ADWITIYA PROJECTS INDIA PVT.LTD,,PUNE vs. INCOME-TAX OFFICER,, PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

Assessee is a company stated to be engaged in the business of Civil Contractor and provides service to mostly industrial and private

clients. Assessee filed its return of income for A.Y. 2013-14 on

28.09.2013 declaring total income of Rs.2,97,31,804/-. The case was

selected for scrutiny and thereafter, assessment was framed u/s

143(3) of the Act vice order dated 29.03.2016 and the total income was

determined at Rs.5,31,46,451/-. Aggrieved by the order of AO,

assessee carried the matter before Ld.CIT(A), who vide order dated

30.01.2017 (in appeal No.CIT(A), Pune-1/10278/2016-17) granted

partial relief to the assessee. Aggrieved by the order of Ld.CIT(A),

assessee is now in appeal before us and has raised the following

grounds :

“1. The ld CIT (A) has erred in confirming the addition of Rs.15,57,000/- u/s 68 of the Act made by the AO only on the ground that the depositor has not properly explained the source of amount deposited in the Bank, and the same was unexplained for the reason that there was no reasonable explanation of the source of cash deposit without appreciating the facts and disregarding the submissions made by the appellant.

a. That the lender of the amount is duly assessed to tax.

b. The lender has substantial assets.

c. That the appellant had complied with all the conditions of Sec. 68 of the Act. d. That the addition made by the AO on the ground the lender had deposited the cash in his saving account is not justified in law.”

the Balance-Sheet noticed that there was an addition on account of

receipt of share application money of Rs.1 crore and unsecured loans

of Rs.2,40,45,274/- from Mr. Uttam Chordiya, Director of the assessee

company. The assessee was asked to furnish the details of

introduction of share application money, unsecured loans and

creditworthiness of the investor. On perusing the ledger account

furnished by the assessee, it was noticed that all the unsecured loans

received by the assessee from Mr. Uttam Chordiya out of which Rs.2

lakh was received in cash on 15.09.2012. He also noticed that there

were various cash deposits in the bank account of lender Mr. Uttam

Chordiya before the issue of cheque of share application money and

unsecured loans (the details of which are tabulated by the AO in page

9 of the order). The assessee was therefore asked to furnish the

source of cash deposits and the availability of the cash. Assessee

inter-alia submitted that the cash was deposited from the cash

balance available in his banks. The submissions of the assessee were

not found acceptable to the AO. AO noted that no details as to

whether the books of accounts were maintained by Mr. Uttam

Chordiya, though he was a salaried employee was not clarified by the

assessee. The submission of the assessee of having cash deposits out

of the cash withdrawals were also not found acceptable to the AO in

view of the fact that assessee has stated to withdrawn the cash of

Rs.2,90,000/- for household and personal expenses. AO also noticed

that Mr. Uttam Chordiya, has shown income from salary only at

Rs.7,97,540/- which was offered to tax in A.Y. 2013-14. He therefore

did not accept the submission of the assessee of having cash deposits

made out of the cash withdrawals. He accordingly held that assessee

has failed to explain the creditworthiness of the transaction of share

application money and unsecured loans and therefore made an

addition of Rs.15,57,000/- u/s 68 of the Act. Aggrieved by the order of

AO, assessee carried the matter before Ld.CIT(A), who upheld the order

of AO by observing as under :

“13. I have carefully considered the facts of the case as well as reply of the appellant. In this case, it is clear that the appellant has taken loan of Rs.15,57,000/- from Mr. Uttam Chordiya, one of the Directors of the company. Out of the above Rs. 2 Lacs were received in cash on 15/9/2002. Regarding balance amount of Rs.13,57,000/- the AO found that equal amount was deposited in cash in the Bank account of Mr. Uttam Chordiya. The appellant could not explain the source of cash deposit in the bank account satisfactorily before the AO. In its reply, it claims that the appellant is not required to prove the source of source i.e. source of cash deposit in the bank account of Mr. Uttam Chordiya. This is nothing but trying to shift the onus. It must be appreciated that Mr. Uttam Chordiya though a different entity is not a third party in real sense. In a private limited company the role of Director is no different than partner of a firm and therefore, the source of cash deposit in the bank account of Mr. Uttam Chordiya could have been easily explained had the appellant wanted to. This has not been explained for the obvious reason that there was no plausible explanation regarding the source of cash deposit. Accordingly, I do not find any merit in the submission of the appellant and the action of the AO in making addition of Rs.15,57,000/- is upheld. Thus, the ground is dismissed.”

Aggrieved by the order of Ld.CIT(A), assessee is now before us.

and Ld.CIT(A) and further submitted that assessee is not required to

prove the source of source of cash deposits. He further submitted that

if at all any addition was required it was to be made in the hands of

Mr. Uttam Chordiya and not the assessee. He therefore submitted

that the addition made by the AO be deleted. Ld. D.R. on the other

took us through the order of AO and supported the order of Ld.CIT(A).

on record. The issue in the present case is with respect to the addition

of Rs.15,57,000/- u/s 68 of the Act. We find that AO had concluded

that assessee has not explained the source of cash deposits in the

books of accounts satisfactorily as there was equal amount of cash

deposits before the giving of loan by Mr. Uttam Chordiya to assessee.

Before us, assessee has not controverted the submissions made by

Ld. D.R. but has simply stated that assessee had furnished the

confirmation and his PAN No. and thus assessee has complied with

the requirements of Sec.68 of the Act. Before us also no satisfactory

explanation about the source of cash deposits in the bank account of

Mr. Uttam Chordiya has been provided by the assessee. In such a

situation, considering the totality of the facts, we find no reason to

interfere with the order of Ld.CIT(A). Thus, the grounds of the

assessee are dismissed.

Order pronounced on 19th day of December, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 19th December, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A) – 1, Pune. . Pr.CIT-1, Pune. 4. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, ITAT, “B” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER,स / / TRUE COPY / / //T// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.