Kailash Swaroop Agarwal v. Commissioner Of Income Tax, Ajmer

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 175 / 2012 Kailash Swaroop Agarwal S/o Late Shri Narayan Swaroop Agarwal,R/o 45-A, Seth Bhagchand Soni Nagar, Foy Sagar Road, Ajmer ----Appellant Versus Commissioner of Income Tax, Ajmer ----Respondent _____________________________________________________ For Petitioner(s) : Mr. P.K. Kasliwal For Respondent(s) : Ms. Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASOrder 03/10/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal wherein the Tribunal has partlyallowed the appeal of the department. 2.While admitting the appeal this Court on 26.09.2012framed following substantial question of law:- “Whether, the tribunal was justified in law inadmitting new plea contrary to the facts on recordand contrary to the Rule 29 of the AppellateTribunal Rules, 1963 and to based his findingsthereon while sustaining the addition of Rs.12.50lacs, can be said to be legal one?” 3.However, on an application moved on 08.09.2017, We have added one more question on 20.9.2017 which reads as under:- “Whether addition made by the Assessing Officeru/s 68 of the IT Act, and deleted by the CIT(A), canbe controverted u/s 69A by the Tribunal while sustaining the addition of Rs.12,50 lacs,irrespective of the fact that the appellant is notmaintaining books of accounts and source ofincome is pension and interest only, suchconclusion is proper?” 4.The Tribunal in its order dated 2.3.2012 has observed as under:- “2.The facts of the case are that at the veryoutset, it was observed by the Bench thatRevenue’s appeal is delayed by a period of 28 days,having been filed on 01-08-2011 as against thecommunication date (of the order appealedagainst)of02-05-2011.However,theCommissioner of Income-tax, Ajmer (`CIT’) videorder dated 27-07-2011, issued in response to thedefect notice issued by the Registry of the Tribunal,clarified that the appellate order by the ld. CIT(A)was in fact communicated to his office only on 03-06-2011, so that limitation expires on 01-08-2011.Our 2 attention was drawn thereto by the ld. DR, inview which we condone the delay. Not only are weare inclined to give due credence to the statementby a responsible officer, the reason stated is onlyunderstandable inasmuch as the impugned order isitself dated 02/5/2011, so that the specification ofits receipt date in F/36 as `02/5/2011’ appears tobe by way of a mistake. The hearing of the appealwas accordingly proceeded with, with the assesseehaving preferred to furnish written submissions,placed on record. 3.1The appeal raises three issues. We shalldeal with the principal issue, raised per the thirdground, first, the other two even otherwise gettingsubsumed therein. The same relates to therestriction of the addition in the sum of Rs.15,51,000/- on account of unexplained cashdeposit by the assessee in his savings bankaccount with Union Bank of India, to Rs. 81,000/-.The details of the transactions in the said bankaccount are as under: DateParticularsCheq No. WithdrawalsDeposits Balance04.06.2007B/F---0,0004.06.2007By cash1,000.001,000,00 Cr.(Account Open)11.06.2007By cash6,01,000,00 Cr.(Amount brought from Ahmedabad)12.06.2007By cash 8,01,000,00 Cr.(Amount brought from Ahmedabad)12.07.2007By Cash2974913,00,000,00-5,01,000,00 Cr.14.07.2007By Cash29749220,000,00-4,81,000,00 Cr19.07.2007By Cash (Out 7,81,000,00 Cr.of cash withdrawn on 12.07.2007)27.07.2007By cash ( Out 8,81,000,00 Cr.of cash withdrawn on 14.07.2007 and cash in hand)03.08.2007By cash 12,31,000,00 (amount Cr.brought from Ahemdabad)15,51,000,00 DateParticularsCheq No. WithdrawalsDeposits Balance04.06.2007B/F---0,0004.06.2007By cash1,000.001,000,00 Cr.(Account Open)11.06.2007By cash6,01,000,00 Cr.(Amount brought from Ahmedabad)12.06.2007By cash 8,01,000,00 Cr.(Amount brought from Ahmedabad)12.07.2007By Cash2974913,00,000,00-5,01,000,00 Cr.14.07.2007By Cash29749220,000,00-4,81,000,00 Cr19.07.2007By Cash (Out 7,81,000,00 Cr.of cash withdrawn on 12.07.2007)27.07.2007By cash ( Out 8,81,000,00 Cr.of cash withdrawn on 14.07.2007 and cash in hand)03.08.2007By cash 12,31,000,00 (amount Cr.brought from Ahemdabad)15,51,000,00 The assessee's explanation before the AssessingOfficer (A.O.) was that an amount of Rs. 11.50 lacsstands sourced from sixty three (63) persons(creditors) residing at Ahmedabad, in support ofwhich their confirmations, containing theiraddresses as well as PAN, were submitted. It wouldat this stage be relevant to narrate the back-ground facts of the case. The assessee made a verbal Agreement for the sale of his residentialhouse at Sri Nagar Road, Ajmer for Rs. 45.00 lacs,receiving a sum of Rs. 5.00 lacs from one, UmaKhandelwal, vide cheque deposited in his bankaccount with ICICI Bank (erstwhile `Bank ofRajasthan’) on 17/1/2007. The property had beensold to four buyers i.e., three others besides UmaKhandelwal, to be conveyed thereto vide separate(registered) sale deeds to be executed within 3months, i.e., by end April, 2007. In anticipation ofthe receipt of the sale proceeds by the said date,the assessee entered into an agreement forpurchase of a residential property at BhagchandSoni Nagar, Foy Sagar Road, Ajmer for a sum of Rs.11.01 lacs on 21-05-2007, paying a token amountof Rs. 21,101/-, again, by cheque drawn on hisbank account with ICICI Bank. The balancepayment of Rs. 10.80 lacs was to be made on orbefore 21-07-2007. As the sale proceeds for the SriNagar Road property were not forthcoming, theassessee resorted to cash borrowings, lest thepurchase agreement for the house property (atBhagchand Soni Nagar, Ajmer) be cancelled. It isclaimed that a sum of Rs. 8.00 lacs, collected fromvarious persons at Ahmedabad, was received byhim at Ajmer on 10-06-2007 and, accordingly,deposited in his newly opened bank account withUnion Bank of India, Sri Nagar Road, Ajmer Branchon 11-06-2007 (Rs. 6.00 lacs) and 12-06-2007(Rs. 2.00 lacs). So however, the assessee did notdraw upon the said funds; his conscious notallowing him to do so, and raised bank loansagainst FDRs of self and wife. The registry of theBhagchand Soni Nagar property was executed on13-07-2007 by availing bank loan for the requisitesum of Rs. 10.80 lacs, i.e., Rs. 2.0 lacs (on 20-06-2007) and Rs. 8.80 lacs (on 11-07- 2007). Further,Rs. 3.20 lacs were withdrawn from the bank on 12-07-2007 (Rs. 3.0 lacs) and 14-07-2007 (Rs. 0.20lacs). This sum is stated to have been withdrawnfor paying back the creditors at Ahmedabad; theassessee having since discharged the paymentobligation under the purchased agreement.However, as the same could not be remitted toAhmedabad due to safety reasons, the amount wasdeposited back in the bank account at Rs. 3.00 lacs(on 19-07-2007) and Rs. 1.00 lac (on 27-07- 2007), i.e., at a total of Rs. 4.0 lacs (as against Rs.3.20 lacs withdrawn). The excess amount of Rs.80,000/- (i.e., Rs. 4.0 lacs minus Rs. 3.20 lacs)was stated to be out of the cash balance with him.Further, the assessee's son had raised more fundsat Ahmedabad, i.e., Rs. 3.50 lacs, which werereceived in Ajmer on 02-08-2007 and againdeposited in the Union Bank savings bank accounton 03-08-2007. 2007), i.e., at a total of Rs. 4.0 lacs (as against Rs.3.20 lacs withdrawn). The excess amount of Rs.80,000/- (i.e., Rs. 4.0 lacs minus Rs. 3.20 lacs)was stated to be out of the cash balance with him.Further, the assessee's son had raised more fundsat Ahmedabad, i.e., Rs. 3.50 lacs, which werereceived in Ajmer on 02-08-2007 and againdeposited in the Union Bank savings bank accounton 03-08-2007. 3.2 The AO, however, considered the entirecash deposited in the Union Bank of India account(Rs. 15.50 lacs) as not satisfactorily explained.Firstly, the creditors/loaners were not produced. Asregards the documents furnished in support, thereturns in most cases were for A.Y. 2008-09 and,thus, not relevant, even as in some cases noreturns were filed. In fact, the balance-sheets, filedalong with in most cases, did not reflect the loan insome cases. The capacity of the creditors was thusnot proved. The entire cash collected was fromAhmedabad, and deposited in a newly openedaccount with another bank. None of theconfirmations stated of the cash loans having beenrepaid, which was claimed to be so during thesame financial year. In any case, mere filing ofconfirmations would not prove the credits. Theclaim of cash deposit of Rs. 4.0 lacs in bankaccount in July’07 as being essentially a redepositof funds withdrawn was also considered by him asan unsubstantiated plea. In appeal, the ld. CIT(A)was of the view that the AO having not found anyalternate application of the funds withdrawn fromthe bank (Rs. 3.20 lacs), recycling of the same byway of deposit in the same bank accountsubsequently could not be doubted. The assesseehad though not substantiated his claim of thedeposit of Rs. 80,000/- out of his own sources. Asregards, the loan raised from Ahmedabad (Rs.11.50 lacs), i.e., at Rs. 8.00 lacs on 10-06-2007and Rs. 3.50 lacs on 02-08-2007, the assessee hadsubmitted the necessary documents, including theincome-tax returns as well as balance-sheets of thecreditors. As such, the onus casts on the assesseehad been met. The assessee could not possibly berequired to establish the source of the source, i.e.,the source of the funds with the creditors. Reliancewas placed on decision by the hon'ble jurisdictional 5. High Court in the case of Kanhaiya Lal Jangid vsACIT, 217 CTR 354. The AO could not draw anadverse inference out of non-production of thecreditors, and which he (AO) could do on his own,drawing strength from the decision in the case ofCIT vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR78 (SC). Aggrieved, the Revenue is in appeal.” The Tribunal while considering the matter in para 5.1 to 5.8, observed as under:- “5.1 The first thing that we observe is that theaddition sustained by the ld. CIT(A), i.e., Rs.81,000/-, includes Rs. 1,000/- deposited cash forthe opening of the new (savings bank) accountwith Union Bank of India on 04-06-2007. The ld.CIT(A) having deleted two additions, for a total ofRs. 97,800/-, on the basis that the assessee couldreasonably be expected to maintain some cashbalance, as well as receipt of Rs. 4 lacs (stated tobe received cash as advance on 27/4/2007 inrespect of the sale of Sri Nagar Road property), theaddition of Rs. 1000/- is thus inconsistenttherewith. The assessee, however, has not disputedthe sustained addition of Rs. 81,000/-, which isprincipally by non-accepting its claim for having acash balance, particularly considering that areasonable sum had already been considered as soby the ld. CIT(A). Notably, for both the saidadditions, aggregating to Rs. 97,800/-, theassessee had not pleaded for having a cash balancewith him, ascribing its source to the cash receipt ofRs. 4.00 lacs from the four lady purchasers of hisSri Nagar Road, Ajmer property. 5.2 Coming to the impugned addition of Rs.14.70 lacs, we observe the assessee’s explanationas fantastic by all counts, bordering on the bizarre.Firstly, the need to raise funds, which constitutesthe essence of the assessee’s explanation, is itselfnot understood. The assessee, by own admission,had secured funds to the tune of Rs. 9 lacs asadvance against the sale of his Sri Nagar Roadproperty by 27/4/2007. He furnishes no balance-sheet or cash flow statement, so as to be able toknow his financial position, the amount as well asthe manner of 6 utilization of funds at his disposal, including those raised, and which may be parked indifferent banks/bank accounts. Even assuming theassessee to have no funds whatsoever of his own(as on that date), it only implies that liquid fundsfor a maximum of Rs. 2.84 lacs were to bearranged for; the property under purchase costingRs. 11.84 lacs, including registration cost of Rs.0.83 lacs, and by 21/7/2007, i.e., the date bywhich the purchase had to be concluded. We say soas the assessee ascribes even the source of Rs.15,000/- deposited cash in his bank account (withICICI Bank) on 21/5/2007 to the cash advancestated to be received from the buyers of his SriNagar Road property on 27/4/2007, so that headmittedly had no funds of his own as on that date.Also, the assessee admittedly has funds in nearliquid securities in the form of bank FDRs, whichcould easily be monetized to meet the liquidityrequired, as indeed was done by him. This is all themore so as the need for funds was admittedly onlytemporary, neutralize as it would on the receipt ofthe balance Rs. 36 lacs (45 lacs – 9 lacs) againstthe contracted sale of the Sri Nagar Roadresidence; rather would not have at all arisen if thesaid sale transaction had matured in time, i.e., asoriginally envisaged (end April, 2007). Further, thisis assuming that no extension of time for thepurchase was possible, and for which no evidencehas been led; the assessee’s own house havingbeen sold to the same persons and at the sameprice as agreed for even though the transactioncame to be completed much later (16/8/2007). Inother words, the need to raise funds (Rs. 11.50lacs), and particularly in the manner done (from asmany as 63 outstation parties), is completelyincomprehensible in view of: a). the need for funds actually required for thestated purpose (at a maximum of Rs. 2.84 lacs);b). the access to funds in the form of near liquidityadmittedly available in the form of bank FDRs; c). the fact that the necessary funds could be easilytapped from the buyers of his residential house,who were allowed excess time by the assessee forcompleting the real estate transaction (wherein thetime lines are to be, as a general rule, strictlyhonoured, even as the assessee seeks to qua his purchase transaction) – and by months - so that hecould under the circumstances have easilybargained for the amount required, being only afraction of what was due (Rs. 36 lacs); and a). the need for funds actually required for thestated purpose (at a maximum of Rs. 2.84 lacs);b). the access to funds in the form of near liquidityadmittedly available in the form of bank FDRs; c). the fact that the necessary funds could be easilytapped from the buyers of his residential house,who were allowed excess time by the assessee forcompleting the real estate transaction (wherein thetime lines are to be, as a general rule, strictlyhonoured, even as the assessee seeks to qua his purchase transaction) – and by months - so that hecould under the circumstances have easilybargained for the amount required, being only afraction of what was due (Rs. 36 lacs); and d). the admittedly temporary nature of the need(for funds). 7 As against such practically nil or atbest a feeble and temporary need for funds, whichcould easily be got financed from any bank orfinancial institution, as by way of a loan againstproperty or bank deposits, the assessee runsamuck, seeking funds from all and sundry, even ifit amounts to raising the same from outstationparties, and for minor amounts, using the goodoffices of his son, ostensibly stationed atAhmedabad. The time and energy required to beexpended in raising funds in such minor sums,even if the requirement for funds stated to beraised was established, would make thetransaction/s impractical and improbable. In fact,as his son has such a large number of goodcontacts, who would come to rescue at the time ofneed, it only implies that the son has a goodfinancial and social standing, and a soundreputation, apart from the assessee enjoyingexcellent relations with his son. As such, thenecessary funds could - if at all – be easily raisedfrom one or a couple of parties. Why, rather, wewonder, could not then the son have himselfchipped in the minor sum required. We wonder ifthis is done to beat the law; the same proscribingacceptance or repayment of loan/ deposit in cashwhere exceeding the threshold limit of Rs.20,000/-. Though normally a matter left to thediscretion and wisdom of the assessee, the saidconsideration follows directly from the stated andadmitted circumstances, given the assessee’sexplanation. 5.3The second query that arises directly, againto no answer, is as regards the mode of acceptanceof the funds. Why were the funds accepted in cash?Acceptance of loans in cash, which is a riskyproposition by any standards, is particularly so inthe instant case considering that the funds are tobe admittedly transmitted to another station,involving time and risk, if not also cost. That is, thestated course represents another act that noreasonable man of ordinary prudence and average 5.3The second query that arises directly, againto no answer, is as regards the mode of acceptanceof the funds. Why were the funds accepted in cash?Acceptance of loans in cash, which is a riskyproposition by any standards, is particularly so inthe instant case considering that the funds are tobe admittedly transmitted to another station,involving time and risk, if not also cost. That is, thestated course represents another act that noreasonable man of ordinary prudence and average intelligence exercising diligence would ordinarilyundertake. What makes this particularly quizzical isthat firstly the funds lent are ostensibly accountedfunds, given from their apparently explainedsources by the creditors, who are largely income-tax assessees 8 and, two, that there was noimmediate need for funds; the first instalmentarriving at Ajmer on 10/6/2007, i.e., much prior tothe limitation date of 21/7/2007, and would have infact been accepted only prior to its transmission,while the second tranche of Rs. 3.50 lacs (receivedin Ajmer on 03/8/2007) was admittedly not evenrequired to be accepted; the purchase transactionhaving been already concluded on 13/7/2007.Rather, even if accepted, was not required to betransmitted to Ajmer, and could have easily beenreturned back to the creditors at Ahmedabad itself.Further, the transmission, even if the loans came tobe accepted in cash, could easily be effectedthrough deposit of cash in the assessee’s bankaccount (with Union Bank of India - assuming thedeposit to be necessarily made in that account - orICICI Bank) at Ahmedabad; the bank accounts,even though maintained by the home branch, arenot strictly branch-specific, so that they could beoperated and accessed from any station where thebank has a branch. Now, it is certainly not the casethat either Union Bank of India or ICICI Bank hasno branch at Ahmedabad, a much bigger placethan Ajmer itself. In fact, the funds could also havebeen deposited in the son’s account at Ahmedabad,and transmitted to Ajmer through the bankingchannel. Not only this, the funds are, to equalamazement, also repaid in cash, attracting thesame (and equal) risk. In fact, while the collectedfunds could be placed in a single account of theassessee-borrower, the repayment involvesdistribution of cash to several creditors, so thatrepayment vide a negotiable instrument or bankingchannel is definitely much more convenient anddesirable from all angles, including safety – thefactor which admittedly constrained the assesseefrom remitting the funds withdrawn from bank toAhmedabad. To our mind, this (safety) benefitalone outweighs by far any other consideration infavour of non-cash transmission, as safety hasmany dimensions to it and, apart from the potential loss of funds, also entails risk to life and propertyof those involved in transmission. There is in factno comparison whatsoever, both practically andconceptually, between the two modes of transfer offunds. Just consider this: in one stroke the moneygets deposited in the bank account of the creditorin a matter of minutes at the minimum or a coupleof days at the maximum (depending on mannerchosen), and at no risk and almost nil cost. Itobviates the need to obtain confirmation of receiptof money individually from each creditor, but forwhich the assessee cannot claim to havedischarged his obligation of repayment, a sine quanon for any debtor. 9 Finally, needless to add, noevidence in respect of transmission of cash fromAhmedabad to Ajmer or vice versa stands adducedby the assessee before any authority. 5.4 Another equally intriguing aspect of theassessee’s case, as made out, is that no `receipts’were admittedly obtained from the creditors uponrepayment of loans. Why? In fact, there is nocontemporaneous material to evidence either thereceipt of funds from, or their repayment to, thecreditors, which is uncomprehensible indeed, giventhat both the receipt as well as repayment of loansis in cash. Any creditor would insist on being issueda receipt, if not execution of a pronote, witnessedindependently and also containing the terms of theloan, including as to repayment. Similarly, anydebtor would insist on being issued a receipt or anendorsement on the pronote while discharging hisobligation under a loan agreement/arrangement,which becomes the primary document evidencingthe transaction. There is no explanation, again, forthe admitted absence of such a basic and primarydocument. The assessee claims to have repaid theloans during the financial year of receipt itself, i.e.,f.y. 2007-08, the relevant previous year. Clearly,such receipts, if maintained, could have beenproduced in the first instance itself. Also, why didnot, as also noted by the AO, then, theconfirmations by the creditors contain informationon this vital aspect, i.e., of the liability having beensince discharged. Further still, in the admittedabsence of a basic document as a receipt or apronote, what is the basis for the issue of suchincomplete confirmations? 5.5The next aspect which is the vital to thevalidity and, thus, the acceptance of the assessee’sexplanation, is the non-production of the creditorsbefore the AO for his examination, as specificallycalled for by him. This is for the simple reason thatmany a query, as some posed by us hereinbeforewhile discussing the assessee’s case, as well asthat may similarly appear hereinafter, concerningthe factual aspects of the assessee’s explanation, insubstantiation and verification thereof, that mayarise in the mind of the AO, could best beanswered in the format of an extempore interviewwith the creditor himself, who only canauthentically reply queries in relation to hispersonal affairs, viz. What is the personalrelationship with the debtor (as the creditors do notappear to be in the financing trade); what is theimmediate source of the monies lent; proof thereof (this is toward validation of the stated source andnot of the source of the 10 source); why did heprefer to extend the loan in cash; what was thedocument/s executed, if any; to whom was thecash handed; who, if any, witnessed thetransaction; its terms, including as to security, etc.,replies to which, including the materials supplied insupport as well as the replies to any further queriesthat may concomitantly and spontaneously arise,are extremely relevant in arriving at a satisfactionor otherwise by the AO with the assessee’sexplanation as to the nature and source of theimpugned deposit of funds; in other words, aboutthe truth of the matter. This requirement is non-negotiable, and assumes prime significance as thelaw envisages `satisfaction’ or otherwise only ofthe AO, so that the purview of an appellateauthority like us is to examine whether the non-satisfaction expressed by the AO is sustainable inlaw, i.e., is the explanation furnished by theassessee one which should satisfy a man ofordinary prudence, acting reasonably and judicially,given the normal course of events, as well that ofhuman conduct. The impugned order is largelysilent on this aspect, except for stating that thecreditors could have been summoned by the AO. Itis trite law that the onus to prove the credits is onthe assessee; the very argument by the ld. CIT(A)being a tacit admission thereof, even as undoubtedly the assessing authority coulddefinitely facilitate the same by exercising hispowers as vested in a civil court for enforcingattendance, where the creditors are not respondingto the assessee in this regard, upon beingcommunicated this fact by the assessee, along witha request for the same. However, there is no suchcommunication or request to the AO by theassessee in the present case. Quite on thecontrary, in response to the AO’s specific requisitionfor production of the creditors for verification on24-10-2010, the assessee chooses to remain silent,not even indicating of any hardship or non-cooperation in its respect from the creditors, if so,being faced by him and, as if surreptiously, videletter dated 23-12-2010, i.e., two months later andbarely a few days prior to the setting in of the timelimitation for assessment (31/12/2010), given notdirectly to the AO but only in the Dak, claims that itwas not possible to produce the creditors, beinginhabitants of Ahmedabad, at such a short notice.Further, that the creditors were cooperating withthe assessee is apparent from the fact that theyfurnished not only their confirmations but alsoincome-tax returns and financial statements, whichwould only be at assessee’s behest, to whom theylend monies ostensibly to bail him out of a difficultsituation. Also, there was no request before the AOto call for, at his choice, some of the large number(63) of creditors, facilitating the process ofvalidation without presumably compromising on the11 quality of the verification, even as admittedlyeach credit constitutes a separate case, warrantinga specific adjudication. In fact, even before the firstappellate authority, the assessee does not stakeany claim for being afforded an opportunity for theproduction of the creditors, having been ostensiblyconstrained for want of time before the AO, andqua which the latter had drawn an adverseinference per the assessment framed and underchallenge by him (assessee). Under thecircumstances, the shifting of the onus by the ld.CIT(A) on the AO; the onus under law being clearlyon the assessee, whose conduct casts aconsiderable shadow on his bona fides in thematter, by relying on the decision in the case of CITvs. Orissa Corporation Pvt. Ltd. (supra) is not valid in law. Attention in this regard is also invited to thedecisions in the case of Kusum Sharma v. CIT, 303ITR 381 (P&H) and CIT v. Meghdoot VillageProducts (P.) Ltd., 212 CTR (All) 484. in law. Attention in this regard is also invited to thedecisions in the case of Kusum Sharma v. CIT, 303ITR 381 (P&H) and CIT v. Meghdoot VillageProducts (P.) Ltd., 212 CTR (All) 484. 5.6The explanation and the narrative furnishedby the assessee in fact bears several otheranomalies, more and more of which tumble out aswe continue to subject it to scrutiny or closerexamination in its various aspects. We say so as itmay not be correct or proper to discard or reject anexplanation only on the basis of a singleincongruity; any person may be prone to anunusual behaviour at times, with the same personhimself behaving differently under similar situationsat different times. The first instalment of the bankloan (through which purchase transaction waseventually financed) was availed on 20-06-2007, sothat the decision to do so, i.e., to go for the bankloan for the purpose was taken even prior thereto.Secondly, why was a loan availed when theassessee had no immediate intention to mature thepurchase, time for which was available up to 21-07-2007; the balance amount of bank loan beingavailed only on 11-07-2007, and onlyunderstandably so, considering that acquisition wascompleted on 13-07- 2007. This is as loan entailsinterest and, besides, keeping cash in hand isalways a risky proposition, so that nobody woulddo so, particularly where it does not serve anypurpose. The assessee states of having withdrawncash from Union Bank of India only after beingreleased of the burden of registration of theconveyance deed qua the purchase, while the factof the matter is that same was transacted on 13-07-2007, and the cash was in the main withdrawnprior thereto on 12-07-2007. A person focussed onconcluding the purchase which has burdened himfor so long, would hardly be bothered to meet thepart payment to Ahemdabad on the eve of and onthe verge of closing the purchase transaction. Thesame, rather, points to the amount having 12 beenwithdrawn for or toward the said purchase or forsome other purpose. Yes, there could exceptions tothis, as (say) where some reliable person isproceeding to Ahemdabad on that date itself (12-07-2007), and has agreed to carry cash (up to thatamount) with him, or where (say) one more creditors are urgently pressing for funds, so thatarrangements were made to transmit the amountborrowed from him/them. But, then, we cannotproceed on any hypothesis, and it is for theassessee to supply the facts, as well assubstantiate the same, being only a part of hisexplanation. Not only is the cash not transmittedon that date (12-07-2007), the assessee `realizes’that he had to remit Rs. 20,000/- more, and whichhe withdraws from the bank only on 14-07-2007.This is a perplexing. Nobody would keep theremission pending - which clearly shows that therewas no urgency for the same – for want of Rs.20,000/-, for which again which no basis has beendisclosed. If at all, it indicates that the assessee didnot have Rs. 20,000/- with him or was short bythat amount, for whatever purpose the same mayhave been required to be withdrawn. The questionof the assessee having Rs. 80,000/- in cash fordepositing in bank, for which again no basis hasbeen furnished, thus, does not arise. This is alsoinconsistent with the assessee's stand of havingopened up a (separate) bank account with theUnion Bank of India for parking his borrowingsfrom Ahemdabad separately. Surprisingly, again, nocash is remitted even on or after 14-07-2007, i.e.,after completing the shortfall in the amount thathad to be purportedly transferred, stating safety asthe reason. Not only that, the programme fortransfer of funds, which represented only a fractionof the total amount to be remitted to Ahmedabad,without disclosing any basis therefor, was notdeferred by one or two days, as for firming up thesafety arrangements, but was totally dropped, andcash `re-deposited’ in bank. We have alreadyexplained that the bank transfer is conceptually,technically as well as practically far superior to thecash mode; rather, a practical necessity, given thedistance as well as the number of persons involved,for non-resort to which no reason has beenadvanced by the assessee at any stage. The stringof unexplained events does not stop here. In spiteof the purchase transaction having been concluded,and the assessee now admittedly engaged orinvolved in the exercise or project, if we may call itso, of transfer of funds back to Ahmedabad, thecollection spree goes unabated, with the assessee moping up another Rs. 3.50 lacs, depositing thesame in his bank account on 03-08-2007, i.e., afterclaiming the same to be received at Ajmer on 02-08-2007. We are afraid, but the same can underthe circumstances be only termed as ludicrous.Finally, we 13 cannot help but noting that thoughthe assessee claims to have repaid the loans duringthe same year, i.e., the year of receipt, it specifiesno date/s, nor even the source of the same, leavealone producing any material in support. In thisregard it would be relevant to state that the copyof the bank account with Union Bank of India,where the borrowed funds have been deposited, asprovided on record extends only up to 03-08-2007,i.e., the date of the last deposit. moping up another Rs. 3.50 lacs, depositing thesame in his bank account on 03-08-2007, i.e., afterclaiming the same to be received at Ajmer on 02-08-2007. We are afraid, but the same can underthe circumstances be only termed as ludicrous.Finally, we 13 cannot help but noting that thoughthe assessee claims to have repaid the loans duringthe same year, i.e., the year of receipt, it specifiesno date/s, nor even the source of the same, leavealone producing any material in support. In thisregard it would be relevant to state that the copyof the bank account with Union Bank of India,where the borrowed funds have been deposited, asprovided on record extends only up to 03-08-2007,i.e., the date of the last deposit. 5.7 Without doubt, the entire explanation (asdiscussed at paras 5.1 to 5.6 above) rings untrueand concocted, is beyond comprehension andbounds of reasonability, inconsistent with normalhuman conduct and behaviour, apart from beingtotally unsubstantiated. It is these reasons thatpersuaded us to state at the beginning of ournarrative that the explanation furnished is fantasticand non-acceptable. We, accordingly, have nohesitation in approving the AO’s action for beingnot satisfied with the assessee’s explanation. Thelaw in the matter is trite, and for which we mayrefer to case laws by the hon’ble apex court, whichhas time and again explained that the receipt ofmoney of which the assessee is a beneficiary isitself a prima facie evidence against him, who hasto satisfactorily explain the same, i.e., render anexplanation as to its nature and source, which isproper, reasonable and acceptable, even as afinding as to non- satisfaction therewith is to berendered on the basis of proper appreciation of thematerial and other attending circumstancesavailable on record; application of mind being asine qua non for forming an opinion. Also, that it isthe cumulative effect of all the facts in their settingas a whole that has to be looked into, withoutattaching any specific weight to any particular factin isolation. We may refer to some of the case laws,clarifying the well settled law in the matter, asunder:- CIT vs. P. Mohanakala &Others, 291 ITR 278 (SC) Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) CIT v. Biju Patnaik (1986) 160 ITR 674 (SC) CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) Kalekhan Mohammed Hanif v. CIT (!963) 50 ITR1(SC) Sreelekha Banerjee & Othrs. v. CIT (1963) 49 ITR112 (SC) A. Govinda Rajulu Mudaliar v. CIT (1958) 34 ITR807 (SC) Though rendered largely in the context ofsec. 68, while the provision applicable in theinstant case is sec. 69A, the law is para materia as,in either case, the assessee has to offer a 14satisfactory explanation about the nature of thesource of impugned credit or debit (money, bullion,jewellery, any valuable article, i.e., assets), as thecase may be. CIT vs. P. Mohanakala &Others, 291 ITR 278 (SC) Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) CIT v. Biju Patnaik (1986) 160 ITR 674 (SC) CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) Kalekhan Mohammed Hanif v. CIT (!963) 50 ITR1(SC) Sreelekha Banerjee & Othrs. v. CIT (1963) 49 ITR112 (SC) A. Govinda Rajulu Mudaliar v. CIT (1958) 34 ITR807 (SC) Though rendered largely in the context ofsec. 68, while the provision applicable in theinstant case is sec. 69A, the law is para materia as,in either case, the assessee has to offer a 14satisfactory explanation about the nature of thesource of impugned credit or debit (money, bullion,jewellery, any valuable article, i.e., assets), as thecase may be. 5.8Further on, we are unable to appreciate thecase laws relied on by the assessee, viz. CIT vs.United Commercial & Industrial Co. (P) Ltd., 187ITR 596 (Cal.) and CIT vs. Precision Finance (P) Ltd(1994), 208 ITR 465 (Cal.). Both the decisions, inratio, confirm the trite law in the matter, i.e., thatthe onus to establish the credit on the parametersof identity and capacity of the creditor and thegenuineness of the transaction, is on the assessee,and only where it by satisfactory proof establishesso, that the onus gets shifted to the Revenue.Further, mere production of confirmatory letters oreven the fact that the transaction is routed throughthe banking channel, does not by itself prove theloan, making a non-genuine transaction, genuine.In the instant case the genuineness of thetransactions stands thoroughly impugned, so thatwe do not consider the credits/deposits in theassessee’s bank account with Union Bank of Indiaas representing his liability or borrowings. We,therefore, do not consider it necessary to considerthe aspect of the creditworthiness of the lenders,even as there is no contemporaneous orcorroborative material evidencing the transactions.Coming to the decision in the case of Kanhaiya LalJangid v. ACIT (supra), we again find no statementof law therein, toward which case law is legion,contradictory or inconsistent with the stand taken by the Revenue; the question of satisfaction orotherwise, on the basis of the explanationfurnished including the surrounding facts, as borneby the material on record, being even otherwise aquestion of fact. The only ratio of the said decisionis that the assessee cannot be called upon toestablish the source of a source. We have alreadyclarified that the assessee has made no case toprove the genuineness of the transactions, whichare un-evidenced and de hors the probabilities ofhuman conduct. Further, the question of Revenuedoubting the source of the source does not arise,with the creditors, even though called for, havingnot been produced. The cited decision, if at all,validates the Revenue’s case; the hon'ble courtupholding the addition u/s. 68 despite theproduction of affidavit from the creditor, undercircumstances of non-production of the creditorcoupled with non-furnishing of his correct address.An opportunity to the Revenue to examine theassessee or the creditor vis-a-vis the explanationand the materials furnished is again a sine qua nonfor any reliance to be placed thereon.” 6.In our considered opinion the view taken by theTribunal is just and proper. 7.Hence the issue is answered in favour of departmentand against the assessee. 8.The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Chouhan/40