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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
Sharad Jaiswal ITA No.776/Ind/2014
आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No.776/Ind/2014 Assessment Year: 2010-11 Sharad Jaiswal, Income Tax Officer 1(1), G-106/69, Shivaji Nagar, Vs. Bhopal Bhopal (Appellant) (Respondent ) PAN No.AKGPJ5075N Revenue by Shri Rajiv Jain, Sr. DR Assessee by Shri Ashish Goyal & N.D. Patwa, Advocates Date of Hearing 11.7.2018 Date of 26.7.2018 Pronouncement
O R D E R PER MANISH BORAD, AM.
This appeal filed by the assessee pertaining to the A.Y. 2010-
11 is directed against the order of ld. Commissioner of Income-tax
(Appeals)-I, Bhopal dated 29.09.2014 which is arising out of the
order u/s 143(3) of the Income Tax Act dated 04.02.2013 passed by
ITO-1(1), Bhopal.
Sharad Jaiswal ITA No.776/Ind/2014
Briefly stated facts as culled out from the records are that the
assessee is an individual earning income from tutions and other
sources. Income of Rs.1,56,190/- declared in the income tax return
submitted on 26.7.2010. The case selected for scrutiny through
CASS. Necessary notices u/s 143(2) and 142(1) of the Income Tax
Act were duly served upon the assessee. The Ld.A.O on the basis of
information received from AIR observed that in the saving bank
account held by the assessee in State Bank of India cash of
Rs.40,74,200/- was deposited on various dates. Information
pertaining to these was called for from the assessee. It was
submitted that out of above referred cash deposit, sum of
Rs.20,00,000/- each were received from Shri L.N. Patidar and Shri
Jeetmal Patidar as advance against agreement for sale of land. The
Ld.A.O called both the persons who advanced the money and took
the statement and other necessary information but was not
satisfied with the creditworthiness and genuineness of the cash
credit and added the same as unexplained income u/s 68 of the
Act. In the similar fashion Ld.A.O also made addition of
Rs.6,00,000/- relating to cheque received at Rs.1,00,000/- and
Sharad Jaiswal ITA No.776/Ind/2014
Rs.5,00,000/- for the source of which the assessee could not
provide necessary explanation. He also made addition of
undisclosed commission of Rs.5,600/- and assessed income at
Rs.47,61,790/-. Aggrieved preferred an appeal before CIT(A) but
failed to succeed on any of the grounds. Now the assessee is in
appeal before the Tribunal raising various grounds which stands
adjudicated in the forthcoming paragraphs.
The Ld. Counsel vehemently argued referring to the written
submissions and paper book filed before us. The Ld. Departmental
Representative supported the findings of the lower authorities.
We have heard the rival contentions and perused the records
placed before us carefully.
Ground No.1:
That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.40,00,000/- being amount deposited in the bank in the form of cash without accepting the explanation offered by the appellant and without appreciating the fact that the aforesaid cash deposit was out of proceeds of agreement to sale of the land with Shri Laxmi Narayan Patidar and Shri Jeetmal Patidar who has given
Sharad Jaiswal ITA No.776/Ind/2014
the cash of Rs.20,00,000/- each and necessary evidences in this regard has already been submitted. Further, the Learned CIT (Appeals) also erred in not giving any findings that the said amount of Rs.40,00,000/- deposited in bank is not out of unsecured loans taken by the appellant but is an advance against the sale of property and hence, provision of section 68 of the Income-tax Act is applicable. 5. Grievances of the assessee through this ground is that the
Ld.CIT(A) had failed to accept his contentions that the source of
Rs.40,00,000/- was well explained and the Ld.A.O erred in making
the additions u/s 68 of the Act. We observe that during the
assessment year the assessee entered into an agreement for
purchase of agriculture land at Gram Misrod from Shri Bhojraj
Patidar vide agreement dated 17.11.2009. The assessee paid
cheque of Rs.40,00,000/- which was cleared on 25.11.2009 as
advance for purchase of agriculture land. On the same date i.e.
25.11.2009, the assessee agreed to sale agriculture land to Shri
L.N. Patidar and Jeetmal Patidar on an agreement written on plain
paper and received cash of Rs.20,00,000/- each from both these
persons. This cash was deposited in bank which facilitated in
clearing the cheque of Rs.40,00,000/- issued to Shri Bhojraj
Sharad Jaiswal ITA No.776/Ind/2014
Patidar. There is no dispute before us about the sale and purchase
consideration of the agriculture land. The only issue before us is
about the genuineness and creditworthiness of the alleged cash of
Rs.40,00,000/- received from Shri L.N. Patidar and Shri Jeetmal
Patidar of Rs.20,00,000/- each. The assessee in order to get away
from the clutches of Section 68 of the Act needs to prove the
identity, genuineness and creditworthiness of the cash credited.
Identity of both the cash creditors stands proved as they
appeared in person before the Assessing Officer and gave statement
on oath to have given cash advance to the assessee.
Now coming to the genuineness and creditworthiness, we find
that the cash creditors are regularly assessed to tax as they have
stated before the revenue authorities confirming the transaction of
giving the advances in cash of Rs.20,00,000/- each to the assessee.
The financial statements of the creditors further reveals that the
advances given to the assessee are reflected in their balance sheet.
The source of cash with these two cash creditors was alleged to
have been received from loans from their relatives which in the case
of Shri L.N. Patidar was loan of Rs.8,00,000/- from Asha Devi, 5
Sharad Jaiswal ITA No.776/Ind/2014
Rs.4,00,000/- from Manmohan Patidar and Rs.8,00,000/- from
own savings. Whereas in case of Shri Jeetmal Patidar the source of
cash was explained to have been received as loan of Rs.15,50,000/-
from Krishna Mohan, Rs.50,000/- from Geeta Devi Patidar
Rs.1,80,000/- from Murli Patidar and Rs.2,20,000/- from own
savings. It is pertinent to note that the assessee in order to to
explain source of source has placed copy of income tax returns and
balance sheet and confirmation letters of Asha Devi, Manmohan
Patidar, Krishna Mohan, Geeta Devi and Murli Patidar and all these
alleged loans received by two cash creditors from various persons
and duly reflected in their balance sheets.
Apart from the above documentary evidences we also find that
the assessee has paid back Rs.12,50,000/- each by cheque to Shri
L.N. Patidar and Jeetmal Patidar on 17.07.2010 and 15.07.2010
respectively and the balance has been paid in cash. These
transactions on repayment of advances has occurred much before
the initiation of assessment proceedings which gives due weightage
in favour of the assessee of proving the genuineness of the
transaction.
Sharad Jaiswal ITA No.776/Ind/2014
In the light of above facts it is clear that the assessee has
successfully proved the genuineness and creditworthiness of both
the cash creditors and in the given facts and given circumstances of
the case the Ld.A.O was not justified in making addition u/s 68 of
the Act. Our view find support by the judgments in the case of CIT
vs Daulat Ramatmull 87 ITR 349 (Supreme Court), CIT vs
Navedram Ahuja 290 ITR 453 (MP).
In view of our above discussions and in the totality of the facts
no addition was called for u/s 68 of the Act for sum of
Rs.40,00,000/- received by the assessee against agreement for sale
of land. Ground No.1 of the appeal is allowed.
Ground No.2:
“ That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.6,00,000/- being cheque of Rs.1,00,000/- and of Rs.5,00,000/- deposited in the bank without accepting the fact that both the cheques are loan received from different persons for which necessary explanation has been given.
Sharad Jaiswal ITA No.776/Ind/2014
At the outset The Ld. Counsel for the assessee requested for
not to press this ground. This ground therefore is dismissed as not
pressed.
Ground No.3:
That on the fact and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.5,600/- being commission received on the basis of information as provided in form 26AS without accepting the explanation offered by the assessee that he has not received any such commission. 12. At the outset the Ld.Counsel for the assessee conceeded to the
fact that the alleged commission income of Rs.5600/- has not been
disclosed in the income tax return and the same has been rightly
added, however he requested that the credit of tax deducted at
source on this amount which is reflected in Form 26AS may be
given to the assessee. No objection was raised by the Ld.
Departmental Counsel.
We have heard rival contentions, perused the records and
considered the facts and records placed before us. The alleged
amount of undisclosed commission income Rs.5600/- is not in
dispute from both the side and only request is to give credit of TDS
Sharad Jaiswal ITA No.776/Ind/2014
as per form 26AS . We therefore directed the Assessing Officer to
give credit of tax deducted at source on the alleged commission
income which is reflected in Form 26AS. We accordingly confirm
the addition of Rs.5600/- with direction to the Assessing Officer for
giving the credit to the Income Tax deducted at source on
undisclosed commission income of Rs.5600/-. This ground of
assessee is dismissed.
Ground No.4 & 5:
That under the circumstances, initiation of penalty proceedings u/s 271(1)(c ) is not justified. 5. That under the circumstances, charging of interest of Rs.4,80,377/- u/s 234B is not justified”. 14. These grounds are consequential and general in nature which
needs no adjudication.
In the result appeal of the assessee is partly allowed.
The order pronounced in the open Court on 26.7.2018.
Sd/- Sd/-
( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 26 July, 2018 /Dev 9
Sharad Jaiswal ITA No.776/Ind/2014
Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Private Secretary/DDO, Indore
Sharad Jaiswal ITA No.776/Ind/2014
Date of dictation : 23.7.2018 2. Date on which the typed draft is placed before the Dictating Member : .24.7.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 24.7.18 4. Date on which the fair order is placed before the dictating Member for pronouncement: 24.7.18 5. Date on which the fair order comes back to the Sr.P.S./P.S.:26.7.18 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order: