GEETA BHASIN,NOIDA vs. JCIT, RANGE- 32, NEW DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Through Video Conferencing) ITA No. 4600/Del/2017 (Assessment Year: 2011-12) Geeta Bhasin, Vs. JCIT, C/o. Sandeep Sapra, Adv, C-763, Range-32, New Friends Colony, New Delhi New Delhi PAN: ACDPB6005D (Appellant) (Respondent)

Assessee by : Shri Sandeep Sapra, Adv Revenue by : Shri Vivek Vardhan, Sr. DR Date of Hearing : 05/10/2021 Date of pronouncement : 09/11/2021

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by Mrs. Geeta Bhasin [the Assessee/ Appellant] against the order of The Commissioner of Income Tax (Appeals) – 18 New Delhi [The LD CIT (A)] dated 1/6/2017 For Assessment Year 2011 – 12. By this order the appeal filed by the assessee against the order passed by The Joint Commissioner Of Income Tax Range 32, New Delhi [ The ld AO] u/s 143 (3) of The Income Tax Act [ The ACT ] on 31st of March 2014 was partly allowed. 2. Briefly stated the fact shows that the assessee is an individual carrying on the business activities. Assessee is engaged in running restaurant business under the name and style of the Dhaba TOT. The assessee has also declared her income as rental income and interest income. Assessee is also partner in three entities. She is also director and shareholder in several companies. She filed her return of income declaring a total income of ₹ 6,316,210 on 29/9/2011. The notice u/s 143 (2) of the act was issued on 7/9/2012. The Joint Commissioner Of Income Tax, Range – 32, New Delhi Page | 1

(the learned AO) passed an assessment order on 31st of March 2014 u/s 143 (3) of the income tax act determining the total income of the assessee at ₹ 73,575,810. 3. The learned assessing officer made the following addition/disallowance to the total income of the assessee:- a. addition u/s 68 of The Income Tax Act of Rs. 178 lakhs with respect to the contract for construction income of ₹ 62 lakhs, amount received for purchase of land of ₹ 66 lakhs and an advance received of ₹ 50 lakhs for purchase of plot b. addition of ₹ 50 lakhs u/s 69A of the act with respect to the debit of the above sum in Axis bank account as the assessee has not recorded this amount in her bank accounts maintained in the books of account as an unexplained investment c. disallowance of ₹ 510,204 on account of payment made for construction of boundary wall to calm construction d. An addition of Rs 1.84 crores Under 68 of the income tax act with respect to the dealings of the assessee with PACL Ltd e. an addition of Rs 1.44 crore u/s 69A of the income tax act with respect to the various debits from Nainital bank as the learned authorised representative of the assessee was not able to file any evidence which can explain to womb these payments were made and for what purpose. Further the above debit are also not recorded by the assessee in her bank account maintained in books of accounts f. Addition u/s 2 (22) (e) of the act with respect to advance/ loan received from Niharaika Enterprises Limited of Rs 59,15,300/- g. Disallowances out of vehicles expenses and Foreign Tour expense

“1. That the additions/disallowances vide ground No. 3 to 12 deserve to be deleted as the AO had either not confronted the Assessee before making such additions/disallowances or the AO had not provided adequate opportunity to the Assessee to explain her case thereby violating the principles of natural justice. 2. That the Ld. CIT(A) did not provide adequate opportunity to the counsel Shri Sandeep Sapra, Advocate to file detailed written submissions/documents thereby violating the principles of natural justice. 3. That the Ld. CIT(A) has erred on facts and under the law in confirming the additions of Rs. 66,00,000/- and Rs. 50,00,000/- as made by the AO on account of unexplained credits received from Shri N.S. Bhangoo u/s 68 of the Income-tax Act. 4. That the Ld. CIT(A) has erred on facts and under the law in confirming the disallowance of Rs. 5,10,000/- paid to M/s Calm Construction on account of construction of boundary wall. 5. That the Ld. CIT(A) has erred on facts and under the law in confirming the addition of Rs. 1,84,00,000/- (40,00,000 + 50,00,000 + 50,00.000 + 44,00,000) as made by the AO on account of unexplained credits received from PACL Ltd. u/s 68 of the Income-tax Act. 6. That the Ld. CIT(A) has erred on facts and under the law in sustaining the addition of Rs. 9,33,817/- out of total addition of Rs. 16,33,817/- as made by the AO on account of commission received from M/s Ritesh Chodankar. 7. That the Ld. CIT(A) has erred on facts and under the law in confirming the addition of Rs. 4,00,000/- as made by the AO on account of unexplained credits received from Shri Anil Kumar u/s 68 of the Income-tax Act. 8. That the Ld. CIT(A) has erred on facts and under the law in sustaining the addition of Rs. 80,000/- out of total addition of Rs. 1,29,125/- as made by the AO on account of notional rental income. 9. That the Ld. CIT(A) has erred on facts and under the law in sustaining the disallowance of Rs. 2,98,620/- out of total disallowance of Rs. 3,37,097/- as made by the AO on account of vehicle running & maintenance expenses. 10. That the Ld. CIT(A) has erred on facts and under the law in confirming the disallowance of Rs. 4,28,692/- as made by the AO on account of foreign travel expenses. 11. That the Ld. CIT(A) has erred on facts and under the law in confirming the disallowance of Rs, 7,65,363/- as made by the AO on account of repairs & maintenance. 12. That the Ld. CIT(A) has erred on facts and under the law in confirming the addition of Rs. 59,15,300/- as made by the AO on account of deemed dividend u/s 2(22)(e) of I.T. Act.”

seller and buyer respectively and the appellant has been shown as a confirming party. With respect to the sum of ₹ 50 lakhs, it was stated that it is received from Mr. Bhangoo, for which the confirmation was never insisted by the learned assessing officer. The assessee also stated that if the AO wanted to verify the same, he has the powers u/s 133 (6) of the act and having the knowledge of the permanent account number of that party, ld AO could have verified the correctness of the claim. It was stated that the amount of ₹ 50 lakhs has been received from that particular party for purchase of land by cheque number 315393-dated 3/4/2010 and returned by cheque number 268413-dated 11/2/2011. In view of this, the assessee submitted that the addition is uncalled for. with respect to ₹ 66 lakhs assessee substantiated argument by submitting sale deed dated 6/10/2010 and the copies of the account of Mr. Anil along with the bank statement For Rs 50 lakhs assessee submitted the copy of account showing that the above amount has been repaid to that particular party. The learned CIT – A in respect to a sum of ₹ 50 lakhs held that that the assessee has not submitted the bank account copy of Mr. Bhangoo nor any copy of the correspondence in this regard. With respect to the sum of ₹, 66 lakhs he held that the genuineness of this transaction is in doubt as assessee has also not produced the confirmation of the account of Mr. Bhangoo and therefore the action of the learned assessing officer was upheld. 9. The learned authorised representative with respect to Rs 50 lakhs submitted that Shri Nirmal Singh bhangoo, was the Chairman of PACL Ltd and is presently behind bars and to substantiate facts, he submitted the various newspaper articles. Therefore assessee could not submit the confirmation. 10. With respect to the transaction of Rs 66 lakhs, he submitted copy of sale deed dated 6/10/2010 between Sri Anil Chaddha and Mr. Bhangoo and the assessee as a confirming party for purchase of immovable property known as Nauxim at Goa for a sum of ₹ 66 lakh. It was further shown that the purchaser has issued cheques number 667742 of ₹ 66 lakhs drawn from Punjab National Bank New Delhi for purchase of the above-mentioned property . The cheque was issued in the name of confirming party and the

receipt of which the seller and the confirming party have been given in the sale deed itself. The assessee also submitted the photocopy of the cheque issued by buyer in favour of the assessee. He further referred to an another transaction of assessee with Mr. Bhangoo . He submitted a copy of an agreement dated 12/3/2010 between the assessee and Mr. Bhangoo for construction of at Goa for ₹ 62 lakhs. It was further stated that an identical facts and circumstances from the same person an addition of ₹ 62 lakhs was made by the learned assessing officer on account of receipt of the sum from Mr. Bhangoo, however , same has been deleted by the learned CIT – A and on appeal filed before the ITAT by the revenue, appeal of the revenue was dismissed. Therefore, he submitted that in case of the same person the identity, creditworthiness and the genuineness of the transaction with respect to a sum of ₹ 62 lakhs has been accepted by the revenue, which is confirmed up to the level of ITAT, therefore, it cannot be said that the identity and creditworthiness of such person is doubted with respect to the above two transactions of Rs 66 lakhs and Rs 50 lakhs. Even otherwise, it was stated that it was not a cash credit but a business transaction, which is also supported by the sale deed. It was further stated that assessee has submitted a copy of the account of Mr. Anil, which shows that the sum of ₹ 66 lakhs received from Mr. Bhangoo, was credited in the books of Sri Anil on 18/8/2010. This cheque was cleared on 4/9/2010. Merely because the cheque has been cleared later on, the transaction has been doubted by the lower authorities. The above cheque has subsequently been cleared on 7/9/2010. He further submitted that the above evidence placed before the lower authorities are not controverted and therefore the addition of ₹ 66 lakhs deserves to be deleted. 11. With respect to the addition of ₹ 50 lakhs, he submitted that assessee has submitted copy of Ledger account, which shows that the assessee has received a sum of ₹ 50 lakhs on 3/4/2010 by cheque number 319353, which was refunded back to the party on 11/2/2011. These entries are duly reflected in the bank account of the assessee with Axis bank. It was stated that the person who deposited the sum is still behind the bars and therefore assessee is prevented by sufficient cause in filing confirmation of the above party. It was submitted that with respect to this addition of ₹ 50

lakhs the same deserves to be restored back to the file of the learned assessing officer as the assessee has been prevented by sufficient cause in filing the confirmation of the above party. 12. The learned departmental representative vehemently supported the orders of the lower authorities. 13. We have carefully considered the rival contention and perused the orders of the lower authorities. We have also considered the paper book filed by the learned authorised representative. The learned assessing officer has made two additions, which are contested by this ground. Addition, of ₹ 66 lakhs and ₹ 50 lakhs because of unexplained credits received from one Mr. N S Bhangoo u/s 68 of the act. a. The facts of the addition of ₹ 66 lakh show that the claim of the assessee, that Mr. Bhangoo has purchased a piece of land from one Mr. Anil Chaddha for a consideration of 66 lakhs. Shri N S Bhangoo paid the above sum to the assessee vide Punjab National Bank cheque number 667742-dated 28/8/2010 and in turn, the appellant made the above payment to Mr. Anil Chaddha by various cheques. The assessee produced a registered sale deed where Mr. Anil Chaddha and Mr. Bhangoo have been shown as seller and buyer respectively and the appellant is shown as a confirming party. This amount was added in the hands of the assessee u/s 68 of The Income Tax Act. The addition has been made for the reason that prior to the sum of ₹ 66 lakhs received from Mr. N S Bhangoo , assessee has already paid Rs. 22 lakhs to Mr. Anil Chaddha. Therefore it was held to be a strange transaction where the confirming party has paid some of ₹ 2,200,000/- for purchase of property in the name of other party from whom sum was received later on. For this reason, the addition has been confirmed. We find that in that particular case it is not in dispute that the buyer and seller have agreed to deal with a property for ₹ 66 lakhs, the assessee is merely a confirming party, the trail of the funds received from the buyer and paid to the seller are from the account of the assessee. Merely because confirming party assessee has invested some sum by paying to the seller , before the sum is received from the purchaser, the whole amount of the sum received

from the purchaser has been taxed in the hands of the assessee u/s 68 of the income tax act. We find that has the assessee not invested the sums by paying to the buyer before sum is received from seller; there was no need to refer assessee as confirming party. To show that sum has been received from Mr. N S Bhangoo, assessee has produced the copies of the cheque, the registered sale deed etc. In view of this, we find that assessee has discharged her onus by producing the copies of the sale deed where assessee is merely a confirming party. The revenue does not dispute the transaction also. The Trail of funds is verified by lower authorities and there is no dispute on it. It is undisputed that Mr. Bhangoo is the buyer of the property, Mr. Anil Chaddha is the seller of the property. Assessee is a confirming party. Consideration is routed through the assessee. Both the buyers and sellers of the property were not questioned. As assessee has invested sum owned by her, she is made confirming party. It is also not the case that sum of Rs 66 lakhs received from Buyer was not paid to the seller. In view of this, we find that the addition of ₹ 66 lakhs in the hands of the assessee u/s 68 of the income tax act deserves to be deleted. Hence, we direct the ld AO to delete this addition. b. Coming to the addition of ₹ 50 lakhs in the hands of the assessee on receipt of advance for purchase of land from one Mr. N S Bhangoo on 3/4/2010 vide cheque number 319353, which was refunded by the assessee to that party on 11/2/2011, assessee submits that these transactions are reflected in the bank account of the assessee. The assessee has fairly agreed that confirmation of that particular party could not be furnished because of the reason that the concerned person was behind the bars. Thus, assessee was prevented by sufficient cause in not obtaining the confirmation of the lender. Assessee has also referred to various newspaper cuttings. In view of this we set-aside issue of taxability of Rs 50 lakhs u/s 68 of the act back to the file of the learned assessing officer with a direction to the assessee to discharge her initial onus. Ld AO may examine and decide issue accordingly.

purchases and not a series of payment over a period of two years before the so-called deal was eventually called off. AO noted that neither the confirmation nor a copy of agreement was submitted and therefore he held that the assessee has introduced her own money in the name of a bogus and sham transaction. Another transaction is receipt of contractual sum of Rs 237,95,818/–. The AO noted that the first payment of advance was received on 18th of March 2010 and on 13th of March 2010 just before the repayment by the assessee of RS 2.37 crore of almost equal amount of the advances was raised against the same company. The AO doubted the entire transaction was not believable on the ground that when the appellant had already failed in the deal for land it is against normal conduct that same party has entrusted the construction work to the assessee. He further held that this transaction is also sham and bogus. The learned AO also doubted the sanction plan stating that there is no name of the assessee mentioned therein. He further held that assessee received the payment only on 13/3/2010 wherein the assessee has substantially payments have been spent by the assessee on construction activities. He further noted that against the contract payment of Rs 237,95,918/- profits of around Rs 5.70 lakhs is shown which is very less. Therefore, it was concluded that the payment in the bank has no relation with the contract payment for construction work. Accordingly he made the addition of ₹ 1.84 crores in the hands of the assessee applying the provisions of Section 68 of the income tax act with respect to following four sums:- a. ₹ 40 lakhs appearing in the account of PACL India in the books of the assessee b. ₹ 50 lakhs credited on 2 April 2010 c. ₹ 50 lakhs credited on 16 April 2010 d. ₹ 44 lakhs credited on 29/9/2010 20. Assessee challenged the above addition before the learned CIT – A. The assessee showed that a contract sum of Rs. 2.37 crores on which tax is also deducted is already shown as an income in financial year 2009 – 10 when the bills were raised and part payment of ₹ 1.02 crore was received and outstanding balance of ₹ 1.35 crores was shown as receivable. It was stated that during the next year the appellant received a further sum of ₹ 94

lakhs and the balance of ₹ 40 lakhs was adjusted by passing a general entry since the assessee was already demanding ₹ 40 lakhs from that party in earlier year. Thus the total amount was adjusted. Assessee also produced a reconciliation statement assessee also stated that she has not spent the amount of construction work out of her own funds but she received a sum of ₹ 1.55 core during financial year 2007 – 08 and another sum of ₹ 79 lakhs during 08-09. The copies of the accounts were also submitted to show the above fact. With respect to the sanction plan, it was stated that the name of architect is mentioned therein but the name of the contractor is not usually mentioned in the sanction plan. There is no such requirement. Assessee also submitted that she has shown a gross profit of 2.4% on the total contract value as the work was subcontracted. Assessee also submitted the confirmation of PACL Ltd. With respect to the error in the bank account, it was submitted that it is because of wrong printout command, however, all the entries recorded in the books of accounts of the assessee. Therefore, it was stated that the omission of such entries in the first printout was bona fide error and there is no suppression of income. Assessee also submitted the account of the party in the books of the assessee shown as debtor and advance against land account. With respect to the construction activity, assessee also submitted a completion certificate dated 13/3/2010 along with the Ledger account. With advance against land account, complete Ledger accounts were submitted. Assessee also submitted the copy of agreement dated 16 February 2007 between PACL India Ltd and the assessee for construction of a villa and compound wall for Rs 237,95,918/–. Therefore, it was contended that despite above facts, the learned assessing officer has made the addition u/s 68 of the act. The learned CIT – A dealt with issue in paragraph number 5.6.3 holding that it is not disputed that the directors of PAC-I Ltd are closely associated with the appellant and it is not difficult to obtain confirmation or other requisite material to the mutual benefit of both. He because of the low profit, nonproduction of agreement for purchase and sales and because of the wrong printout as well as proximity between assessee and Directors of PACL Limited held that it cannot be a mere coincidence accordingly he

upheld the addition of ₹ 1.84 crores u/s 68 of the income tax act made by the learned AO. 21. The learned authorised representative vehemently assailed the order passed by the learned AO and confirmed by the learned CIT – A by producing and referring extensively to the submission dated 26/5/2016, 15/7/2016, 23/9/2016 and 29/05/2017 placed before the various authorities. The assessee also referred to the copy of agreement dated 16/2/2007 and the completion certificate dated 13/3/2010. Assessee also produced and referred documents dated 13/3/2010 for Rs 197,95,918 and ₹ 40 lakhs aggregating to Rs 237,95,918 which is shown by the assessee as income of the assessee for this year. Learned authorised representative also referred to the various Ledger accounts showing contract receipt and the copy of the tax deduction certificate issued by the principal. The learned authorised representative also referred to the copy of income tax return, computation of total income, annual balance sheet and profit and loss account along with details of other liabilities and sundry debtors of the assessee for the assessment year 2010 – 11 and stated that the contract income has been shown on the credit side of the profit and loss account and further also referred that the party was shown as a debtor. It also referred to the various Ledger account in her books along with the copies of the cheques and the relevant bank statements of the assessee. He further referred to the annual accounts of PACL Ltd and the profit and loss account for the respective financial year of the principal to show that there is no doubt about the identity, creditworthiness and the genuineness of the transaction. In view of this, he submitted that the addition of ₹ 1.84 crores made by the learned assessing officer and confirmed by the learned CIT – A of the sum received from PAC-I Ltd u/s 68 of the act deserves to be deleted. 22. The learned departmental representative vehemently supported the orders of the learned assessing officer. 23. We have carefully considered the rival contention and perused the orders of the lower authorities. With respect to the construction receipt of Rs 237,95,918/– raised by the assessee on PACL Ltd which has been shown by the assessee as income for assessment year 2010 – 11, supported by the agreement dated 16/2/2007 for construction of a villa and compound wall

at Goa. Merely because in the sanction plan the name of the assessee is not mentioned cannot go against the assessee in absence of any provision of law shown by the revenue authorities that it should necessarily have the reference of the contractors name in that plan. Assessee has also produced the completion certificate of the above property and stated that she has subcontracted the work to the other parties. There is no doubt about the subcontract work given by the assessee to other parties who have been paid by proper cheques based on supporting evidences of invoices. Further sum received by the assessee from PACL Ltd was also through account payee cheques. Assessee has also produced a. the copy of the agreement, b. copies of the invoices, c. annual accounts of PAC-I Ltd, and d. the proof with respect to the construction activity carried out through assessee as a contractor and e. accounts and the details of subcontracted work f. TDS Certificates g. Subsequent sum received in next years h. Completion certificates i. Income tax Return j. Copies of accounts Above evidences clearly shows that assessee has on the above sum which has been shown in the profit and loss account for this year has paid due tax s income. Assessee has also produced confirmation and the reconciliation of any printing error in the bank account. Even otherwise, it is not the case of the revenue authorities that the sum received by the assessee in the bank account has not been shown by the assessee in her books of account. Further, merely because the learned CIT – A and AO held that assessee is closely related to the directors of the principal company, the above amount cannot be added u/s 68 of the income tax act in absence of any evidence that there is collusion between the assessee and the directors of the principal company. Assessee has clearly denied any proximity. Revenue authorities have also not shown what kind of proximity exits between them and how it affects the above transaction. There is no Page | 14

evidences that transaction is sham or bogus except mere assumptions. The fact is also clear that when there was an outstanding amount receivable from the principal , against which the work was carried out by the assessee mere adjustment of that work and amount outstanding in earlier years cannot be added in this year u/s 68 of the act for the simple reason that sum to that extent is not received during the year i.e. not credited in the books during the year. The sum received by the assessee from PAC-I Ltd during the year is ₹ 1.84 crores whereas the assessee has shown income out of the above contract of Rs 2 .37 crores, which are higher than the sum, received. Thus, the assessee has already shown the income higher than the amount of credit added by the learned assessing officer. So far as the issue of low profit is concerned, we find that learned assessing officer should have rejected the books of accounts of the assessee and determine the profit on the above sum of contract receipt, however, same has not been done but the total contract sum received despite shown as income, has been added u/s 68 of the act. We hold that ld AO could have made addition u/s 68 as well as could have made addition on account of profit also separately. The complete explanation of the assessee made before the learned CIT – A which has been reproduced in paragraph number 5 – 6 – 2 of the act clearly shows that the addition has been made by the learned assessing officer merely on conjectures and surmises and the learned CIT – A is confirmed the same merely holding that it is not difficult for the assessee to obtain confirmation or other requisition for the mutual benefit of the assessee as well as the principal. The learned CIT – A also held that it could not be a mere coincidence. Thus, the whole addition made by the learned assessing officer and confirmed by the learned CIT – A is merely on assumption. In view of this the addition made by the learned assessing officer of ₹ 1.84 crores in the hands of the assessee on account of unexplained credits u/s 68 of the income tax act deserves to be deleted. Accordingly, ground number 5 of the appeal of the assessee is allowed. 24. Ground number 6 of the appeal of the assessee is with respect to the sustained the disallowance/addition of Rs 933,817 out of the total addition made by the learned assessing officer of Rs 1,633,817 because of commission received from Mr. Ritesh Chodankar. Facts of the case shows Page | 15

that assessee has provided services to this party by raising bills dated 13/7/2010 of ₹ 30 lakhs and on 31/3/2011 of ₹ 70 lakhs. Therefore, the total commission income was shown at Rs. 1 Crore. The above billing was inclusive of service tax against which the assessee has deposited a service tax of ₹ 280,145/– and ₹ 653,672/–. The assessee has also been given a certificate of tax deduction at source on the above sum. The assessee also submitted the copy of the Ledger account of the party from the books of the assessee as well as the copy of the Ledger account of the assessee from the books of the third party to show that the actual commission income received is only Rs 1 crore including of service tax. However the copy of the bank statement of the assessee shows a sum of ₹ 7 lakhs received from Mr. Ritesh on 23/9/2011 therefore the learned assessing officer made the addition of ₹ 7 lakhs including service tax amounting to ₹ 1,633,817/–. On appeal before the learned CIT – A the addition to the extent of ₹ 933,817 was confirmed for the reason that the assessee has shown the gross commission received from the appellant of Rs 1 crore on which ₹ 7 lakhs TDS has been made. The learned CIT – capital and dismiss the explanation of the assessee that assessee has returned the above sum of ₹ 7 lakhs in the next financial year on 23/9/2011. The learned CIT – A the above party was witnessing the deal of sale between Mr. Anil Chaddha and Mr. Bhangoo therefore both the parties are having more than normal transactional relationship. Therefore the learned CIT – A agreed that the gross commission offered should have been Rs 1 crore and thus affirming the addition of the balance over that shown by the assessee of ₹ 9,066,183/- i.e. ₹ 933,817. Against this, the assessee is in appeal before us. 25. The learned authorised representative referred to the copies of the bills including the service tax raised by the assessee on account of commission charges for sale of land. The confirmation of the party as well as the proof of payment of the service tax was also produced. The confirmation of the parties showing the Ledger account of the assessee from the books of the commission payer was also submitted it was submitted that the balance sum of ₹ 7 lakhs was advance against sale of plot in the books of the assessee for the year Under consideration along with the conformity certificate dated 13/2/2014 and is subsequently the above sum of ₹ 7 lakhs

was paid back on 23/9/2011. Therefore it was the contention that the addition sustained by the learned CIT – A of ₹ 933,817 out of the total addition of ₹ 1,633,817/– on account of the commission received deserves to be deleted. 26. The learned departmental representative vehemently supported the orders of the lower authorities. 27. We have carefully considered the rival contention and perused the orders of the lower authorities. The only grievance in this case is an addition of ₹ 7 lakh sustained by the learned CIT – A which has been returned by the assessee to the party on 23/9/2011, which is supported by the copies of the bank statement of the assessee showing the repayment of the above amount. The assessee has shown the commission income by raising two bills. The respective service tax amount was paid by the assessee and it was demonstrated by production of the service tax challan and the copies of the bank statement of the assessee. Further, the impugned amount of Rs 7 lakhs , which has been confirmed by the learned CIT – A is not on account of the commission but was advance against the sale of land, which was returned by the assessee in subsequent years, which is also proved by the copy of the bank statement. The learned lower authorities did not support any material to show that the amount of ₹ 7 lakhs, which is received by the assessee during the year and subsequently returned by the assessee, was part of the commission income of the assessee. Merely because assessee has a dealing with the other party for provision of services, it cannot be said that assessee cannot have any other transaction with that party and whatever is received which is for other transaction should also be considered as service income even without any evidence. In view of the documents produced by the assessee with respect to the repayment of ₹ 7 lakhs, it cannot be said that assessee has also received the above 7 lakhs as a commission during the year. Accordingly we reverse the order of the learned CIT – A confirming the addition of ₹ 7 lakhs as commission income in the hence of the assessee and allow ground number 6 of the appeal. 28. Ground number 7 is with respect to the addition of Rs. 4 lakhs on account of unexplained credit received from one Shri Anil Kumar added by the learned assessing officer u/s 68 of the income tax act. This amount was

shown by the assessee is an advance against the sale of property. The assessee filed the confirmation letter of the party but other details were not produced therefore the learned assessing officer made the addition. On appeal before the learned CIT – A assessee submitted the permanent account number, confirmation filed by the assessee of the above party. The learned CIT – A noted that except the confirmation from that party regarding the liability and containing the permanent account number of the credit and nothing more has been submitted and therefore he confirmed the addition. 29. The learned authorised representative submitted that that assessee has submitted the confirmation dated 6/3/2014 of Mr. Anil Kumar wherein the permanent account number of that particular party was submitted. Against this, the learned assessing officer did not make any enquiry but made the addition. He submitted that the learned assessing officer could have enquired or investigated the matter further if there is any doubt or should have confronted the assessee against any adverse material available with the learned assessing officer. He submitted that the learned assessing officer did not have any adverse material and therefore the addition deserves to be deleted. 30. The learned departmental representative vehemently supported the order of the lower authorities. 31. We have carefully perused the orders of the lower authority as well as the rival contentions. In that particular case the assessee has received a sum of Rs. 4 lakhs from one Mr. Anil Kumar . The assessee submitted the confirmation letter along with the PAN of that party. The learned assessing officer without making enquiry made the addition of the above sum and also did not confront assessee with any other adverse material. In fact assessee has discharged initial onus cast upon him with respect to the about transaction. Once the assessee has submitted the confirmation letter, if the assessing officer has any doubt about that, he either should have made enquiry himself or should have asked the assessee to further substantiate the transaction. In absence of this enquiry, the addition u/s 68 of the act cannot be sustained. Accordingly, we direct the learned assessing officer to delete the addition u/s 68 of the sum of Rs. 4 lakhs. Accordingly, ground number 7 of the appeal is allowed.

claimed, the above ground of appeal might be restored back to the file of the learned assessing officer for verification. 36. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that there is a serious dispute the extent of expenditure incurred by the assessee on vehicle running and maintenance expenditure. If the assessee has incurred an expenditure of only ₹ 298,620/–, the learned assessing officer could not have disallowed a sum of ₹ 337,097/– on that count. Further, it is the claim of the assessee that she did not get any proper opportunity of hearing before the learned assessing officer to substantiate the claim of allowability of such expenditure. In view of this, we set-aside this ground of appeal back to the file of the learned assessing officer with a direction to the assessee to substantiate the allowability of such expenditure, the learned assessing officer may verify and decide the issue on the merits after giving assessee a proper opportunity of hearing. Accordingly, ground number 9 of the appeal is allowed with above direction. 37. Ground number 10 is with respect to the disallowance of foreign travel expenditure of ₹ 428,692/–. The learned authorised representative did not press this ground of appeal and therefore it is dismissed. 38. Ground number 11 of the appeal is with respect to the disallowance of ₹ 765,363 made by the learned assessing officer out of repairs and maintenance expenditure. The learned and authorised representative did not press this ground of appeal and therefore it is dismissed. 39. Ground number 12 of the appeal is with respect to the confirmation of the addition of ₹ 5,915,300 on account of deemed dividend u/s 2 (22) (e) of the act. During the course of assessment proceedings, the learned assessing officer asked for the details of the shareholding of the appellant in various companies. The learned assessing officer observed that assessee is holding 5,12,501 shares out of 5,12,503 shares in one of the company. It was noted that assessee has taken loans and advances from that company and the total debit for the period being ₹ 6,020,982/– and total credits being 59,22,396/– the balance of ₹ 8,036,000 were shown by the assessee as unsecured loan in the balance sheet. The learned assessing officer questioned the assessee about the taxability of the above sum is a deemed

dividend. The assessee explained that assessee has received a sum of ₹ 5,922,396/– as imprest money from the company for investment on behalf of the company, which is in the nature of a commercial transaction. As the deal failed, the assessee returns back almost immediately the above sum. Since the assessee has not derived any benefit out of the above sum the provisions of Section 2 (22) (e) of the act is not applicable. The learned assessing officer rejected the contention of the assessee and made an addition of Rs 5,915,300/– in the hands of the assessee as deemed dividend. The learned assessing officer held that there is no reason to show that there is an evidence for benefit to the shareholder received on account of the loan. On appeal before the learned CIT – A it was submitted that ₹ 59,22,396/- was received as a loan from the company out of which the assessee has invested a sum of ₹ 50 lakhs in another company M/s Maher farms for a project which was shelved . Thus, the above money was returned back by that company which was also returned back by the assessee to the original company. The assessee submitted the copies of the board resolution to support her contention. The learned CIT – A rejected the contention of the assessee and held that merely because the assessee says that she has received the above sum for business purpose by submitting copy of the board resolution would not be sufficient in absence of details to corroborate such unilateral documentation. Thus, he confirmed the addition in the hands of the assessee. 40. The learned authorised representative reiterated the same facts. He further stated that above is a business transaction as stated in the board resolution dated 24/1/2011 of the company from which the loan was received. It was further stated that assessee has immediately paid back the sum to the above company the movement the project was not carried forward. The assessee also submitted that she has not received any benefit of the about transaction and therefore there cannot be taxability of any deemed dividend in the hands of the assessee. He relied upon the following judicial precedents:-

CIT v. NS Narendra IT Appeal No. 557/Bang/2013 (para 10) affirmed  by honourable Karnataka High Court. Page | 21

Pradip Kumar Malhotra v. CIT [2011] 15 taxmann.com 66/203  Taxman 110/338 ITR 538 (Cal.) (para 5) Jamuna Vernekar v. Dy. CIT [IT Appeal No. 43 of 2013, dated 10-2-  2021] (para 5) Bagmane Constructions (P.) Ltd. v. CIT [2015] 57 taxmann.com  120/231 Taxman 260 (Kar.) (para 5)  CIT v. Creative Dyeing & Printing (P.) Ltd. [2009] 184 Taxman 483/318 ITR 476 (Delhi) (para 5) CIT v. Ambassador Travels (P.) Ltd. [2008] 173 Taxman 407/[2009]  318 ITR 376 (Delhi) (para 5).

verify the claim and decide the issue on the merits of the case. Thus this ground is allowed 43. In the result, appeal filed by the assessee is partly allowed. 44. Order pronounced in the open court on : 09/11/2021. -- Sd/-(SUCHITRA KAMBLE) Sd/-(PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 09/11/2021 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

Date of dictation 9.11.2021 Date on which the typed draft is placed before the 9.11.2021 dictating member Date on which the typed draft is placed before the other 9.11.2021 member Date on which the approved draft comes to the Sr. PS/ 9.11.2021 PS Date on which the fair order is placed before the 9.11.2021 dictating member for pronouncement Date on which the fair order comes back to the Sr. PS/ 9.11.2021 PS Date on which the final order is uploaded on the website 9.11.2021 of ITAT date on which the file goes to the Bench Clerk 9.11.2021 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order