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Income Tax Appellate Tribunal, PUNE “B” BENCH, PUNE at saint
Before: SHRI S S VISWANETHRA RAVI & SHRI G. D. PADMAHSHALI
द्वारा / Appearances Assessee by : Shri Sanket Joshi Revenue by : Dr. Kalpesh Rupavatiya सपिवधई की तधरऩख / Date of conclusive Hearing : 30/05/2023 घोर्णध की तधरऩख / Date of Pronouncement : 30/05/2023 आदेश / ORDER PER G. D. PADMAHSHALI; This appeal is laid against the first appellate order of National Faceless Appeal Centre, Delhi [‘NFAC’] dt. 25/11/2021 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’] for the assessment year [‘AY’] 2017-18 ITAT-Pune Page 1 of 7
Following grounds are raised for adjudicating in the appeal memo filed in record; “1. The learned CIT(A) erred in confirming the addition u/s 69A of ₹ 30,78,000/- made by the A.O. towards alleged unexplained cash credits made in bank account without appreciating that the said disallowance was not warranted on facts and in law.
2. The learned CIT(A) failed to appreciate that the source of the said cash deposits was duly explained to be out of unsecured loans obtained in cash from various agriculturists for purposes of settlement of bank loan under One Time Settlement Scheme which was also repaid by the assessee to the said persons in the same year through banking channel upon sale of agricultural land and hence, there was no reason to make any addition u/s. 69A towards alleged unexplained cash deposits in the present case.
3. The learned CIT(A) ought to have appreciated that the assessee had furnished various documentary evidences in the form of confirmations, Aadhar Cards and 7/12 extracts in respect of agricultural land holding of the various lenders before the A.O. and therefore there was no reason to make any addition u/s 69A by treating cash deposits sourced out of above unsecured loans as unexplained money in hands of the assessee.
4. The learned CIT(A) erred in not appreciating that considering the various documentary evidences furnished and explanations filed, the A.O. was not justified in denying the genuineness of unsecured loans obtained from various agriculturists merely on the ground that the said farmers did not attend before the A.O. especially considering the peculiar facts of the case which were specifically pointed out in written submissions made to CIT(A) and therefore the addition of Rs.30,78,000/- made by A.O. u/s. 69A was not justified. 5. The appellant craves, leave to add, alter, amend and delete any of the grounds of appeal.”
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Samadhan Rambhau Patil
Briefly stated the facts of the case are; 3.1 The assessee is an agriculturist, in whose case information of cash deposit of ₹61.56Lakhs in various bank accounts maintained with ‘Dena Bank’ during demonetisation period was received through AIMS under Operation Clean Money [‘OCM’]. Pursuant to said information, the assessee was called upon to furnish return of income [‘ITR’] for AY 2017-18, but no compliance found made by the assessee till the culmination of assessment u/s 144 of the Act. 3.2 The submission of the appellant that, cash receipts in his case were partially arisen out of agri-cash sales for 2015-16 & 2016-17 could inspire the learned Income Tax officer, Ward-1, Malegaon (Nashik) [‘AO’]. Resultantly after giving credit of such agricultural income earned i.e. ₹30.78Lakhs as against the total cash deposits, the Ld. AO vide his order dt. 17/12/2019 has brought to tax balance cash deposit of ₹30.78Lakhs as unexplained u/s 69A of the Act.
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Samadhan Rambhau Patil 3.3 Aggrieved assessee unsuccessfully challenged the said addition before first appellate authority; therefore the appellant is in appeal before us.
At the outset, Ld. AR fairly submitted that although grounds raised in appeal memo are inconsonance with rule 8 of Income Tax Appellate Rules, 1963 [ITAT- Rules’], however are collectively directed against sole issue of impugned addition made u/s 69A of the Act.
We have heard the rival contentions of both the parties on substantive ground; and subject to the provisions of rule 18 of ITAT-Rules, perused the material placed on records, case laws relied upon and duly considered facts in the light of settled legal position which are forewarned to parties present.
We note that, as against the alleged total cash deposit, the appellant could successfully establish availability of cash of ₹30.78Lakhs with him which claimed to have arisen out of cash sales effected, ITAT-Pune Page 4 of 7
Samadhan Rambhau Patil however failed to substantiate the balance cash deposit during the course of assessment proceedings. The appellant claim that, said balance cash deposits were sourced out of cash loans taken from various farmer-lenders to meet his dying need in closing out the overdue bank loan account under onetime settlement scheme [‘OTS’] and such loans were subsequently repaid by him through banking channel out of funds generated from sale of land did remained unconvinced to the tax authorities below. We also note that, in support of claim of cash loans availed, the assessee failed file copy of any such OTS sanctioned (if any) by bank and loan closure account to strengthen his case. The copies of Aadhaar Card and land 7/12 extracts of lenders-financer adduced in establishing their identity, occupation and nature of their sources etc., also failed to serve any purpose for the reason that, when these lenders were summoned/called upon to confirm the fact of cash loans advanced (if any), none could effectively ITAT-Pune Page 5 of 7
Samadhan Rambhau Patil confirm. This non-verification or non-confirmation coupled with absence of OTS documents etc., persuaded the Ld. AO to hold the balance cash deposit remained unexplained for the reason same was brought to tax u/s 69A of the Act.
The said failure on the part of assessee in adducing the evidentiary material and producing the farmers-lenders continued in an appeal before the first appellate proceedings, resultantly the Ld. CIT(A) has rightly countenanced the views of Ld. AO in holding cash loan as non-genuine for the purpose of section 69A.
In the present proceedings also the Ld. AR’s averments on merits did not inspire any confidence to the bench. Therefore appellant’s failure to effectively adduce the copies of OTS and cogent documents in support of his explanation against source of cash deposits remained unverified at all stages. However we note that, the appellant on the direction of Ld. AO ITAT-Pune Page 6 of 7 could produce all these farmers-lenders-creditors on 20/10/2019, but these lenders could not confirm the facts before Ld. AO due to his non-availability on the schedule date. Since the appellant failed to convince all such farmer-lender to visit again to the office of Revenue for confirming the fact resulted into impugned addition, these two facts remained uncontroverted by the Ld. DR. For this reason, without offering our comments on merits, we deem it just and proper to remand this limited issue back to Ld. AO for de-nova verification in the light of OTS and other persuasive evidence to be adduced by assessee.
In result, appeal stands ALLOWED for statistical purpose in aforestated terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this WEDNESDAY 30th day of May, 2023.
-S/d- -S/d- S. S. VISWANETHTRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 22nd day of June, 2023. आदेश की प्रतितिति अग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent.
3. The CIT -1, Nashik 4. The CIT(A)-NFAC, Delhi (India) 5. DR, ITAT, Bench ‘B’, Pune 6. ग र्डफ़ इल / Guard File. Ashwini आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
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