$ * IN HIGH COURT OF DELHI AT NEW DELHI Reserved on: 18th July, 2019 Decided on: 22nd August, 2019 + ITA 927/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Through: Mr. Ajit Sharma, Senior Standing Counsel and Ms Adeeba Mujahid, Junior Standing Counsel for Revenue. versus ANOOP JAIN ..... Respondent Through: Mr Ajay Vohra, Senior Advocate with Mr U.A. Rana and Mr Himanshu Mehta, Advocates. CORAM: JUSTICE S. MURALIDHAR JUSTICE TALWANT SINGH JUDGMENT % Dr. S. Muralidhar, J.: 1. This is appeal by Revenue against order dated 21 st February, 2005 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA Nos. 2959 & 3221/Del./1996 for Assessment Year ( AY ) 1992-93. 2. While admitting this appeal on 22nd August, 2007, following question of law was framed for consideration: Whether Income Tax Appellate Tribunal was correct in law in affirming decision of Commissioner of Income Tax ITA 927/2005 Page 1 of 21 (Appeals) deleting addition of Rs.5,17,45,958/- made by Assessing Officer under Section 69-A of Income Tax Act, 1961? 3. background facts are that Respondent/Assessee is stated to be member of Delhi Stock Exchange ( DSE ), carrying on business in name and style of M/s. Jain and Company. He is also stated to be empanelled broker of financial institutions and funds like Unit Trust of India ( UTI ), Indian Bank Mutual Fund, Can Bank Mutual Fund, etc. 4. For AY in question, Assessee filed return declaring his income as Rs.3,96,960/-. return was picked up for scrutiny. Assessing Officer ( AO ) noticed that Assessee had disclosed bank account with Corporation Bank at Bombay in Balance Sheet for year ending on 31st March, 1993. This was, however, not disclosed in Balance Sheet for earlier year and year ending on 31st March, 1992. In his statement on 13th February 1995, Assessee claimed that this bank account had been inadvertently left out. 5. AO further noticed that balance in said bank account as per books of accounts of Assessee was nil, whereas bank statement showed it to be Rs.32,105/-. It was also noticed that as on 4th March, 1992, in said account, there was credit balance of Rs.1,03,31,250/-. Against this account, 24 cheques in different names had been issued between 11 th and 17th March, 1992. explanation offered by Assessee was that this credit amount represented sale proceeds of 7,25,000 units of UTI 1964 Scheme sold to State Bank of Hyderabad ( SBH ). ITA 927/2005 Page 2 of 21 6. Looking into complexity of account, AO directed special audit under Section 142 (2A) of Income Tax Act, 1961 ( Act ). It transpired that chain of transactions had led to above credit entry into bank account of Assessee. On 6 th February, 1992, 7,25,000 units of UTI 1964 Scheme were purchased from SBH Funds Management Cell, Bombay at Rs.14.20 each, for total consideration of Rs.1,02,95,000/-. SBH issued their bankers receipt for same amount on same date in lieu of units sold by them. payment of this amount was made by Assessee by cheque dated 6th February, 1992 drawn on Standard Chartered Bank ( SCB ) in favour of SBH, Bombay. 7. After purchasing above shares, Assessee sold units on same date to Mr. D. D. Chaturvedi. Assessee explained to AO that Bank Receipt was purchased from SBH on 6th February, 1992 on behalf of Mr. Chaturvedi, who in turn had bought same on behalf of M/s. Shri Maharaj Investment ( SMI ), which was proprietory concern of Mrs. Sneh Pathak wife of Mr. Jaideep Pathak, manager of SCB. Assessee further explained that this bank receipt had been sold back to SBH on 4th March, 1992 for consideration of Rs.1,03,02,250/- on instructions of Mr. Chaturvedi. Assessee thus claimed that he had entered into transaction not on his own behalf but on behalf of Mr. Chaturvedi, who in turn was acting on behalf of SMI. Assessee claimed that he had only made profit of Rs.7,250/- in this transaction. 8. AO, not being satisfied with above explanation, recorded statement of Mr. Chaturvedi. He also obtained statements of Mr. Jaideep ITA 927/2005 Page 3 of 21 Pathak and his wife Mrs. Sneh Pathak at Bombay. In his statement, Mr. Chaturvedi accepted transaction of purchase and sale of units through Assessee. However, Mr. Pathak and Mrs. Sneh Pathak denied having entered into any such transaction with Mr. Chaturvedi or with Assessee. AO found that SCB had issued letter on 6th February, 1992 under signature of Mr. Pathak by which cheque for Rs.1,02,95,000/- was forwarded. AO was of view that cheque had been issued on instructions and at instance of Assessee i.e. M/s Jain & Company. It was concluded that this amount had been obtained by Assessee from SCB by utilizing his own funds. 9. AO found that there were in all 15 drafts/pay orders ( PO ) issued by Mr. Jaideep Pathak on behalf of SCB totalling to Rs.5,68,75,958/-. Out of these 15 POs, 13 were received by Assessee, aggregating to Rs.5,17,45,958/-. first of such POs of Rs.1,02,95,000/- was utilised for purchase of 7,25,000 units from SBH. Remaining 12 POs were utilised for purchase of shares of different companies by Assessee on his own account which were later sold to Mr. Chaturvedi. Since first PO of Rs.1,02,95,000/- was held to have emanated from funds of Assessee, AO held that for remaining 12 POs, same belonged to Assessee on parity of reasoning given with respect to first PO of Rs.1,02,95,000/-. AO noticed that remaining 12 POs were not deposited in Assessee's bank account with Corporation Bank but were paid directly for purchase of securities to vendors. 10. Assessee volunteered that this purchase was also done on behalf of ITA 927/2005 Page 4 of 21 Mr. Chaturvedi and that difference of price and amount of POs was adjusted in running account of Assessee with Mr. Chaturvedi. However, AO not being convinced with above explanation, treated entire amount of Rs.5,17,45,958/- as unexplained income of Assessee under section 69A of Act. 11. During proceedings, Special Auditor in his report under section 142 (2A) of Act pointed out that Assessee had made payments in excess of Rs.10,000/- otherwise than by crossed cheque or crossed bank draft. This was held to be in violation of Section 40A (3) of Act. Further, amount of 9 cheques to extent of Rs.3,43,450/- was disallowed under Section 40A (3) of Act. Rs.1,34,450/- was disallowed for failure to enter transactions representing amount into Chopris . 12. Aggrieved by above order, Assessee filed appeal before Commissioner of Income Tax (Appeals) [ CIT (A) ]. By order dated 6th February, 1996, CIT (A) held that there was no material on record to suggest that draft of Rs.l,02,95,000/- was utilised for Assessee s own benefit. It was also held that there was no material to show that Assessee was acting in collusion with Mr Chaturvedi. 13. CIT (A) noted that certain assets were found by Central Bureau of Investigation ( CBI ) in possession of Mr Chaturvedi, who then surrendered them to CBI. CIT (A) also held that there was no evidence to show that money in question was utilised by Assessee. CIT (A) accordingly deleted addition of Rs.5,17,45,958/-. CIT ITA 927/2005 Page 5 of 21 (A) however, confirmed addition made by AO of Rs.1,34,405/- and Rs.3,43,450/-. 14. Both, Assessee as well as Revenue, filed appeals before ITAT. addition of Rs.5,17,45,958/- under section 69A of Act by AO, was held by ITAT in impugned order to be bad in law since Revenue had not been able to bring on record any material or evidence to indicate that Assessee had carried out any transactions outside books of accounts. ITAT held that Section 69A of Act was not applicable since conditions precedent to give rise to legal fiction had not been proved. However, in respect of Assessee s plea as regards addition of Rs.l,34,150/- and disallowance of Rs.3,43,450/- under Section 40A (3) of Act, it was held that since it was inadvertent omission, no addition could be made. 15. ITAT further held that loss of Rs.24,29,739/- was rightly characterised as loss in speculation. only question was how much of loss had been suffered by Assessee and how much by Assessee s clients. Despite ample opportunities Assessee failed to furnish particulars. Thus Assessing Officer (AO) was compelled to resort to estimate. AO attributed 50% loss to Assessee which was reduced by CIT (A) to 25%. Consequently, ITAT saw no reason to interfere. 16. Thus, Revenue s appeal was dismissed and appeal filed by Assessee was partly allowed by ITAT. addition of Rs.1,34,450/- on account of failure to enter transactions into Chopris and Rs.3,43,450/- by ITA 927/2005 Page 6 of 21 way of disallowance under Section 40A (3) of Act were deleted. 17. As already noticed hereinabove present appeal has been admitted confined to only one question regarding deletion by ITAT of addition made by AO of Rs.5,17,45,958/- to income of Assessee under Section 69A of Act. 18. Mr. Ajit Sharma, learned counsel appearing for Revenue submitted that ITAT failed to appreciate that both Mr. Jaideep Pathak and Smt. Sneh Pathak had stated that they had not entered into any transaction with Mr. Chaturvedi or with Assessee. He submitted that ITAT also failed to appreciate that when Mr. Chaturvedi for whom 7,25,000/- units of UTI 1964 scheme were purchased by Assessee was questioned, he replied that PO had been received from SMI, proprietary concern of wife of Mr. Jaideep Pathak. However, he was unable to produce any documentary evidence to substantiate this. This was also denied by SMI. fact remained that in terms of cheque dated 6th February, 1992 issued by SCB addressed to SBH proceeds of PO were to be credited into account of Assessee. 19. Relying on decision in CIT v. K. Chinnathamban (2007) 7 SCC 390, Mr. Sharma submitted that in above circumstances onus to prove source of Rs.1,02,95,000/- was on Assessee and he failed to discharge it. Reliance was also placed on decision in Sumati Dayal v. Commissioner of Income Tax, Bangalore (1995) Supp 2 SCC 453 to urge that burden of proof in present case had shifted to Assessee to prove sources ITA 927/2005 Page 7 of 21 of income. 20. Mr. Ajay Vohra, learned Senior counsel for Respondent/Assessee, referred to correspondence between parties. In particular he referred to letter dated 21st August, 1995 issued by SCB to AO stating that record of bank did not show that aforementioned cheque of Rs.1,02,95,000/- in favour of SBH was issued on instructions of Jain & Co. i.e. Assessee. He pointed out that letter stated that there were no written instructions from Assessee to that effect and further that money was not received back with bank. 21. Mr. Vohra referred to letter dated 25th August, 1995 stating that no security had been received against PO. He also referred to letter dated 25th August, 1995 addressed by bank to AO stating that it had not received any security against PO nor were funds returned to bank. He referred to reply of Mr. Chaturvedi to Question No. 3 of AO where he confirmed that payment of above sum of Rs.1,02,95,000/- was made by Mr. Chaturvedi to Assessee for making payment to SBH. He also confirmed that 24 cheques issued from Corporation Bank, Bombay by Assessee were as per his instructions and on his behalf. He denied that Assessee was connected with clients of Mr. Chaturvedi to whom 24 cheques were issued. Even in course of cross-examination by AO, Mr. Chaturvedi confirmed these transactions. 22. Mr. Vohra referred to statement of Mr. Jaideep Pathak recorded by AO on 24th March, 1995. In reply to questions 3,4 & 5 Mr. Pathak stated ITA 927/2005 Page 8 of 21 that he had received instructions from Mr. Hiten P. Dalal, who was stock and share broker from Kanpur, for issuing pay orders totalling Rs.5,68,74,958/-. He referred to charge-sheet filed by CBI on 20th June, 1992 where it was alleged that pay orders of SCB were issued by Mr. Pathak from funds of Mr. Hiten P. Dalal which were then given to Mr. Chaturvedi as part of criminal conspiracy to derive pecuniary benefit. He pointed out that in assessment order dated 31st July, 1995 of Mr. Pathak for AY 1992-1993 Rs. 5,68,75,958/- was added to his income and this included sum of Rs. 5,17,45,958/- added by AO in hands of Assessee. He pointed out that Mr. Pathak had also written letter on 6th February, 1992 to SBH stating that he had not received any instructions from Assessee to issue draft for Rs.1,02,95,000/-. 23. By letter dated 26th September, 1995 SCB confirmed to Assessee that he did not have any bank account with them and that SCB had not filed any civil claim against Assessee. Mr Vohra referred to letter dated 25th September, 1995 from Mr. Chaturvedi to Assessee giving list of securities and money deposited by Mr. Chaturvedi with CBI amounting to Rs.4,73,19,836/- consisting of drafts, shares and money. This letter also confirmed that assets were held by Mr. Chaturvedi in his books in name of SMI whose proprietor was Mrs. Sneh Pathak, wife of Mr. Jaideep Pathak. This showed that money was held by Mr. Chaturvedi on behalf of SMI. Additional evidence was also admitted by CIT (A) at time of appeal. 24. above submissions have been considered. Apropos question of ITA 927/2005 Page 9 of 21 law framed in this appeal, it is necessary first to refer to Section 69A of Income Tax Act which reads as under: 69A. Where in any financial year assessee is found to be owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in books of account, if any, maintained by him for any source of income, and assessee offers no explanation about nature and source of acquisition of money, bullion, jewellery or other valuable article, or explanation offered by him is not, in opinion of Assessing Officer, satisfactory, money and value of bullion, jewellery or other valuable article may be deemed to be income of assessee for such financial year. 25. legal requirement as regards Section 69A may be summarised thus: i) In any financial year Assessee should be found to be owner of any money, bullion, jewellery etc. ii) Such money, bullion, jewellery etc. should not be recorded in his books of account, if any maintained by him for any source of income. iii) Assessee should offer no explanation about nature and source of acquisition of money. iv) explanation offered by him is not found to be satisfactory in opinion of AO. 26. If above conditions exist then such money and value of such bullion, jewellery etc. would be deemed to be income of Assessee for ITA 927/2005 Page 10 of 21 such financial year. In Chuharmal v. CIT (1988) 3 SCC 588 it was explained that word income in Section 69A had wide meaning. 27.1 In CIT v. K. Chinnathamban (supra) relied upon by learned counsel for Revenue, Respondent/Assessee was connected with firm by name of V.V. Enterprises. On search of its premises by police officers Rs.1.18 crores of cash was seized. firm was managed by one K. Palaniasamy who had filed its returns and gave statements in course of assessment proceedings. 27.2 Mr. K. Palaniasamy was not in position to explain source of deposit of Rs.1.18 crores. AO therefore treated said amount as undisclosed income of persons in whose names deposit appeared. As far as Respondent/Assessee was concerned, Rs.5.16 lakhs was determined to be his income on basis that Rs.16,148/- as his salary and Rs.5 lacs as undisclosed income. It was found by AO that although M/s V.V. Enterprises was stated to be registered firm but there were in fact no bank accounts in name of such firm. Also there were no accounts in name of any of partners alleged therein. There were no deposits either in name of firm or of any of partners. 27.3 In view of statements of Mr. K. Palaniasamy AO proceeded to frame assessment in his hands on protective basis and in hands of deposit holders for unexplained deposits. As far as Assessee is concerned, he could not establish source of deposit and there was no evidence to support his claim that amount had been collected from members of ITA 927/2005 Page 11 of 21 public. 27.4 It was held by Supreme Court in CIT v. K. Chinnathamban that where deposit stands in name of third person and that person is related to Assessee then in such case proper course would be to call upon person in whose books deposit appears or person in whose names deposit stands to explain such deposit. 27.5 In that case it was found that there was no evidence regarding registration of firm or source of investment. onus of proving source of deposit primarily rested on persons in whose names deposit appeared in various banks. Accordingly, action of department in making individual assessment in hands of Assessee was upheld. Therefore, what turned decision in case was failure of Assessee to properly explain source of deposit. 28.1 Turning now to decision in Sumati Dayal v. CIT, Bangalore (supra), Assessee there carried on business as dealer in art pieces, antiques and curios in Bangalore. During AY 1971-72 Assessee received total amount of Rs.3,11,831/- by way of race winnings in Jackpots and Treble events in races at Turf Clubs in Bangalore, Madras and Hyderabad. amount was shown by Assessee in capital account in books. AO recorded statement of Assessee and in Assessment Order held that above amount did not represent winnings and races. He treated receipt as income from undisclosed sources and assessed it as income from other sources. For AY 1972-73 similar ITA 927/2005 Page 12 of 21 amount of Rs.93,500/- shown by Assessee as race winnings was treated as income from other sources. 28.2 While appeals were pending before Appellate Tribunal Assessee withdrew those appeals and went before Settlement Commission. By majority, Settlement Commission came to conclusion that Assessee s claim about her winnings and races was contrived and not genuine. Chairman of Settlement Commission gave dissenting opinion. 28.3 In upholding majority of opinion of Settlement Commission Supreme Court explained that once there was prima facie evidence against Assessee, burden shifted to Assessee to rebut inference that unexplained money constituted income in Assessee s hands. legal position was explained in para 4 as under: 4. It is no doubt true that in all cases in which receipt is sought to be taxed as income, burden lies on Department to prove that it is within taxing provision and if receipt is in nature of income, burden of proving that it is not taxable because it falls within exemption provided by Act lies upon assessee. (See: Parimisetti Seetharamamma (supra) at P. 536). But, in view of Section 68 of Act, where any sum is found credited in books of assessee for any previous year same may be charged to income tax as income of assessee of that previous year if explanation offered by assessee about nature and source thereof is, in opinion of Assessing Officer, not satisfactory. In such case there is, prima facie, evidence against assessee, viz., receipt of money, and if he fails to rebut, said evidence being unrebutted, can be used against him by holding that it was receipt of income nature. While considering explanation ITA 927/2005 Page 13 of 21 of assessee Department cannot, however, act unreasonably. (See: Sreelekha Banerjee (supra) at p. 120) 28.4 As far as merits of case was concerned, it was observed as under: 7. There is no dispute that amounts were received by appellant from various race clubs on basis of winning tickets presented by her. What is dispute is that they were really winnings of appellant from races. This raises question whether apparent can be considered as real. As laid down by this Court, apparent must be considered real until it is shown that there are reasons to believe that apparent is not real and that taxing authorities are entitled to look into surrounding circumstances to find out reality and matter has to be considered by applying test of human probabilities. (See: Commissioner of Income Tax v. Durga Prasad More,(1971) 82 ITR 540, at pp. 545, 547) 28.5 Both above decisions, therefore, turned on peculiar facts of each case. In both cases, Assessee was not able to satisfactorily explain source of income. 29. Turning to case on hand, question to be asked is whether Assessee was able to satisfactorily explain source of credit entry of Rs.1,02,95,000/- appearing in his Corporation Bank Account. It must be recalled that while this was starting point, during course of assessment AO found that Assessee had received not one but 13 pay orders aggregating to Rs.5,17,45,958/- from SCB, Bombay during FYs in question and mostly between December, 1991 and February, 1992. All these POs were utilised by him for purchasing units and shares from different ITA 927/2005 Page 14 of 21 banks and mutual funds. 30. explanation offered by Assessee was that all 13 POs were received from Mr. Chaturvedi, Bombay Broker and purchase of units and shares were done by him on behalf of Mr. Chaturvedi and then same were sold back to Mr. Chaturvedi after earning normal brokerage. AO found that all 13 POs were actually tainted POs relating to Securities Scam of 1992 and that they had been issued by SCB under extra ordinary circumstances. SCB had informed ACIT Circle 7 (3) that it had been victim of massive fraud perpetrated in 1992 by certain brokers in collusion with certain ex-employees of SCB to siphon out funds from bank. It was also informed that SCB had filed FIR with CBI in which Mr. Jaideep Pathak, ex-employee was named as one of accused and all above referred 13 POs were part of total 15 POs fraudulently issued by Sh. Pathak. 31. It must be noticed here that even during course of assessment proceedings AO required Assessee to show cause as to why said sum of Rs.1,02,95,000/- should not be added to his total income under Section 69A of Act. Assessee filed petition before CIT under Section 144A of Act challenging above proposal. This application was disposed of by Additional CIT by order dated 22/25th September, 1995. 32. direction sought by Assessee from Additional CIT was that AO should put to Assessee, material gathered by him on basis ITA 927/2005 Page 15 of 21 of which addition was proposed to be made. In said order dated 22/25th September, 1995 Additional CIT noted fact that AO of Mr. Jaideep Pathak had held that there was apparent case of financial quid pro quo against Mr. Pathak and had already added sum of Rs.5.68 crores, equal to amount of said 15 POs, as Mr. Pathak s income from other sources. It was noticed therein that 13 out of these 15 POs were received by Mr. Anoop Jain, Assessee and were utilised by him for purchasing units and shares from different banks. 33. According to Additional CIT above facts appeared to be sufficient justification to AO to suspect Assessee s claim that transactions relating to 13 POs of SCB were normal business transactions. He started investigation to find out truth. Additional CIT set out gist of evidence collected by AO but added that it was not exhaustive nor is it possible for me to describe it fully due to time constraint. 34. However it was concluded that prima facie there appears to be collusion between Assessee and DDC in obtaining 13 POs from Standard Chartered Bank through financial quid pro quo with Mr. Jaideep Pathak. objective behind collusion appeared to be to invest heavily in booming stock market prior to Budget of 1992 and make big and quick profit on sale of shares subsequently. However, additional CIT added as under: 15. However, I hasten to add that before coming to final and fair conclusion in this regard it would be necessary to consider ITA 927/2005 Page 16 of 21 all facts, materials, and surrounding circumstances of case including materials and arguments advanced by assessee in this regard. This will be lengthy and time consuming exercise and I do not have adequate time for this purpose. However, I am satisfied that AO is capable of passing fair and judicious order after considering all relevant facts, materials and surrounding circumstances of case. I, therefore, direct him to do so and decide issues on merits and in accordance with law. 35. When matter went back to AO he referred to not this paragraph but subsequent paragraphs of order of CIT where attention was drawn to AO to decision of ITAT Delhi in ITO v. DC Rastogi 39 ITD 490. AO then proceeded to hold that Assessee had acquired pay order of Rs.1,02,95,000 from SCB after financial quid pro quo of equal amount . On this very basis he added amount to income of Assessee. On same basis he further concluded that amount constituting remaining 12 POs should also be added to income of Assessee. 36. Thus it is seen that very basis for making additions is inference drawn by AO that Assessee had received above POs and spent monies for purchase of shares and units as result of some financial quid pro quo . 37. This Court has again examined evidence in some detail. There are certain facts that stand out which showed that aforementioned amounts received by Assessee as POs did not belong to him. Assessee was only conduit through whom amounts were floated. One of essential ITA 927/2005 Page 17 of 21 conditions in Section 69A of Act is that Assessee should be owner of money and it should not be recorded in his books of accounts. This was pre-condition to next step of Assessee offering no explanation about nature and source of acquisition of such money. 38. In present case evidence placed before AO clearly indicated that Mr. Chaturvedi confirmed that draft of Rs.1,02,95,000/- was given by him to Assessee and that transactions of purchase of units were done by Assessee on his behalf. Books of accounts maintained by Mr. Chaturvedi confirmed above statement. 39. Added to this is fact that CBI recovered securities and cash worth Rs.4,73,19,836/- from Mr. Chaturvedi and he claimed that these were held on behalf of Mrs. Sneh Pathak, proprietor of SMI. This was to be read with statement of Mr. Jaideep Pathak, employee of SCB, stating that drafts worth Rs.5,68,74,958/- were issued by him on instructions of Mr. Hiten P.Dalal. 40. two letters issued by SCB dated 21st August and 25th August, 1995 to AO are significant. They clearly state in regard to cheque of Rs.1,02,95,000/- issued in favour of SBH that as per records there were no written instructions from M/s Jain & Company to this effect. They also confirmed that money was not received back by SCB. letter dated 25th August, 1995 in this regard is even more detailed. It was confirmed that: above Pay Order is part of 15 Pay Orders which were issued by said Mr. Jaideep Pathak to siphon out funds from ITA 927/2005 Page 18 of 21 Bank. circumstances surrounding these Pay Orders have been investigated by Deputy Superintendent of Police, Central Bureau of Investigation (CBI) in SCB s case Ref No. RC-11 (S) 92-Bom. 41. This obviously meant that above POs had been issued without obtaining any corresponding deposit of money into SCB by anyone else. Certainly Assessee did not seem to have been involved at all. addition of sum of Rs.5,17,45,958/- to income of Mr. Jaideep Pathak by his AO is another significant aspect. said addition was part of larger sum of Rs.5,68,79,958/- added to his income. question of adding same amount in hands of assessee clearly was not permissible. 42. following reasoning of CIT (A) in disbelieving case of Revenue appears to be acceptable analysis of evidence. 36. During course of hearing of appeal, A.C. was confronted with letter of SCB stating that no security was received by them against issue of draft of Rs.1,02,95,000/-. A.O. admitted that his case does not rest any longer on deposit of money with bank of equivalent amount and case of department now is that this money was given by assessee to Mr. Jaideep Pathak, manager of SCB in his personal capacity for obtaining draft in his favour. If this is so, it means that assessee had utilised his unaccounted money to obtain white money by way of draft from bank. If that is so, there was no need for him to attempt to conceal his bank account in corporation bank, Bombay as is claimed by department. Secondly, draft would have been utilised by assessee for his own benefit and it has not been shown by A.O. whether it was so. On contrary, amount of Rs.1,02,95,000/- has been utilised for issuing 24 drafts in favour of certain parties on instruction of Mr. DDC which fact is confirmed by DDC. Thus, ITA 927/2005 Page 19 of 21 subsequent conduct of assessee does not support case of department that money was given by assessee to Mr. Jaideep Pathak to obtain drafts and is rather disproved by facts stated above including chargesheet filed by CBI where facts and modus operandi adopted have been discussed in details. 37. theory of A.O. is also not sustainable on another consideration. If money belonged to assessee and purpose was to launder same as is made out, then it has to be explained as to why Mr. DDC is supporting contention of assessee that money was supplied by him which belonged to Shri Maharaj Investment. It was argued on behalf of revenue that assessee was acting in collusion with Mr. DOC and that is why case of assessee is being supported by him. 38. However, this contention is without any merit as even as per case of department, no money has been invested by Mr. DDC. If assessee and Mr. DDC were acting in collusion then it stands to reason that both will be making investments and not merely assessee. No such investment by Mr. DDC is even alleged by Department. Further, from conduct of parties and subsequent events, it appears that no benefit was to accrue to Mr. DDC and if that is so then story of collusion is not supported by facts. As already stated, chargesheet filed by CBI disproves this contention totally. It may however, be mentioned that certain assets were found by CBI in possession of Mr. DDC which have been surrendered by him to CBI. He claimed that these assets were held by him on behalf of SMI and not on his own behalf. He had not stated that this money belonged to assessee or he himself and this claim has not been disproved and on contrary is accepted by Deptt. in case of Mr. Jaideep Pathak. 43. As rightly noted by CIT (A) there was no evidence to show that 24 cheques stated to have been issued by Assessee on behalf of Mr. ITA 927/2005 Page 20 of 21 Chaturvedi were utilised by Assessee and were meant for benefit of Assessee. 44. In other words, there was nothing to show that Assessee had benefited in any way from any of above transactions. As regards test of human probabilities if there was no evidence whatsoever to contrary it could have been resorted to draw certain inference. 45. However, in present case there appears to be overwhelming evidence to show involvement of Mr. Chaturvedi acting on behalf of Mrs. Sneh Pathak for SMI. CBI also did not choose to proceed against Assessee and that discounts case of any collusion between Assessee and Mr. Chaturvedi along with Mr. Pathak. It does appear that Assessee was at highest used as conduit by other parties and did not himself substantially gain from these transactions. 46. In that view of matter, concurrent view of both CIT (A) and ITAT that addition of aforementioned sum to income of Assessee was not warranted, does not call for interference. question of law framed is accordingly answered in affirmative i.e. in favour of Assessee and against Revenue. appeal is accordingly dismissed. S. MURALIDHAR, J. TALWANT SINGH, J. AUGUST 22, 2019/rd/mw ITA 927/2005 Page 21 of 21 Commissioner of Income-tax, Delhi v. Anoop Jain