THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. GOPAL HERITAGE P. LTD.

This appeal under Section 260A of the Income Tax Act ( for short “The Act, 1961”) is at the instance of the Revenue and is directed against the order passed by the Income Appellate Tribunal, Ahmedabad Bench ‘A’, Ahmedabad, dated 17.02.2020 in ITA No.824/Ahd/2016 for the A.Y. 2012-13. The Revenue has proposed a solitary question of law for the consideration of this Court.

We straightaway go to the findings recorded by the Tribunal with respect to the amount of Rs.40 Lakh deposited in cash in the bank account of the assessee. We quote the relevant observation of para 5 as under: “We have duly considered rival contention and gone through the record carefully. The assessee was required to explain the source of cash deposited in the bank totaling to Rs.40 Lakhs, whereas it has a negative cash balance in the cash book by Rs.37,13,752/-. Both the authorities have rejected explanation of the assessee. However, a perusal of the record, we find that both the authorities have failed to appreciate true nature of the transaction. If a company is engaged in the business of real-estate and it has understanding with some buyers, then it is always not C/TAXAP/242/2021 ORDER DATED: 10/01/2022 necessary that it would receive the advances only when it is owner of that real-estate. Sometime, at the very initial stage negotiations were being made orally on the basis of confidence level among the parties. Otherwise the contention of the assessee was only corroborative factor that it was received advance from Shri Dilip Suthar. Even if it has not received advance for sale of the land, then also the assessee alleged that the amount was received from the said Shri Dilip Suthar. In case the asssessee able to demonstrate that identity of the creditors, genuineness of the transaction and his credit-worthiness, then also it could not be added in the hands of the asssessee. As far as Shri Dilip Suthar is concerned, it is not in dispute. He has given confirmation; he has given PAN and other details. The assessee has called that it has received advance in cash. Shri Dilip Suthar has been proved to be man of means because he has purchased a land worth of Rs.2,69,00,000/- by way of sale deed by way of sale deed dated 8.2.2011. This amount has also been advanced in the month of April, 2011. Thus, the period of advance taken from this man as well as his capacity to purchase a piece of land for Rs.2.69 crores, was of same time. It shows that he was man of means and he has owned the transaction. In the above circumstances, the ld. Revenue authorities are not justified to disbelieve the version of the assessee. We allow this ground and delete addition of RS.37,13,652/-.”

Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue invited the attention of this Court to Section 68 of the Act, the relevant portion of which reads as under: “Section 68: Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.” C/TAXAP/242/2021 ORDER DATED: 10/01/2022

Mr. Bhatt, the learned senior counsel would submit that it is not in dispute that the amount of Rs.40 Lakh in cash was deposited in the bank account of the assessee. So far as the deposit of this amount is concerned, the assessee offered an explanation that such amount was transferred into its account by one Mr. Dilip Suthar in connection with a transaction relating sale of a immovable property. The identity of Mr. Dilip Suthar is not in dispute. Mr. Dilip Suthar also seems to have confirmed about the transfer of such amount of Rs.40 Lakh in the bank account of the assessee. The PAN details of Mr. Dilip Suthar is also with the Department. However, the fact remains that the transaction did not materialize and the very same amount came to be repaid by the assessee to Mr. Dilip Suthar. Mr. Bhatt, the learned senior counsel would submit that the transaction appears to be doubtful as there is nothing on record to indicate that such amount was transferred in the account of the assessee with respect to any sale transaction.

We are of the view having regard to the findings of fact recorded by the Tribunal that the question as proposed by the Revenue cannot be termed as a substantial question of law. The question of law as proposed is more on the factual aspect. We decline to interfere with the impugned order passed by the Tribunal in the facts and circumstances of the case. In the result, this Appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Y.N. VYAS