The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘SMC’, adjudicated the appeal filed by Shamsher Singh, resident of Jind, Haryana, against the order passed by the Income Tax Officer (ITO), Ward-1, Jind. The appeal, registered as ITA No. 370/DEL/2021, pertains to the assessment year 2009-10.
Shamsher Singh filed the appeal on 31/03/2021, challenging the assessment order issued by the ITO, which added Rs. 9,00,000 as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The final order was pronounced on 30/06/2022.
The assessee, Shamsher Singh, is a resident individual. For the assessment year 2009-10, the original assessment was completed under Section 143(3) of the Act on 18/10/2011, accepting the income declared by the assessee. However, the assessment was subjected to proceedings under Section 263, where the revisionary authority held that the Assessing Officer did not properly examine the agricultural income and an unsecured loan of Rs. 9,00,000. Consequently, the assessment order was set aside with directions for a de novo assessment.
During the reassessment, the Assessing Officer made several additions, including the disputed Rs. 9,00,000 as unexplained cash credit under Section 68. The assessee contested this addition before the Commissioner of Income Tax (Appeals), but the appeal was dismissed.
Before the Tribunal, the learned counsel for the assessee argued that the Rs. 9,00,000 was a loan taken from Azad Singh, the assessee’s uncle. The counsel emphasized that the loan was genuine, and the lender had sufficient creditworthiness, evidenced by his substantial agricultural land and income. The counsel also highlighted procedural lapses, claiming that the Commissioner (Appeals) confirmed the addition without further inquiry or giving the assessee an opportunity to prove the genuineness of the loan.
The Departmental Representative supported the findings of the lower authorities but did not object to remanding the matter back to the Assessing Officer for further verification.
The Tribunal noted that during the proceedings under Section 263, the lender had admitted to advancing the loan. However, doubts were raised due to the lender’s ignorance about the bank transactions. The Tribunal acknowledged the assessee’s efforts to establish the identity of the lender but noted the need for further evidence to prove creditworthiness.
The Tribunal admitted additional documentary evidence presented by the assessee, including Jamabandi Nakal (land records), to demonstrate the lender’s landholding and agricultural income. Considering the importance of these documents, the Tribunal deemed it necessary to admit them and provide the Assessing Officer an opportunity to verify their authenticity.
In light of the new evidence and the need for thorough verification, the Tribunal set aside the addition of Rs. 9,00,000 and remanded the issue back to the Assessing Officer for fresh adjudication. The Assessing Officer was directed to examine all evidence, including the additional documents, and make a decision after providing a reasonable opportunity for the assessee to be heard.
The appeal was allowed for statistical purposes, with directions for a fresh assessment.
Order pronounced in the open court on 30th June, 2022.
Signed by:
(SAKTIJIT DEY) – Judicial Member
Date: 30th June, 2022
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
ITA No. 370/DEL/2021 – Shamsher Singh vs ITO Ward-1 – Cash Credit Appeal for AY 2009-10
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