Smt. Jagmohan Kaur Bajwa Vs ITO (ITAT Chandigarh)
In the instant case the entries relating to the advances received from Shri Hardev Singh and his son Shri Maninder Singh Sahi from Canada were recorded in the books of accounts and the assessee also explained that this amount was received as an advance for making the investment in the property by the said persons and the assessee was engaged in the property business. The A.O. therefore was not justified in invoking the provisions of Section 69A of the Act particularly when the entries were recorded in the books of accounts maintained by the assessee and the explanation relating to the purpose of receiving the advances was given, identity of the person from whom amount was received, was not in doubt, the entries were through banking channel and it is not the case of the A.O. that the assessee went to Canada then put his money in the account of the depositor i.e; Shri Hardev Singh and Shri Maninder Singh Sahi which was remitted back, therefore, the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified particularly when the credit of Rs. 19,00,000/- in the similar circumstances from Shri Hardev Singh had been accepted but the advance amounting to Rs. 99,84,046/- received from his son Shri Maninder Singh Sahi was doubted and added to the income of the assessee. In our opinion the A.O. was not justified in blowing hot and cold in the same wind pipe.
On a similar issue the ITAT Chandigarh Bench “B” Chandigarh in ITA No. 825/Chd/2007 for the A.Y. 2004-05 in the case of Shri Ashok Kumar Prop. M/s Shree Shankerjee Rice & Genl. Mills, Sangrur Vs. ACIT, Circle, Sangrur vide order dt. 18/11/2009 held as under:
19. The onus on the assessee in respect of any cash loan received during the year is to establish the identity, creditworthiness and genuineness of the transactions u/s 68 ofhte Act. The assessee before us has discharged his onus of complying with the three conditions in respect of loan received during the year. The identity of the person being father of the assessee stands established in view of the statement recorded during the course of assessment proceedings. The credit worthiness of the person is also established by the series of evidence filed, wherein in addition to the agriculture income earned by him, the father of assessee has shown the receipt of money by way of return of loans, which were advanced as per registered mortgage deed, placed before us in the paper book. Further, the said amount then being transferred to the bank account of the father of the assessee from where the cheques have been issued to the propriety concern of the assessee establishes the genuineness of transaction. In the totality of facts and circumstances of the case, the genuineness of transactions stands established. The maounts have been advanced through account payee cheques and we find no merit in the addition being made on this account. Their lordships of Hon’ble Supreme Court in CIT Vs. Chuni Lal [211 ITR (8T) 11] had held that cash credits received through bank account of wife, son and daughter in law could not be added unless it is proved that they were benamidars of the assessee. In the facts of present case, father of assessee has proved the availability of cash in hands. The requirement of law is not to prove the source of source of cash credit. Accordingly, we direct the Assessing officer to delete the addition of Rs. 35 lakhs credited to the books of the assessee, being on account of loan received from the father of the assessee. Thus the grounds No. 8 & 9 raised by the assessee are allowed.”
9.4 In the present case also the assessee furnished the details relating to the source of advance received by him, the amount in question was received from Shri Maninder Singh Sahi S/o Shri Hardev Singh of Canada which was received through banking channel, the assessee furnished all the details and informed the address of the person from whom the amount was received and also requested the A.O. to summon the person if there was any doubt. But the A.O. had not taken any step for issuance of the summon under section 131 of the Act, therefore the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This is an appeal by the Legal heir of the deceased assessee against the order dt. 26/04/2019 of Ld. CIT(A)-1, Chandigarh.
2. Following grounds have been raised in this appeal:
1. That the Commissioner of Income Tax(Appeals) erred on facts and in law in upholding the addition of Rs. 99,84,046/- u/s 69A of the Income Tax Act, 1961 in respect of the additions made in appellant’s capital account which already stood disclosed in the books of accounts.
2. That the Commissioner of Income Tax(Appeals) erred on facts and in law in treating the amounts received by the appellant from his maternal cousin (through his son’s account) for investing the same in purchase of an immovable property on his behalf as unsecured loan and thereby upholding the addition made by the Assessing Officer amounting to Rs. 99,84,046/- as unexplained investment.
3. The assessee craves leave to add/alter any of the ground of appeal on or before the date of hearing of appeal.
From the aforesaid grounds it is gathered that the only grievance of the assessee relates to the sustenance of addition of Rs. 99,84,046/- made by the A.O. under section 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’).
3. Facts of the case in brief are that the assessee electronically filed the return of income on 29/11/2014 declaring an income of Rs. 8,87,340/- which was processed under section 143(1) of the Act, later on the case was selected for scrutiny.
3.1 During the course of assessment proceedings the A.O. noticed that there was a substantial increase in the capital account of the assessee amounting to Rs. 1,19,44,047/-. The A.O. asked the assessee to furnish the source of increase in the capital account with supporting evidence. The assessee submitted that he had introduced capital from the funds received from Shri Hardev Singh Sahi in Indian rupees and Canadian Dollar and also furnished the copy of the ledger account. The assessee also furnished “advice of inward remittance” from Canada in Indian rupees issued from Axis Bank, Sector-16, Chandigarh and the relevant page of his HDFC Bank statement wherein Rs. 19,00,000/- was reflected as received from Shri Hardev Singh. According to the A.O. the aforesaid documents did not prove the identity, creditworthiness and genuineness of the transactions. He asked the assessee to furnish the bank statement of the persons from whom the assessee received money from Canada in Indian rupees and prove the identity and creditworthiness of the persons. The A.O. incorporated the copy of the ledger account of capital account furnished by the assessee in para 4 of the assessment order dt. 26/12/2016 which read as under:
Bajwa Construction Co. – 2013-14 Final
3027 Sector 19-D
Chandgiarh
JASKARNA SINGH BAJWA
Ledger Account
1-Apr-2013 to 31-Mar-2014
