Itta/110/2003 Of Vijayalakshmi Dhir v. The Asst.commissioner Of Income Tax

HON’BLE SRI JUSTICE L. NARASIMHA REDDYAND HON’BLE SRI JUSTICE CHALLA KODANDA RAMI.T.T.A. No.110 OF 2003 JUDGMENT:- (per Hon’ble Sri Justice Challa Kodanda Ram) This appeal is filed raising the following question of law saidto be arising from the orders of the Income Tax Appellate Tribunal,Hyderabad Bench “B” (for short “the Tribunal”) in I.T. (S.S.)A.No.54/Hyd/2002, dated 16.09.2002, for the Block Period 1987-88to 1997-98 at the instance of the assessee. 1)Whether on the facts and circumstances of the case, theHon’ble Income Tax Appellate Tribunal is justified in holdingthat the loans advanced by Smt. Geeta Devi Bhutada, SriNathmal Bhutra and Sangeeta Devi Bhutra only should beaccepted as genuine and the creditworthiness of the other fivecreditors was not established?” 2)The brief facts as found by the Tribunal are as under: A search under Section 132 of the Income Tax Act (in short“the Act”) was conducted on 18.03.1997 in the case of M/s TinaElectronics Ltd. The assessee is the wife of the ManagingDirector and in response to notice issued under Section 158BD ofthe Act, the assessee filed return of income on 22.12.1997declaring a total undisclosed income of Rs.25,68,500/- forpurchase of shares in M/s. Tina Electronics Ltd. The sources ofinvestment was explained by the assessee were NRI gifts to atune of Rs.25,68,000/-, loans of Rs.8,20,000/- from variouspersons and Rs,2,60,000/- from her husband. So far as NRI giftsare concerned the same came to be admitted as undisclosedincome in the return. So far as Rs.8,20,000/- is concerned the assessee’s claim as loans from various persons consists of familymembers of one Sri Damodarlal Bhutra was disbelieved by theAssessing Officer and the said amount was added in the processof assessment. In the further appeal questioning the aboveaddition, the assessee filed appeal before the appellate Tribunaland the appellate Tribunal vide its orders dated 16.09.2002 hadaccepted the claim of the appellants with regard to the loantransactions to an extent of Rs.2,95,000/- from Geeta DeviBhutada, Mathmal Bhutra and Smt.Sangeeta Devi Bhutra. Withrespect to the other loanees, the Tribunal did not find any materialto support the claim of the assessee. Aggrieved by the same, theassessee filed the present appeal. 3)In the above set of facts, the question of law said to bearising from the orders of the Tribunal at the instance of theassessee is required to be considered. 4)Sri A.V.Krishna Kaundinya, learned senior counselappearing on behalf of the appellant submits that the Tribunal haserred in appreciating the facts on record and contends that exceptDamodarlal Bhutra none of the other loanees were examined andin the circumstances the confirmation letters of creditors, theAssessing Officer ought not to have disbelieved the same,particularly considering the fact the loan amounts were receivedthrough bank cheques. 5)On the other hand learned standing counsel for thedepartment supported the order of the Tribunal with a submissionthat the finding recorded by the Tribunal is after scrutinizing thematerial on record and this order of the Tribunal does not warrantany interference. 4)Sri A.V.Krishna Kaundinya, learned senior counselappearing on behalf of the appellant submits that the Tribunal haserred in appreciating the facts on record and contends that exceptDamodarlal Bhutra none of the other loanees were examined andin the circumstances the confirmation letters of creditors, theAssessing Officer ought not to have disbelieved the same,particularly considering the fact the loan amounts were receivedthrough bank cheques. 5)On the other hand learned standing counsel for thedepartment supported the order of the Tribunal with a submissionthat the finding recorded by the Tribunal is after scrutinizing thematerial on record and this order of the Tribunal does not warrantany interference. 6)We have considered the rival submissions. A closescrutiny of the facts on record reveal that when a notice wasissued to Sri Damodarlal Bhutra, he could not explain how a sumof Rs.8,20,000/- could be lent to the assessee with his meagerincome. Sri Damodarlal Bhutra found to have meager sources ofincome earned from writing of accounting books of variousparties. His sons also deriving income from writing of books ofaccounts. His family consists of 13 members comprising of twosons and their wives and seven children. He had admitted that noreturns were being filed on behalf of other members of the familyshowing any interest income. The verification of bank passbooksrevealed that they all having minimum balance in their accountsand the transactions were also very few. Further, the AssessingOfficer found that the amounts were deposited by way of cash oneor two days prior to clearing of cheques issued towards loan to theassessee-appellant. Based on appreciation of these factsAssessing Officer made addition. However, after a deep scrutinyof the material before the Tribunal, the Tribunal found, as a matterof fact, Geeta Devi Bhutada, Nathmal Bhutra and Sangeeta DeviBhutra had in fact capacity to advance the loans to a tune ofRs.2,95,000/- and directed to modify the order to allowRs.2,95,000/- as loans with a direction to delete the addition to thatextent. 7)A careful analysis of the order of the Tribunal as set outabove goes to show that the Tribunal had carefully analyzed thefacts and came to a categorical conclusion that only to an extentof Rs.2,95,000/- were genuine loan transactions and accordinglymodified the order of the Assessing Officer. In the abovecircumstances, we do not find any reason to interfere with the order of the Tribunal as the order of the Tribunal is based onanalysis of the facts on record and the question of law raised inthe present appeal is a pure question of fact and required to beanswered in the affirmative i.e., against assessee and in favour ofrevenue. 8)In these circumstances, the appeal is dismissed. There shall be no order as to costs. ___________________________ L. NARASIMHA REDDY, J Date:09.09.2014.Ssv ____________________________ CHALLA KODANDA RAM, J