TaxTMI 
TaxTMI 
2017 (12) TMI 932
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....n (2002) 125 TAXMAN 1018 (M.P.). 3. Having heard counsel for both the sides, looking to the reasons stated in para - 04 to 09 of the Civil Miscellaneous Petition and in view of the aforesaid decision, as per Order XLI Rule 21 to be read with Section 260A (7) of the Income Tax Act, 1961, ex-parte order passed in appeal can be challenged by the respondent and the said ex-parte order passed in the appeal can be restored as sufficient cause is available. 4. We, therefore, recall the order passed by this Court dated 14.09.2010 in Tax Appeal No.38 of 2008 and Tax Appeal No.38 of 2008 is restored to its original file with the same number. 5. This Civil Miscellaneous Petition is allowed and disposed of. Tax Appeal No.38 of 2008 1. This Tax Appeal is taken for its final hearing upon the consent of the counsel for both the sides. 2. Counsel appearing for the appellant has submitted that this respondent is the partnership firm. The assessment for the year 2001 - 2002 had already been made and the Commissioner of Income Tax while exercising power under Section 263 of the Income Tax Act (revisional power) opened the assessment mainly on the grounds that huge amount of cash was....
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....rce of the amount. It is submitted by the counsel for the respondent that the department is in search of "the source of source" which is not permissible. From where Ranjan Jaiswal and Anju Jaiswal obtained the amount, that can be asked to Ranjan Jaiswal and Anju Jaiswal by re-opening their re-assessment, but, the facts remain that the partnership firm has received the amount by cheques or demand drafts. Thus, the source of the amount has already been explained. This aspect of the matter has been properly appreciated by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi while allowing the appeal preferred by the assessee by order dated 23.11.2007. 4. Counsel appearing for the respondent has relied upon the several decisions which are as under : (a) 256 ITR 360 (Gujarat); (b) (1985) 151 ITR 150 (Patna); (c) (2009) 177 TAXMAN 331 (Delhi); (d) (2013) 215 TAXMAN 85 (Gujarat (M.A.G.); (e) (2004) 268 ITR 381 (Patna); (f) (2007) 208 CTR 459 (Punjab & Haryana); (g) (2007) 291 ITR 232 (Madras); (h) 245 ITR 160 (M.P.); (i) (2013) 214 TAXMAN 440 (Allahabad); (j) (2015) 282 CTR 200 (Patna). 5. ....
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....an Jaiswal Date Amount Mode of Payment 2.9.00 43,312.50 by A/c payee cheque 16.10.00 8,30,540.36 by A/c payee drafts 4.01.01 25,887.00 by A/c payee cheque 1.2.01 291.00 by bank interest 7.3.01 20,000.00 by A/c payee cheque 22.3.01 25,988.00 by A/c payee cheque Total = Rs.9,46,126.76 2 . Smt. Anju Jaiswal 24.10.00 Rs.6,38,700.00 By A/c payee Bank Draft 28.4.00 4,203.00 By A/c payee cheque 19.6.00 4,203.00 - do - 26.7.00 8,406.00 - do - 6.9.00 4,203.00 do - 6.11.00 4,203.00 - do - 15.1.01 8,406.00 - do - 14.3.01 4,203.00 - do - 30.3.01 8,406.00 - do - 31.3.01 4,203.00 Decited P/T Dept. 31.3.01 12,000.00 Being Godown rent credited. 1.12.00 427/- Bank Intt. 23.10.00 50,000.00 By Bank drafts 28.11.00 1,00,000.00 - do - 8.3.01 1,00,000.00 - do - Total = Rs.9,51,563.00 VI. In view of the aforesaid amount received from Ranjan Jaiswal and Anju Jaiswal by account payee cheques or by Bank drafts, by this respondent - assessee firm, the departmen....
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...., 7, 9, 10, 11, 12 and 16. In the remaining cases where the assessment orders passed were not readily available, the assessee has furnished the copies of returns filed by the creditors with the Department along with their statement of income. All the loans were received by the assessee by account payee cheques and the repayments of loans have also been made by account payee cheques along with the interest in relation to those loans. It is rather strange that although the Assessing Officer has treated the cash credits as nongenuine, he has not made any addition on account of interest claimed as business expenditure and has been allowed by the Assessing Officers. It is also pertinent to note that in respect of some of the creditors the interest was credited to their accounts/ paid to them after deduction of tam at source and information to this effect was given in the loan confirmation statements by those creditors filed by the assessee before the Assessing Officer. Thus it is clear that the assessee had discharged the initial onus which lays on it in terms of section 68 by proving the identity of the creditors by giving their complete addresses GIR numbers/ permanent accounts number....
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....al Commissioner of Income-tax Vs. Hanuman Agarwal, reported in (1985) 151 I.T.R 150 (Patna) in paragraph no.3 as under :- "3. It is by now well-settled that Sec.131(1)(b) empowers but does not oblige the revenue authorities concerned to administer oath. Therefore, the statements of witnesses taken without administration of oath are equally admissible in evidence. When the evidence of such witness is being taken in the course of the assessment proceeding, the witness has no right, but the assessee has, to be represented by a lawyer or other authorised representative. The assessee is not supposed to know the capacity of the money-lender or the cash creditor. It is within the exclusive domain or the dark trusses of the minds of the creditors to know as to whether and how their sources of income are arrived. It is for that specific purpose that Sec.131 of the Act has been introduced so that in case of any suspicion, the ITO or the authorities concerned may exercise the powers of a civil court under Sec.131 and call upon the creditor concerned to prove his capacity to pay and the genuineness of his transaction. Once the ITO or the authority concerned is satisfied that the credi....
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....isite documents like copies of DD, gift deed, copy of PAN cards, copy of acknowledgement of returns of the donors along with computation and balance sheet. It also found that all the donors were assessed to tax except one who was based at USA. On thus having found identity of the donors so also creditworthiness and genuineness of the transaction having been established, Tribunal did not accept the say of the Revenue that the gifts were bogus. (Emphasis supplied) XIII. It has been held by Hon'ble Patna High Court in the case of Commissioner of Income-tax Vs. Md. Perwez Ahmed., reported in (2004) 268 ITR 381 (Patna) in paragraph no.2 as under :- "2. The Tribunal after having considered the materials on record has found that section 68 of the Income-tax Act, 1961 is not attracted in the case for the reason that in this case credit in the books if account of the assessee-firm is on account of introduction of capital by the partners and the firm has failed to prove the amount credited in the books of account and as such it would be assessed in the hands of the partners as unexplained investment." (Emphasis supplied) XIV. It has been held by Hon'ble ....
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....ble in the hands of the firm. Unless there are contradictions and inconsistencies in the statement of the partners, the credit cannot be treated as unexplained and cannot be added under Section 68 of the Act in the hands of the assessee-firm. Also, it is clear from the language employed under Section 68 of the Act that only the assessee alone has to offer explanation. If the assessee makes explanation, it is for the Assessing Officer to accept or reject the same. The finding given by the Tribunal is that the assesseefirm had explained the source of the capital and hence the same cannot be assessed as undisclosed income in the hands of the assessee firm. The order of the Tribunal reads as follows:- "When the assessee has explained the amounts as capital contributions by the partners, the Revenue authorities are not justified in holding that the assessee has not explained the source and the same is to be added under the head Other Sources in the hands of the firm. In case the Assessing Officer doubted the genuineness of the source, he should have considered the same in the hands of the partners only and not in the case of the firm. This view of ours is supported by the decis....
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....e donors had filed their Income Tax Return for the Assessment Years 1988-89 to 1991-92 on a single day and further the return for the Gift Tax was filed on 25.08.1992, which was well within the due date." (Emphasis supplied) XVIII. It has been held by Hon'ble Patna High Court in the case of Commissioner of Income Tax-I, Patna & Anr. Vs. M/S Anurag Rice Mills, Navi Nagar, Aurangabad, Gaya, Bihar., reported in (2015) 282 CTR 200 (Patna) in the last page of the order, which reads as under :- "----- In the present matter, the partners were also assessees and had been summarily assessed under Section 143 (1) of the Act for several years prior to the assessment year 1991-92. They have brought in the said amount to be included as a capital to the firm. Evidently, it is for the partner to explain the source of the said funds and it was not open to the Assessing Officer to have treated the said amount as income of the firm as there was no business of the firm to carry forward such income, and it was not in dispute that the amounts had been brought in by the partners into the firm. In the said circumstances, the Tribunal has rightly held that if at all the a....