Commissioner of Income Tax, Delhi-IX, New Delhi vs B.B. Arora

In the matter of cash credits found in the books of accounts of the assessee, it is not in dispute that initial burden lies on the assessee to prove

the genuineness of those cash credits. The issue is about the kind of onus which the assessee is bound to discharge. As per the judgment of the

Guwahati High Court in the case of Nemi Chand Kothari Vs. Commissioner of Income Tax and Another, , the assessee is to satisfy the following

three conditions :-

a) identify of the creditor;

b) genuineness of the transaction; and

c) creditworthiness of the creditor.

The Karnataka High Court in the case of The Assistant Commissioner of Income Tax Vs. Vishwanath and Company Excise Contractors, , has

further held that the assessee must prove identify of the lendor, capacity to lend, and genuineness of the transaction.

Submission of the learned counsel for the appellant is that in the present case the assessee was not able to prove the capacity of the persons

who had given the loans.

Admit.

The following questions of law arise for consideration :-

a) Whether ITAT was correct in law in deleting the addition of Rs. 5.50 lacs (Rs.3 lacs from Mrs. Geeta Sethi + Rs.2.50 lacs from Mrs. Amita

Arora) made by the Assessing Officer, being alleged loan taken by the assessee for purchase of property No. BP-58, Shalimar Bagh, Delhi,

treating the same as undisclosed income of the assessee?

b) Whether ITAT was correct in law in deleting the addition of Rs. 7.50 lacs (Rs.1.25 lacs from Shri Rajinder Gupta + Rs. 1.25 lacs from M/s.

Vijay Kumar Poddar-HUF + Rs.3 lacs from Shri Manjeet Jaju + Rs. 2 lacs from Lochhead Commercials Limited) made by the Assessing Officer,

being the alleged loan taken by the assessee for purchase of property at 27, NWA, Punjabi Bagh, New Delhi, treating the same as undisclosed

income of the assessee?

c) Whether the ITAT was correct in law in deleting the addition of Rs. 5 lacs and Rs. 4.80 lacs made by the Assessing Officer being alleged gifts

taken by the assessee from Shri Arum Kumar and Shri Mohit Thakre respectively, treating the same as undisclosed income of the assessee u/s 63

of the Act?

We may point out at this stage that in ground (b), the appellant has also included the name of Mrs. Varsha Arora from whom a sum of Rs. 2

lacs was shown as loan. Likewise, in another ground raised by the appellant in the appeal, the appellant has challenged the ITAT order in deleting

the addition of Rs. 3,65,000 purportedly taken as loan by the assessee for purchase of Maruti 1000cc car from Mrs. Varsha Arora as undisclosed

income. Mrs. Varsha Arora is the wife of the assessee. In the Stock assessment order passed by the Assessing Officer in. respect of the assessee,

at the same time, similar order was passed in respect of Mrs. Varsha Arora as well. The said order was set aside by the ITAT and appeal there

against, namely, ITA No. 519/2007, has been dismissed by this Court vide order dated 28-5-2009.

Therefore, we are of the opinion that insofar as cash credits from Mrs. Varsha Arora are concerned, no substantial question of law arises.

Paperbook be filed within three months.