1. This appeal by the assessee for the assessment year 1989-90 is directed against order of DCIT (Appeals) upholding addition of Rs. 20,000 under section 69 of the Income-tax Act for three loans claimed to have been obtained from close relations by the assessee and invested in construction of a house property. The details of loans and explanation of assessee are as under :- This loan was obtained from father through cheque No. 286497 drawn on Savings Bank A/c No. 031053 with Punjab & Sindh Bank, Sector-17C, Chandigarh. Confirmation from the aforesaid Shri N.S. Gujral accompanied with statement of bank account is available at pages 6 and 8 of the paper book.
A certificate from husband giving his account number is available at page 4 of the paper book. The husband stated that it was festival loan given by his employer.
A certificate from Punjab & Sindh Bank that above loan was advanced to the assessee on security of NSC for Rs. 10,000 in the name of Mrs. Rajinder Kaur, photocopy of which is available at page 13 of the paper book.
2. The Assessing Officer refused to accept above loans from father, husband and mother as no confirmations were placed before him. The amount was added as assessee's income from undisclosed sources.
3. Being aggrieved, assessee impugned the addition in appeal before DCIT (Appeals) who issued letter dated 13/14-11-1990 to the assessee to prove above three loans and also furnish evidence of mode of receipt of loan and repayment with sources thereof. The assessee filed letter dated 4-12-1990 explaining the position and also copies of certificate in evidence. The mode of receipt and payment was also explained. The assessee could not personally appear before the ld. DCIT (Appeals) as she and her husband in the meanwhile had shifted to New Delhi. The ld.DCIT (Appeals) upheld the addition as assessee did not personally appear before him in spite of several opportunities provided by him. He further held that requisite details and evidence were not furnished and therefore, loans were not genuine. Accordingly, the addition was upheld. The assessee has come up in appeal before me.
4. I have heard Shri D.K. Gupta, ld. counsel for the assessee and Mrs.
Monica Ratan, the ld. D.R. for the revenue. Shri D.K. Gupta emphasised that loans were prima facie proved through documentary evidence which has been rejected without any justification. The assessee and her husband had permanently shifted to Delhi and in their absence their counsel produced whatever evidence was available. But without verification, such evidence has been rejected. According to Shri Gupta, the loans have been proved in accordance with law and addition on the facts of the case is unsustainable. The ld. D.R. opposed the above submissions. She pointed out that no confirmation was filed before the AO; in appeal before the DCIT (Appeals) only photocopies of documents and bank statements were produced. Such photocopies are inadmissible in evidence. In this connection, she relied upon the decision of Hon'ble Supreme Court in the case of CIT v. Durga Prasad More [1971] 82 ITR 540, and submitted that as authentic evidence was not forthcoming, the ld. DCIT (Appeals) insisted upon production of appellant-assessee. In spite of several opportunities, the assessee did no appear nor produce requisite evidence. In above circumstances, addition was rightly confirmed. Smt. Ratan stated that onus to prove genuineness of transaction and capacity of creditor to advance loan was on the assessee and said onus in the present case was not discharged. She accordingly supported the impugned order.
5. I have given careful thought to the submissions advanced before me.
I have also considered material available on record. I have seen original cover of ld. DCIT (Appeals) where photocopies of different documents have been filed. The three loans are from husband, mother and father and if certified copies are taken as good material, these loans are reasonably proved. The loan of Rs. 7,000 was taken by the assessee against security of NSC held by assessee's mother Mrs. Rajinder Kaur.
Likewise, father had given loan to the assessee through cheque from his account No. 031053 with Punjab & Sind Bank, Sector 17, Chandigarh. A copy of bank statement is available on record. There is no material to show that above documents or any of them are not genuine. The other loan of Rs. 3,000 from husband is petty amount and should have been accepted without insisting upon further (demonstrative) evidence. The revenue was at liberty to verify any of the claims as account and ward number in the case of the husband and details of bank account in the case of father and mother were made available.
6. The main objection raised by the D.R. during the course of hearing was that only photostat copies were made available to DCIT (Appeals) and original documents were not filed. As per settled law the rigid and technical rule of evidence Act are not applicable to income-tax proceedings and document produced in the income-tax proceedings is not to be proved under the Indian Evidence Act like the proceedings before a Civil Court. A photocopy or any sort of copy certified by the assessee is good enough for assessment proceedings. Having regard to the nature of proceedings, no rules have been framed regarding production and proof of document or other evidence. The Assessing Officer has power to demand original and insist on such proof as warranted by the circumstances and in case such evidence is not led, to draw appropriate adverse inference. But whether adverse inference drawn is justified or not would again depend upon the facts of the case. The discretion has to be exercised not in an arbitrary manner but in a quasi-judicial manner. Approach of the revenue authorities must always look fair and reasonable. Certain facts and situations are to be established by the assessee and when prima facie evidence is led by the assessee and case is not accepted, a duty is cast upon the Assessing Officer to make inquiry and investigation and disprove the case set up by the assessee. This duty cannot be discharged by placing extraordinary onus on the assessee. There is clear demarcation between proving a case and through investigation showing that it is not proved.
There is no hard and fast rule regarding degree of proof required.
Their Lordships of Supreme Court made the following pertinent observations in case of Durga Prasad More (supra) : ".... Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal.
Therefore, the Courts and Tribunals have judge the evidence before them by applying the test of human probabilities. Human minds may differ as to the reliability of a piece of evidence. But in that sphere the decision of the final fact finding authority is made conclusive by law." 7. In the present case, as already noted, the assessee has led sufficient evidence to prove prima facie case in respect of loans received from close relations. Having regard to the background that it was a case of small investments with the assessee having no scope of earning income from undisclosed sources, the ld. DCIT (Appeals) should have accepted the evidence placed before him without insisting upon personal presence of the assessee and further proof. The DCIT (Appeals) through his staff or through the Assessing Officer could have got the matter investigated from the bank or Income-tax records if he considered it necessary to do so. Without above enquiry or investigation, he could not shift entire burden on the assessee and for her failure to appear, the matter decided against her. The technical objections raised by the ld. D.R. are inappropriate and cannot be accepted in the circumstances of the case. It was open to DCIT (Appeals) not to accept photocopies and ask the assessee to produce document signed by the lender, but no such objection was taken at the appropriate stage and assessee was permitted to explain its case by filing photocopies. Those photocopies are quite reliable evidence and there is no justification to doubt their genuineness and throw them on technical grounds. The revenue has failed to disprove the case established by the assessee. In the light of above discussion, I accept loan amounts and direct that the addition be deleted.