Itta/85/2013 Of M/S. Royal Marketing Agencies v. The Asst. Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH ATHYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAAND THE HON’BLE MS. JUSTICE G. ROHINI I.T.T.A. No.85 of 2013 DATE: 25.06.2013 Between: M/s. Royal Marketing Agencies,Hyderabad. … Appellant And The Assistant Commissioner of Income Tax,Central Circle-I, Hyderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE MS. JUSTICE G. ROHINI I.T.T.A No.85 of 2013 JUDGMENT:(Per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal in relation to the assessment year 2003-04 is sought to be admitted on the following suggested substantial question of law. “Whether on the facts and circumstances of the case, theHon’ble Tribunal was justified in sustaining the addition ofRs.55,00,000/- made by the assessing officer u/sec.68 of the IncomeTax Act, 1961 on the ground the assessee has not established thegenuineness of the transaction specially when it did not have theopportunity of examining the lender?” On facts, the assessee is said to have received unsecured loan fromone R.K. Sobti, Managing Partner of M/s. Positive Fashions. The said Sobtihas made a statement denying having given the loan and this statement wasrecorded under Section 131 of the Income Tax Act, 1961. When the person,who has given the loan, denied the fact, it does not establish the factum ofgiving the loan, as banking transaction is not clear proof of borrowing ofmoney. In the circumstance, there is no question of establishing thegenuineness of the transaction. It is contended by the learned counsel for the appellant that theappellant has not given an opportunity to cross-examine the said Sobti. In our view at no point of time such question was raised by theappellant either before the assessing authority or before the Tribunal and forthe first time it has been raised here. In any view of the matter, the statementmade by the said Sobti amounts to admission under Section 20 of theEvidence Act, which reads as follows: 20. Admissions by persons expressly referred to by partyto suit:- Statements made by persons to whom a party to the suithas expressly referred for information in reference to a matter indispute are admissions.” Therefore, from the admission made by Sobti, we find that unless thebanking transaction is properly explained, payment of amount does notestablish the factum of granting loan. Moreover, the banking transaction atthe highest proves that certain amount has been paid and received and underwhat count it is received cannot be established. Therefore, we find that thelearned Tribunal was correct in following the decision of the Apex Court inthis regard. We, therefore, decline to interfere with the order of the learnedTribunal. The appeal is accordingly dismissed. _____________________ K.J. SENGUPTA, CJ ______________G. ROHINI, J