SUNIL RATHI ALIAS JITENDRA RATHI v. ASSISTANT COMMISSIONER OF INCOME TAX
[Citation -2007-LL-0920]

Citation 2007-LL-0920
Appellant Name SUNIL RATHI ALIAS JITENDRA RATHI
Respondent Name ASSISTANT COMMISSIONER OF INCOME TAX
Court ITAT
Relevant Act Income-tax
Date of Order 20/09/2007
Assessment Year BLOCK PERIOD 1ST APRIL, 1996, 18TH SEPT. 2002
Judgment View Judgment
Keyword Tags undisclosed income • valuable article • block period • nil income
Bot Summary: R.S. SYAL, A.M.: This appeal by the assessee is directed against the order passed by the CIT(A) on 3rd Aug., 2006 in relation to the block period 1st April, 1996 to 18th Sept., 2002. Briefly stated, the facts of the case are that a search under s. 132 was conducted on 18th Sept., 2002 in the case of Shri Om Prakash Rathi, who happens to be the father of this assessee. Only a sum of Rs. 10,000 was treated a s undisclosed income of the assessee against the nil income filed by the assessee. The AO made the addition of Rs. 10,000 on the ground that the assessee had not proved the genuineness of the entry appearing in his regular books nor the capacity of the creditor was established nor even her identification. A bare perusal of this definition reveals that the undisclosed income comprises of any asset or entry in the books of account or other documents which represents wholly or partly income or property which has not been or would not have been disclosed. How the receipt of loan can be considered as undisclosed income is beyond our comprehension. The position would have been otherwise if this entry had been made for advancement of loan by the assessee to anybody, which remained unrecorded and the assessee further failed to lead evidence in support of his case.


R.S. SYAL, A.M.: This appeal by assessee is directed against order passed by CIT(A) on 3rd Aug., 2006 in relation to block period 1st April, 1996 to 18th Sept., 2002. only ground raised in this appeal is against confirmation of addition of Rs. 10,000. Briefly stated, facts of case are that search under s. 132 was conducted on 18th Sept., 2002 in case of Shri Om Prakash Rathi, who happens to be father of this assessee. Only sum of Rs. 10,000 was treated s undisclosed income of assessee against nil income filed by assessee. Facts apropos of this ground have been discussed at p. 2 of assessment order which show that as per entry on p. 6 of Exhibit 2 in Panchanama of residence of family of assessee, sum of Rs. 10,000 was found recorded as loan from Smt. Dhaku Bai on 13th Aug., 2002. assessee replied vide letter dt. 20th Sept., 2004 that this sum of Rs. 10,000 was taken as loan from lady named therein which was also repaid after gap of three days on 16th Aug., 2002. In support of this contention affidavit of Smt. Dhaku Bai was also filed. AO made addition of Rs. 10,000 on ground that assessee had not proved genuineness of entry appearing in his regular books nor capacity of creditor was established nor even her identification. In next para he resorted to provisions of s. 69 for making this addition. learned CIT(A) confirmed action of AO in making this addition. We have heard rival submissions and perused relevant material on record. It is search case and addition of Rs. 10,000 has been made on account of entry found recorded in diary as per which assessee had received loan of Rs. 10,000 from Smt. Dhaku Bai. AO made addition for this sum. At this stage it would be relevant to consider definition of undisclosed income as enshrined in s. 158B(b) which is as under: "(b) undisclosed income includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false". bare perusal of this definition reveals that undisclosed income comprises of any asset or entry in books of account or other documents which represents wholly or partly income or property which has not been or would not have been disclosed . We are not concerned here with remaining part of definition, which deals with deduction for expenses or allowances, etc., which is found to be false. sum and substance of definition, which is relevant for our purpose is that assessee should have any income or property which has not been or would not have been disclosed to Revenue. Now let us test facts of case on touchstone of definition given in s. 158B(b). Here is case in which entry was found in Exhibit 2 vide which assessee had received sum of Rs. 10,000 from Smt. Dhaku Bai. How receipt of loan can be considered as undisclosed income is beyond our comprehension. position would have been otherwise if this entry had been made for advancement of loan by assessee to anybody, which remained unrecorded and assessee further failed to lead evidence in support of his case. Be that as it may, here is situation in which assessee had received loan, which in our considered opinion does not fall within definition of undisclosed income under s. 158B(b). We, therefore, order for deletion of this addition. order was pronounced in open Court immediately after conclusion of bearing on 20th Sept., 2007. In result appeal is allowed. *** SUNIL RATHI ALIAS JITENDRA RATHI v. ASSISTANT COMMISSIONER OF INCOME TAX
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