Smt. Shobha Agarwal, Prop M/s Kiran & Co., Aligarh v. ITO, Aligarh

ITA 472/AGR/2009 | 2005-2006
Pronouncement Date: 05-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 47220314 RSA 2009
Assessee PAN ABHPA1034C
Bench Agra
Appeal Number ITA 472/AGR/2009
Duration Of Justice 1 month(s) 19 day(s)
Appellant Smt. Shobha Agarwal, Prop M/s Kiran & Co., Aligarh
Respondent ITO, Aligarh
Appeal Type Income Tax Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 05-02-2010
Assessment Year 2005-2006
Appeal Filed On 16-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH SMC AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.472/AGR/2009 ASST. YEAR: 2005-06 SMT. SHOBHA AGRAWAL VS. INCOME-TAX OFFICER WAR D 1 PROP. M/S KIRAN & COMPANY ALIGARH. C/O. M/S. LAXMI METAL WORKS SARAI HAKEEM ALIGARH (U.P.). (PAN : ABHPA 1034 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH ADVOCATE RESPONDENT BY : SHRI R.C. SHARMA JR. D.R. ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 17.09.2009 BY TAKING THE FOLLOWING EFFECTIVE GROUND S :- (1) BECAUSE THE ADDITION OF RS.1 00 000/- U/S 68 O F INCOME TAX ACT AS UNEXPLAINED CASH CREDIT OF LOAN RECEIVED BY ACCOUNT PAYEE CHEQUE FROM SMT. GEETIKA AGARWAL IS WRONG ILLEGAL AND AGAINST THE FACTS AND LAW OF THE CASE. (2) BECAUSE THE DISALLOWANCE OF INTEREST AT 10% ON ABOVE LOAN OF RS.10 000/- IS WRONG ILLEGAL ARBITRARY AND AGAINST THE FACTS AND LAW OF THE CASE. 2. THE BRIEF FACTS OF THE GROUNDS ARE THAT THE ASSE SSEE HAS TAKEN A LOAN OF RS.1 00 000/- DURING THE YEAR FROM SMT. GEETIKA AGARWAL VIDE CHEQ UE NO.118961 IN OCTOBER 2004. WHILE THERE WAS OPENING LOAN TOWARDS THE LOAN ACCOUNT OF SMT. GEETIKA AGARWAL AMOUNTING TO RS.6 60 892/-. THE CLOSING BALANCE OF THE LOAN WAS RS.8 10 830/-. BOTH THE OPENING AND CLOSING BALANCE OF THE LOAN WAS DULY SHOWN BY SMT. GEETIKA AGARWAL IN HER BALANCE SHEET AS ON 31.03.2004 AND 31.03.2005. ALTHOUGH THE ASSESSEE H AS SUBMITTED COPY OF THE LOAN ACCOUNT OF 2 SMT. GEETIKA AGARWAL COPY OF ACKNOWLEDGEMENT OF RE TURN OF INCOME FOR THE A.Y. 2005-06 WITH COMPUTATION STATEMENT COPY OF CAPITAL ACCOUNT BAL ANCE SHEET FOR THE YEAR ENDED 31.03.2004 AND 31.03.2005 COPY OF THE DETAILS OF THE BANK ACC OUNT FOR THE YEAR ENDED 31.03.2005 BUT THE A.O. DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE TO BE SATISFACTORY IN RESPECT OF THE CASH CREDIT FOUND FOR A SUM OF RS.1 00 000/- AND ADDED IT UNDER SECTION 68 OF THE ACT AS THE A.O. NOTED THAT SMT. GEETIKA AGARWAL HAS ISSUED A CHEQUE BEARING NO .118961 DATED 30.10.2004 IN FAVOUR OF THE ASSESSEE WHEN THERE WAS A BALANCE OF RS.23 559/- IN THE BANK ACCOUNT OF SMT. GEETIKA AGARWAL. IT WAS NOTED THAT SMT. GEETIKA AGARWAL HAS DEPOSITE D RS.1 00 000/- IN CASH IN HER BANK ACCOUNT ON 29.10.2004. IT WAS ALSO NOTICED THAT THE ASSESS EE COULD NOT EXPLAIN THE SOURCE OF THE CASH DEPOSIT MADE BY SMT . GEETIKA AGARWAL AND ACCORDING LY THE A.O. WAS OF THE VIEW THAT THE TRANSACTION WAS NOT GENUINE. SINCE THE ASSESSEE HA S SHOWN THE INTEREST @ 10% ACCORDINGLY THE INTEREST AMOUNTING TO RS.10 000/- ON RS.1 00 000/- WAS ALSO DISALLOWED UNDER SECTION 36(1)(III) OF THE ACT. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE A.O. AND TOOK THE VIEW THAT THE ASSESSEE FAILED TO DISCHARGE HER BURDEN AS LAID DOWN UNDER SECTION 68 OF THE ACT. 3. LD A.R. BEFORE ME VEHEMENTLY CONTENDED BY REFERR ING TO PAGE NOS. 16 17 18 19 & 22 OF THE PAPER BOOK THAT SMT. GEETIKA AGAWAL WAS HAVING AN OPENING BALANCE OF RS.6 60 892/- WITH THE ASSESSEE. SHE HAS DEPOSITED A SUM OF RS.1 00 0 00/- VIDE CHEQUE NO.118961 WITH THE ASSESSEE. SHE IS AN INCOME-TAX ASSESSEE. SHE SUBMITTED THE R ETURN OF INCOME FOR THE A.Y. 2005-06 SHOWING THE INTEREST INCOME FROM THE ASSESSEE. THE ASSESSEE FILED THE BALANCE SHEET OF SMT. GEETIKA AGARWAL AS ON 31.03.2005 AND 31.03.2004 ALO NGWITH COPY OF THE RETURN. SMT GEETIKA AGARWAL WAS HAVING A CASH IN HAND OF RS.97 588/- AS ON 31.03.2004 AND THEREFORE THE CASH WHICH WAS DEPOSITED BY HER ON 29.10.2004 HAS COME O UT OF A SUM OF RS.97 588/-. ON QUERY 3 FROM THE BENCH THAT ANY CASH STATEMENT HAS BEEN FIE LD BEFORE THE AUTHORITIES BELOW THE LD. A.R. WAS FAIR ENOUGH TO STATE THAT NO CASH STATEMENT WAS SO PREPARED AND FILED BUT VEHEMENTLY STRESSED THAT CASH IN HAND AS ON 01.04.2004 AMOUNTING TO RS. 97 588/- WAS SUFFICIENT FOR MAKING DEPOSIT OF RS.1 00 000/- IN HER BANK ACCOUNT. COPY OF THE BANK ACCOUNT IS AVAILABLE AT PAGE 20 OF THE PAPER BOOK. IT WAS CONTENDED THAT THE IDENTITY OF SMT. GEETIKA AGARWAL HER CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION IS PROVED. IF THE A.O. WAS NOT SATISFIED HE SHOULD HAVE ASKED SMT. GEETIKA AGARWAL AND IF ANY ADDITION WAS TO BE MADE THAT SHOULD HAVE BEEN MADE IN HER HAND. EXPLANATION OF THE ASSESSEE WAS GENUINE ONE. RELIANCE WAS PLACED ON THE DECISION OF ROHINI BUILDERS VS. DCIT 117 TAXMAN 25 (ITAT AHMED ABAD BENCH B) M/S. SUBHASH DAL MILL VS. ACIT 257 ITR 115 (ITAT AGRA BENCH) AND T HE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF ACIT VS. HANUMAN AGARWAL 151 ITR 15 0. 4. LD. D.R. ON THE OTHER HAND CONTENDED THAT NO D OUBT SMT. GEETIKA AGARWAL WAS HAVING CASH IN HAND AT RS.97 588/- AS ON 31.03.2004 . FROM THE COPY OF ACCOUNTS IT IS CLEAR THAT SHE MADE A WITHDRAWAL OF RS.32 141/-. O UT OF THE WITHDRAWAL SHE INVESTED RS.24 520/- IN LIC AND RS.8 458/- TOWARDS THE INCOM E TAX PAYMENT BY WAY OF TDS. THUS PRACTICALLY THERE WAS NO WITHDRAWAL OF SMT. G EETHIKA AGARWAL. THE ONUS IS ON THE ASSESSEE UNDER SECTION 68 OF THE ACT TO PROVE T HE CASH CREDIT TO THE SATISFACTION OF THE A.O. SMT. GEETIKA AGARWAL HAS DEPOSITED A SUM OF RS.1 00 000/- IN CASH ON 29.10.2004 WHILE A CHEQUE OF RS.1 00 000/- WAS GIVE N TO M/S. KIRAN & CO. ON 30.10.2004. THEREFORE THE ADDITION MUST BE SUSTAI NED. REFERRING TO THE DECISION AS RELIED ON BY THE LD. A.R. IT WAS POINTED OUT THAT THOSE DECISIONS ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 4 5. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. I NOTED THAT THE ASSESSEE WAS H AVING CASH IN HAND AS ON 31.3.2004 AMOUNTING TO RS.97588/-. THERE IS NO EVIDENCE ON R ECORD WHICH MAY PROVE THAT THE ASSESSEE HAS EITHER INVESTED OR SPENT THIS MONEY PR IOR TO DEPOSIT IN THE BANK ACCOUNT. EVEN IF WE ESTIMATE THE DRAWING MADE BY THE ASSESSE E FOR 7 MONTHS I.E. UPTO OCTOBER AMOUNTING TO RS.12588/- THE ASSESSEE MUST BE HAVI NG SOME CASH IN HAND WHICH CANNOT BE IGNORED. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES I ESTIMATE THAT THE ASSESSEE SHOULD GET THE CREDIT FO R RS.85000/- EIGHTY FIVE THOUSANDS ONLY OUT OF THE SUM OF RS.100000/- AND TO THAT EXTE NT IN MY OPINION THE SOURCE OF THE DEPOSIT IS DULY EXPLAINED. I ACCORDINGLY SUSTAIN THE ADDITION TO RS.15000/- AND DELETE THE ADDITION OF RS.85000/- THE ADDITION MADE TOWAR DS THE INTEREST IS ALSO REDUCED TO RS.1500/- 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2010) . SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 5 TH FEBRUARY 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL AGRA TRUE COPY