RADHEY RAM GODARA,JAIPUR vs. ITO, JAIPUR

PER BHAGCHAND, AM

The assessee has filed an appeal against the order of the ld.

CIT(A)- I, Jaipur dated 04-02-2016 for the assessment year 2008-09

raising therein following grounds of appeal. ‘’1. That the impugned assessment order u/s 143(3)/250/set aside dated 14-03-2014 is bad in law and on facts of the case for want of jurisdiction and for various other reasons and hence the same may kindly be quashed. 2. Rs.17,89,302/-: the ld. CIT(A) has grossly erred in law as well as on the facts of the case estimating the agriculture income of Rs. 19,61,198/- as against Rs. 37,50,500/- declared by the assessee and thereby erred in sustaining the addition at Rs. 17,89,302/- by treating

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

the agriculture income as income from other sources despite the evidences available on record. Hence, the treatment so given by the AO and addition so made by the AO and partly confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the AO may kindly be directed to treat all the income as agriculture income as not income from other sources and resultant addition may kindly be deleted in full. 3.1 Rs.99,06,000/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 99,06,000/- on account of deposit in his bank account by cheque from various persons (i.e. Rs. 47,03,000/- from Shri Satish/Madhu Sharma, Rs. 35,00,000/- from Shri Mahaveer Prasad, Rs. 2,03,000/- from Shri Vijay Char and Rs. 15,00,000/-from Shri Surjeet Singh) without considering or appreciation our written submission and evidences available on record. Hence the addition so made by the AO and confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and fats on the record and hence the same may kindly be deleted in full. 3.2 The ld. CIT(A) has grossly erred in law as well as on the facts of the case in not admitting the additional evidences. Hence, the additional evidences so not admitted by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the same may kindly be considered. 4. Alternatively and without prejudice to above, it is submitted that if the addition on account of agriculture income is sustained or not then the set off of the same may kindly be given against the addition on account of deposit in the bank account if any sustained. 5. The AO erred in law as well as on the facts of the case in charging interest u/s 234A & 234B. The appellant totally denies its liability of charging of any such interest. Hence, the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.

2.1 Apropos Ground No. 1 of the assessee, the facts as emerges from

the order of the ld. CIT(A) is as under:-

‘’3.1.2 I have duly considered the submissions of the appellant, assessment order and the material placed on record. Vide its order dated 18- 10-2012, the Hon'ble ITAT Jaipur set aside the matter to the file of the AO for making fresh assessment. It was the contention of the appellant that no proper 2

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

opportunity of being heard was given to it by the AO while framing the instant assessment order under consideration. It is noted from the assessment order that notices u/s 143(2)/ 142(1) were issued by the AO on 22-01-2014 requiring the appellant to furnish certain details and to produce some persons on 4-02- 2014. The written submissions were furnished before the AO on 03-02-2014 and it appears that the case was adjourned for 12-02-2014 and again for 19-02- 2014 and finally the assessment was completed on 14-03-2014. Thus, it is evident that sufficient opportunities were provided by the AO to the appellant to explain its case. Hence, the contention of the appellant that no proper opportunity was provided by the AO is without any merit and deserves to be rejected.’’

2.2 We have heard the rival contentions and perused the materials

available on record. It is observed that in the present case the original

assessment was completed on 20.12.2010 which reached before the

ITAT, Jaipur Bench, Jaipur and the ITAT, Jaipur Bench has restored the

matter to the file of the AO vide order dated 18-10-2012 in ITA No.

372/JP/2012 (PB126) with following observation

‘’3.12……. “We therefore, keeping in view the contrary stand and in the absence of relevant facts on record deem it proper to set-aside the impugned order on these issue and remand the same to the file of the AO for fresh adjudication in accordance with law after providing due and reasonable opportunity of being heard to the assessee. “ In pursuant thereto the AO has issued notice on 22.01.2014 and passed

assessment order on 14.03.2014 (page 2 of astt. order). The ld.AR of the

assessee has drawn our attention that while passing assessment order the

AO has not issued the demand Notice u/s 156, ITNS 150, Penalty Notice

u/s 274 r.w.s. 271of the Act for the year under consideration i.e for

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

A.Y.2008-09. He has issued the demand Notice u/s 156, ITN 150, Penalty

Notice U/s 274 r.w.s 271of the Act for A.Y. 2009-10. It is further noted

that in the remand report reproduced at page No.5 of CIT(A)’s order, it

has been indicated that the mistakes has been rectified by the Assessing

Officer himself on 20.06.2014, these mistakes are typing mistakes and no

cognizance is required. In this view of the matter, the Ground No. 1 of the assessee is dismissed.

3.1 Apropos Ground No. 2 of the assessee, the facts as emerges from

the order of the ld. CIT(A) is as under:-

‘’3.2.2 Determination (i) I have carefully perused the submission of the appellant, assessment order and the material placed on record. It is noted from the assessment order that the appellant declared agriculture income of Rs. 37,50,000/- in his return of income. The appellant has taken 57 acres of land on lease besides having own land. The AO on the basis of report of ITO, Fatehabad computed the total agriculture income from the lease hold land at Rs. 21,91,798/- and determined the share of the appellant in the said agriculture income @ 50% i.e. 10,95,899/- and he treated the remaining amount of Rs. 26,54,601/- out of the declared agriculture income of Rs. 37,50,500/- as ‘’income from other sources’. (ii) During appellate proceedings, it was the contention of the appellant that its share in the agriculture income from lease hold land was 2/3rd and not ½ as taken by the AO. It was submitted by the appellant that issue under consideration is covered by the decision of ld. CIT(A) in the case of the appellant itself for the subsequent Assessment Year i.e. 2009-10 vide order dated 27-03-2014, the ld. CIT(A)-1,Jaipur has considered 2/3rd share of total agriculture income from leasehold lands in the hands of the appellant. As the facts of the case remains the same, therefore, following the principle of

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

consistency, it is held that the appellant share in the agriculture income from leasehold lands is 2/3rd and not ½ as determined by the AO. Therefore, the agriculture income of the appellant is determined at Rs. 14,61,198/- (being 2/3rd of Rs. 21,91,798/-).

(iii) It is noted from the above order of ld. CIT(A) that for the Assessment Year 2009-10, the ld. CIT(A) after considering the overall facts of the case, estimated the income from fodder at Rs. 5,50,000/-. As the facts remains the same and following the principle of consistency the income from fodder is estimated at Rs. 5,00,000/- for the year under consideration. In view of the above discussion, the total agricultural income of the appellant is estimated at Rs. 19,61,198/-. The rest of the income shall be treated as ‘income from other sources’ and taxed Accordingly. The appeal on this ground is accordingly partly allowed.’’

3.2 During the course of hearing, the ld.AR of the assessee prayed for

deletion of addition for which the ld.AR of the assessee filed the

following written submission.

‘’SUBMISSIONS: 1. Firstly it is submitted that now there is no any dispute remained regarding the land holding by the assessee as well as land taken on lease and agriculture activity carried on by the assessee on these lands as the AO himself admitted after the inquiry and statement recorded by him. 2.1 Secondly in the impugned assessment order the ld. AO and the ld.CIT(A) both has only discussed and estimated the Agriculture income of the land taken on lease. However they has not given any credit of agriculture income arises from his own land. When the ld. AO himself has accepted the Agriculture income of Rs. 10,25,000/- of the assessee from his own land for A.Y. 2011-12 vide assessment order u/s 142(1)/143(3) dt. 19.03.2014(PB164-165), which is passed only after 5 days of this impugned order by the same AO, because the lease of agriculture land has been finished in the year 09-10 vide Ans to Q No. 15 of statement of Sh. Surendra Singh (PB150) recorded by the AO himself. Hence as per the AO & CIT(A) himself the Agriculture income of the assessee comes to Rs.29,86,198/-(Rs.19,61,198/- estimated by the CIT(A) for lease land + Rs.10,25,000/- from own land). 2.2 The lower authority nowhere disputed or disproved that the assessee has not owned his own agriculture land. The said lands were irrigated and capable for giving yield are also supported by the copy of khasra girdawri. The assessee might not have kept any evidence whatsoever to show that any agriculture activity on the said land was done, its productivity is supported by the documentary evidences of land holding stated above. The facts of sale of Rs.37,50,500/- available presupposes the agriculture land with the assessee which could

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

demonstrate the availability of agriculture income. Refer Dr. G.G. Dhir v/s ACIT 129 TTJ 1 (Agra)™ .

An allegation remains a mere allegation unless proved. Suspicion cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All). All the addition deserve deletion on this submission alone. The Honble ITAT has estimated the agriculture income of the assessee in A.Y. 2009-10 at Rs…….. vide order in ITA No. dt…… Further the agreement of cultivation is very important, in which all the details are clearly mentioned (PB21-24) in this agreement as the natural fertilizer, seeds shall be used the crops shall be sold in retailer in the open market to the footkar persons etc.

In the case of Kamal Kishore Chandak v/s ITO 103 TTJ 843(Jd) it has been held that the averment of the affidavit filed in support of the agriculture income remained uncontroverted. The AO was not justified in making addition by rejecting a part of the agriculture income simply on the basis of non availability of sale vouchers because an agriculturist is not required to maintain any books of account. Copies as of Girdawari are on record, which proves that crops were grown on the land belonging to the assessee. Here the facts are similar to the present case. Also refer S.V. Hariprasad v/s ITO 120 TTJ 1105(Bang). Which is also applicable in the present case.

The assessee has also filed statement showing the situation of such agriculture lands, Khasara number, chak number, area in Bhigha (PB 56-76). Hence as per the AO and CIT(A) himself the Agriculture income of the assessee comes to Rs.29,86,198/- as stated above. Hence the Addition remains only of Rs. 7,63,802/-. For which our submissions are as under. 3.1 Now the dispute is remained only about the estimation of agriculture yield, rate and income. In this regard it is submitted that there were two type of report were available on the record. One by ITO Fatehbad who send the report on the basis of Inspector report who is not a technical person. Second by the Agriculture department and Market who are the technical person and Authentic. 3.2 Firstly we would like to draw your kind attention toward the report of the Inspector Fatehbad. The inspector in his report at para last on page No. 1 (PB162) stated that as per my personal experience and after looking around I found that here the land is fertile, the water in full for irrigation, the irrigation is done by Canal and Tubewell both, crop of wheat there is in very good position, there is also the garden of Guvavas where the fruit (Guava) are in very good quantity. 3.3. On the very same page(PB162) the inspector has reported that Sh. Sardar Singh S/o Sh. Bhajan Singh this time has taken 33 Acre land except or there apart to Garden(Guvava Garden) at the rate of 51,000/- per acre on contract. It means this person has not taken the Guava Garden on contract he has taken only land where other crops i.e. wheat, rice/paddy etc. cultivated. However by both the ld. AO have misunderstood that Sh. Surendra Singh has given Guvav Garden on lease at the rate of 51,000/- per acre. And wrongly estimated the Income from Guvava at the rate of 32,500/- per Acre.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

The inspector in his report at page No. 2 in second last para (PB163) stated that Sh. Parmanand Contractor has taken 15 Acre of Guvava Garden from Sh. Surendra Singh and others for the rate of 15 Lacs. Sh. Parmanand has also stated about the crop of Guvava that there are average 100 trees of Guvava in a one Acre and one tree gives average 150 kg Guvavas and sold at the average rate of Rs. 10 per Kg. it means there were the crop of Rs. 1,50,000/- per acre(100X150X10). And in one year there is two crops of Guvava. Thus in one year it comes Rs. 3,00,000/-(Rs.1,50,000/-X2) per Acre. As per this calculation the produce of Guvava in 17 Acre comes to Rs. 51,00,000/- and the share of the assessee come to Rs. 34,00,000/- and after 15% expenses i.e Rs.6,80,000/- net income from Guvava comes to Rs.27,20,000/- according the inspector report itself as against Rs. 3,86,750/- taken by the AO. However the AO has taken only Rs. 32,500/- per acre i.e about 9-10 time less, on the basis of letter of the ITO of Fatehabad who has stated that “as regards garden of Guvava, it has been given on lease of Rs. 50,000/- per Acre during the current year. The amount of lease rent during the year 2008-09 is estimated at Rs. 30,000/- to 35,000/- per Acre.” However on perusal of the inspector report it is clear that these facts are not coming from this report, the ITO Fatehbad himself assumed the same his own and contrary from the report itself as stated above in para 3.3. Further it is submitted that neither the AO nor the inspector are technical persons nor they have been brought any material evidence on record in support of their contention regarding the quantity and quality of produce, sale price etc except verbal inquiry which is also not fully considered. In the case of Badar Durrez Ahmed, JCIT-XI vs. Delhi Housing & Finance Corporation 84 CCH 079(Del)HC it has been held that CIT and tribunal are justified in not relying on the report of inspector where he had made only verbal inquiries, had not collected any instances of actual sales in the said areas and that too when inquiry related to his date of visit .

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

given to the AO and is being enclosed(PB166-175) herewith for ready reference. As per these details or information the income from agriculture comes as under: As the assessee having agreement of 57 Acre agriculture lands and as per papers of agriculture land holding the assessee has cultivated the crops of Guavas in 17 Acre land and the crops of Paddy(Rice) and Wheat cultivated in 40 Acre Lands. There are two crops in 40 Acre one crop of paddy in Kharif and one crops of wheat in Ravi in one year. And in 17 acre there are two crop of Guavas. Paddy/Rice: In the year there was average yield of Paddy was 4341 kg per Hectare and in one Acre it comes to 16.06 Qntl. (43.41X37/100) and as per rate of 2504 per Qntl. 16.06X2504=40214 and in 40 Acre it comes Rs.16,08,560/-. This is also supported with the statement of Sh. Surendra Singh vide Ans to Q.5 wherein he stated that in one Acre there was Average yield is 17-18 Qntl. (PB144)And in Ans to Q. No.18(PB151-152) he stated that the rate was Rs. 5,000/- to Rs. 5500/- per Qnt. And as per this it come to 17X5000X40=34,00,000/-. Wheat: In the year there was average yield of Wheat was 5120 kg per Hectare and in one Acre it comes to 18.94 Qntl. (51.20X37/100) and as per rate of 1160 per Qntl. 18.94X1160=21970 and in 40 Acre it comes Rs.8,78,800/- . This is also supported with the statement of Sh. Surendra Singh vide Ans to Q.5 wherein he stated that in one Acre there was Average yield is 20-22 Qntl. (PB144)And in Ans to Q. No.18(PB151-152) he stated that the rate was Rs. 2,800/- to Rs. 3500/- per Qnt. And as per this it come to 20X2800X40=22,40,000/-. Guavas: In the year there was average yield of Guavas was 2108 (Tones) or 2108000 kg per Hectare and in one Acre it comes to 80.00 Qntl. (21080X37/100) and as per rate of 1700 per Qntl. 80X1700=136000 and in 17 Acre it comes Rs.23,12,000/- . This is also supported with the statement of Sh. Surendra Singh vide Ans to Q.11 wherein he stated that in one Acre there was Average yield is 80-90 Qntl. (PB148). Green fodder and Fodder: Fodder and Green fodders in Paddy come about Rs.15,000/- per Acre and in 40 Acre it Comes to Rs. 6,00,000/-. Fodder and Green fodders in Wheat come about Rs.20,000/- per Acre ans in 40 Acre it Comes to Rs. 8,00,000/-. Fodder and Green fodders in Guavas come about Rs.30,000/- per Acre and in 17 Acre it Comes to Rs. 5,10,000/-. This is also supported with the statement of Sh. Surendra Singh vide Ans to Q.11 (PB148-149) Thus Total Income from Agriculture Comes to Rs. Name of Crop As per Udhan Deptt. As per Statement Paddy/Rice 1608560.00 34,00,000/- Wheat 878800.00 22,40,000/- Guavas 2312000.00 23,12,000/- Fodder in Paddy 600000.00 6,00,000/- Fodder in Wheat 800000.00 8,00,000/- Fodder in Guavas 510000.00 5,10,000/- -------------------- -------------------- Total: 67,09,360/- 95,62,000/-

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

-------------------- -------------------- Thus the 2/3 ratio of the assessee comes to Rs. 44,72,906/- and after Exp about Rs. 5,70,000/- it comes to Rs. 39,02,906/- as per Udhan Department as against Rs. 27,25,500/- declared by the assessee and as per statement of Sh. Surendra Singh it comes to 63,74,666/- and at the worst 30% expenses (19,12,340/-) as per the AO than it comes to 44,62,326/. Further it is submitted that the assessee has sold their crops in the open market where the rate is high than to Mandi and the assessee has cultivated high Quality crops by organic fertilizer vide its agreement and statement of Land Lord vide (PB151-152). Hence the agriculture income are more than to above. We have urged before the ld. CIT(A) that if he is having any doubt about the above working or information’s as provided by the assessee the AO may kindly be direct to conduct the inquiry again regarding the agriculture yield in that year by way of agriculture or statics department or by patwari the assessee is ready to incur the cost on this account. but did not do so. Further the ld. AO has not rebutted these details and our submission with the help of any contrary material and he repeated the thing as already stated in the assessment order and the assumption made by the ITO Fatehabad. He has not bring any new material or evidences from any technical or expert person on record which suggest that the contention of the assessee is wrong. Therefore it is prayed that kindly consider our submissions and details in true perspective and the additions so sustained by the ld. CIT(A)may kindly be deleted in full. " The above submission was also filed before the AO. However the ld. AO has totally ignored the same. Hence the agriculture income of the assessee so declared may kindly be accepted and the addition of Rs.17,89,302/- sustained by the ld.CIT(A) may kindly be deleted in full.’’ 3.3 On the other hand, the ld. DR supported the order of the lower

authorities.

3.4 We have heard the rival contentions and perused the materials

available on record. It is observed that the assessee was having own

agriculture lands of 41.85 Bhiga and he has also taken 57 Hectare

agriculture lands on lease from Sh. Surendra Singh who holds 35

Acres(56 Bhigas) of agriculture land at village Gillan Distt. Fatehbad,

Haryana and Late Smt. Nirmala holds 22 Acres (35 bhigas) of agriculture

land at village Gillan Dist. Fatehbad Haryana, on lease, jointly through 9

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

the agreement dated 28.06.2007 (PB 21-24) in the ratio 2/3 of the assessee and 1/3rd of land owners. The assessee has declared the agriculture income of Rs.37,50,500/- from both the lands. In the original

assessment the AO has disallowed entire agriculture income and made the addition as income from other sources. In the remand proceedings, the AO has recorded the statements of Sh. Surendra Singh who had

admitted the facts of land given on lease to the assessee and the AO has also made inquiry through the Inspector and estimated the agriculture income of Rs.21,91,798/- from the land taken on lease (para 6.6 of the astt order). The AO has taken the ½ ratio in place of 2/3rd and assessed

the agriculture income at Rs. 10,95,899/- and made the addition of Rs.26,54,601/-. In first appeal the ld. CIT(A) has estimated the agriculture income at Rs.19,61,198/- by taking the ratio of the assessee in 2/3rd in

place of ½ and also taken the estimated the agriculture income from fodders at Rs.5,00,000/-. Thus the CIT(A) has sustained the addition of agriculture income at Rs.17,89,302/- (Rs. 37,50,500 minus Rs.

19,61,198). It is also noted that there is neither dispute regarding the having agriculture lands (i.e. the assessee's own and the land taken on lease) , nor regarding the ratio of crop in lease land. The ld.AR of the

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

assessee submitted that lower authorities has not given any credit of the

agriculture income from his own land, when the AO has assessed the

agriculture income of the assessee from his own land at Rs. 10,25,000/- in

the A.Y. 2011-12 under Scrutiny assessment order dated 19.03.2014 in

the same month when the present assessment order has been passed (PBP

164-165). It is also pertinent to mention that in the A.Y. 2011-12 there

was no lease and nor agriculture income from the lease land except his

own lands. The ld.AR of the assessee also filed the crops report like

average yield and production of crops in district Fatehabad as well as

block Fatehabad from the office of Dy. Director of Agriculture (PBP 167-

168).The AR further stated that the estimation of income shown by the

assessee was on the basis of documents of experts or markets and Udhan

department. Taking into consideration materials available on record, facts

and circumstances of the case, the agriculture income from the

assessee’s own land is estimated at Rs. 9,00,000/- in this year when the

same AO at the same time has assessed the agriculture income at

Rs.10,25,000/- in the A.Y. 2011-12. It is also noted on perusal of the

orders that no income has been taken or benefit of agriculture income

from his own land is given to the assesse, when he is having 41.85 Bhigas

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

Agriculture land of his own. It is also noted that the ld. CIT(A) has

estimated the income from lease land at Rs.19,61,198/- on the basis of

Inspector report who is not a technical person while the assessee has

brought on record the report and documents from Market Committee,

Fatehabad and Agriculture Department, Fatehabad (PBP167 to 175),

however, on the other side the assessee has not filed the sale bills and

purchase bills. Thus looking to the totality of the facts and circumstances

the case and surrounding circumstances the agriculture income from lease

land is taken at Rs.22,75,000/-.Thus the total Agriculture income is

estimated at Rs.31,75,000/- (Rs. 9,00,000/- from own land +

Rs.22,75,000 from lease lands). Accordingly an amount of Rs.

Rs.5,75,500/- is disallowed . Thus this ground no. 2 of appeal is partly

allowed.

4.1 Apropos Ground No. 3.1 & 3.2 of the assessee, the facts as

emerges from the order of the ld. CIT(A) is as under:-

3.3.2 Determination

(i) I have carefully perused the submissions of the appellant, assessment order and the material placed on record. The AO mode addition of Rs.99,06,000/- on account of unexplained credits in the bank account of the appellant during the year under consideration. The breakup of the above amount of Rs. 99,06,000/- is as under:

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

Name Amount Shri Satish Sharma Rs. 47,03,000/- Shri Mahaveer Prasad Rs. 35,00,000/- Shri Surjit Singh Rs. 15,00,000/- Shri Vijay Chahar Rs. 2,03,000/- Total Rs. 99,06,000/-

(ii) During the assessment proceedings, the AO required the appellant to produce the above mentioned four persons, however they were not produced before the AO, instead a request was made by the appellant to the AO to issue summons u/s l3l of the Act to these persons which were not issued by the AO as the initial burden is on the appellant to explain the credit entries in its bank account under consideration with appropriate evidences. However, neither the above four persons were produced nor their bank accounts were filed before the AO and consequently the AO made addition of Rs. 99,06,000/- to the income of the appellant as unexplained credits. (iii) During the course of appellate proceedings, a detailed submission was furnished by the appellant which was forwarded to the AO for obtaining his comments. vide his remand report doted 31.08.20.l5, as reproduced earlier, the AO submitted that the addition of Rs. 99,06,000/- made by the AO is justified. A copy of the remand report of the AO was also provided to the AR and vide its letter dated 14.09.2015, the AR submitted its rejoinder to the remand report which has already been reproduced in this order. (iv) Vide order sheet entry dated 14.09.2015, the AR was required to file the certified copies of the relevant bank accounts of above four persons along with evidences to prove the creditworthiness of these four persons. Vide its reply dated 22.12.2015, the appellant filed only the copies of the bank statements (not certified copies) of Sh. Surjit Singh, Sh. Mahaveer Prasad, Sh. Vijay Chahar and Smt. Madhu Sharma, wife of Sh. Satish Sharma. The AR has also filed a copy of affidavit and a letter of Sh. Surjit Singh dated 29.11.2015 and made a request to admit the same as additional evidence U/R 46Aof the I.T Rules 1962. (v) The copy of bank account of Smt. Madhu Sharma wife of Sh. Satish Sharma cannot be admitted as additional evidences as the name of Smt. Madhu Sharma appears before me for the first time on 22.12.2015 itself i.e. this contention was not taken before the AO even in the set aside assessment proceedings. In view of the discussion made

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

earlier in this order, now the issue in respect of unexplained credits from these four persons is being discussed as under: 1. Shri Satish Sharma (vi) During appellate proceedings, a copy of the affidavit [PB-77] dated 16.06.201l of Sh. Satish Sharma was submitted by the appellant wherein it was stated that he paid a sum of Rs. 47,03,000/-during the year under consideration from his bank account No. 51020838449 with SBBJ and other banks. It was further stated that part of the aforesaid amount was paid out of loan taken from various banks amounting to Rs. 50 Lac. It is noted from PB-49 which is relating to explanation of entities appearing in bank statement of the appellant with OBC, Jaipur that the appellant had received the amounts from Shri Satish Sharma as under:- Date Amount 25-05-2007 Rs. 1,00,000/- Rs. 10,00,000/- Rs. 20,00,000/- 23-11-2007 Rs. 16,03,000/-

(via) Further, vide its letter dated 22.01.2016, it was submitted by the appellant that it received the following amounts from the bank account of Madhu Sharma wife of Sh. Satish Sharma. Date Amount 30-06-2007 Rs. 9,77,000/- 03-07-2007 Rs. 7,35,000/- 20-07-2007 Rs. 17,16,000/- 23-11-2007 Rs. 16,03,000/- Total Rs. 50,31,000/-

(vib) The above tables reveal that there is only one common entry of Rs. 16,03,000/- on 23.11.2007 only whereas the details of Rs. 31 Lac taken from Shri Satish Sharrna on 25.07.2002 has not been mentioned anywhere in the letter dated 22.01.2016. It has been mentioned earlier that in his affidavit Sh. Satish Sharma stated that he had advanced Rs. 47,03,000/- from his bank account No. 51020838449 after taking loan of Rs. 50 Lac from various banks to the appellant during the year under consideration. However, it is observed that the Smt. Madhu Sharma had advanced a sum of Rs.41,31,000/- to the appellant during the year under consideration and no confirmation or any other evidence

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

including the creditworthiness of Smt. Madhu Sharma was filed even during the appellate proceedings. It is pertinent to mention here that the sum of Rs.3l Lac received by the appellant on 25.05.2007 from Sh. Satish Sharma is not reflected anywhere in the reply dated 22.01.20l6 of the AR. It has been held in a number of cases by the Judicial Authorities that transactions through banking channels are not sacrosanct. Therefore, looking to the totality of the facts and circumstances of the case, it is held that the appellant was not able to prove the genuineness of the alleged loan of Rs. 47,03,000/- taken from Sh. Satish Sharma and creditworthiness of Sh. Satish Sharma as nobody will give any interest free loans to a person after obtaining interest bearing loan from banks and also looking to the fact that there are inherent contradiction in the submissions made by the appellant. The appellant failed to discharge the primary onus to explain the credit entries in its bank account and thus the addition of Rs. 47,03,000/- made by the AO as unexplained credits in the bank account of the appellant is hereby sustained. 2. Mahaveer Prasad

(vii) During the appellate proceedings, the appellant had filed a copy of affidavit dated 16-06-20111 of Shri Mahaveer Prasad wherein it was stated that he has paid Rs. 32 lac to the appellant during the year under consideration out of his agriculture income and sale of agriculture land for a total consideration of Rs. 25 lac. Shri Mahaveer Prasad is not assessed to income tax as stated in above referred affidavit. On a perusal of the bank account statement of Shri Mahaveer Prasad with OBC, Jaipur (PB 182,183,184), it has been observed that there was cash deposit of Rs. 20 Lac, Rs. 4.5 Lac and Rs. 8.50 Lac on 21-02- 2008, 22-02-2008 and 25-02-2008 respectively and cheques of Rs. 18.50 Lac, Rs. 4.5 Lac and Rs. 8.50 Lac were debited on 21-02-2008, 22-02-2008 and 25-02-2008 respectively i.e. before issue of cheques, there was cash deposits in the bank account of Shri Mahaveer Prasad. It may be mentioned that as per the copies of two sale deeds dated 02- 03-2007 (PB 95 to 112), Shri Mahaveer Prasad sold his agriculture land for a sum of Rs. 25 Lac and the sale consideration was received through banking channels and thus it is certain that the cash deposits in the bank account, as referred above, in the bank account of Shri Mahaveer Prasad is not from the sale of agriculture land as claimed in the affidavit of Shri Mahaveer Prasad.

(viia) Further, the appellant has not produced any evidence which may prove the creditworthiness of Shri Mahaveer Prasad. It has been held in a number of cases by the Judicial Authorities that transactions through banking channels are not sacrosanct. Therefore, looking to the 15

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

total facts and circumstances of the case, it is held that the appellant was not able to prove the genuineness of the alleged loan of Rs. 35 Lac taken from Shri Mahaveer Prasad and creditworthiness of Shri Mahaveer Prasad was not established. The appellant failed to discharge the primary onus to explain the credit entries in its bank account and thus the addition of Rs. 35 Lac made by the AO as unexplained credits in the bank account of the appellant is hereby sustained.

(viii) During the appellate proceedings, it was submitted that there was opening debit balance of Rs. 4,19,000/- as on 01-04-2007 and out of the said outstanding, Shri Vijay Chahar paid Rs. 25,000/- and Rs. 1,78,000/- on 03-08-2007 and 16-02-2008 from his saving bank account which was credited in the bank account of the appellant on 03- 08-2007 and 16-02-2008 respectively (PBP-43 and 44A). On perusal of the bank account of Shri Vijay Chahar with OBC, Jaipur , it was observed that there was cash deposit of Rs. 25,000/- and Rs. 1,78,000/- on 02-08-2007 and 16-02-2008 respectively. In its affidavit dated 16- 06-2011 (PB-83 to 85), it was stated by Shri Vijay Chahar that he is assessed to income tax and he repaid sum of Rs. 2,03,000/- during the year under consideration to the appellant out of opening credit balance of Rs. 4,19,000/-. However, the appellant has not filed any evidence regarding furnishing of income tax return by Shri Vijay Chahar. The appellant has also not filed any evidence to establish the creditworthiness of Shri Vijay Chahar.

(viiia) It has been held in a number of cases by the Judicial Authorities that transaction through banking channels are not sacrosanct. Further, having a PAN does not establish the creditworthiness of any person as PAN is issued on the basis of application of person without examining his/ her creditworthiness. Therefore, looking to the total facts and circumstances of the case, it is held that the appellant was not able to prove the genuineness of the alleged loan of Rs. 2.03 lacs taken from Shri Vijay Chahar and creditworthiness of Shri Vijay Chahar was not established. The appellant failed to discharge the primary onus to explain the credit entries in its bank account and thus the additions of rs2.03 lac made by the AO as unexplained credits in the bank account of the appellant is hereby sustained.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

(ix) During the appellate proceedings, vide letter dated 22-01-2016, it was submitted by the A.R. that the appellant has given Rs. 15 lac on 28-05-2007 to Shri Surjit Singh through demand draft which was credit in the Canara Bank account of Shri Surjit Singh at New Delhi on 29- 05-2007. The appellant has also filed a copy of affidavit dated 29-11- 2015 and acknowledgement in ITR-4 of Shri Surjit Singh for the A.Y. 2008-09.

(ixa) It has already been mentioned that the affidavit dated 29-11- 2015 of Shri Surjit Singh filed cannot be given any cognizance as it was not admitted as additional evidence under Rule 46A of the I.T. Rules. It is therefore, held that the appellant has failed to substantiate creditworthiness and genuineness of entries of Rs. 15 Lac credited in its bank account as claimed to be received from Shri Surjit Singh. Hence, the addition of Rs. 15 Lac is hereby sustained.

(x) In view of the above discussion, the total addition of Rs. 99,06,000/- made by the AO on account of unexplained credit entries in the bank account of the appellant is sustained. Hence, this ground of appeal is rejected.’’

4.2 During the course of hearing, the ld.AR of the assessee prayed for

deletion of addition for which the ld.AR of the assessee filed the

following written submission.

“1. Firstly it is submitted that the deposits in the bank account are on account of recovery from the persons to whom advances were given by the assessee in the earlier years and in this year as clearly appearing from the bank statement of earlier years and this year and from the sale proceed of agriculture income and some unsecured loans received from 2 parties. After filling all the evidences of all the persons before the ld. CIT(A). The position of loan given and taken from these persons comes as under with the bank statements supported. Regarding deposits in Bank A/c: Vide following chart Name of the Persons Date & amount of Loan or repayment of loan Date and Amount of Recovery or received of given by the assessee Loan by assessee Surjeet Singh 28.05.2007 Rs.15,00,000/- through DD from 03.09.2007 Rs.15,00,000/- through DD from

ITA No. 349/JP/2016

Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

A/c of Sh. Surjeet Singh (PB216) and credited in the Bank A/c No. 09972151000172 OBC(PB43) credited A/c No. 09972010008390 of Sh. assessee on 06.09.2007 in the Canara Bank A/c No. 23317 of Sh. Surjeet (PB42) Singh on 29.05.2007 (PB215) Rs. 25,000/- on 03.08.2007 and Rs. 1,78,000/- Vijay Chahar Opening debit Balance of Rs.4,19,000/- as on on 16.02.2008 from A/c No. 09972011010105 of 01.04.2007. Sh. Vijay Chaher and credited in the Bank A/c No. 0997201000172 of . assessee on 03.08.2007 and 16.02.2008 (PB43 and 44A) Mahaveer Prasad On 30.07.2007 Rs. 16,00,000/- and on Rs.18,50,000/- on 22.02.2008, Rs.4,50,000/- on 25.02.2008 8,50,000/- on 25.02.2008 03.12.2007 Rs. 43,000/- from A/c No. Rs.3,00,000/- on 07.11.2007 and Rs.50,000/- 04182151001498 (PB231) credited in the Bank on 17.11.2007 from Sh. Mahveer Sing Bank A/c of Sh. Mahaveer (PB218 & 219) on and credited in the Bank A/c 0997201000172 30.07.2007 and 03.12.2007 of assessee A/c (PB44-44A) Rs. 9,77,000/- on 30.06.2007, Rs, 7,35,000/- Satish/Madhu Rs.8,13,600/- on various date from 09.06.2005 on 03.07.2007. Rs.17,16,000/- on 20.07.2007 Sharma to 10.10.2006 form A/c No. 09972010008390 and Rs.16,03,000/- on 23.11.2007 vide Bank (PB37-42). And also paid Rs.5,94,000/- during A/c of Madhu Sharma (PB222-224) credited the year. in the Bank A/c No. 04182151001498 & 0172 of assessee (PB195-196) Also made repayment of Rs. 49,56,000/- on various date from 06.08.2008 to 06.05.2010 from A/c No. 0997201000172 of assessee (PB227-232)

Name of the person Net Loan Amount

For better appreciation we had explained the each transaction details of each person as under before the ld. AO.

A. Shri Satish/Madhu Sharma (Rs. 47,03,000/-): Firstly we clarify that Smt. Madhu Sharma is the wife of Sh. Satish Sharma and the amount given to the assessee was from the joint A/c of Madhu Sharma and Satish Sharma. Hence Satish and Madhu is one. The assessee had given loans of Rs.8,13,600/- to Sh. Satish Sharma on various dates in earlier years i.e from 09.06.2005 to 10.10.2006 vide bank statement of the assessee(PB37-42). Thus the assessee has received the loan only of Rs. 42,17,400/- from Sh. Satish/Madhu Sharma not of Rs. 50,31,000/- or Rs. 47,03,000/- (i.e Rs. 8,13,600/- was recovery of loan given by the assessee to Sh. Satish Sharma in earlier year ). During the year assessee has repaid of Rs. 5,94,400/- to Sh. Satish Sharma. Hence the loan remained at the year end is only of Rs. 36,23,400/-. Sh. Satish Sharma

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

had given this loan to the assessee out from the loan of about Rs. 50 Lacs taken by him from the different banks for the proof loan bank details of Sh. Satish Sharma enclosed(PB114), which is also clear from the Bank Statements of Madhu/Satish(PB222-224)this is showing loan amount credited before amount given to the assessee. Sh. Satish Sharma is on Sr. Executive post in Navyug Ltd and having handsome salary, he also having income from agriculture etc.. That is why looking the capacity or creditworthiness of Sh. Satish Sharma the various bank had given huge loan to him otherwise the banks would not give him such huge loan. He is regular income tax assesee his PAN is AKDPS0965M, for the support we had filed affidavit of Sh. Satish Sharma(PB77-79) narrating all the above facts which has not been rebutted by the ld. AO till date. Further the assessee has also made repayment of Rs. 49,56,000/- to Sh. Satish Sharma from the 06.08.2008 to 06.05.2010. Thus there is no loan amount is outstanding after 06.05.2010 in the assessee. Vide Bank statements of the assesse(PB227-232). B. Sh. Mahaveer Prasad(Rs.35,00,000/-): Firstly Sh. Mahaveer Prasad has taken Amount of Rs. 16,00,000/- on 30.07.2007 and Rs. 43,000/- on 03.12.2007 from the assessee and thereafter he has given amount of Rs. 35,00,000/- on various dates i.e on 07.11.2007, 22.02.2008 and 25.02.2008 to the assessee. Thus the assessee has taken only of Rs.18,57,000/- from Sh. Mahaveer Prasad. Sh. Mahaveer Prasad has given loan to the assessee out of Rs.25,00,000/- from the sale proceed of his agriculture land and from the agriculture income and savings. He is having income from the agriculture and agriculture property sold. In support an affidavit of Sh. Mahaveer Prasad(PB80-82),sale deed of two agriculture land of Sh. Mahaveer Prasad was enclosed(PB 95-113). as appearing from the bank statements itself. As assessee had filed the affidavit narrating all the above facts which has not been rebutted by the ld. AO till date. Further the allegation of the ld. CIT(A) that before issuing the cheque to the assessee there was cash deposits in the bank account. However the ld. CIT(A) has ignored that there were also huge cash withdrawal before depositing the cash and also huge deposits through the cheques. There were continuous cheque deposits, cheque issuing cash deposits and cash withdrawals. The ld. CIT(A) has ignored whole bank statements. Hence the allegation of the ld. CIT(A) is half heartedly and should be ignored.

C. Sh. Vijay Chahar(Rs.2,03,000/-):Firstly the assessee had given loan/ advances to Sh. Vijay Chahar (son of the sister of assessee) in the earlier years hence Sh. Vijay Chahar repaid a sum of Rs. 2,03,000/- out of the opening credit of Rs. 4,19,000/- to the assessee. Hence the assessee has not received any loan from Sh. Vijay Chahar as wrongly understood by the AO but also a recovery from the loan/advances given to Sh. Vijay Chaar. Sh. 19

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

Vijay Chahar is carrying on legal profession since last 10 years. He has repaid the said amount from the income of legal profession and agriculture. He is regular income tax assessee and his PAN No. is AEAPC6078A. In support an affidavit of Sh. Vijay Chahar was filed (PB 83-85) before the AO narrating all the above facts which has not been rebutted by the ld. AO till date. The only allegation of the ld. CIT(A) that there is cash deposits before issuing the cheque and not filed ITR Thus, this is not a loan. It is not with the assessee to prevent any person in depositing the cash.

D. Sh. Surjeet Singh(Rs. 15,00,000): Firstly the assessee had given loan/advance of Rs.15,00,000/- to Sh. Surjeet Singh on dt. 28.05.2007 through DD of Rs. 9,00,000/- an Rs. 6,00,000/- from the funds of Rs. 30,00,000/- received from other persons on 25.05.2007 vide bank statement of the assessee(PB43). For removal of doubt it is clarified that the entry in the bank statement is Rs. 9,02,528 and Rs. 6,01,685/- due to the DD charges. And Sh. Surjeet Singh has returned this amount on dt.06/7.09.2007 to the assessee(PB42). However the ld. AO has ignored the withdrawals for advance as well as returned back and he only considered deposit which is not justified. Sh. Surjeet is having handsome income from rental which given to the Ambancy New Delhi and Agriculture income. He is regular income tax assessee. In support the assessee has tried to obtained an affidavit and PAN No of him. But at that time his father has expired hence the assessee has not obtained the same at that Now there is some dispute between the assessee and him. Hence the assessee had requested to the AO to issue the summon u/s 131 of the Act in the interest of natural justice vide page 11-12 of the assessment order but the AO denied. However the transaction is very clear from the bank statement of the assessee itself. In first appeal we have filed the affidavit(PB212-213), Bank statement(PB214-216) and ITR (PB217)of Sh. Surjeet Singh with the application u/r 46A dt. 22.12.2015(PB208-211). However the ld. CIT(A) has rejected the same by not admitting these vital evidences. These documents are in support of our earlier contentions.

Thus from the above it is clear that the assessee has received loan only of Rs.54,80,000/- at the end of year from two persons as against wrongly calculated by the AO at Rs. 99,06,000/- from four persons. which has also paid been in the subsequent years by the assessee.

In ITO v/s Computer Force 136 TTJ 221(Ahd-B)- Assessee having made payments to the creditors in the subsequent years which is corroborated by the ledger accounts, addition in respect of such credits cannot be made.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

However the ld. AO and CIT(A) have not rebutted all these vital facts and evidences rather he ignored these vital facts and evidences. And proceeded on own assumption, presumptions and suspicion. And it is well settled law that no addition can be made on assumption presumptions and suspicion as held above. Hence from the above the identity, genuineness and creditworthiness are very clerically proving and such evidence are beyond any doubt. The assessee had filed the additional evidences in the form of 1. Copy of affidavit of Sh. Surjeet Singh, Copy of IT Return and Bank Statement of Sh. Surjeet Singh and Bank statements of Sh. Vijay, Chahar, Mahaveer Prasad and Madhu/Satish Sharma and on earlier occasion the WS has also been sent by the ld. CIT(A) to the AO for his comments. On both the occasion the ld. AO has send his remand report without commenting on the WS and additional evidence. Looking to the both remand report it is very clear that the ld. AO has not comply the direction of Honble ITAT. It is also clear that he has not stated anything or commented on the documents filed by the assessee i.e he has not speak a single word on the merit of the additional evidence. He has neither rebutted the contention of the assessee nor disproved the same with the help of any evidence nor he brought on record any adverse material in support of him, it means he is fully satisfied on the merit of the case. Further in the application u/r 46A we have already stated that the power of the CIT(A) are co-terminus and are very vide with those of the AO and what AO can do, he can do and what AO fail to do, that also he can do. Despite these the ld. CIT(A) has not admitted the same which is against the principal of natural justice. Hence the additions deserve to be deleted.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

In Ms. Mayawati v/s DCIT 113 TTJ 178(Del) it has been held that where the assessee does not maintain any books of account S. 68 cannot be invoked, balance sheet or statement of affairs cannot be equated to books of account bank pass book is not a books of account maintained by the assessee within the meaning of S. 68. Here also the AO made addition on the basis of deposit in bank account. Also refer Jawahar Lal Oswal V/s ACIT 71 TTJ 240(Chd.) and Kishore Lahoti Vs. ACIT 27 TW 164. In the case of Sheraton Apparels V/s CIT 256 ITR 20(Bom.) meaning of books of account has been defined. 3. If it is deemed that AO rightly made addition u/s 68 than kindly consider following submissions 4. Sources Explained with Evidence and not rebutted by the AO: The lower authority alleged that the appellant could not file satisfactory reply and produce the persons to prove the genuineness of the transaction and to prove the creditworthiness. However the appellant has fully explained the sources of such deposits in bank account before the ld. AO vide para2 of above. In support assessee had filed affidavit, I.T particulars of these persons(PB77-85) bank statements(PB214-224). These person duly accepted of giving money to the appellant as appearing from the above documents. From these documents it is not appearing that these are bogus. The lower authority merely proceeded on his own suspicion without making any enquiry despite the request made by the assessee u/s 131 or without giving sufficient opportunity of being heard to the assessee as directed by the Honble ITAT. 5.1. Assessing Officer must form opinion by applying his mind - A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by the assessee, that such credit has to be of a sum during the previous year, and that the assessee offers no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. It is only then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The expression ‘the assessee offers no explanation’ means where the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. It is true that the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion - CIT v. P. Mohanakala [2007] 161 Taxman 169 / 291 ITR 278 (SC). On perusal of assessment order it is clear that the AO did not consider the material available on record.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

5.2 In the Case of CIT v/s Real Time Marketing (P) Ltd 306 ITR 35 (Del) it has been held that “AO made the addition towards unexplained cash credit on the basis that it was the assessee’s money(Rs. 22,97,000/-) which was deposited in cash in the account of FBSL and routed through different accounts and was received as unsecured loan by the assessee- on appeal, concurrent findings of facts recorded by the CIT(A) and Tribunal that there is no material to link the assessee with the amount deposited in cash in the bank account of FBSL and thus no case is made out for making addition” Here is the same facts and position. 5.3 In the case of CIT v/s S.D. Investment & Trading Co. 306 ITR 31(Bom) It has been held that “ the explanation of the assessee that cash deposit in bank account represented advance against sale of air-conditioner was satisfactory as the parties confirmed ledger entries hence no addition is called for”. Here is also same position, as the assessee received amount from the 3-4 persons, which were deposited in bank through account payee cheque. 6.1 The above matter is covered by the decision of Honble Supreme Court in the case of CIT v/s Lovely Exports (P) Ltd 216 CTR 195(SC), wherein it has been held that “If the share application money is received by the assessee company from alleged bogus share holders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessment in accordance with law, but it cannot be regarded as undisclosed income of assessee company” Further we may submit that the present case is also directly covered by the decision of CIT vs. First Point Finance Ltd 286 ITR 477 (Raj.) by holding that It is not denied that all the share holders/share applicants are genuinely existing persons. It is also not denied that each of them is an income tax assessee and the copies of the return of their income were also placed before the AO by the assessee which facts is also not denied . In these circumstances, no material has been brought on record except inferring that the investor in the opinion of the AO was not creditworthy to link the assessee with such investment of money made by those persons. There is no presumption that the assessee is the benami owner of the investment made by the existing persons. The share holder filed their confirmation from such investors has been obtained and their statement were also recorded. The assessee did discharge the initial onus cast upon in this case. Further in the case of CIT vs. First Point Finance Ltd (Supra) the Honble High Court followed the following observation of the Hon'ble Delhi High Court in the case of Steller Investment Ltd. 192 ITR 287 which has now been affirmed by the Hon'ble Supreme Court also in the case of Steller Investment 251 ITR 263. The ratio laid down in this case was that Sec.68 shall not apply on share application money. "13 We have considered the rival contentions, relevant material on record, as also the cited decisions. In 192 ITR 287 Steller Investment Ltd., Honble Delhi High Court has laid down as under:

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

"It is evident that even if it be assumed that the subscribers to (the subscribers to) the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names shares had been issued and the money may have been provided by some other persons. If the assessment of the persons who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself." 7. Initial Onus Discharged: Further it is submitted that even assuming, S. 68 applies, it is only initial onus, which lay upon the assessee to prove the identity and the capacity of the creditor and the genuineness of the transaction and once this initial onus is discharged, it shifts to the AO to rebut/ disprove the same for making a valid addition u/s 68. kindly refer CIT vs Shree Barkha Synthetics 182 CTR 175 (Raj). The Hon’ble RHC again reiterated the same view in CIT vs. First Point Finance Ltd 286 ITR 477 (Raj.) holding that this court held after referring to the aforesaid decisions, that once the initial burden has been discharged in respect of the identity of investors, about their existence, and the confirmation from such investors has been obtained, the burden shifts to the Revenue to prove otherwise not only that the invested amount did not belong to the creditors but further it has to prove the said amount belonging to the assessee. The assessee did discharge the initial onus cast upon in this case. i. Identity Established: The identity of all the persons stood proved in as much as the appellant files name, address, PAN, Bank statements and affidavit of all the person. As all these person (except one ) are IT assessee thus identity is verifiable. Thus, the identity of all the persons stood established. ii. Genuine Transaction: Genuineness of transaction is also duly and fully established under the peculiar facts and circumstances of the case in as much as the receipt of the subjected amounts were admittedly duly have been received by Account Payee cheqes from them as appearing from their documents. Admittedly there are no cash transactions from whom amount received or paid. iii. Capacity Proved: All the persons(except one) are IT assessee and fully explained the sources of loan given, thus having sufficient earning and funds.

The assessee thus, duly discharged the initial burden lay upon it, to which extent only it was responsible, as held earlier in CIT vs. Orissa Credit Corp. Ltd. 159 ITR 78 (SC) held that Income—Cash credit—Burden of proof—Assessee had given the names and addresses of the creditors—It was in the knowledge of the Revenue that the said creditors were income-tax assessees—Their index number was in the file of the Revenue—Revenue, apart from issuing notices under s. 131 at the instance of the

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

assessee, did not pursue the matter further—Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the allowed loans—Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence—High Court was, therefore, right in refusing to refer the questions sought for

and recently referred in CIT vs P. Mohan Kala 291 ITR 279 (SC). Identity Established: It is further submitted that even assuming the ratio so laid down in the case of Sophia Finance Ltd. 205 ITR 98 (Del.) is held applicable, i. e . what is required is only to establish that there existed a shareholder and the payment was really made by it, which stands established in the present case, as would appear from the above documents enclosed. Thus identity of all these persons stood established beyond doubt. 8. Onus was to be discharged by the AO: On the other hand when the onus now shifts on the AO the same was to be discharged by him. The ld. AO despite having all the relevant information’s could not rebut the material available with him with the evidence and also request for summon has denied. He has proceeded only on suspicion. An allegation remains a mere allegation unless proved. Suspicion cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All). All the addition deserves deletion on this submission alone. The AO neither speak a single word on the evidences filed by the appellant nor rebutted the same with the help of any supporting evidence. Also refer CIT v/s Kulwant Rai 291 ITR 36( Del).

Kindly refer a very recent decision in Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.)- Held: cash credit- burden of proof- identity of the creditors established and they confirmed the credit. This discharged the burden of assessee to prove genuineness. However capacity of the lender to advancement money to assessee was not a matter which the assessee could be required to establish and that would amount to calling upon him to establish the source of source. Hence addition cannot be sustained. Also refer Kanhaialal Jangid vs. ACIT (2008) 8 DTR 38 (RAJ.), ( 217 CTR 354) held Income –cash credit –Burden of proof – Assessee having filed confirmation from the creditor and having produced the creditor before AO where the creditor affirmed advancement of loan to assessee, no addition under s. 68 could be made in the hands of assessee on the ground that the creditor could not satisfactorily explain the source of loan- Burden on the asssessee in such cases does not extend to prove the source of the creditor from where he made the advance to the assessee.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

Also refer Aravali Trading Co. v/s ITO 8 DTR 199 held that once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee's onus stand discharged and the latter is not further required to prove the sources from which the creditors could have acquired the money deposited with him and, therefore the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the assessee itself. 9. No Summon U/s 131 despite the request: During the course assessment proceedings the assessee stated that the persona are out of station and requested to issue summons u/s 131 of the Act to these persons vide para 7.3 page 11 of the assessment order. However the ld. AO has neither issued the summon to these person despite the request made by the assessee nor allowed the time despite the direction of the honble ITAT. The ld. AO stated that the request of the assessee to issue the summons is not acceptable as prima facie the assessee was liable to produce the persons. He alleged that the assessee has not made any effort in spite of giving several opportunity of being heard to him. The action of the AO in not issuing the summon is illegal and the courts has deleted the addition only on this reasons. Kindly refer following judicial pronouncements.

9.1. In the case of CIT vs. Orissa Credit Corp. Ltd. 159 ITR 78 (SC) held that Income—Cash credit—Burden of proof—Assessee had given the names and addresses of the creditors—It was in the knowledge of the Revenue that the said creditors were income-tax assessees—Their index number was in the file of the Revenue—Revenue, apart from issuing notices under s. 131 at the instance of the assessee, did not pursue the matter further—Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the allowed loans—Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence—High Court was, therefore, right in refusing to refer the questions sought for

9.2 In the case of CIT vs. Varinder Rawlley (2014) 366 ITR 232 (P&H) held that It has come on record that the assessee-respondent received the amount by way of an account payee cheque. The amount was returned by way of an account payee cheque. The transactions were reflected in the bank accounts of the assessee as well as the creditor. The firm M/s Vishnu Jewellers was an income tax assessee. Its PAN card was placed on record. The assessee had filed the copy of the account of M/s Vishnu Jewellers in his books of account. The assessee had on three occasions informed that the firm was not under his control and he is unable to produce it before the Assessing Officer. He had requested the Assessing Officer to directly make enquiries. It appears that no enquiry was made by the Assessing Authority. If the Assessing Officer had any

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

doubts about the entry, instead of drawing any inference, the Assessing Officer could have summoned the proprietor of the firm. No attempt was made by the Assessing Officer to ascertain the factum of clearance of cheque from the bank and subsequent refund of the amount. Once it is so, in our view the assessee had sufficiently discharged the burden which lay upon it to explain the nature and source of the credit entry appearing in its accounts and the burden clearly shifted in the present case on to the department to prove to the contrary and hold that in spite of the assessee’s explanation, the entries could still be held to represent the assessee’s income. The Assessing Officer failed to invoke the provisions under Section 131 of the Act, the Tribunal has rightly concluded that it was sufficient to delete the addition. 9.3 Also refer CIT v/s Fair Finvest Pvt. Ltd 357 ITR 146(Del) where it has been held Income—Cash credit—Share application money—Accommodation entries— Addition—Deletion thereof—Addition on account of share application money received during previous year was made to income of assessee in reassessment proceedings on basis of investigation report received by AO—ITAT upheld order of CIT(A) allowing appeal of assessee—Held, the least that AO ought to have done was to enquire into matter by, if necessary, invoking his powers u/s 131 summoning share applicants or directors—No effort was made in that regard—In absence of any such finding that material disclosed was untrustworthy or lacked credibility, AO merely concluded on basis of enquiry report, which collected certain facts and statements that income sought to be added fell within description of Section 68—Impugned order upheld—Appeal dismissed

9.4 In CIT V/S Abdul Aziz 72 DTR 216(Chhattisgarh)- Held that no independed inquiry was made by the a AO to disprove the creditworthiness of the creditors, as established by the affidavits and statement showing source of income. Hence CIT(A) was justified in deleting the additions.

9.5. In the case of Prakash Chand Nahata v/s CIT 301 ITR 134(MP) held that

“In the obtaining factual matrix the seminal question is whether the said statement of Mohd. Rashid could have been utilised against the assessee without calling him for cross-examination. It is of immense significance that Mohd. Rashid has filed an affidavit in variance of his original statement. That apart, the AO has ignored the affidavit and ascribed reasons how the transaction with said Mohd. Rashid was not worth giving credence. The genuineness of bills produced by the assessee has not been accepted exclusively on the basis that the said Mohd. Rashid was a small businessman and was not assessed to income-tax. The aforesaid circumstances eloquently speak that the addition in the order of assessment has been made on the basis of the statement made by Mohd. Rashid. There is no cavil that a prayer was made under s. 131 of the Act to summon said Mohd. Rashid for cross-examination. That has not been done. The language employed under s. 131 of the Act empowers the AO to ensure the attendance of any person. When the statement of Mohd. Rashid was used against the assessee and an affidavit was filed controverting the same, we are 27

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

disposed to think, it was obligatory on the part of the AO to allow the prayer for cross-examination. That would have been in the fitness of things and in compliance of principles of natural justice. 10. In view of the aforesaid we answer the reference holding that as the AO had not summoned Mohd. Rashid, the proprietor of M/s Rashid & Co., Jabalpur in spite of the request made under s. 131 of the Act, the evidence of said Mohd. Rashid could not have been used against the assessee and in the absence of affording reasonable opportunity of being heard by summoning the said witness the assessment order is vitiated and cannot be saved as the addition has been made on the foundation of his deposition”. 11. In view of the above submissions the addition so made by the AO u/s 68 on account of entries in the bank account in the name of four persons may kindly be deleted in full.” 4.3 On the other hand, the ld. DR supported the orders of the lower

authorities.

4.4 We have heard the rival contentions and perused the materials

available on record. it is observed that in the course of original

assessment proceeding the AO observed that there were huge bank

transactions with the other parties, amounts of Rs. 99,06,000/- were

credited in the bank account of the assessee on various date maintained

with Oriental Bank of Commerce in the name of four

persons(Rs.47,03,000/- of Sh. Satish Kumar Sharma, Rs.35,00,00/-of Sh.

Mahaveer Prasad, Rs.2,03,000/- of Sh.Vijay Chahar and Rs.15,00,000/-

of Sh. Surjeet Singh) vide at page 9 of the assessment order. The AO

required the assessee to explain the entire amount credited in his bank

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

account. In response thereto the assessee stated that the deposits in the

banks are out of sale of agriculture produce, recovery from advance given

to these persons and unsecured loan taken from the parties. However the

AO was of the view that the assessee could not file satisfactory reply to

prove the genuineness of the transactions and creditworthiness of such

parties. Therefore amount of Rs.99,06,000/- is found as unexplained

credit in the bank account of the assessee and the same is added to the

total income of the assessee.

4.4.1 In first appeal in first round the assessee filed the details of the

bank account and also filed the affidavit of person, copy of account of Sh.

Vijay Char, sale deed of Agriculture land by Sh. Mahaveer Prasad, loan

details taken by Sh. Satish Sharma. In remand proceedings for want of

sufficient time, full details could not be produced. Hence the ld.CIT(A)-

1, Jaipur has decided the matter and confirmed the additions made by the

AO vide order in appeal No.425/10-11 dated 20.01.2012.

4.4.2 Against the order of the ld. CIT(A, the assessee filed an appeal

before the ITAT, Jaipur Bench which vide order dated 18.10.2012 in

ITA No. 372/JP/2012 was set- side to the lower authorities and

remanded back to the file of the AO for fresh adjudication in accordance

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

with law for re-examination on the issue of addition made on account of

deposits in the bank by giving following direction:

“We therefore, deem it fit and proper to set aside the impugned order passed by the ld. CIT(A) on this issue and remand back to the file of the AO for fresh adjudication in accordance with law after providing due and reasonable opportunity of being heard to the assessee. ‘’ 4.4.3 The A/R has argued before us that in consequent thereto the AO

has issued notice u/s 143(2)/142(1) on 22.01.2014 after 15 months fixing

the case for 04.02.2014. In response thereto the assessee filed detailed

reply with the details and evidences vide letter dt. 03.02.2014 (PB137-

141). On 12.02.02014 the assessee filed letter stating that the person for

recording their statements have been contacted but they are unable to

appear on this day as they are residing out of Jaipur and were busy in

their affairs. The AO adjourned the case on 19.02.2014. On 19.02.2014,

the assessee stated that the persons are out of station and requested to

issue summons u/s 131 of the Act to these persons vide para 7.3 at page

11 of the assessment order. However the AO has neither issued the

summon to these person despite the request made by the assessee nor

allowed the time despite the direction of the Hon'ble ITAT. The AO

stated that the request of the assessee to issue the summons is not

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

acceptable as prima facie the assessee was liable to produce the persons

(Page 11 Para 7.4 of the astt order).The AO observed that the persons in

whose name amounts were credited into the bank account of the assessee

could not be examined. Moreover, in the absence of bank statement of

these parties, creditworthiness could not be verified. The AO also

observed that merely saying that the deposits in the bank account are on

account of recovery from the persons to whom advances were given by

the assessee in the earlier years and this year is not sufficient explanation

especially when huge amounts were credited in his bank account on

regularly basis (page 12 of astt order). Thus the amount of Rs.99,06,000/-

are found as unexplained credits in the bank account of the assessee and

the AO is added the sum of Rs. 99,06,000/- to the total income of the

assessee. In first appeal the assessee has filed the written submission

and evidences which has been sent by the ld. CIT(A) to the AO for his

comments. However, the AO without providing adequate opportunity to

the assessee has sent his remand report dated 31.08.2015 (PB204-207) in

which he has supported the assessment order passed by predecessor AO.

Thereafter the assessee has been able to get the affidavits ITR, Bank

statement of Sh. Surjit Singh and Bank statements of the other three

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

persons. Hence the assessee has filed an application u/r 46A to the ld.

CIT(A) on 22.12.2015 (PBP 36 of ld. CIT(A)’s order) . The ld. CIT(A)

has sent these evidence to the AO mentioning that additional evidence

have not been admitted. The AO has sent his short Remand Report dated

23.12.2015, wherein he has mentioned that the remand report in this case

has already been submitted (PBP 35 of ld. CIT(A)s’ order). In response to

both the remand report, assessee filed his comments or rejoinder dated

18.01.2016 which is reproduced at page 35-36 of the CIT(A) order. .

However, the ld. CIT(A) has not admitted additional evidences vide his

observations at page 36-38 and has confirmed the entire additions of

Rs.99,06,000/- . It is observed that the AO has made the addition on

account of cash credit through cheques in bank account. However on

observation of the above facts, evidences, bank statements of the assessee

and above persons it is clear that there was only cash credit only of

Rs.54,80,400/- instead of Rs. 99,06,000/-. The detailed observation in

each case are as under:-.

In the case of Sh. Surjeet Singh:- the assessee had given

loan/advance of Rs.15,00,000/- to Sh. Surjeet Singh on 28.05.2007

through DD of Rs. 9,00,000/- and Rs. 6,00,000/- vide bank

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

statement of the assessee placed at (PB43). The ld.AR clarified the

entry in the bank statement as the amount is Rs. 9,02,528 and Rs.

6,01,685/- due to the DD charges. Sh. Surjeet Singh has returned

this amount on 06/7.09.2007 to the assessee which is also coming

in the bank statements of the assessee (PBP42). Thus the AO has

ignored the withdrawals (debit) for advance as well as returned

back (credit) in assesses bank account itself, which were before the

AO and on the basis of which he has made the addition. Hence it is

the recovery of the loan given through the cheque. Thus when there

is no loan taken from Sh. Surjeet Singh then no addition can be

made on this account.

In the case of Sh. Vijay Chahar:- the assessee had given

loan/ advances to Sh. Vijay Chahar (son of the sister of assessee) in

the earlier years. Sh. Vijay Chahar repaid a sum of Rs. 2,03,000/-

to the assessee out of the opening credit of Rs. 4,19,000/- in this

year. The assessee has not received any loan from Sh. Vijay

Chahar which is wrongly understood by the AO and it is a

recovery from the loan/advances given to Sh. Vijay Chaar. Sh.

Vijay Chahar is carrying on legal profession since last 10 years. He

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

has repaid the said amount from the income of legal profession and

agriculture. He is regular income tax assessee and his PAN No. is

AEAPC6078A. In support of the same, an affidavit of Sh. Vijay

Chahar was filed (PB 83-85) before the AO narrating all the above

facts which has not been rebutted by the AO. Hence it is the

recovery of the loan given through the cheque. Thus when there is

no loan taken from Sh. Vijay Chahar then no addition can be made

on this account.

Shri Satish/Madhu Sharma (Rs.47,03,000/-): During the

course of hearing before us, the ld.AR of the assessee stated that

Smt. Madhu Sharma is the wife of Sh. Satish Sharma and the

amount given to the assessee was from the joint A/c of Madhu

Sharma and Satish Sharma in support has filed the copy of Bank

Bank Pass Book which shows the name of Madhu Sharma and Sh.

Sharma of the same account No. 51020838449. Hence Satish and

Madhu is one account holder. We find that the ld. CIT(A) has

correctly pointed out that the amount of Rs.50,31,000/- has been

taken from Sh. Satish/Madhu Sharma and not of Rs.47,03,000/-

.Further on perusal of the Bank statements of the assesse placed at

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

(PB37-42), it reveals that the assessee had given loans of

Rs.8,13,600/- to Sh. Satish Sharma on various dates in earlier years

i.e from 09.06.2005 to 10.10.2006 and also of Rs.5,94,400/- during

the year. Thus the assessee has received the loan only of Rs.

42,17,400/- from Sh. Satish/Madhu Sharma not of Rs. 50,31,000/-

or Rs. 47,03,000/- (i.e Rs. 8,13,600/- was recovery of loan given by

the assessee to Sh. Satish Sharma in earlier year and after

repayment of Rs.5,94,400/- during the year) the loan remained at

the year end was only of Rs. 36,23,400/-. Thus no addition can be

made more than to Rs.36,23,400/- in the case of Sh. Satish

Sharma. The ld.AR stated that Sh. Satish Sharma had given this

loan to the assessee from the loan of Rs. 50 Lacs taken by him

from the different banks and for the proof loan bank details of Sh.

Satish Sharma were placed at (PB114), which is also clear from the

Bank Statements of Madhu/Satish(PB222-224). This is showing

loan amount credited before the amount given to the assessee. In

our view, no bank give such huge loan to any person without any

capacity. The ld.AR has also stated that he is regular income tax

assesee, his PAN is AKDPS0965M, for the support he had filed

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

affidavit of Sh. Satish Sharma(PB77-79) narrating all the above

facts which has not been rebutted by the AO. The assessee has

stated that the AO has not provided the sufficient opportunity and

the ld. CIT(A) has also not admitted the details, evidences. Hence

in the interest of equity and justice, we restore the issue of loan to

the extent of Rs.36,23,400/- outstanding at the year end relating to

Sh. Satish/Madhu Sharma to the AO to verify the same afresh by

giving adequate opportunity of being heard to the assesse. Further

the assesse has also drawn our attention that the assessee has also

made repayment of Rs. 49,56,000/- to Sh. Satish Sharma from the

06.08.2008 to 06.05.2010. Thus there is no loan amount

outstanding after 06.05.2010 in the assessee case vide Bank

statements of the assesse(PB227-232). Hence the AO is also

directed to verify this facts also and allow the relief accordingly.

Sh. Mahaveer Prasad(Rs.35,00,000/-): During the course

of hearing before us the ld.AR of the assesse has stated that Sh.

Mahaveer Prasad has taken Amount of Rs.16,00,000/- on

30.07.2007 and Rs. 43,000/- on 03.12.2007 from the assesse vide

bank statements of assesse(PB231) and Bank statements of Sh.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

Mahaveer Prasad at (PB218-219)and thereafter he has given

amount of Rs.35,00,000/- on various dates i.e on 07.11.2007,

22.02.2008 and 25.02.2008 to the assessee. Thus the outstanding

loan in assessee from Sh. Mahaveer Prasad was only of

Rs.18,57,000/-. Hence in case Sh. Mahaveer Prasad addition if any

can not be made in excess to Rs.18,57,000/-. For 18,57,000/- we

have seen the bank statements of assesse as well as Sh. Mahaveer

Prasad and find that Sh. Mahaveer Prasad has given loan of

Rs.18,57,000/- to the assessee out of Rs.25,00,000/- from the sale

proceed of his agriculture land. In support, the assesse has filed an

affidavit of Sh. Mahaveer Prasad places at (PB80-82),sale deed of

two agriculture land of Sh. Mahaveer Prasad placed at (PB 95-113)

and bank statements of assesse as well as Sh. Mahaveer Prasad.

The ld. CIT(A) has observed that before issuing the cheque to the

assessee, there was cash deposits in the bank account. However on

perusal of the bank statement of assesse as well as Sh. Mahaveer

Prasad, it is noted that there were also huge cash withdrawal from

the bank account of Sh. Mahaveer Prasad before depositing the

cash in his bank account and also huge deposits through the

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

cheques. Thus there were continuous cheque deposits, cheque

issuing cash deposits and cash withdrawals in the whole years.

Hence in the interest of equity and justice, we restore the issue of

loan to the extent of Rs.18,57,000/- outstanding at the year end

relating to Sh. Mahaveer Prasad to the AO to verify the same

afresh by giving adequate and reasonable opportunity of being

heard to the assesse. Hence the AO is also directed to verify this

facts also allow the relief accordingly.

Thus after considering various facts stated above and the factual matrix of

the creditors, the grounds No. 3 and 3.1 are partly allowed for statistical

purpose.

5.1 The Ground No. 4 of the assessee is as under:- ‘’4. Alternatively and without prejudice to above, it is submitted that if the addition on account of agriculture income is sustained or not then the set off of the same may kindly be given against the addition on account of deposit in the bank account if any sustained.’’

5.2 During the course of hearing,the ld.AR of the assessee's has filed

the following facts and submissions as to the issue in question.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

‘’ Alternatively plea that “without prejudice to the above we also would like to submit that at the worst if the addition u/s 68 or on account of deposit in the bank account in what extent is sustained than the setoff out of Rs.37,50,500/- on account of agriculture income either sustained or accepted may kindly be allowed. In view of the decision of Honble Rajasthan High Court in the case of CIT v/s Tyaryamal Bal Chand 165 ITR 453(Raj.), Dhandia Jewellers v/s CIT 214 ITR 712(Raj.). Because as per the AO himself there were availability of Rs.37,50,500/- either by the income from agriculture income or from other sources. The AO has not shown utilization of these funds anywhere except deposits in the bank account. In first appeal the ld. CIT(A) has rejected our claim and the judgment refer by him is not on telescoping the same were on explanation of cash credit entries. It is a settled law that the undisclosed income assessed by the authorities below is available to the assessee for the purpose of explaining the other additions/investments and the same would also be available to the assessee for set off purposes in respect of the other additions. Therefore, the undisclosed income assessed by the assessing officer at even higher amount was available to the assessee for the purpose of explaining other additions/ investments. Having assessed the bank deposits as his undisclosed income, the assessing officer cannot take a stand that such income did not exist and therefore, not available with the assessee for set off against undisclosed cash, investment, loans and advances, expenses etc. In support of the above proposition, the reliance is placed upon the following judgments:

(a) S. Kuppuswami Mudaliar VS. C.I.T. [51 ITR 757 (MAD)] (b)Anantharam Veerasinghaiah & Co. VS.C.I.T.[123 ITR 457 (SC)] © C.I.T. VS. Prem Chand Jain [189 ITR 320 (P&H)] In view of the decisions in CIT v. Ram Sanehi Gian Chand [1972] 86 ITR 724 and Anantharam Veerasinghaiah & Co. v. CIT [1980] 123 ITR 457C.

(d) C.I.T. VS. Tyaryamal Balchand 165 ITR 453 (Raj.) In the present case, the ITO was within his right to tax the amount of Rs.16,950 as income from undisclosed sources even though he had added the amount of Rs.18,117 in addition to the profits shown by the assesses in its account books. However, the assessee was well within its right to plead that the amount of Rs.16,950 was covered from the intangible income assessed at Rs.18,117, and added in the

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

income of the assessee and apart from this, since for the last preceding 3 years, substantial additions amounting to Rs.32,797 had been added, the amount of Rs.16,950 could have been taken as having come out of such intangible additions. Accordingly, the Tribunal in the instant case was right in treating the unexplained cash credit entries to the extent of Rs.16,950 as covered by added gross profit in the sum of Rs.18,117 on the basis of the estimate.

Hence, in view of the above submissions the addition may kindly be deleted in full.’’ 5.3 On the other hand, the ld. DR supported the orders of the authorities below. 5.4 After hearing both the parties and perusing the materials available on record, we are of the considered view that in the afresh assessment

proceedings the AO after verifying all the facts and issue which has been

restored to him and if any addition is remained on account of deposits in

the bank then the AO shall give the setoff to the extents of agriculture

income of Rs.37,50,500/- or addition of Rs. 5,75,500/- on account of

agriculture income sustained. Thus ground No. 4 of appeal of the assesse

is also allowed for statistical purpose

6.1 The Ground No. 5 of the assessee is regarding charging of interest

u/s 234A and 234 B of the Act which is mandatory and consequential in

nature.

ITA No. 349/JP/2016 Shri Radhey Ram Godara vs ITO, Ward- 3(5), Jaipur

7.0 In the result, appeal of the assessee is partly allowed for Statistical purposes Order pronounced in the open court on 29 /11/2017.

Sd/- Sd/- ¼dqy Hkkjr½ ¼HkkxpUn½ (KUL BHARAT) (Bhagchand) U;kf;d lnL; /Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 29/11/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Radhey Ram Godara, Jaipur 1. 2. izR;FkhZ@The Respondent- The ITO, Ward- 3(5), Jaipur vk;dj vk;qDr¼vihy½@ CIT(A). 3. 4. vk;dj vk;qDr@ CIT, विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 349/JP/2016) vkns'kkuqlkj@ By order, सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत