Delhi High Court
Jasjiwan Kaur vs Ito on 30 May, 2012
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 30.05.2012
+ ITA 161/2011
JASJIWAN KAUR ... Appellant
versus
ITO ... Respondent
Advocates who appeared in this case:
For the Appellant : Ms Sonia Mathur
For the Respondent : Mr Sanjeev Sabharwal
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE V.K. JAIN
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
1. This appeal by the assessee pertains to the assessment year 2005-2006 and
it arises out of ITA 283/Del/2009 decided on 06.08.2010 by the Income Tax
Appellate Tribunal. The questions which have been framed for the consideration
of this Court are as under:-
"(i) Whether on the facts of the present case, Tribunal was
justified in law in upholding the addition of Rs.8,28,375/- made by
Assessing Officer under Section 56(2)(v) of the Act in disregard of
the fact that the amount of loan was subsequently paid/received by
assessee?
(ii) Whether Tribunal was justified in law in upholding the
addition by misinterpreting the provisions contained in Section
56(2)(v) of the Act and by disregarding that an admitted amount of
"loan" could not be brought to tax in the hands of assessee as
"Income from other sources"?"
2. During the course of arguments, the learned counsel for the appellant
drew our attention to the fact that the appellant had mentioned in paragraph 3 of
this appeal itself that the amount that was taken as loan had, in fact, been repaid.
Paragraph 3 of the appeal reads as under:-
"3. That ld. Tribunal has failed to appreciate that the amount of
Rs.7.13 lacs was repaid by assessee to Smt Kewal Rattan on
25.05.2006. As regards the other amount of Rs.2.35 lacs received
from Smt J Gurmeet Singh, an amount of Rs.1.15 lacs paid to
assessee on 30.11.2004 was only repayment of the amount which
was paid by assessee towards the electricity charges of Smt Gurmeet
Singh by way of a draft made from the account No. SB 7924 held by
assessee in Punjab and Sindh Bank. Consequentially no addition on
this account was called for."
3. We find from the factual position with regard to the addition of
` 8,28,375/- made under Section 56(2)(v) of the Income Tax Act, 1961
(hereinafter referred to as 'the said Act') that, initially, the Assessing Officer had
made an addition of ` 27,20,375/- under the head of 'income from other sources'
with regard to the alleged loans taken by the assessee. At that point of time, the
Assessing Officer had not required the assessee to produce any evidence with
regard to repayment of the alleged loan amount. It is the case of the learned
counsel for the appellant/ assessee before us that the loan amount had been
repaid prior to the passing of the assessment order. Since the Assessing Officer
had not required the assessee to place on record the evidence in respect thereof,
no such evidence had been produced before the Assessing Officer. After the
assessment order was passed, the assessee preferred an appeal before the
Commissioner of Income Tax (Appeals), who substantially accepted the plea of
the assessee and deleted an amount of ` 26,40,375/- from the said amount of
` 27,20,375/- leaving an amount of ` 80,000/- as being the amount of addition
sustained under the head of 'income from other sources'. Since the amount was
small, the assessee did not prefer any appeal before the Income Tax Appellate
Tribunal in respect of the order passed by the Commissioner of Income Tax
(Appeals). However, the revenue filed an appeal before the Income Tax
Appellate Tribunal. The revenue's appeal was partially allowed by enhancing
the addition of ` 80,000/- to ` 9,48,375/-.
4. It appears from paragraph 14 of the impugned order passed by the Income
Tax Appellate Tribunal that the addition has primarily been made on the ground
that the assessee could not show that the loans had, in fact, been repaid by the
assessee. Another aspect of the matter which was considered by the Tribunal
was that since no interest was paid on the purported loans, the said amounts were
to be regarded as payments received without consideration.
5. We feel that the assessee's assertion that she had repaid the loans ought to
be examined by the Tribunal. Since the material with regard to the repayment of
the loan was not before the Tribunal in the circumstances mentioned above, we
feel that it would be appropriate if the impugned order is set aside and the matter
is remitted to the Tribunal to consider the issue afresh. Liberty is, however,
granted to the assessee to file/ produce evidence of repayment of the said loans.
The same, if filed/ produced by the assessee, shall be considered by the Tribunal
and an appropriate order in accordance with law, after considering the entire
facts and circumstances of the case, would be passed by the Tribunal.
6. With these directions, the matter is remitted to the Tribunal. In the first
instance, the parties shall appear before the Tribunal on 10.07.2012.
BADAR DURREZ AHMED, J
V.K. JAIN, J
MAY 30, 2012
SR
