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TMI Blog2021 (11) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... DR) For the Respondents : Tej Mohan Singh, Advocate ORDER Per R. L. Negi, Judicial Member The Revenue has filed the present appeal against the order dated 05.03.2019 passed by Commissioner of Income Tax (Appeals), Patiala [for short 'the CIT(A)'], whereby the Ld. CIT(A) has allowed the appeal filed by the assessee against the order passed by the AO 143(3) of the Income Tax Act, 1961 [for short 'the Act'] for the assessment year 2015-16. 2. Brief facts of the case are that the assessee an individual filed his return of income for the assessment year under consideration declaring total income of ₹ 5,04,990/-. The case was selected for scrutiny and the AO passed assessment order u/s. 143(3) of the Act and determined the total income of the assessee at ₹ 2,85,50,990/- after making addition of ₹ 2,80,46,000/- u/s 69 of the Act. The assessee challenged the assessment order before the Ld. CIT(A). The Ld. CIT(A) after hearing the assessee allowed the appeal and deleted the addition made by the AO. The revenue is in appeal against the said findings of the Ld. CIT(A). 3. The revenue has challenged the impugned order passed by the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. Since the AO had made addition in question ignoring the documentary evidence adduced by the assessee, the Ld. CIT(A) has rightly deleted the same. The Ld. counsel accordingly submitted that since the decision of the Ld. CIT(A) is based on the evidence on record and as per the settled principles of law, there is no merit in the appeal of the revenue. 6. We have heard the rival submissions of the parties and carefully perused the material on record. The only grievance of the revenue is that the Ld. CIT(A) has wrongly deleted the addition made by the AO u/s. 69 of the Act. The Ld. CIT(A) has deleted the addition in question holding as under:- That the appellant purchased property through registered deeds executed on 12.08.2014 05.11.2014 for a total consideration of 2,75,00,000 (₹ 2,53,00,000/- + ₹ 19,25,000/-, TCS ₹ 2,75,000/-) and paid stamp duty of ₹ 13,75,000/- thereon is a matter of record and not in dispute. The appellant has attempted to demonstrate in his submission that all payments are either in cheque/Demand draft drawn from the appellant's bank account and the ones in cash are backed by cash withdrawal from the same Bank acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and held that the same has been done due to the close relationship of the rest of the partners with the appellant. The Ld. AO has not taken into account the availability of funds with the firm in the form of 'bank deposits and cash in hand' I have carefully considered the appellant's submissions and the Ld. AO's findings with regards to this loan shown from Mittal traders. It is my considered view that the appellant has duly discharged the burden of proof with regards to the identity and creditworthiness of the firm as also the transaction qua the appellant. That the appellant may be subject to disallowance u/s. 36(i)(iii) or that the appellant firm has diverted business funds to a partner is a subject to be examined in the assessment of the firm and the Ld. AO was free to refer the matter to the concerned Assessing Officer. b. Withdrawals of ₹ 10,00,000/- made from joint bank account of the appellant with Smt. Kusum Lata. That the appellant was co-owner of immoveable property at Park, Sangrur, with Smt. Kusum Lata and had been receiving rent from this property along with his aunt Kusum Lata is matter of record. That the appellant and Kusum L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year is no criteria for judging the accounted funds at hand of a person and his/her capacity to pay. I have not considered the bank account of Rajinder Pal Mittal submitted as additional evidence; regardless therefore it is my considered view that the appellant has discharged the burden of explaining the identity, creditworthiness of Rajinder Pal Mittal and also the genuineness of the transaction qua the appellant. e. Amounts totaling ₹ 25,00,000/- received from Shri Surinder Pal Mittal appellant's father: That Shri Surinder Pal Mittal, the appellant's father is regular Assessee assessed with ITO, Ward-Sangrur with annual rental income of ₹ 25,88,628/- and also deriving income from share in partnership firm and interest incomes is a matter of record and not in dispute. That the appellant has received the loan amount through bank transfer in two tranches of ₹ 13,00,000/- and ₹ 12,00,000/- is also matter of record and not in dispute. The Ld. AO has doubted the loan on the basis that the appellant has paid no interest on the loan from his father and that the father's returned income is on the lower side. It is my considered view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors. g. Loan from M/s. Garg Chemicals, Sunami Gate, Sangrur for 10 days The appellant has shown a loan form M/s. Garg Chemicals, Sunami Gate for a period of 10 days received on 12.08.2014 through RTGS from the bank account of Garg Chemicals and repaid 10 days later on 22.08.2014 after receiving additional loans from J.R Chemicals as discusses supra. That Garg Chemicals is an existing income tax Assessee, regularly filing its return of income is a matter of record and not in dispute. That the loan payment and repayment is through banking channels is a matter of record and not in dispute. That the appellant has filed copy of the ledger account of the appellant in the books of Garg Chemicals is a matter of record and not in dispute. The Ld. AO has not accepted the genuineness of the loan on the grounds that during the assessment proceedings the appellant did not remember the name of the creditor while a statement was recorded. In addition, the Ld. AO has commented on the fact that the appellant has not paid any interest on the loan and not given the details of returned income of Garg Chemicals. The Ld. AO has brought nothing on record to establish that the bank transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account 2 lakh The payment for the property in question was made between 02.06.2014 to 05.11.2014 and the two initial loans the appellant claims have purportedly been taken in two tranches of loans of ₹ 10,00,000 and ₹ 43,00,000/- s from JR Printing Press ostensibly to pay back Garg Chemicals and to pay back part of the loan taken form the agricultural limit account of the appellant and his relatives discussed supra. The Ld. AO has not discussed the later loans and their genuineness or otherwise in the assessment order. That the creditor JR Printing Press is a partnership firm regularly filing a return of income is a matter of record and not in dispute. That the appellant filed the copy of account of the account of the appellant in the books of JR Printing Press, copy of the bank account, returns of income P L Account balance sheet and computation of income of of the JR Printing Press before the Ld. AO is a matter of record and not in dispute. That the appellant was a creditor of the firm JR Printing Press at the beginning of the previous year relevant to the AY of the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e documentary evidence to establish that he received ₹ 1,57,00,000/- from M/s. Mittal Traders wherein the assessee was a partner. He has placed on record the documentary evidence to prove withdrawal of ₹ 10,00,000/- from his joint account with Smt. Kusum lata, withdrawal of ₹ 60,00,000/- from joint Kissan Gold card bank account with S/Shri Rajinder Pal Mittal and Puneet Mittal. He has also placed on record the documentary evidence to establish that he had obtained loan amounting to 3,00,000/- from Sh. Rajinder Pal Mittal, loan amounting to ₹ 21,00,000/- from Smt. Praveen Mittal and Smt. Kiran Bala, loan amounting to ₹ 25,00,000/- from Sh. Surinder pal Mittal (father of the assessee), loan amounting to ₹ 10,00,000/- from M/s. Garg Chemicals and loan amounting to ₹ 2,00,000/- from M/s. JR Printing Press. During the appellate proceedings, no infirmity was noticed by the Ld. CIT(A) in the said transactions. The AO has also not doubted the identity of the persons or entities from whom the assessee raised loans in question. The Ld. CIT(A) further noticed that all the transactions had been made through banking channels. Under these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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