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TMI Blog2018 (10) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... ies below and directed the Assessing Officer to adopt the annual rental value of the properties with certain directions. We, therefore, restore this issue to the file of the Assessing Officer with direction to adjudicate the issue afresh in the light of the decision of the Tribunal in the case of the husband of the assessee. The second issue raised by the assessee in the grounds of appeal is accordingly allowed for statistical purposes. - ITA No.1322/Del/2015 - - - Dated:- 12-10-2018 - Sh. R.K. Panda, Accountant Member And Sh. Sudhanshu Srivastava, Judicial Member For the Appellant : Sh. Ved Jain, Advocate, Sh. Kislaya, Parashar, Advocate For the Respondent : Sh. N. K Bansal, Sr. DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 15.12.2014 of the CIT(A)-27, New Delhi relating to A. Y. 2010-11. 2. The first issue raised by the assessee in the grounds of appeal relates to the orders of the CIT(A) in confirming addition of an amount of ₹ 1,53,62,570/- made by the Assessing Officer on account of unexplained loan. 3. Facts of the case, in brief are that the assessee is an individual and derives inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r also mentioned in the assessment order the names of those proprietary concerns which are owned and fully controlled by Sh. Aseem Kumar Gupta, in which cash received from the beneficiaries was being deposited and also the names of some of the private limited companies which were also owned and fully controlled by Sh. Aseem Kumar Gupta for using as intermediaries for layering cash and cheques issued to various beneficiaries. In his statement dated 2311.2011 recorded u/s 131 of the I T Act, 1961 Sh. Aseem Kumar Gupta admitted to have used the bank accounts of all the entities as mentioned in the assessment order including that of Ganpati Fincap Services Pvt. Ltd. 5. The Assessing Officer observed that plenty of material was seized from the office premises of Sh. Aseem Kumar Gupta at 2-D, Gulabi Bagh, which established that several companies and proprietorship concerns owned by Sh. Aseem Kumar Gupta or controlled by him were being managed and operated from there for providing accommodation entries. The Assessing Officer enumerated such seized material in the assessment order as under: Cash deposits slips: Some cash deposit slips annexurized as Annexure A-7 have been seized fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. etc. 6. On the basis of the statements recorded of Sh. Aseem Kumar Gupta, material seized during the search and survey operation, fund flow chart etc. the Assessing Officer observed that undoubtedly and evidently it was established that Sh. Aseem Kumar Gupta was running the business of providing of accommodation entries with the help of entities owned by him or used and fully controlled by him and M/s Ganpati Fincap Services Ltd. was one of such intermediary company used by Sh. Aseem Kumar Gupta for the purposes of providing accommodation entries. 7. The Assessing Officer also observed that Sh. Aseem Kumar Gupta provided a list of beneficiaries in which the name of the assessee, her husband and their HUF was clearly mentioned as beneficiary alongwith amounts of benefit derived. The Assessing Officer observed that in list of beneficiaries the name of M/s Ganpati Fincap Services Pvt. Ltd. was mentioned against the name of the assessee as an intermediary company used for providing accommodation entry to the assessee. The Assessing Officer observed that in the said list of beneficiaries even the cheque numbers, dates and bank accounts used for providing accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order, was provided to the assessee and she was asked to explain the genuineness of the alleged loan taken from M/s Ganpati Fincap Services Pvt. Ltd. The Assessing Officer observed that the assessee failed to furnish any plausible explanation in this regard. 11. On the basis of the statement of Sh. Aseem Kumar Gupta, material seized during the search and survey operations, list of beneficiaries provided by Sh. Aseem Kumar Gupta, the statement of the husband of the assessee and the fund flow chart incorporated in the assessment order, the Assessing Officer observed that undoubtedly and evidently it was the unaccounted cash of the assessee which was deposited in the bank accounts of bogus proprietary concerns that was routed back to the assessee through cheque disguised as loan from M/s Ganpati Fincap Services Pvt. Ltd. after layering it in to several intermediary companies. He accordingly made addition of ₹ 15362570/- to the total income of the assessee on account of unexplained loan. 12. Before CIT(A) the assessee made elaborate submissions and filed additional evidence u/s Rule 46A. The Ld. CIT (A) called for a remand report from the Assessing Officer. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.2 The material seized from the office premises of Sh. Aseem Kumar Gupta, in the form of cash deposit slips, signed cheque books, documents containing details of accommodation entries, letter heads, letter pads of M/s Ganpati Pineap Services Pvt. Ltd., and other material on record was sufficient enough to establish that Sh. Aseem Kumar Gupta was running the business of providing accommodation entries with the help of entities owned by him and controlled by him and M/s Ganpati Fincap Services Pvt. Ltd. was one of such intermediary companies used for the purpose of providing accommodation entries. Merely because the intermediary companies were registered with the ROC, were filing returns of income, having PANs, maintaining bank accounts etc. did not establish their identity as these companies might have been existing on papers or in real sense not at all in existence. The appellant's duty to establish the source of funds does not cease by merely furnishing these documents. The concept of shifting onus does not mean that once certain documents / details are provided, the appellant s duties are over. If on verification, the credibility of the evidence filed is found to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant which was liable to be taxed in the year under consideration and rightly added the same to the income of the appellant for the assessment year under consideration by invoking the provisions of section 68 of the IT Act, 1961. Accordingly, the addition of ₹ 1,53,62,570/- made by the Assessing Officer is confirmed. 13. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 14. The Ld. Counsel for the assessee, at the outset filed, a copy of the order of the Tribunal in the case of the husband of the assessee Sh. Raj Kumar Chawla vide ITA No.1323/Del/2015 order dated 26.09.2018 for A. Y. 2010-11. Referring to the said order he submitted that in the husband s case also an amount of ₹ 2,29,73,630/- was added by the Assessing Officer on account of loan received from M/s. Ganpati Fincap Private Limited and interest of ₹ 8,98,630/- paid to the said party. The CIT(A) had confirmed the addition made by the Assessing Officer and the Tribunal after considering the various decisions and facts of the case had deleted the addition. Therefore, this being a covered matter in favour of the assessee by the decision of Tribunal, the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year under appeal as well as in the preceding AY 2009-10. It would, therefore, prove that there is no new fund received by the investor company so as to prove that it has received any unaccounted cash amount from any third person. The loan amounts have been received through banking channel, which is supported by the bank statement of the investor. Therefore, allegation of the AO that amount have been received as accommodation entry on rooting the cash is improper and such finding have not been corroborated by any material or evidence on record. The findings of the AO are unjustified that cash have been routed in this case for giving loan because in the course of the search, no material was found that any cash has been paid by the assessee. The statements of various persons were recorded during the course of search as well as post search proceedings and in none of the statements, anybody has made allegation against assessee of providing cash. The assessee specifically submitted before Ld. CIT(A) that all the statements of Sh. Aseem Kumar Gupta along with various documents seized at his premises have been obtained at the back of the assessee and have never been provided to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee gave any cash to the investor company for giving loan. The assessee proved that investor had sold investment during the year and has given advance to the assessee. The onus upon assessee to prove identity of the investor, its creditworthiness and genuineness of the transaction have been duly discharged. It is well settled law that assessee is not required to prove sources of the source. We, rely upon the decision of the Hon ble Delhi High Court in the case of Dwarkadhish Investment P. Ltd. 330 ITR 298 and decision of the Gujarat High Court in the case of Rohini Builders Ltd. 256 ITR 360. It may be noted here that it is a case of interest bearing loan taken by the assessee and there is nothing illogical and there is no material found during the course of search or any adverse statement against the assessee about the loan as explained above. Ld. Counsel for the assessee referred to the assessment order u/s 143(3) of the Act dated 27.12.2011 in the case of Sh. Manoj Kumar proprietor of AMB Traders and Shiva Trading Company, copy of which is filed at page 28 of another paper book. Ld. Counsel for the assessee rightly pointed out that this addition cannot be made on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon ble High Court. v. Decision of jurisdictional High Court in the case of CIT vs. Laxman Industrial Resources Pvt. Ltd., ITA.No. 169 of 2017 dated 14th March, 2017, in which it was held as under : The CIT(A) took note of the material filed by the assessee and provided opportunity to the AO in Remand proceedings. The AO merely objected to the material furnished but did not undertake any verification. The CIT(A) deleted the addition by relying upon the decision of the Hon ble Apex Court in the case of Lovely Exports Pvt. Ltd. (supra) and judgement of Delhi High Court in the case of CIT vs Divine Leasing Finance Ltd. [2008] 299ITR 268. The ITAT confirmed the opinion of the Ld.CIT(A). Hon ble High Court in view of the above findings noted that the assessee had provided several documents that could have showed light into whether truly the transactions were genuine. The assessee provided details of share applicants i.e. copy of the PAN, Assessment particulars, mode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke section 68. One must not lose sight of the fact that it is the Revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the source of source . The assessee-company was engaged in the business of financing and trading of shares. For the assessment year 2001-02 on scrutiny of accounts, the Assessing Officer found an addition of ₹ 71,75,000 in the share capital of the assessee. The Assessing Officer sought an explanation of the assessee about this addition in the share capital. The assessee offered a detailed explanation. However, according to the Assessing Officer, the assessee failed to explain the addition of share application money from five of its subscribers. Accordingly, the Assessing Officer made an addition of ₹ 35,50,000/- with the aid of section 68 of the Act, 1961 on account of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry on the documents filed by the assessee. The AO has thus, failed to conduct scrutiny of the documents at assessment stage and merely suspected the transaction between the investor company and the assessee because some materials found during the course of search in the case of Sh. Aseem Kumar Gupta or his statement recorded, but these would not prove anything against the assesse. It is not reported, if any, cash was found deposited in the account of the investor before making investment in assessee company. Therefore, the totality of the facts and circumstances of the case, clearly prove that assessee discharged its initial onus to prove the identity of the investor company, its creditworthiness and genuineness of the transaction in the matter. We, accordingly, set aside the orders of the authorities below and delete the addition of ₹ 2,29,73,630/- on account of unexplained loan. Ground nos. 1 to 7 of the appeal of assessee are allowed. 17. Since the facts of the instant case are identical to the facts of the case decided by the Tribunal in the case of husband of the assessee Shri Raj Kumar Chawla, therefore, in absence of any contrary material brought to our notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ownership of the property coupled with r inherent capacity of being let out. The charge is levied on the owner of the house /property and it is immaterial whether the owner is in possession and enjoying the /property or had let it out on rent or given otherwise for the use to a third person. The charge is levied on the owner of the house property and it is immaterial whether the owner is in possession and enjoying the basis for assessing the tax under the head income from house property is the ownership of the property and not necessarily the actual realization of income. The property must be capable of being let out in order to be charged to tax under the provisions of section 22 of the IT Act, 1961. 19.1 In the instant case, the criteria for charging the annual letting value of the properties in question to tax was fulfilled. The appellant was the owner of the properties which had the inherent capacity of being let out. The basis for assessing the tax under the head income from house property is ownership of the property and not the actual realization of income. The property must be capable of being let out in order to be charged to tax under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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