Society For Institute For Professional Studies Vs JCIT (ITAT Delhi)
It is well settled Law that assessee need not to prove source of the source. We rely upon the Judgment of the Hon’ble Delhi High Court in the case of Dwarkadhish Investment P. Ltd., [2011] 330 ITR 298 (Del.) (HC), Judgment of Hon’ble Gujarat High Court in the case of Rohini Builders 256 ITR 360 (Guj) and Judgment of Hon’ble Allahabad High Court in the case of Zafar Ahmed & Co. 30 taxman.com 269 (All.).
The A.O. entirely on different reasons that there is a common Director in 03 companies and common address disbelieved the explanation of assessee. It may not be relevant criteria to decide the issue under section 68 of the I.T. Act, 1961. While considering the issue under section 68 of the I.T. Act, 1961, the A.O. shall have to consider the identity of the creditors, their creditworthiness and genuineness of the transaction in the matter. Since all the creditors are assessed to tax, therefore, their identity cannot be disputed by the A.O. All the loans are given through banking channel and the creditors have sufficient bank balance in their bank accounts and net worth as per their balance-sheets. Therefore, creditworthiness of the creditors is also not in doubt. Therefore, assessee has been able to prove the genuineness of the transaction in the matter because the amounts in question have been returned subsequently which were subjected to interest and TDS payment on such loans. The assessee has been able to discharge onus under section 68 of the I.T. Act, 1961. However, the A.O. has not brought any evidence against the assessee on record to disbelieve the documentary evidences. Whatever enquiry was conducted through Income Tax Inspector does not appear to have been confronted to the assessee or explanation of assessee have been called for. Therefore, such material cannot be used in evidence against the assessee. We rely upon Judgment of the Hon’ble Supreme Court in the case of Kishanchand Chellaram vs., CIT 125 ITR 713 (SC). Considering the totality of the facts and circumstances above, we do not find any justification to sustain the addition. In view of the above findings, we set aside the Orders of the authorities below and delete the entire addition. In view of the above, the other contentions raised by the Learned Counsel for the Assessee are left with academic discussion only and we do not propose to decide the same. Accordingly, appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by Assessee has been directed against the Order of the Ld. CIT(A), Muzaffarnagar, Dated 28.03.2017, for the A.Y. 2010-2011, on the following grounds :
1. That learned CIT(A) grossly erred in sustaining addition of Rs. 95 lakhs , being loans from three parties supported with ITR, confirmation, B/s proving huge funds/disclosing loans and bank a/c of said parties etc. and even after verifying that repayment of loans and/or interest payment is accepted by revenue is subsequent years, which is against the ratio of decision of Hon’ble jurisdictional High Court/other Courts etc. some of which are mentioned on page 34 of order.
2. That in addition to above, ld. CIT(A) failed to appreciate that the alleged enquiries about the address of director etc. are wholly irrelevant beside said unconfronted enquiries were taken up half decade before without any opportunity to cross etc. and there is no material against the mass evidences/ material placed on record and Id. AO failed to discharge the shifted onus lay upon him.
3. That learned CIT(A) grossly erred in sustaining addition of Rs.16.28 lakhs , being loans from four parties supported with ITR, confirmation, B/s and bank a/c of said parties and even after verifying repayment of loan in case of one party while other parties confirmed the loans in response to direct enquiries conducted by AO and all the parties are assessed at Ghaziabad itself.
4. That learned CIT(A) has recorded wrong findings in sustaining the additions that assesse has failed to discharge the shifted onus lay upon, identities/ creditworthiness etc. of parties not proved (para 15), verification latter remained uncomplied (Page41) identity in dispute (Page 42) etc. by wrongly applying the ration of the cases of Sumati Dayal/Nova promoters etc.
5. That without prejudice to above and without any dilution in above grounds but in alternative, learned CIT(A) failed to follow the ratio of jurisdictional/other courts holding that provisions of s. 68 has no applicability where deemed income u/s 68 is applied for charitable purposes .
6. That in addition to above, learned CIT(A) failed to appreciate that loans were taken within 2-3 months of constituting the society, hence neither there was any possibility to have earned so much of income nor assessee u/s 12A had any advantage to reflect income as loans and failed to follow the ration of jurisdictional/other courts on the issue.”
2. We have heard the Learned Representative of both the parties and perused the material available on record.
3. Briefly the facts of the case are that assessee society is registered with the Registrar of Society, Uttar Pradesh vide letter Dated 09.07.2009. The society has been granted Registration under section 12AA of I.T. Act, 1961 by the Ld. Commissioner of Income Tax, Ghaziabad vide order Dated 02.07.2012. The assessee society has also been granted exemption under section 80G of I.T. Act, 1961 by the Ld. Commissioner of Income Tax, Ghaziabad vide order Dated 02.07.2012 for the period from 18.01.2011. The assessee filed return of income declaring NIL income. The case was selected for scrutiny assessment and requisite details were called for. The assessee produced books of account and other details which have been test-checked by the A.O. During the assessment year under appeal, assessee society has received an amount of Rs.1,25,78,000/- on account of unsecured loans from the following parties.
