SMT A LATHA ,COIMBATORE vs. ACIT CENTRAL CIRCLE 2, COIMBATORE

PER G. MANJUNATHA, AM:

These three appeals filed by the assessee are directed

against separate, but identical orders of the learned

Commissioner of Income Tax (Appeals)-18, Chennai, dated

22.3.2018 passed u/s.271(1)(c) of the Income Tax Act, 1961

for the assessment year 2014-15 and orders passed

u/s.250(6) of the Income Tax Act, 1961, both dated 20.11.2017

for the assessment years 2014-15 & 2015-16. Since, facts are

identical and issues are common, for the sake of convenience,

these appeals were heard together and are being disposed off,

by this consolidated order.

2 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

ITA No.3/Chny/2018 (A.Y. 2014-15):

3 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

operation u/s.132 of the Income Tax Act, 1961, was carried out

in the case of Shri E. Anandan, Director of M/s. Green Home

Landscape Pvt. Ltd. on 17.03.2015. During the course of

search in the premises of Shri E.Anandan, some incriminating

documents (sale agreement/deeds) were found and seized

4 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

which revealed fact that the assessee had entered into sale

agreement dated 07.02.2014 with Mr. K.Thangavelu for

purchase of property at Vadavalli. As per sale agreement dated

07.02.2014, the assessee had paid an amount of Rs.1 core

advance in cash to Mr. K.Thangavelu for purchase of property

and said property has been registered in the name of the

assessee on 03.03.2015 for consideration of Rs.4,10,00,000/-.

When the assessee was called upon to explain source for

payment made to Mr. K.Thangavelu, it was submitted that one

Mr. Ashok Kumar, S/o. Gopal had entered into sale agreement

with Mr. K.Thangavelu on 23.08.2013 and paid advance of

Rs.1 crore for purchase of very same property and the said

sale agreement was cancelled on 07.02.2014, because Mr.

Ashok Kumar could not arrange funds. Since, Mr. Ashok Kumar

is relative to the assessee, he made over advance paid to seller

of the property to the assessee and agreed to take back

advance subsequently. The recital of Rs.1 crore advance

mentioned in sale agreement between the assessee and Mr.

K.Thangavelu was in fact, Rs.1crores advance paid by Mr.

Ashok Kumar and same has been returned to Mr. Ashok

5 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

Kumar, out of sale proceeds of property owned by Mr.

E.Anandan, husband of the assessee at Chennai.

Assessing Officer however, was not convinced with explanation

furnished by the assessee and according to Assessing Officer,

on perusal of confirmation letter given by Mr. Ashok Kumar, it is

noticed that said advance of Rs.1 crore was paid on 07.02.2014

as per registered sale deed as well as agreement of sale. If it is

a case of Mr. Ashok Kumar make over his advance paid by him

to Mr. K.Thangavelu to the assessee, same should have been

reflected as a creditor in the balance sheet of Mrs. A.Latha.

Further, contention of the assessee is that she had paid Rs.1

cores to Mr. Ashok Kumar, out of money received from sale of

property by her husband Mr. E.Anandan at Chennai also does

not hold water, because on perusal of bank account statement

submitted by Mr. E.Anandan, it was noticed that buyer of the

property Mrs.Lakshmi has paid sale consideration of Rs.90

lakhs by way of demand draft and RTGS starting from

03.04.2014 to 07.04.2014 and further, there is no cash

withdrawal from account of Mr. E.Anandan to pay cash to Mr.

6 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

Ashok Kumar. The Assessing Officer further noted that as per

seized documents found during the course of search in the

premises of the assessee there are two notings in respect of

cash paid to Mr.Ashok Kumar on 22.10.2013 for Rs.85 lakhs

and on 24.11.2013 for Rs.57,50,000/- and this amply proves

that Mr. Ashok Kumar had entered into an agreement of sale

with Mr. K.Thangavelu on behalf of Mr. E.Anandan and paid

these amounts. The Assessing Officer further noted that Mr.

Ashok Kumar does not have any creditworthiness to advance

such huge amount to Mr. K.Thangavelu. Therefore, the

Assessing Officer opined that so called advance paid to Mr.

K.Thangavelu by the assessee is made out of her undisclosed

income and thus, made addition of Rs.1 crore being advance

paid to Mr. K. Thangavelu for purchase of property as

unexplained money u/s.69A of the Income Tax Act, 1961.

preferred an appeal before the learned CIT(A). Before the

learned CIT(A), the assessee has filed detailed written

submissions of the assessee which has been reproduced at

para 7 on page 4 to 6 of learned CIT(A) order. The sum &

7 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

substance of arguments of the assessee before learned CIT(A)

are that she had entered into sale agreement for purchase of

property with Mr. K.Thangavelu, after agreement of Mr. Ashok

Kumar with Mr. K.Thangavelu was cancelled on 07.02.2014

and further, advance paid by Mr. Ashok Kumar has been

adjusted towards advance payable by the assessee. The

assessee further contended that same has been repaid to Mr.

Ashok Kumar, out of sale consideration received by her

husband Mr. E.Anandan from sale of Chennai property.

also taken note of entries contained in sheet No.100 of seized

documents found during the course of search, opined that

although, the assessee has made payment of Rs.1,42,50,000/-,

but, the Assessing Officer has not considered above amount for

addition. Therefore, after analyzing various documents found

during the course of search, including agreement between the

assessee and Mr. K.Thangavelu has issued enhancement

notice to the assessee and proposed to make addition of

Rs.1,83,50,000/- towards unexplained investments in purchase

of property. According to the learned CIT(A), evidences filed by

8 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

the assessee, including so called agreement between M/s.

Green Home Landscape Pvt.Ltd with Mr. K Thangavelu dated

22.06.2012 and subsequent agreement between Mr. Ashok

Kumar with Mr. K.Thangavelu are make belief stories.

Therefore, the learned CIT(A) opined that the assessee had

entered into agreement for purchase of property and made

various payments to Mr. K.Thangavelu and thus, after

considering necessary submissions of the assessee has

enhanced assessment to the extent of Rs.1,83,50,000/- being

various payments made by the assessee for purchase of

property as unexplained money u/s.69A of the Income Tax Act,

1961. The learned CIT(A), in the process, has deleted additions

made by the Assessing Officer towards advance paid by the

assessee to Mr. K.Thangavelu amounting to Rs.1 crore on the

ground that so called agreement between Mr. Ashok Kumar

with Mr. K. Thangavelu is make belief story and thus, claim of

Mr. Ashok Kumar making over said payment to the assessee is

not accepted. The relevant findings of the learned CIT(A) are as

under:-

ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

“17.1. The sources attributed for the payments of the above amounts to Shri K.Thangavelu even though supported by documentary evidences, the same cannot be accepted at all for the simple reason that, all these sources have been raised before Lhe date of entry of the appellant into the picture i.e., 7.2.2014 and further, nexus was not explained so as to prove that these sources were utilized for the purchase of the property. It is to be mentioned here that, during the course of assessment proceedings, when the Assessing Officer questioned about the source for the payment to Shri Ashok Kumar, the appellant did not claim the sources which he is claiming now during the appellate proceedings.

17.2. Further, it is to be stressed here that, Shri Anandan has schemed the entire deal in such a way to show as if initially M/s Green Home Landscape Pvt.Ltd., was the purchaser, later it was Shri.Ashok Kumar and finaNy it was Smt.Latha, the appellant. But in truth, Shri.Anandan’s intention was to buy the property in the name of Smt.Latha only. This inference will be proved as correct if one goes through the relevant discussions made in the preceding paragraphs. Some important points to be highlighted here are that, even though the value of the property transferred runs to several crores, most of the payments were in cash only. Even though various agreements are claimed to have been entered into with Shri.K.Thangavelu by M/s Green Home Landscape Pvt.Ltd., and Shri Ashok Kumar, they have been cancelled and only the agreement entered into between Shri Thangavelu and Smt. Latha alone materialized.

17.3. Further, during the period 23.08.2013 and 07.02.2014 Shri. Anandan continued to make part payments of Rs.15,00,000/- & Rs.85,00,000/- to Shri.Thangavelu on

ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

22.10.2013 &. 24.11.2013 respectively in spite of the fact that the agreement between Shri.Ashok Kumar and Shri Thangavelu was alive during the above said period.

17.4. For the above payments received from M/s Green Home Landscape Pvt.Ltd., represented by Shri.Anandan, the vendor Shri K.Thangave!u has authenticated the same by his signature. In addition, signature of a witness (Shri.D.Karthik) has also been affixed. These entries are made on the reverse of the agreement entered between M/s Green Home Landscape Pvt.Ltd., and Shri Thangavelu.

17.5. If the agreement between Shri Ashok Kumar and Shri K.Thangavelu was really genuine and existing, then Shri Anandan would not have made payments during the period when this agreement was live.

17.6. Thus, it can be concluded that, Shri Ashok Kumar was only a benami and his name was unnecessarily dragged into this transaction. An inference can easily be drawn that, the money passed on from the Appellant to Shri K.Thangavetu is still lying with Shri K.Thangavelu till Smt.Latha enters into the agreement with Shri K.Thangavelu. This itself inexplicably proves that, there was no real transaction between Shri Ashok Kumar and Shri K.Thangavelu. Had there been such a transaction, this document should find a place only in the premises of Shri Ashok Kumar and not that of the appellant, as it happened in reality.

17.7. As per the observation made by the AO in the Asst.Order, regarding the addition of Rs, 1 Crore, it represents the amount returned by the Appellant to Shri Ashok Kumar. Since it is now

11 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

held that the introduction of Shri Ashok Kumar is a make believe story, the claim of Shri Ashok Kumar making over the said payment to the appellant is not accepted and the addition of Rs.1 Crore made by the AO is hereby deleted. This is because, in this order it is clearly proved that Shri Ashok Kumar was never a party in this transaction as wrongly projected by the appellant.

17.8. In this appeal, the appellant challenges the addition of Rs.1 Crore. While deciding the issue, the undersigned took the support of the seed material and hence the entire issue is re- visited. While doing so, this Appellate Order resulted in enhancement and therefore, the Grounds raised by the appellant against the addition of Rs.1 Crore made by the Assessing Officer stands deleted. 1. Hence the resultant enhancement is worked Out as under:

18.1. Even though various payments have been made as evidenced by the seized documents, those relating to the impugned Asst.Year alone (F.Y.2013-14) have been taken into

12 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

consideration in this order and thus resulting in an enhancement of Rs.1,83,50,000/-“

Aggrieved by the learned CIT(A) order, the assessee is in

appeal before us.

learned CIT(A) erred in enhancing assessment without

appreciating fact that the assessee has explained source for

advance payment made to Shri K.Thangavelu for purchase of

property. The learned A.R for the assessee further referring to

various documents relied upon by the learned CIT(A)

submitted that although, the learned CIT(A) observed that

agreement between Mr. Ashok Kumar with Mr. K. Thangavelu is

a make belief story, but failed to examine both the parties, when

the assessee has filed evidences to justify her case. He further

submitted that agreement between the assessee and Mr. K.

Thangavelu was found during the course of search. As per

seized documents, Mr. Ashok Kumar had entered into

agreement for purchase of property and paid advance amount

of Rs.1 crore on various dates. Since, he could not register

property by paying balance consideration, had requested the

13 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

assessee and the assessee had entered into separate

agreement, but amount of advance mentioned in the agreement

was in fact, paid by Mr. Ashok Kumar and make over to the

assessee. He further submitted that the learned CIT(A) without

appreciating facts has simply enhanced the assessment only on

the basis of some jottings found in loose papers.

the learned CIT(A) submitted that in fact, there is no

enhancement from the learned CIT(A), because if you see

issue in total, whole issue is on account of unexplained

investments in purchase of property. As per seized documents

found during the course of search, the assessee had

purchased property from Mr. K. Thangavelu for a consideration

of Rs.6.67crores, including stamp duty and registration. The

assessee could explain source to the extent of Rs.2.5 crores

only, out of loan borrowed from bank. The balance amount has

been added as unexplained investment, because the assessee

could not explain source for investments. Although, the

Assessing Officer had considered balance amount of

Rs.4,17,00,000/- as unexplained investments, but made

14 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

addition of Rs.1 crore for the assessment year 2014-15 on the

basis of agreement between the assessee and Mr. K.

Thangavelu and balance amount of Rs.3,17,00,000/- has been

added for the assessment year 2015-16. Though, the learned

CIT(A) has enhanced addition for the assessment year 2014-

15, to Rs.1,83,50,000/-, but while considering source for

assessment year 2015-16 has sustained addition to the extent

of Rs.2,33,50,000/-, which means total additions made by the

Assessing Officer for both assessment years and sustained by

the learned CIT(A) is one and the same and therefore, there is

no merit in the arguments of the assessee that the learned

CIT(A) has enhanced assessment for assessment year 2014-

investments made in purchase of property, although the

assessee claims to have various sources, including loans

borrowed from various persons, but on perusal of details filed

by the assessee, it is observed that the assessee could not

substantiate source and thus, learned CIT(A), after considering

relevant explanation has rightly sustained additions made by

the Assessing Officer and his order should be upheld.

15 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

available on record and gone through orders of the authorities

below. The sole issue revolves around addition made by the

Assessing Officer towards amount paid for purchase of

property by the assessee as unexplained money u/s.69A of

the Income Tax Act, 1961. The basis for additions towards

unexplained money u/s.69A of the Income Tax Act, 1961, is

search conducted in the case of Shri E.Anandan, husband of

the assessee. During the course of search, sale agreement

between the assessee and Mr. K.Thangavelu dated

07.02.2014 was found as per which, the assessee had

entered into agreement for purchase of property from Mr.

K.Thangavelu for a consideration of Rs.4,10,00,000/- and paid

advance of Rs.1 crore on the date of agreement. The

Assessing Officer has made addition of Rs.1 crore u/s.69A of

the Income Tax Act, 1961 for assessment year 2014-15 on the

ground that explanation of the assessee that Mr. Ashok Kumar

paid advance and said advance has been make over to the

assessee is a make belief story without any evidence. The

learned CIT(A), has deleted additions made by the Assessing

Officer, however enhanced assessment and made addition of

16 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

Rs.1,83,50,000/- on the basis of his own appraisal of evidences

and reasoning. The learned CIT(A) has disregarded all

evidences filed by the assessee, including agreement between

Shri Ashok Kumar and Mr. K.Thangavelu before the assessee

had entered into agreement with Mr. K.Thangavelu for

purchase of very same property. The sole reason for learned

CIT(A) to disbelieve claim of the assessee was relationship

between the assessee and Shri Ashok Kumar. According to

learned CIT(A), Shri Ashok Kumar being related to the

assessee, he had created document to make believe story, but

in fact, Mr. E.Anandan had entered into agreement with Mr.

K.Thangavelu for purchase of property in the name of his wife

Smt. A.Latha, present assessee before us. The learned CIT(A)

has given various reasons to disregard arguments advanced

by the learned A.R for the assessee and according to him,

when the agreement between Shri Ashok Kumar and Mr. K.

Thangavelu was subsists, there is no reason for the assessee

to make payment to Mr. K. Thangavelu. The learned CIT(A) has

considered various facts and has also assumed certain facts

and inferred that claim of the assessee that Shri Ashok Kumar

had entered into agreement is a make believe story and

17 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

therefore, rejected arguments and went on to discuss the issue

in light of various evidences and concluded that the assessee

has purchased property from Mr. K.Thangavelu for a

consideration of Rs.6,30,00,000/-, but could not explain source,

except bank loan.

reasons given by the learned CIT(A) in light of various

arguments advanced by the learned A.R for the assessee and

we ourselves do not subscribe to the reason given by the

learned CIT(A) for simple reason that when the learned CIT(A)

has disbelieved agreement between Shri Ashok Kumar and Mr.

K. Thangavelu, he could have examined both the parties before

taking any adverse inference against the assessee, more

particularly, when Mr. Ashok Kumar has confirmed having

entered into agreement with Mr. K.Thangavelu and also

confirmed make over advance payment to the assessee. The

learned CIT(A), without carrying out necessary verification has

simply rejected arguments of the assessee and went on to

make additions by considering certain jottings recorded in the

incriminating materials found during the course of search. The

18 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

main allegation of the learned CIT(A) is Mr. E.Anandan

continued to make part payments of Rs.15 lakhs and

Rs.85,00,000/- to Mr. K.Thangavelu on 23.10.2013 &

24.11.2013 respectively, even when the purported agreement

dated 23.08.2013 between Shri Ashok Kumar and Mr.

K.Thangavelu was alive. Therefore, the learned CIT(A) opined

that agreement between Shri Ashok Kumar and Mr.

K.Thangavelu was not genuine. We find that the learned

CIT(A) has drawn inference against the assessee on

assumption and suspicion without bringing on record any

evidences to counter various evidences filed by the assessee,

including agreement entered into by M/s. Green Home

Landscape Pvt. Ltd. with Mr. K. Thangavelu. Further, the

learned CIT(A) had also disbelieved various documents filed by

the assessee, including agreement between Shri Ashok Kumar

and Mr. K.Thangavelu with confirmation from the party only on

the ground that Mr. Ashok Kumar is relative of Mr. E. Anandan,

otherwise, evidences filed by the assessee, including

agreement between Shri Ashok Kumar and Mr. K.Thangavelu

clearly shows that he had paid advance of Rs.1 crore. Further,

Shri Ashok Kumar has confirmed transactions by filing

19 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

confirmation letter. The learned CIT(A) without considering

those evidences has simply disbelieved various documents filed

by the assessee and made additions, even though parties have

clearly proved payment of advance by Shri Ashok Kumar and

make over said advance to the assessee. Therefore, we are of

the considered view that the learned CIT(A) has erred in

making enhancement of assessment only on the basis of

certain entries in loose sheets without any further evidence to

prove that said transactions are in fact taken place. Hence, we

are of the considered view that the learned CIT(A) has erred in

making enhancement of assessment on the basis of jottings

recorded in loose sheets found during the course of search and

assumed that the assessee has purchased property for a

consideration of Rs.6,65,00,000/-, even though sale agreement

between the assessee and Mr. K.Thangavelu and subsequent

registered sale deed clearly proves fact that property has been

purchased for consideration of Rs.4,10,00,000/-. Thus, we

reject reasons given by the learned CIT(A) to enhance the

assessment on the basis of incriminating materials found during

the course of search. Further, in our considered view,

explanation of the assessee that advance mentioned in sale

20 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

agreement between the assessee and Mr. K.Thangavelu was

paid by Mr.Ashok Kumar and make over to the assessee is

proved beyond doubt with necessary evidences, including

confirmation letter from the party. Further, the assessee had

also proved fact that she had repaid a sum of Rs.1 crore to Shri

Ashok Kumar, out of sale proceeds of property at Chennai by

her husband Mr. E.Anandan is also proved beyond doubt which

is evidenced from fact that although, the purchaser had paid

sale consideration of Rs.90 lakhs by demand draft / RTGS, but

Mr. E.Anandan has withdrawn amount from his bank account

which clearly proves that money has been used to make

payment to Shri Ashok Kumar. Therefore, we are of the

considered view that additions made by the Assessing Officer

towards advance payment made to Mr. K.Thangavelu on the

basis of sale agreement dated 07.02.2014 is not correct.

The learned CIT(A) made addition of Rs.10 lakhs cash advance

claims to have been paid by M/s.Green Home Landscape Pvt

Ltd. to Shri Thangavelu on the ground that this amount has

gone from undisclosed source of Mrs.Latha. We find that when

21 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

the agreement clearly shows that payment has been made by

M/s.Green Home Landscape Pvt. Ltd., same cannot be

attributed to the assessee and thus, we are of the considered

view that the learned CIT(A) has erred in making addition of

Rs.10 lakhs in the hands of the assessee. Similarly, the

learned CIT(A) has made additions towards entries recorded in

some loose sheets on the ground that the assessee has paid

cash to Mr. K.Thangavelu for purchase of property. As we have

already stated in earlier part of this order, no additions can be

made only on the basis of loose sheets, when the assessee

demonstrated with evidence that the property has been

purchased for the stated consideration in the agreement of sale

and further registered deed executed for transferring title also

confirms consideration paid for purchase of property. Therefore,

we are of the considered view that enhancement made by the

learned CIT(A) amounting to Rs.1,83,50,000/- on the basis of

entries in loose papers cannot be sustained. Hence, we

reverse findings of the learned CIT(A) and delete enhancement

made by the learned CIT(A).

22 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

year 2014-15 is allowed.

ITA No.1223/Chny/2018 (A.Y. 2014-15):

“1 The order of The Commissioner of Income Tax (Appeals) - 18, Chennai dated 22.03.2018 in I.T.A.No.479/2016-17 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case.

23 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

Vadavalli was wrong, erroneous, unjustified, incorrect and not sustainable in law. 5. The CIT (Appeals) failed to appreciate that the reliability of the seized materials was heavily challenged both in the quantum proceedings as well as in the penalty proceedings and ought to have appreciated that the penalty imposed on the seized materials was wholly unjustified.

penalty levied by the learned CIT(A) on enhancement of

assessment amounting to Rs.1,83,50,000/-. We find that

additions made by the learned CIT(A) has been deleted by us in

ITA No.3/Chny/2018 for the assessment year 2014-15. Since,

addition on which penalty levied u/s.271(1)(c) of the Act, is

24 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

itself deleted, penalty levied by the learned CIT(A) on said

addition cannot survive. Hence, we delete penalty levied by the

learned CIT(A) u/s.271(1)(c) of the Income Tax Act, 1961 .

assessment year 2014-15 is allowed.

ITA No.39/Chny/2018 (A.Y.2015-16):

to the facts & issues which we have considered in ITA

No.3/Chny/2018 for the assessment year 2014-15. The

Assessing Officer has made addition of Rs.3,17,00,000/-

u/s.69A of the Income Tax Act, 1961 on the ground that the

assessee has purchased property from Mr. K.Thangavelu for

Rs.6,30,00,000/- and has established source of

Rs.2,50,00,000/- out of bank loan and thus, balance amount of

Rs.4,17,00,000/- has been treated as unexplained investment.

Since, a sum of Rs. 1 crore has been added for the

assessment year 2014-15, balance amount of Rs.3,17,00,000/-

has been treated as unexplained investments in house property

for the assessment year 2015-16. We find that an identical

issue has been considered by us in preceding paragraph in ITA

25 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

No.3/Chny/2018, where we have clearly held that additions

made by the Assessing Officer and sustained by the learned

CIT(A) on the basis of jottings recorded in loose sheets cannot

be sustained, when the assessee has clearly established

purchase of property for Rs.4,10,00,000/- and has also

explained source. Therefore, additions made by the Assessing

Officer and sustained by the learned CIT(A) on the basis of

loose sheets cannot be sustained.

source for such investments. The assessee has purchased

property for a consideration of Rs.4,47,00,000/-, including

registration expenses. The assessee has explained source for

investments in purchase of property, as per which the assessee

has taken loan from bank amounting to Rs.2,50,00,000/-

Further, the assessee had taken loan from Mr. Anthonysamy

amounting to Rs.60,00,000/-. The assessee also availed

jewellery loan from Karur Vysaya Bank amounting to

Rs.7,54,000/-. The assessee has also availed jewellery loan

from Axis Bank for Rs.17,00,000/-. The assessee had taken

loan from Mr. E.Anandan out of jewellery loan from Karur

26 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

Vysaya Bank amounting to Rs.7,00,000/-. All these amounts

are credited to bank account of the assessee maintained at

Karur Vysaya Bank, R.S.Puram and from said bank account,

amount has been paid to Sundaram BNP Paribas Home

Finance Ltd amounting to Rs.2,94,00,000/-. The assessee had

paid further amount of Rs.4,93,000/- to Sundaram BNP Paribas

Home Finance Ltd. through RTGS from KVB Bank. The

assessee had paid Rs.3,85,000/- on 08.10.2014 by cheque

no.000106. All these amounts are transferred from the

assessee bank account to Mr. K.Thangavelu. Therefore, we are

of the considered view that there is no doubt about source of

payment to the extent of Rs.3,13,78,000/-. Therefore, to this

extent, the assessee has explained source for purchase of

property and thus, the Assessing Officer and learned CIT(A)

have erred in making additions towards amount invested for

purchase of property by disregarding various evidences filed by

the assessee, including documents filed for availing various

loans from banks and relatives.

assessee claims to have made Rs.1,03,22,000/- cash payment

27 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

to Mr. K. Thangavelu, out of which a sum of Rs.1 crore was

paid on 07.02.2014 which has been explained out of advance

paid by Mr. Ashok Kumar and make over to the assessee.

Therefore, to the extent of Rs.1 crore, there is no dispute with

regard to fact that the assessee has proved source, because

the assessee has make over advance paid by Mr.Ashok Kumar

and same has been subsequently repaid to Mr. Ashok Kumar

out of sale proceeds of Madras property of Mr. E.Anandan,

husband of the assessee. Hence, we are of the considered

view that the assessee has proved source of cash payment

of Rs.1 crore to Mr. K.Thangavelu and thus, the Assessing

Officer as well as learned CIT(A) were erred in making additions

towards amount invested in purchase of property.

03.03.2015, it was explanation of the assessee that the

assessee is having sufficient source of income out of

agricultural loan jointly borrowed with her husband amounting

to Rs.13,22,000/-. The assessee has filed source for agricultural

loan in the form of loan sanction letters and also credits in the

bank account of the assessee . Therefore, to the extent of

28 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

amount paid in cash of Rs.3,22,000/-, the assessee is having

sufficient source to explain payment made to Mr. K. Thangavelu

for purchase of property. Therefore, we are of the considered

view that the learned CIT(A) has erred in sustaining additions

made by the Assessing Officer for unexplained investments

towards purchase of property.

circumstances of the case, we are of the considered view that

the Assessing Officer as well as the learned CIT(A) were

completely erred in making additions towards unexplained

investments in property disregarding various evidences filed by

the assessee to prove source for said investments. Hence, we

reverse findings of the learned CIT(A) and direct the Assessing

Officer to delete additions made u/s.69 of Income Tax Act,

1961, amounting to Rs.2,33,50,000/- for the assessment year

2015-16.

ground no.9 & 10 of assessee appeal is addition of

Rs.39,51,560/- towards unexplained cash credits in the bank

29 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

account of the assessee on various dates. The Assessing

Officer has made addition of Rs.39,51,560/- being cash

deposits found in bank account on various dates. It was

explanation of the assessee that these cash deposits were

payment made for purchase of property at Vadavalli and thus,

when the Assessing Officer has made addition towards

investments in purchase of property, once again addition

towards cash deposits found in bank account amounts to

double addition.

available on record and gone through orders of the authorities

below. We find that except stating that the Assessing Officer

has already made additions towards investments made in

property, the assessee could not file any documentary evidence

to explain cash deposits found in bank account. Further,

additions made by the Assessing Officer towards unexplained

investments in purchase of property has been deleted by

holding that the assessee has explained source for

investments out of borrowings from banks, loan from friends

and relatives and various other loans from banks. However,

30 ITA Nos.1223/Chny/2018 3/Chny/2018 & 39/Chny/2018

with regard to cash deposits found in bank account on various

dates, the assessee could not file any satisfactory explanation.

Therefore, we are of the considered view that there is no error

in the reasons given by the Assessing Officer to make

additions towards cash deposits found in the bank account

u/s.69A of the Income Tax Act, 1961. Hence, we are inclined to

uphold findings of learned CIT(A) and reject ground taken by

the assessee.

year 2015-16 is partly allowed.

Nos.3/Chny/2018 & 1223/Chny/2018 for assessment years

2014-15 are allowed and appeal filed in ITA No.39/Chny/2018

for assessment year 2015-16 is partly allowed. Order pronounced in the open court on 31st March, 2022 Sd/- Sd/- ( वी. दुगा� राव ) ( जी.मंजुनाथ) (V. Durga Rao) ( G.Manjunatha) $या�यक सद&य /Judicial Member लेखा सद&य / Accountant Member

चे$नई/Chennai, )दनांक/Dated 31st March, 2022 DS आदेश क� ��त+ल,प अ-े,षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु.त (अपील)/CIT(A) 4. आयकर आयु.त/CIT 5. ,वभागीय ��त�न2ध/DR 6. गाड� फाईल/GF.