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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by Revenue for Assessment Year (AY) 2012-13 arises out of the order of learned Commissioner of Income Tax (Appeals)-6, Chennai [CIT(A)] dated 01-02-2019 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 27-03-2015. The grievance of the revenue is two-fold i.e., (i) deletion of addition of Rs.156.80 Lacs u/s 68; (ii) Deletion of disallowance u/s 14A for Rs.0.56 Lacs.
2 - 2. The Ld. Sr. DR advanced arguments to submit that the findings given by Ld. AO in the remand report dated 28.03.2018 has been overlooked by appellate authority whereas Ld. AR submitted that cash deposits are duly supported by cash book maintained by the assessee. Regarding disallowance u/s 14A, it is admitted position that the assessee has not earned any exempt income during the year. Having heard rival submissions, the appeal is disposed-off as under.
The assessee made cash deposit of Rs.156.80 Lacs in HDFC Bank and Axis Bank. The same were claimed to be out of cash balance held by the assessee. During assessment proceedings, the assessee produced books of accounts for the year. The assessee is stated to be engaged in real estate business. It was submitted that the assessee had received property advances from different parties which was deposited into Bank. The same was duly supported by entries in books of accounts. However, Ld. AO held that mere production of books of accounts without supporting evidences could not be construed as conclusive proof. The assessee failed to prove the source of cash deposit and accordingly, the same was added to the income of the assessee. The Ld. AO also made disallowance u/s 14A r.w.r. 8D for Rs.0.56 Lacs.
During appellate proceedings the assessee’s submissions and evidences were subjected to remand proceedings and a remand report was forwarded by Ld. AO. A copy of the same is on record. The assessee submitted that it received back advances of Rs.139.63 Lacs and also received sale consideration in cash for Rs.47.47 Lacs. Thus, total cash received during the year was Rs.187.10 Lacs. The same was used to deposit cash of Rs.187 Lacs including Rs.156.80 Lacs as added by Ld. AO. The Ld. AO, after perusal of relevant agreements as furnished by the assessee, held that the authenticity of agreements was not substantiated / the agreements were not registered. The assessee could not prove the genuineness of cash credit. The assessee could also not establish as to how the amounts so received were accounted for in the books of accounts. Finally, Ld. AO justified the additions as made in the assessment order.
The Ld. CIT(A), after considering the contents of remand report as well as assessee’s submissions, noted that the assessee had maintained regular books of accounts including the cash book. The cash available in the books was used for making the cash deposits into bank accounts. Thus, the source of cash deposits stood explained. The assessee furnished books of accounts which contained all business transactions including the advances received, income earned and expenditure incurred etc. All the transactions were reflected in the books of accounts. No defect was found in the assessee’s books. The details of cash received by the assessee during the year was tabulated as under: - No. Details of transactions Amount (Rs.) 1 Cash receipts from the sale of Property at Manimangalam Rs. 26,59,24 2 Advance amount received back for the land in KK Nagar Rs. 10,00,000 TNHB 3 Advance amount received back from Gnanaprakasam on Rs. 25,00,000 cancellation of purchase deed of the land in Pukkadurai 4 Balance amount of advance for the land in Thandalam Rs.3,18,883 5 Advance amount received back for the land at Mdichur Rs.50,000 Road 6 Advance received back as part payment for cancellation of Rs.5,00,000 purchase of land in Siruseri 7 Advance amount received back from the land in Rs.69,35,000 Kundrathur 8 Sale considerations received in cash- From sale of plot at Jaldampet : 3,00,000 Rs.47,47,600 From sale of Vallapakkam property : 16,82,000 From sale of plot at Mahaveer Avenue : 10,15,600 From sale of plot at Somangalam : 17,50,000 Total Cash Receipts During the Year Rs.1,87,10,273 Finally, the additions were deleted by observing as under: - 4.1.10 Thus, the total of cash receipts of the assessee during the financial year 2011-12 are to the tune of Rs.1,87,10,273/-. This amount of cash receipts, which are reflected in the assessee's cash book, is higher than the cash deposits in the above bank accounts. Further, there are certain cash withdrawals from the bank accounts during the year. Similarly, there were certain expenses incurred by the assessee in cash during the year. All these transactions are reflected in the assessee's cash book. Therefore, the sources for the cash deposits into the above bank accounts are the cash available in the assessee's cash book. 4.1.11 In view of the above reasons and discussions, the above cash deposits of Rs.58,80,000/- and Rs.98,00,000/- (totaling to Rs.1,56,80,000/-), made in the bank accounts of HDEC bank and Axis bank, are out of the regular cash balance available in the regular books of accounts maintained by the assessee. Therefore, the sources for the cash deposits stands explained and the Assessing Officer's action of treating the same as unexplained cash credits u/s.68, is not justified and stands deleted. The disallowance u/s 14A was deleted since no exempt income was earned by the assessee during the year as held by Hon’ble Supreme Court in CIT vs. Chettinad Logistics Pvt. Ltd. (80 Taxmann.com 221). Aggrieved, the revenue is in further appeal before us.
The undisputed position that emerges is that the assessee has maintained regular books of accounts and furnished the same to Ld. AO. The total cash received during the year was Rs.187.10 Lacs which was sourced to deposit the same into the bank accounts. All the business transactions have been reflected by the assessee in its books of accounts. No defect was found in the assessee’s books. The Ld. AO has doubted the source on mere presumption and doubt without bringing any evidence on record to show that the transactions were not 5 - authenticated one. Under such scenario, the adjudication in impugned order, on this issue, could not be faulted with.
The disallowance u/s 14A has also rightly been deleted since the assessee has not earned any exempt income during the year and therefore, no such disallowance could have been made in terms of cited decision of Hon’ble Supreme Court.
In the result, the appeal stands dismissed. Order pronounced on 06th December, 2022.