DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JABALPUR vs. SHRI MUKESH KUMAR AGRAWAL, JABALPUR
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Income Tax Appellate Tribunal, BENCH “DB” JABALPUR
Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE
PER OM PRAKASH KANT, AM
This appeal by the Revenue is directed against order dated 22.09.2020 passed by the Ld. Commissioner of Income-tax (Appeals) -1, Jabalpur [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
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On the facts and in the circumstances of the case, the Ld. CIT(A) was 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in Law in deleting the additions of Rs. 71,50,000/ not justified in Law in deleting the additions of Rs. 71,50,000/ not justified in Law in deleting the additions of Rs. 71,50,000/- made by the AO on account of unexplained cash deposit. e AO on account of unexplained cash deposit. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in Law in deleting the additions Rs. 29,14,680/ not justified in Law in deleting the additions Rs. 29,14,680/ not justified in Law in deleting the additions Rs. 29,14,680/- made by AO on account of unexplained purchase of property. AO on account of unexplained purchase of property. 3. On the facts 3. On the facts and circumstances of the case, the Ld. CIT(A) was not and circumstances of the case, the Ld. CIT(A) was not justified in Law in deleting the additions of Rs. 10.00,000/ justified in Law in deleting the additions of Rs. 10.00,000/- - made by the AO on account of unexplained capital income AO on account of unexplained capital income. 2. Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed return of income on return of income on 27.10.2017 declaring total income at 27.10.2017 declaring total income at Rs.35,99,840/-. The return of income filed by the assessee was . The return of income filed by the assessee was . The return of income filed by the assessee was selected for scrutiny and statutory notices selected for scrutiny and statutory notices under the Income under the Income-tax Act.1961 (in short the ‘Act’) short the ‘Act’) were issued and complied with. The were issued and complied with. The assessee was engaged in t was engaged in the business of jewellary through his he business of jewellary through his proprietary concern namely “ proprietary concern namely “M/s Suhagan Abhusan Emporium Suhagan Abhusan Emporium”. During the course of assessment proceedings, the Assessing Officer During the course of assessment proceedings, the Assessi During the course of assessment proceedings, the Assessi noticed cash deposits in bank account during cash deposits in bank account during post post demonetization period. After taking into fter taking into consideration explanation of the assessee while passing assessment order u/s 143(3) on 27.12.2019, the while passing assessment order u/s 143(3) on 27.12.2019 while passing assessment order u/s 143(3) on 27.12.2019 Assessing Officer made addition of Rs.71,50,000/- to the total Assessing Officer made addition of Rs.71,50,000/ Assessing Officer made addition of Rs.71,50,000/ income as unexplained cash deposit by the assessee in the bank income as unexplained cash deposit by the assessee in the bank income as unexplained cash deposit by the assessee in the bank accounts. The Assessing Off The Assessing Officer also made addition for icer also made addition for increase in capital due to old property brought capital due to old property brought in capital account in capital account and advance from sale of plot amounting to Rs.29,14,680/ amounting to Rs.29,14,680/- and Rs. 10,00,000/ Rs. 10,00,000/- respectively. On further appeal, the Ld. CIT(A) deleted all the three respectively. On further appeal, the Ld. CIT(A) deleted all the three respectively. On further appeal, the Ld. CIT(A) deleted all the three additions made by the Assessing Officer. Aggrieved de by the Assessing Officer. Aggrieved, , the Revenue is in appeal before the Tribunal raising grounds in appeal before the Tribunal raising grounds as reproduced above. reproduced above.
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Before us, the Ld. Counsel of the assessee has filed a Paper Before us, the Ld. Counsel of the assessee has filed a Paper Before us, the Ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 217. Book containing pages 1 to 217.
In ground No. 1 of the appeal, the Revenue has challenged the In ground No. 1 of the appeal, the Revenue has challenged the In ground No. 1 of the appeal, the Revenue has challenged the addition of Rs.71,50,000/ addition of Rs.71,50,000/- deleted by the ld CIT(A), deleted by the ld CIT(A), which was made by the Assessing Officer on account of unexplained cash made by the Assessing Officer on account of unexplained cash made by the Assessing Officer on account of unexplained cash deposit. The facts in brief qua the issue in dispute are that the deposit. The facts in brief qua the issue in dispute are that the deposit. The facts in brief qua the issue in dispute are that the Assessing Officer observed that ssing Officer observed that cash deposit of Rs.66,50,000/ Rs.66,50,000/- for the period from 10.11.2016 to the period from 10.11.2016 to 19.11.2016 in the Union Bank of 19.11.2016 in the Union Bank of India. Similarly, he observed India. Similarly, he observed cash deposit of Rs.85,00,000/ deposit of Rs.85,00,000/- for the period from 10.11.2016 to 17.11.2016 in the Bank of India. The from 10.11.2016 to 17.11.2016 in the Bank of India. The from 10.11.2016 to 17.11.2016 in the Bank of India. The Assessing Officer asked the assessee to explain source of those cash Assessing Officer asked the assessee to explain source of Assessing Officer asked the assessee to explain source of deposits totaling to ( (66,50,000+ 85,00,000)= Rs. 1 1,51,50,000/- in above two bank accounts above two bank accounts for the period from 10.11.2016 from 10.11.2016 to 19.11.2016 i.e. post demonetization period. The assessee explained 19.11.2016 i.e. post demonetization period. The assessee expla 19.11.2016 i.e. post demonetization period. The assessee expla that those cash was deposited out of cash balance available in that those cash was deposited out of cash balance available in that those cash was deposited out of cash balance available in books of accounts. However, the Ld. Assessing Officer rejected the books of accounts. However, the Ld. Assessing Officer rejected the books of accounts. However, the Ld. Assessing Officer rejected the contention of the assessee. The Assessing Officer noted that the contention of the assessee. The Assessing Officer noted that the contention of the assessee. The Assessing Officer noted that the cash balance in the books of accounts of the assessee on cash balance in the books of accounts of the assessee on cash balance in the books of accounts of the assessee on 21.10.2016 was only Rs.47,24,780/ 21.10.2016 was only Rs.47,24,780/- and therefore, he treated and therefore, he treated closing balance as on 10.11.2016 at Rs.50,00,000/-. Further, the closing balance as on 10.11.2016 at Rs.50,00,000/ closing balance as on 10.11.2016 at Rs.50,00,000/ Assessing Officer estimated estimated the sales of Rs.30,00,000/ the sales of Rs.30,00,000/- for the period of nine days from 10.11.2016 to 19.11.2016 period of nine days from 10.11.2016 to 19.11.2016 . I . In this manner the the Assessing Assessing Officer Officer gave benefit benefit of of Rs.50,00,000/- Rs.50,00,000/ and Rs.30,00,000/- as the cash available and the excess as the cash available and the excess of cash as the cash available and the excess
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deposits deposits [Rs.1,51,50,000 [Rs.1,51,5 –(Rs.50,00,000 (Rs.50,00,000 + + Rs.30,00,000] Rs.30,00,000] = = Rs.71,50,000/- was as held as unexplained cash deposits. The Ld. unexplained cash deposits. The Ld. CIT(A) deleted the addition observing as under: e addition observing as under:
“4.2.1 I have considered the facts of the case, plea raised by the 4.2.1 I have considered the facts of the case, plea raised by the 4.2.1 I have considered the facts of the case, plea raised by the appellant and findings of the AO. The appellant has been doing business appellant and findings of the AO. The appellant has been doing business appellant and findings of the AO. The appellant has been doing business of jewellery. The appellant has contended that the peak season in the of jewellery. The appellant has contended that the peak season in the of jewellery. The appellant has contended that the peak season in the business of appellant is only during festival and marriage season. The appellant is only during festival and marriage season. The appellant is only during festival and marriage season. The appellant further submitted that Diwali was celebrated on 30.10.2016 appellant further submitted that Diwali was celebrated on 30.10.2016 appellant further submitted that Diwali was celebrated on 30.10.2016 and subsequent two days were holidays. The accountant of the appellant and subsequent two days were holidays. The accountant of the appellant and subsequent two days were holidays. The accountant of the appellant was also on holiday and entire sale of last October 2016 was also on holiday and entire sale of last October 2016 and first week and first week of November 2016 were entered in of November 2016 were entered in books of accounts in the first week of books of accounts in the first week of November 2016 which has resulted in high cash balance as on November 2016 which has resulted in high cash balance as on November 2016 which has resulted in high cash balance as on 08.11.2016. The closing balance shown by appellant as on 08.11.2016 08.11.2016. The closing balance shown by appellant as on 08.11.2016 08.11.2016. The closing balance shown by appellant as on 08.11.2016 was Rs.1,21,58,784/ was Rs.1,21,58,784/-. Further, the appellant has shown turnover of Rs. ant has shown turnover of Rs. 9,45,68,664/-. The AO has accepted turnover shown by the appellant. . The AO has accepted turnover shown by the appellant. . The AO has accepted turnover shown by the appellant. The cash deposited in bank account was part of turnover shown by the The cash deposited in bank account was part of turnover shown by the The cash deposited in bank account was part of turnover shown by the appellant. The books of account of the appellant has not been rejected by appellant. The books of account of the appellant has not been rejected by appellant. The books of account of the appellant has not been rejected by the AO. The app the AO. The appellant has taken an alternative plea that the entire sale is ellant has taken an alternative plea that the entire sale is supported by sales bills, purchase, stock records, VAT and GST returns supported by sales bills, purchase, stock records, VAT and GST returns supported by sales bills, purchase, stock records, VAT and GST returns etc therefore, the cash receipts out of sales does not represents any etc therefore, the cash receipts out of sales does not represents any etc therefore, the cash receipts out of sales does not represents any unaccounted income of the appellant. The AO on other h unaccounted income of the appellant. The AO on other hand has treated and has treated sales of Rs.30,00,000/ sales of Rs.30,00,000/- as genuine sales and cash balance of as genuine sales and cash balance of Rs.50,00,000/- - as on A 3102016 as genuine. It is seen that the AO on as on A 3102016 as genuine. It is seen that the AO on one side has acceped turnover sown by the appellant and on other side one side has acceped turnover sown by the appellant and on other side one side has acceped turnover sown by the appellant and on other side has presumed some sales and cash balance has presumed some sales and cash balance without any finding on without any finding on record. It is important to mention here that no discrepancies has been record. It is important to mention here that no discrepancies has been record. It is important to mention here that no discrepancies has been pointed by the AO. All the sales are dully supported by bills and pointed by the AO. All the sales are dully supported by bills and pointed by the AO. All the sales are dully supported by bills and vouchers. The findings of the AO are drawn on some presumption and vouchers. The findings of the AO are drawn on some presumption and vouchers. The findings of the AO are drawn on some presumption and assumption basis. Hon'ble De assumption basis. Hon'ble Delhi ITAT in the case of Moongipa lhi ITAT in the case of Moongipa Investments Ltd vs ITO (2013) 30 taxmann.com 113 (Del ITAT) has held Investments Ltd vs ITO (2013) 30 taxmann.com 113 (Del ITAT) has held Investments Ltd vs ITO (2013) 30 taxmann.com 113 (Del ITAT) has held that where deposits in bank were from cash balance available to that where deposits in bank were from cash balance available to that where deposits in bank were from cash balance available to assessee in its books of accounts, no addition could be made under assessee in its books of accounts, no addition could be made under assessee in its books of accounts, no addition could be made under section 68. In the inst 68. In the instant case also, there was sufficient cash balance ant case also, there was sufficient cash balance with the appellant as on 08.11.2016 which was deposited in bank with the appellant as on 08.11.2016 which was deposited in bank with the appellant as on 08.11.2016 which was deposited in bank account of the appellant. Therefore, the AO was not justified in making account of the appellant. Therefore, the AO was not justified in making account of the appellant. Therefore, the AO was not justified in making addition on his whims and fancies. Thus, addition made by the AO addition on his whims and fancies. Thus, addition made by the AO addition on his whims and fancies. Thus, addition made by the AO amounting to Rs. ing to Rs. 71,50,000/- is Deleted. Therefore, appeal on this is Deleted. Therefore, appeal on this ground is Allowed. ground is Allowed.” 5. Before us, the Ld. Counsel of the assessee submitted that Before us, the Ld. Counsel of the assessee submitted that Before us, the Ld. Counsel of the assessee submitted that immediately prior to the demonetization period immediately prior to the demonetization period, the assessee had the assessee had declared Rs.77,79,503/ declared Rs.77,79,503/- under ‘Income Disclosure S Scheme’ (IDS) on 26.09.2016 in the form of silver of Rs.53,04,616/-, gold of 26.09.2016 in the form of silver of Rs.53,04,616/ 26.09.2016 in the form of silver of Rs.53,04,616/
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Rs.6,82,988/-, diamond of Rs.8,40,000/ , diamond of Rs.8,40,000/- precious stone of precious stone of Rs.9,26,850/- and semi precious stones of Rs.25,040/ and semi precious stones of Rs.25,040/ and semi precious stones of Rs.25,040/- and paid taxes thereon. The Ld. Counsel of the assessee referred to the taxes thereon. The Ld. Counsel of the assessee referred to taxes thereon. The Ld. Counsel of the assessee referred to declaration under the IDS available on the Paper Book page 13 to declaration under the IDS available on the Paper Book page 13 to declaration under the IDS available on the Paper Book page 13 to 25 of the Paper Book. The Ld. Counsel submitted that in view of the 25 of the Paper Book. The Ld. Counsel submitted that in view of the 25 of the Paper Book. The Ld. Counsel submitted that in view of the additional raw material available additional raw material available in the form of ‘gold gold’ and ‘silver’ available with the assessee for converting the sa with the assessee for converting the same me into jewellery and sale thereon and post thereon and post October, 2016 was a marriage season October, 2016 was a marriage season besides ‘Akshaya Tritiya Akshaya Tritiya’ and ‘Diwali’ and ‘Dhanterash Dhanterash’ festival ,therefore sales prior to the demonetization were relatively higher in therefore sales prior to the demonetization were relatively higher in therefore sales prior to the demonetization were relatively higher in the year under consideration as compared the year under consideration as compared to the earlier years to the earlier years ,hence, deposit of Rs.1,51,50,000/ hence, deposit of Rs.1,51,50,000/- were justified.
We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the assessee has duly demonstrated closing cash balance in its the assessee has duly demonstrated closing cash ba the assessee has duly demonstrated closing cash ba books of accounts as on 08.11.2016 at Rs.1,21,58,784/-. The books of accounts as on 08.11.2016 at Rs.1,21,58,784/ books of accounts as on 08.11.2016 at Rs.1,21,58,784/ Assessing Officer has accepted the turnover shown by the assessee Assessing Officer has accepted the turnover shown by the assessee Assessing Officer has accepted the turnover shown by the assessee of Rs.9,45,68,664/-. Thus . Thus, on one side the Assessing Officer on one side the Assessing Officer has accepted the cash sales of the assessee but non sales of the assessee but non-giving benefit of the ng benefit of the cash realized on those sales and that too cash realized on those sales and that too without disturbing the without disturbing the books of account of the assessee. This action of the Assessing books of account of the assessee. This action of the Assessing books of account of the assessee. This action of the Assessing Officer cannot be justified. Further, the assessee has also explained Officer cannot be justified. Further, the assessee has also explained Officer cannot be justified. Further, the assessee has also explained the reason of higher sales during the pr the reason of higher sales during the pre demonetization period in e demonetization period in view of the disclosure made under the view of the disclosure made under the IDS sheme in the form of raw heme in the form of raw
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material for the jewellary jewellary business including silver, gold, diamond business including silver, gold, diamond and precious stones etc. The Department has duly accepted the and precious stones etc. The Department has duly accepted the and precious stones etc. The Department has duly accepted the said disclosure and therefore there is no reason for the Assessing said disclosure and therefore there is no reason for the Assessing said disclosure and therefore there is no reason for the Assessing Officer to doubt the corresponding sales of the assessee. In view of Officer to doubt the corresponding sales of the assessee Officer to doubt the corresponding sales of the assessee the aforesaid discussion scussion, we do not find any infirmity in the order of , we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and we uphold the same. The the Ld. CIT(A) on the issue in dispute and we uphold the same the Ld. CIT(A) on the issue in dispute and we uphold the same ground No. 1 of the appeal of the Revenue is accordingly dismissed. ground No. 1 of the appeal of the Revenue is accordingly dismissed. ground No. 1 of the appeal of the Revenue is accordingly dismissed.
In ground No. 2, the Revenue has challenged the finding of the In ground No. 2, the Revenue has challenged the finding of the In ground No. 2, the Revenue has challenged the finding of the Ld. CIT(A) in deleting the addition of Rs.29,14,680/- to the capital Ld. CIT(A) in deleting the addition of Rs.29,14,680/ Ld. CIT(A) in deleting the addition of Rs.29,14,680/ made by the Assessing Officer on account of unexplained purchase made by the Assessing Officer on account of unexplained purchase made by the Assessing Officer on account of unexplained purchase of the property. The relevant finding of the Ld. CIT(A) are of the property. The relevant finding of the Ld. CIT(A) are of the property. The relevant finding of the Ld. CIT(A) are reproduced as under: reproduced as under:
“4.3.1 I have considered the facts of the case, plea raised by he case, plea raised by the appellant and findings of the AO. The appellant during appellate the appellant and findings of the AO. The appellant during appellate the appellant and findings of the AO. The appellant during appellate proceedings has submitted the details of properties introduced as proceedings has submitted the details of properties introduced as proceedings has submitted the details of properties introduced as capital. The brief details of these properties are as under: capital. The brief details of these properties are as under: capital. The brief details of these properties are as under:- Sr. No. Details of property Details of property Cost of Year of purchase Year of purchase acquisition 1. House No. 666, Bharam House No. 666, Bharam 1749390=00 The assessee purchased house The assessee purchased house Kripa, Kripa, Gole, Gole, Bazar Bazar on 07.05.2000 related to A.Y. on 07.05.2000 related to A.Y. Jabalpur 2001-02 2. Shop No. 15 b and 16 b, Shop No. 15 b and 16 b, 301580=00 The assessee purchased shop The assessee Ashirwad Ashirwad Market, Market, on 12.11.2002 related to A. Y. on 12.11.2002 related to A. Y. Lordganj, Jabalpur Lordganj, Jabalpur 2003-04 3. Shop No. 15A and 16A Shop No. 15A and 16A 301630=00 The assessee purchased shop The assessee purchased shop Ashirwad Ashirwad Market, Market, on 18.10.2002 related to A. X. on 18.10.2002 related to A. X. Lordganj, Jabalpur Lordganj, Jabalpur 2003-04 4. Shop Shop No. No. 42 42 and and 31, 31, 130250=00 The assessee purchased shop The assessee purchased shop Ashirwad Market Lordanj Ashirwad Market Lordanj no. 42 on 21.11.1983 related no. 42 on 21.11.1983 related Jabalpur to A.Y. 1984-85 and shop no. to A.Y. 1984 31 on 31.07.1995 related to 31 on 31.07.1995 related to A.Y. 1996-97 A.Y. 1996 5. Shop No. 26, and 41, Shop No. 26, and 41, 431830=00 The assessee purchased shop The assessee purchased shop Ashirwad Ashirwad Market, Market, no. 26, on 21.04.1999 related no. 26, on 21.04.1999 related Lordganj, Jabalpur. Lordganj, Jabalpur. to A.Y. 2000-01 and purchased to A.Y. 2000
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shop no. 41 on 21.04.1999 shop no. 41 on 21.04.1999 related to A.Y. 2000-01 (the related to A.Y. 2000 shop were received from Shri shop were received from Shri Rishi Kumar Agrawal. Copy of Rishi Kumar Agrawal. Copy of correction deed is enclosed) correction deed is enclosed) Total 29,14,690=00
On perusal of the copies of registered deed on record it is evident perusal of the copies of registered deed on record it is evident perusal of the copies of registered deed on record it is evident that all the properties has been purchased by the appellant prior to that all the properties has been purchased by the appellant prior to that all the properties has been purchased by the appellant prior to the period of the year 2002. Therefore, the appellant has introduced the period of the year 2002. Therefore, the appellant has introduced the period of the year 2002. Therefore, the appellant has introduced these assets in his books of accounts by passing a b these assets in his books of accounts by passing a b these assets in his books of accounts by passing a book entry i.e. debit in assets account and credit to capital account. Thus, no fresh debit in assets account and credit to capital account. Thus, no fresh debit in assets account and credit to capital account. Thus, no fresh property was purchased by the appellant and introducing old property was purchased by the appellant and introducing old property was purchased by the appellant and introducing old property is just a book entry and nothing else and no addition could property is just a book entry and nothing else and no addition could property is just a book entry and nothing else and no addition could be made on this account in the instant yea be made on this account in the instant year under consideration. In r under consideration. In view of the above discussion, addition made by the AO amounting view of the above discussion, addition made by the AO amounting view of the above discussion, addition made by the AO amounting to Rs.29,14,680/ is Deleted. Therefore, appeal on this ground is to Rs.29,14,680/ is Deleted. Therefore, appeal on this ground is to Rs.29,14,680/ is Deleted. Therefore, appeal on this ground is Allowed.” 7.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the dispute and perused the relevant material on record. The Ld. relevant material on record. The Ld. Assessing Officer has made addition for the reason that those Assessing Officer has made addition for the reason that those Assessing Officer has made addition for the reason that those properties were purchased in earlier years and introducing the properties were purchased in earlier years and introducing the properties were purchased in earlier years and introducing the same in the capital during the year was not explained by the same in the capital during the year was not explained by the same in the capital during the year was not explained by the assessee. We find that the assess assessee. We find that the assessee has duly explained the ee has duly explained the purchase of the properties in his individual name however, in the purchase of the properties in his individual name however, in the purchase of the properties in his individual name however, in the year under consideration has only made entry in his capital year under consideration has only made entry in his capital year under consideration has only made entry in his capital account for which the assessee is not prohibited. As no fresh account for which the assessee is not prohibited. As no fresh account for which the assessee is not prohibited. As no fresh property has been purchased by the assesse property has been purchased by the assessee and only book entry e and only book entry has been made into the capital account, w made into the capital account, we do not find any e do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and infirmity in the order of the Ld. CIT(A) on the issue in dispute and infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same. The ground No. 2 of the appeal of the accordingly uphold the same. The ground No. 2 of the appeal of the accordingly uphold the same. The ground No. 2 of the appeal of the Revenue is accordingly dismissed. Revenue is accordingly dismissed.
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In ground No. 3, the Revenue has challenged the finding of the n ground No. 3, the Revenue has challenged the finding of the n ground No. 3, the Revenue has challenged the finding of the Ld. CIT(A) in deleting the addition of Rs.10,00,000/- which was Ld. CIT(A) in deleting the addition of Rs.10,00,000/ Ld. CIT(A) in deleting the addition of Rs.10,00,000/ made by the Assessing Officer on account of unexplained capital made by the Assessing Officer on account of unexplained capital made by the Assessing Officer on account of unexplained capital introduced. The Ld. CIT(A) has deleted the addition observing as introduced. The Ld. CIT(A) has deleted the addition observing as introduced. The Ld. CIT(A) has deleted the addition observing as under:
“4.4.1 I have considered the facts of the case, plea raised by the I have considered the facts of the case, plea raised by the I have considered the facts of the case, plea raised by the appellant and findings of the AO. The appellant during appellate appellant and findings of the AO. The appellant during appellate appellant and findings of the AO. The appellant during appellate proceedings stated that he owns 28 plots in Kachanar City, proceedings stated that he owns 28 plots in Kachanar City, proceedings stated that he owns 28 plots in Kachanar City, Jabalpur and appellant during year under consideration Jabalpur and appellant during year under consideration Jabalpur and appellant during year under consideration received sum of Rs. 10,00,000/ sum of Rs. 10,00,000/- as advance against sale of 3 plots from Shri as advance against sale of 3 plots from Shri Arvind Soni. The appellant further submitted that the plots under Arvind Soni. The appellant further submitted that the plots under Arvind Soni. The appellant further submitted that the plots under consideration does not belongs to jewellery business therefore, the consideration does not belongs to jewellery business therefore, the consideration does not belongs to jewellery business therefore, the amount received as advance was introduced in amount received as advance was introduced in capital account. In capital account. In support appellant has filed copies of sale deed of plots and ledger support appellant has filed copies of sale deed of plots and ledger support appellant has filed copies of sale deed of plots and ledger account of fixed assets. On perusal of the evidences on record it is account of fixed assets. On perusal of the evidences on record it is account of fixed assets. On perusal of the evidences on record it is evidently clear that the plots under consideration were not part of evidently clear that the plots under consideration were not part of evidently clear that the plots under consideration were not part of appellants fixed assets as per appellants fixed assets as per books of accounts therefore, the books of accounts therefore, the appellant was not in an obligation to shown advance in fixed asset appellant was not in an obligation to shown advance in fixed asset appellant was not in an obligation to shown advance in fixed asset account. The AO was not justified in perusing that the fixed asset account. The AO was not justified in perusing that the fixed asset account. The AO was not justified in perusing that the fixed asset shown by appellant has been sold. Thus, addition made by the AO shown by appellant has been sold. Thus, addition made by the AO shown by appellant has been sold. Thus, addition made by the AO was not justified qua the was not justified qua the evidences on record. The fixed assets evidences on record. The fixed assets under consideration did not relates to business of the appellant and under consideration did not relates to business of the appellant and under consideration did not relates to business of the appellant and the sales proceeds received by the appellant against sale of these proceeds received by the appellant against sale of these proceeds received by the appellant against sale of these assets were shown as capital assets and the appellant was correct assets were shown as capital assets and the appellant was correct assets were shown as capital assets and the appellant was correct in showing the in showing the same as capital. Therefore, addition made by the AO Therefore, addition made by the AO amounting to Rs. 10,00,000/ amounting to Rs. 10,00,000/- is Commissioner or Commissioner or Deleted. Therefore, appeal on this ground is Allowed. Therefore, appeal on this ground is Allowed.” 8.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant ma dispute and perused the relevant material on record. We find that terial on record. We find that the assessee has explained the introduction of Rs.10,00,000/- out the assessee has explained the introduction of Rs.10,00,000/ the assessee has explained the introduction of Rs.10,00,000/ of advance sale of the plot which was sold in subsequent year and of advance sale of the plot which was sold in subsequent year and of advance sale of the plot which was sold in subsequent year and registration document and same was also produced before the registration document and same was also produced before the registration document and same was also produced before the Assessing Officer. The Assessing Assessing Officer. The Assessing Officer has confused the Officer has confused the advance as income of the assessee of the assessee whereas the assessee has made only whereas the assessee has made only
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entry for the said amount into his capital account. Since amount entry for the said amount into his capital account. Since amount entry for the said amount into his capital account. Since amount was received as advance and was received as advance and was available with the assessee, was available with the assessee, therefore, we do not find any infir herefore, we do not find any infirmity in the order of the Ld. CIT(A) mity in the order of the Ld. CIT(A) in deleting the addition made by the Assessing Officer. The ground in deleting the addition made by the Assessing Officer. The ground in deleting the addition made by the Assessing Officer. The ground No. 3 of the appeal of the Revenue is accordingly dismissed. No. 3 of the appeal of the Revenue is accordingly dismissed. No. 3 of the appeal of the Revenue is accordingly dismissed.
The cross-objections filed by the assessee are in support of objections filed by the assessee are in support of objections filed by the assessee are in support of order of the Ld. CIT(A). Si order of the Ld. CIT(A). Since, we have already dismissed the appeal nce, we have already dismissed the appeal of the Revenue challenging the addition deleted on merit and of the Revenue challenging the addition deleted on merit and of the Revenue challenging the addition deleted on merit and therefore, cross-objection of the assessee are only rendered as objection of the assessee are only rendered as objection of the assessee are only rendered as infructuous.
In the result, both appeal of the Revenue and cross both appeal of the Revenue and cross both appeal of the Revenue and cross-objection of the assessee are dismissed. sessee are dismissed.
Order pronounced Order pronounced under Rule 34(4) of the ITAT Rules, 1963 by way under Rule 34(4) of the ITAT Rules, 1963 by way of result of appeal displayed on the Notice Board at ITAT Office, Jabalpur of result of appeal displayed on the Notice Board at ITAT Office, Jabalpur of result of appeal displayed on the Notice Board at ITAT Office, Jabalpur on 03/11/2023. Sd/ Sd/- Sd/ Sd/- (PAVAN KUMAR GADALE PAVAN KUMAR GADALE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 03/11/2023 Rahul Sharma, Sr. P.S.
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Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) Registrar) ITAT, Mumbai ITAT, Mumbai
