS PER PARA. 13 OF HIS OR DER WHICH IS ALSO REPRODUCED BELOW: 13. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. A.R. AND PERUSED THE ORDER OF ASSESSMENT. FROM THE ASSESSMENT ORDER IT BECOMES APPARENT THAT THE IDENTITY OF THE CREDITOR SMT. MAYA DEVI IS ESTABLI SHED BY THE FACT OF HER FURNISHING OF INCOME FOR ASSESSMENT YEAR 2005-06 AN D ALSO FROM THE FACT THAT SHE IS THE WIFE OF ONE OF THE DIRECTORS SHRI SATYA PRA KASH. ALSO THE FACT OF THE SAVINGS BANK ACCOUNT NO.1053 IN BANK OF MAHARASHTRA IN THE JOINT NAMES OF SHRI SATYA PRAKASH AND SMT. MAYA DEVI HAS BEEN ACCE PTED BY THE A.O. IT IS NORMALLY INFERRED FROM THE NAMES OF THE BANK ACCOUN TS THAT THE FIRST NAME USUALLY IS THE HOLDER OF THAT ACCOUNT UNLESS AN ADVERSE FIN DING IS GIVEN THAT IT BELONGED TO THE SECOND HOLDER OF THE BANK ACCOUNT. FROM THIS PO INT OF VIEW SHRI SATYA PRAKASH BEING THE FIRST NAME OF THE JOINT ACCOUNT C LEARLY SHOWS THAT THE AMOUNTS IN THE SAID SAVINGS ACCOUNT BELONGED TO SHRI SATYA PRA KASH UNLESS OTHERWISE ESTABLISHED. HAVING CONSIDERED THAT THE DEPOSITS I N THE BANK ACCOUNT ARE TO BE EXAMINED FROM THE BANK STATEMENT/PASS BOOK PLACED O N RECORD FROM PAGES 14 TO 20 OF THE PAPER BOOK. IT IS FOUND THAT SHRI SATYA P RAKASH WAS OWNING 6 TRUCKS IN THE LAST YEAR WHICH HAVE BEEN SOLD DURING THE YEAR UNDER CONSIDERATION AND ALSO THAT HE BELONGS TO AN AGRICULTURALIST FAMILY AND WA S RECEIVING GOOD AMOUNT OF ITA NO.2257/DEL./2009 (AY : 2005-06) 6 COMPENSATION FROM THE MEMBERS OF THE FAMILY IN THE PRECEDING ASSESSMENT YEAR. ALL THE ENTRIES OF DEPOSITS/WITHDRAWALS EVIDENT FRO M THE BANK STATEMENT/PASS BOOK OF BANK OF MAHARASHTRA HAVE BEEN VERIFIED FROM THE CASH BOOK MAINTAINED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE PRODUCED BEFORE TH E A.O. AND THE BANK STATEMENT OF BANK OF MAHARASHTRA FROM 01.04.2004 TO 31.3.2005 WHICH IS ALREADY LYING ON THE ASSESSMENT RECORDS. IT BECOMES QUITE ESTABLISHE D THAT THE DEPOSITS SHOW THAT SHRI SATYA PRAKASH HIMSELF IS A MAN OF MEANS AND TH E DEPOSITS AMOUNTING TO RS.83 93 469/- BELONG TO HIM. ALSO IT IS ASCERTAIN ED THAT THE NOMENCLATURE TO TRF CA35 IN THIS JOINT ACCOUNT SHOWS THAT THE TRAN SACTIONS AS TRANSFERRED TO THE CURRENT ACCOUNT NO.35 OF THE COMPANY AND IT IS NOT CORRECT TO SAY THAT SUCH NARRATION WAS ALSO SEEN AGAINST MANY OTHER TRANSFER S FROM THIS BANK ACCOUNT. THEREFORE THE A.O. HAS ONLY SUSPICIONS ABOUT THE C REDIT-WORTHINESS OF THE LOAN CREDITOR SMT. MAYA DEVI AND THE GENUINENESS OF THE TRANSACTION WHILE THE FACT OF SUCH LOAN HAS BEEN ACCEPTED BY THE DEPARTMENT IN HE R RETURN FILED FOR THE ASSESSMENT YEAR 2005-06. HENCE IN VIEW OF THE ABOVE DISCUSSION THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ARE SUFFICIENTLY PROVED AND THEREFORE THE ADDITION OF RS.14 48 500/- U/S 68 OF THE INCOME TAX ACT 1961 BECOMES INCORRECT ON FACT AND LAW AND CONSEQUENTLY IT IS DELETED. 9. NOW THE REVENUE IS IN APPEAL BEFORE US. IT IS SUBMITTED BY THE LD.DR OF THE REVENUE THAT THE LOAN IS TAKEN BY THE ASSESSEE FROM SMT. MAYA DEVI WHEREAS THE CIT(A) IS TALKING ABOUT THE CREDITWORTHINESS OF SHRI SATYA PRAKASH I.E. THE HUSBAND OF SMT. MAYA DEVI AND HENCE HIS ORDER SHOULD BE REVERSED AND THA T OF THE AO SHOULD BE RESTORED. AS AGAINST THIS LD.AR OF THE ASSESSEE SUPPORTED THE OR DER OF THE CIT(A). IT IS ALSO SUBMITTED THAT COPY OF BANK STATEMENT OF THE JOINT BANK ACCOU NT IN THE NAME OF SHRI SATYA PRAKASH AND SMT. MAYA DEVI IS AVAILABLE ON PAGES 14 TO 20 O F THE PAPER BOOK. FROM THE SAME IT CAN BE SEEN THAT ALL THESE AMOUNTS WERE TRANSFERRED FROM THIS BANK ACCOUNT AND SINCE SMT. MAYA DEVI AND SHRI SATYA PRAKASH BOTH ARE INCOME-T AX ASSESSEE ADDITION MADE BY THE AO ON ACCOUNT OF THIS LOAN IS RIGHTLY DELETED BY TH E CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT A CLEAR FINDING IS GIVEN BY T HE AO THAT CREDITWORTHINESS OF SMT. MAYA DEVI I.E. THE LOAN CREDITOR HAS NOT BEEN ESTA BLISHED BECAUSE SHE HAS DISCLOSED TOTAL INCOME OF RS.1 04 500/- AS INCOME FROM STITCHING AN D EMBROIDERY CLASSES. IN THE BANK STATEMENT OF SMT. MAYA DEVI JOINTLY WITH SHRI SATYA PRAKASH THERE ARE VARIOUS OTHER ENTRIES ALSO WITH THE NARRATION TO TRF CA 35. IT IS ALSO OBSERVED BY THE AO THAT TOTAL DEPOSIT IN THIS BANK ACCOUNT DURING THIS YEAR IS OF RS.83 93 409/- FOR WHICH THERE IS NO ITA NO.2257/DEL./2009 (AY : 2005-06) 7 EXPLANATION AS TO WHETHER THESE DEPOSITS BELONG TO SMT. MAYA DEVI OR TO SHRI SATYA PRAKASH. THERE ARE VARIOUS CASH DEPOSITS ALSO SUCH AS RS.1.50 LAKHS ON 30.6.2004 AND RS.6 LAKHS ON 10.8.2004 RS.3 LAKHS ON 11.9.2004 R S.1 50 000 RS.5 95 000 ON 16.9.2004 AND RS.3.50 LAKH ON 22.9.2004 ETC. THE SOURCES OF THESE CASH DEPOSITS IN THIS BANK ACCOUNT ARE NOT EXPLAINED BEFORE THE AUTHORITIES BE LOW OR BEFORE US. EVEN THE BALANCE SHEET OF SMT. MAYA DEVI OR SHRI SATYA PRAKASH IS NO T PRODUCED BEFORE US AND THE SAME WERE NOT PRODUCED BEFORE THE AUTHORITIES BELOW ALSO BECAUSE THERE IS NO MENTION OF ANY BALANCE SHEET OF THESE TWO PERSONS IN THE ORDERS OF THE AUTHORITIES BELOW. THE CIT(A) HAS PROCEEDED ON THE BASKS THAT IN THIS JOINT BANK ACCO UNT FIRST NAME IS OF SHRI SATYA PRAKASH AND HENCE IT HAS TO BE HELD THAT THESE AMOUNTS BLOW N GO SHRI SATYA PRAKASH. IF THAT BE SO THEN HOW THE LOAN CREDIT IN THE CASE OF THE ASSESSE E STANDING IN THE NAME OF SMT. MAYA DEVI CAN BE ACCEPTED AS EXPLAINED. EVEN IN THE HAND S OF SHRI SATYA PRAKASH GENERAL OBSERVATIONS ARE MADE BY CIT(A) REGARDING HIS CREDI TWORTHINESS BY SAYING THAT HE BELONG TO AN AGRICULTURIST FAMILY AND WAS RECEIVING GOOD A MOUNT OF COMPENSATION FROM THE MEMBERS OF THE FAMILY IN THE PRECEDING ASSESSMENT Y EAR. THE CREDITWORTHINESS OF ANY LOAN CREDITOR CANNOT BE EXPLAINED BY MAKING THESE G ENERAL STATEMENTS AND WITHOUT FURNISHING ANY EVIDENCE IN THAT REGARD. IN VIEW OF ALL THESE FACTS WE ARE OF THE CONSIDERED OPINION THAT THE CREDITWORTHINESS OF THI S LOAN CREDITOR I.E. SMT. MAYA DEVI HAS NOT BEEN EXPLAINED. EVEN IF WE ACCEPT THIS CLAIM O F THE ASSESSEE THAT HE LOAN CREDIT IN QUESTION IS ACTUALLY OF SHRI SATYA PRAKASH AND NOT OF SMT. MAYA DEVI WE FIND THAT CREDITWORTHINESS OF SHRI SATYA PRAKASH IS ALSO NOT EXPLAINED BEFORE US PARTICULARLY WHEN THERE ARE SO MANY CASH DEPOSITS IN THIS JOINT BANK ACCOUNT AND THERE ARE SIMILAR TRANSFER ENTRIES WITH THE SAME NARRATION TO TRF CA 35 IN T HE SAID JOINT BANK ACCOUNT. WE ALSO FIND THAT EVEN PAN OF SMT. MAYA DEVI OR SHRI SATYA PRAKASH ARE NOT BROUGHT ON RECORD BY THE ASSESSEE AND WE DO NOT FIND AS TO WHETHER TH IS JOINT BANK ACCOUNT IN THE NAME OF SMT. MAYA DEVI AND SHRI SATYA PRAKASH IS A DISCLOSE D BANK ACCOUNT OR NOT IN WHICH THERE ARE HUGE TRANSACTIONS AND HENCE WE FEEL IT FIT AND PROPER THAT THIS ISSUE SHOULD GO BACK TO THE FILE OF THE AO FOR A FRESH DECISION. THE AO SH OULD OBTAIN THE PAN AND AOS DETAILS OF BOTH THESE PERSONS I.E. SMT. MAYA DEVI AND SHRI SATYA PRAKASH AND THEREAFTER THE AO SHOULD COLLECT NECESSARY EVIDENCE AND DETAILS FROM THE AO OF THESE TWO PERSONS IN THIS REGARD IF THESE TWO PERSONS ARE INCOME-TAX ASSESSE E AND THEREAFTER THE AO SHOULD DECIDE ITA NO.2257/DEL./2009 (AY : 2005-06) 8 THE ISSUE AFRESH AS TO WHETHER ANY ADDITION ON THIS ACCOUNT IS CALLED FOR IN THE HANDS OF THE ASSESSEE OR WHETHER ACTION IS REQUIRED TO BE TA KEN IN THE HANDS OF THE LOAN CREDITOR AS PER BOOKS OF THE ASSESSEE I.E. SMT. MAYA DEVI OR IN THE HANDS OF SHRI SATYA PRAKASH WHO IS STATED TO BE THE REAL BENEFICIARY OF THE TOTAL D EPOSITS IN THE JOINT BANK ACCOUNT OF RS.83.93 LAKS BECAUSE ON PAGE 9 OF HIS ORDER IN PAR A 13 IT IS OBSERVED BY THE CIT(A) THAT ENTIRE DEPOSITS IN THE JOINT BANK ACCOUNT TO THE EX TENT OF RS.83.93 LAKHS BELONG TO SHRI SATYA PRAKASH. IT IS VERY IMPORTANT TO EXAMINE THE ASSESSMENT RECORDS OF BOTH THESE PERSONS TO FIND OUT AS TO WHETHER THIS LOAN CREDIT OF RS.14 48 500/- IN THE BOOKS OF THE PRESENT ASSESSEE ACTUALLY BELONG TO SMT. MAYA DEVI OR SHRI SATYA PRAKASH AND WHETHER THERE IS CREDITWORTHINESS OF THE REAL LOAN CREDITOR AS PER BALANCE SHEET OF THE REAL LOAN CREDITOR.. WE THEREFORE SET ASIDE THE ORDER OF T HE CIT(A) AND RESTORE THE MATTER BACK TO THE AO FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND NO.3 OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSE. 11. IN THE RESULT THIS APPEAL OF THE REVENUE IS PA RTLY ALLOWED AS INDICATED ABOVE. 12. ORDER PRONOUNCED IN OPEN COURT ON 19.03.2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: MARCH 19 2010. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) FARIDABAD. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. AR/ITAT ITA NO.2257/DEL./2009 (AY : 2005-06) 9