ITO, NABHA vs. SHRI JASPREET SINGH, NABHA

आदेश/ORDER

PER BENCH: Both the appeals of the Revenue in the case of different assessees have been preferred against separate orders of the Commissioner of Income Tax (Appeals), Patiala [(in short ‘CIT(A)’] both dated 4.12.2018, relating to assessment year 2012-13. The assessees have filed Cross Objections against the same.

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

unexplained investment in land. They were therefore taken

up together for hearing.

For the sake of convenience we shall be dealing with the facts

in the case of Jaspreet Singh in ITA No.252/Chd/2019 and the

decision rendered therein will be applied mutatis mutandis to

appeal of the other assessee also.

present appeal relates to addition made to the income of the

assessee on account of unexplained investment towards

purchase of agricultural land.

during assessment proceedings, the Assessing Officer (A.O),

inquiring into an allegation in a Tax Evasion Petition that the

assessee had purchased agricultural land in Village Chaswal

for Rs.1,50,07,500/- during the previous year relevant to the

impugned assessment year, found that the assessee had

indeed purchased the land on 28th February, 2012.The AO

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

asked the assessee to explain the source of the investment and

the assessee in reply stated that the investment was sourced

from unsecured loans received from the following persons:

Name of Creditor Amount in Rupees Date of loan Sr. No . 1. Shingara Singh 15,00,000/- 17.02.2012

The AO asked the assessee to produce documentary

evidence along with the source of income of the creditors.

The assessee submitted details of the source of the source.

In order to verify the above the Ld AO summoned and

recorded the statements of the 6 creditors as under:

i. Shingara Singh, Baghel Singh and Kaka Singh on 21.12.2017 ii. Major Singh, Naib Singh and Kartar Singh on 22.12 2012

The submissions of the assessee regarding source of source

and the statements of the 6 Creditors are summarized in the

order of the Ld.CIT(A) at para 4.2 as under:-

Source of Source Evidence Given Sr. Name of Amount in No. Creditor Rupees 1. 15,00,000/- Shingara Singh Creditor provided i) Confirmation regarding proof of advance filed by AR withdrawal ii)Creditor an Agriculturist iii)Withdrawals from Axis Bank Account of Rs. 8,00,000/- on 15.02.2012

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

Rs.7,00,000/- on and 17.02.2012. iii) Amount given to Jaspreet Singh on 17.02.2012 in cash.

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

The AO found that the explanation regarding the source

of the creditors as given above was not acceptable on the

ground that it was not practical to keep cash at home for

periods ranging from November 2011 to February 2012

(between 4 days to around 88 days) and that the appellant had

not produced any copy of his own bank account during

assessment proceedings. The AO went on to make the addition

of Rs.1,48,86,000/- to the income of the appellant.

contention considering which the Ld.CIT(A) deleted the

addition made holding as under:

“Discussion & Determination: The Ld. AR 's arguments in the case centre around the submission that had discharged burden of proof regarding the identity, source and credit worthiness of the creditors qua the appellant stands discharged both on the basis of the information provided by the appellant and the submissions in the statements of the Creditors. Once the identity, creditworthiness and genuineness of the transaction affidavits of all the six creditors was established, the source of source though not required to be proved as per law has been established by the appellant as each amount given as credit is predicated on either the sale of house (duly supported with a copy of agreement to sell in each case) or on a CC Account or on verifiable agricultural income duly established along with bank account showing withdrawals. The Ld. AO while not disputing the loans/

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

other evidences has held that is not practical to keep such large amounts of cash in the house from periods ranging from 4 days to 4 months and that no interest is charged on the amounts leading to the conclusion that the explanations are an afterthought. I have carefully considered the written submissions of the Ld. AR and the findings of the Ld. AO and contextualized these to the facts of the case. That the appellant has bought the said agricultural land on 28.12.2012 is matter of record and undisputed. That the appellant produced the confirmations of the creditors;, is also on record and undisputed. That the assessment order provides source of source in the form of agreement to sell/ CC account details/ bank accounts of the creditors is also matter of record and undisputed. That the Ld. AO has not taken any adverse view regarding the creditors also

on record and undisputed. The ID AO has not produced anything on record to suggest that the appellant or the creditors have any other source of income other than agricultural income. That the appellant has not claimed any other source for the cash to suggest that the Creditors have been claimed as an afterthought is also on record. It is my considered view that the evidences produced by the Appellant cannot be discounted on the mere apprehension that the cash shown to have been advanced has been withdrawn from to 88 days before the date of executing the sale deed. It is my considered view that qua the appellant has discharged the burden of proof regarding establishing the identity, creditworthiness of the creditors stands discharged; and further there is nothing on record to doubt the genuineness of the transaction. It was open to the AO to refer all the cases of the creditors to their assessing officers to make any further inquiries. The addition, in my view is based on surmises and has no legs to stand on and is directed to be deleted. Thus ordered.” 8. Before us the Ld. DR relied upon the order of the AO

stating that evidently the cash loans given to the assessee for

the purchase of land had been kept for a substantial period of

time before being invested in purchase of land, with the

withdrawals having been made in the months of November,

December, 2011 and January, February, 2012, while the

investment was made on 28.2.2012. The Ld. DR further

pointed out that no interest had been charged on the cash

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

loans advances and, therefore, the AO had rightly

concluded that it was highly improbable that the loans

advanced by these persons to the assessee had been utilized

for purchase of the property. The Ld. DR accordingly

supported the order of the AO.

relied upon the findings of the CIT(A).

gone through the orders of the authorities below. The issue

relates to explanation regarding source of investment in

purchase of an agricultural land amounting to

Rs.1,50,07,500/- which the assessee had explained had been

sourced from the cash loans obtained from six persons as

mentioned in the table above.

assessee had proved the identity & creditworthiness of the

creditors and also the genuiness of the transaction by filing

confirmations from all the creditors,explaining the source of

the loan given by the creditors as being either from sale of

land or agricultural income or CC account and substantiating

the same with evidence also in the form of agreement to sell

land,copy of account of commission agent through whom

agricultural produce sold and copy of CC account wherever

applicable. The Ld.CIT(A) has also found the genuineness of

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

the transaction proved by the assessee by demonstrating cash

withdrawals from the bank account of the donors before giving

the loan.Also he has noted that the donors confirmed the

transaction in the statement recorded by the AO. None of the

above facts have been controverted by the Revenue before us

nor any discrepancy pointed out in the same. In fact we find

that even the AO has disputed the fact that the identity and

creditworthiness of the creditors was adequately proved by the

assessee as above.

transaction by the Revenue,is as rightly pointed out by the

Ld.CIT(A) the fact that there was a time gap of upto 44 days

between withdrawal of cash by the creditors from their bank

account and advancing the same to the assessee. In this

regard ,we are in agreement with the Ld.CIT(A) that the same

is of no consequence and cannot discount the evidences

produced by the assessee,with nothing else on record to doubt

the genuineness of the transaction.As rightly held by the

Ld.CIT(A), the assessee had discharged his onus of proving the

genuiness of the transaction and with nothing adverse being

brought on record /unearthed by the Revenue,the transaction

could not be doubted for the mere reason of small time gap in

withdrawing cash by creditors and deposit of the same in the

bank account of the assessee.

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

the Ld.CIT(A) deleting the addition made on account of

unexplained investment amounting to Rs.1,48,86,000/-

Grounds of appeal filed by the Revenue are dismissed.

Kamaljeet Singh in ITA No.253/Chd/19,the facts it was

pointed out were identical with addition being made on

account of unexplained investment in land amounting to

Rs.1,48,86,000/-.That in the said case also the assessee had

explained the source of investment as from loans advanced

from his uncles Dalbir Singh and Ranjit singh and had also

filed their confirmations and proved their source of source

also.The said creditors had also confirmed giving loan to the

assessee in their statement recorded by the AO. That the

Ld.CIT(A) ,finding that the assessee had discharged his onus of

proving the identity ,creditworthiness and genuineness of the

transaction had deleted the addition made, stating that mere

gap in withdrawal of cash by creditors and deposit in the

bank account of the assessee of upto 3 to 11 months could not

discount the evidences produced by the assessee.

identical to that in the case of Jaspreet singh in ITA

No.252/Chd/19,adjudicated above by us, our decision

ITA No.252/Chd/2019 & CO No.15/Chd/2019 A.Y.2012-13 & ITA No.253/Chd/2019 & CO No.16/Chd/2019 A.Y.2012-13

rendered therein will apply to this case also following which we uphold the order of the Ld.CIT(A) deleting the addition made of Rs.1,48,86,000/-on account of unexplained investment.

Order pronounced in the Open Court.

Sd/- Sd/- �दवा �संह अ�नपूणा� गु�ता (ANNAPURNA GUPTA) (DIVA SINGH ) लेखा सद�य/Accountant Member �याय�क सद�य/Judicial Member �दनांक /Dated: 23rd July, 2019 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File