Income tax Appeal No v. Income Tax Officer Hry Salary cum Coy Ward Chandigarh

Income tax Appellate - Tribunal , Chandigarh Bench Chandigarh , ( “ the Tribunal” ) passed

17.9.2001, Income tax Appeal No . - 1096/ CHD /1994 for the assessment year 1992-93: 1- Whether under the facts and circumstances of case ITAT was justified in law by upholding the squared up accounts of Deepak Chadha for a loan of Rs . 9,500/-, Pardeep Kumar Rs . 9,000/-, Som Nath Rs . 9,000/- and Darshan Singh Rs . 6,000/- as income from undisclosed sources of the appellant only on the basis that the appellant has not produced them before the ld Assessing . Authority . Income tax Appeal No - . 52 2002 3 2- That on the facts and circumstances of the case , whether ITAT was justified in law by interpreting the provisions of Section 68 the Income Tax - Act , 1961 in maintaining addition of Rs . 1,08,500/- on account of various unsecured loan as mentioned in the order against each person as assessee’s income from undisclosed sources ” . The assessee filed return for the assessment 1992-93 declaring an income of Rs . 18,850/-. The assessment after scrutiny under Section , , 143(3) the Act , was finally concluded at an income of Rs . 2,56,010/-, order dated

24.2.1994. The assessing officer amongst others , , made addition in declared income on account of squared up account of Deepak Chadha Pardeep Kumar Som Nath and , , Darshan Singh . Besides this , an addition on account of unexplained credit account unsecured loans amounting to Rs . 1,08,500/- was also made under Section 68 the Act . The assessee carried appeal before the Commissioner of Income tax Appeals ( - ) [( for short CIT A ” ( )] . “ The appeal was partly allowed The assessee still . took up Income tax Appeal No - . 52 2002 matter before the Tribunal The Tribunal as well . , 4 concurred with the findings of the authorities below and consequently dismissed the assessee’s appeal , - - in so far as the challenge on the above count is concerned vide order dated ,

17.9.2001. Regarding Question No . .1 The issue that arises for consideration in this Court is whether the squared up cash credits in the names of - , persons namely Deepak Chadha Pardeep Kumar Som Nath , , , , and Darshan Singh , amounting to Rs . 9,500/-, 9,000/-, 9,000/- 6,000/- respectively were to be treated as genuine and could not form part of the assessee’s income from undisclosed sources . The assessing officer , considering the genuineness of the above amounts observed , the assessee had not produced the said persons to genuineness unsecured loans and consequently added the aforesaid four amounts , . i e . amount of Rs . 33,500/- to the income of the assessee . The appellant assessee contended before the CIT A that no ( ) - sufficient opportunity was provided to it to produce aforesaid persons verification , , addition of Income tax Appeal No - . 52 2002 5 squared up - accounts unsecured treated as unexplained cash credits was not justified The CIT A while ( ), . upholding the finding of the assessing officer , recorded as : “2.4. I carefully examined the rival submissions After examination of . the assessment records maintained by the AO I , find that the facts stated by the appellant are not correct . In fact stated the AO in -2 of his assessment order are correct On .

23.12.1993, appellant had categorically stated before the AO as : Shri Deepak Chadha “ and Shri Pardeep Kumar are not traceable and therefore cannot be , , produced . As regards , Shri Jarnail Singh and Suman Jain seek time to produce ” . Again on

4.1.1994 Shri G C Jain . . , himself along with his counsel stated before the AO as under : “ following persons are not traceable and , therefore cannot be produced : , Income tax Appeal No - . 52 2002 6 -i Sh Som Nath . -ii Sh Darshan Singh” .

2.5 Therefore , the above said 4 creditors were never produced by the appellant and in fact categorically stated they were untraceable When . assessee’s own admission these creditors were untraceable it was , just possible to give their latest addresses and addresses were by the appellant the AO . Therefore , I have no hesitation in holding that the appellant had neither proved the identity the capacity creditors nor the factum of actual passing of cash was proved . The AO had correctly involved the provisions of section 68 and added this amount of Rs . 33,500/- to the income of the appellant This . addition is therefore upheld ” . , , The above finding was affirmed by the Tribunal in the appeal preferred by the assessee . Learned counsel the assessee has now sought to challenge the Income tax Appeal No - . 52 2002 7 said finding on the ground that the non production of - above four persons could not be a ground for treating the income to be from undisclosed sources of the assessee . In our view the contention does not carry any weight , . This is a finding of recorded by the authorities below that cash credits were not genuine and it was to be treated as income of the assessee from undisclosed sources . Once the assessee was unable to produce those persons from whom he had shown the above squared up cash credits , inference drawn by the authorities below cannot be said to be perverse . Regarding Question No .2. Now adverting to the second question whether the , assessing officer was right in treating the unsecured loan to various persons as unexplained cash credits under Section 68 the Act ? The Tribunal while upholding the finding of , CIT A in this regard recorded as under ( ) , :- I have gone through the submissions advanced on “ behalf of the assessee It . is strange that most of the creditors have given loans of Rs . 19,000/- Income tax Appeal No - . 52 2002 8 the assessee . This obviously has been done to hoodwink provisions section 269 SS of Income tax Act which prohibits - receipt of cash deposit of Rs . 20,000/- or more . The A O and . . appeal , the CIT A ( ) creditors had no capacity to advance loans to the assessee . This conclusion has been reached after examining source of income of the creditors and their family status In reaching the above conclusion . all relevant and material facts have been taken into account . I have nothing before me to take a view contrary to the one taken by the lower authorities . Therefore these cash credits cannot be treated as , provided in accordance with law The Revenue . authorities were justified in treating cash credits as assessee’s income from undisclosed sources . In the same way , they were fully justified in not accepting addition of Rs . 14,000/- to the capital account of the assessee as genuine . The amount was introduced from an undisclosed source and Income tax Appeal No - . 52 2002 9 was rightly added to the income of the assessee . Thus , additions referred to above were rightly , made by the A O and confirmed by the CIT A . . ( ). I agree with them and uphold their orders on these credits ” . The above again being a finding of against which no misreading could be shown no interference , is called for by this Court . Learned counsel for the appellant made an unsuccessful attempt to persuade this Court to re - appreciate the evidence and record a finding in favour of assessee We are not . inclined to accede to the submission made by the counsel Re appraisal of evidence without . - , reference to any material which had been misread does not , fall within the domain of Section 260- A of the Act . No substantial question of law arises in this appeal for consideration of this Court and the appeal , therefore , dismissed . ( AJAY KUMAR MITTAL ) JUDGE Income tax Appeal No - . 52 2002 GOEL ) 14, 2010 July rkmalik * * 10 ADARSH KUMAR ( JUDGE