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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DLEHI
Before: SMT. DIVA SINGH
ORDER The present appeal has been filed by the assessee, wherein correctness of the order dated 28.03.2016 of CIT(A), Meerut pertaining to 2010-11 assessment year is assailed on the following grounds:
“1. That Ld. Commissioner of Income Tax (Appeals) has erred in sustaining the addition of Rs.25,00,000/- on account of loan raised by the assessee from Shri Kuldeep Singh without considering the facts that the lender has filed his confirmation and concerned bank account from where aforesaid cash amount was withdrawn. 2. That Ld. Commissioner of Income Tax (Appeals) has also ignored the facts and documentary evidence brought on records, 2 that the seller of the property namely Shri Vikas Talwar has confirmed cash amount of Rs.20,00,000/- received on 28.07.2009 and further Rs.5,00,000/- received on 22.09.2009 directly from Shri Kuldeep Singh and not on date of registry as alleged by the assessing officer in his remand report.
That the Ld. Commissioner of Income Tax (Appeals) has also erred in not considering the statement on oath recorded by Assessing Officer on 27.01.2016, whereby the lender Shri Kuldeep Singh has proved his identity, capacity and creditworthiness of the aforesaid transaction.”
Both the parties have been heard. The core issue addressed in ground No. 1 & 2 is found addressed in page 12 para (iii) of the impugned order. For ready reference, it is extracted as under :
(iii) Loan of Rs.25,00,000/- from Shri Kuldeep Singh During the year, assessee has raised cash loan of Rs.25 lac from Shri Kuldeep Singh in two phases. This loan was raised for purchase of immovable property as stated above. Shri Kuldeep Singh on request of the assessee, paid directly to the seller cash amount of Rs.20 Lac and Rs.5 Lac on 28.07.2009 and 22.09.2009 respectively out of withdrawing it from his bank account of Indian Overseas Bank, Ghaziabad. I have carefully considered the contents of AO’s remand report and submission of A.R. and observed that there is force in the AO’s observation in respect of cash loan of Rs. 25 Lac raised from Shri Kuldeep Singh. Undoubtedly, the capacity of lender is proved but the transactions were not carried out through banking channel in spite of the facts that both the persons, lender Shri Kuldeep Singh as well as assessee have maintained their bank accounts properly and transactions in the past have been carried out through RTGS and cheques. Moreover, the seller of the property, Shri Vikas Talwar has received cash amount of Rs.31 lac on the date of registry i.e., on 3 13.10.2009 as mentioned at page 38 of the sale deed. So, it is simply a fabricated story framed by the assessee just to justify the aforesaid investment in the property. Looking to the aforesaid facts, I find that the aforesaid loan of Rs.25 Lac is not genuine and the investment thereof is also unexplained.” 3. The ld. AR inviting attention to paper book page 59, which is the copy of page 38 of the sale deed, submitted that dates mentioned therein refer to cheque transactions and qua the cash amount received by the seller, no date is mentioned. Carrying the Bench to the specific extract, it was his submission that the tax authorities have presumed that the cash necessarily was paid on 13.10.2009. Inviting attention to the impugned order itself at page No. 8, it was his submission that the assessee has all along stated that the cash was specifically paid to the seller on behalf of the assessee on 28.07.2009 and 22.09.2009. For ready reference his submissions extracted in the impugned order in para 4.1 were also heavily relied upon.
The ld. Sr. DR relies upon the findings of the ld. CIT(A). It was her submission that page 38 is the sale deed which records the position as on 13.10.2009 and there is no reason to believe that the stated transaction took prior to the date of sale and no doubt, Shri Kuldeep Singh had the 4 capacity to advance funds but the fact that bank account shows frequent withdrawals by itself shows nothing, as the payment was made in cash.
I have heard the submissions of both the parties and perused the material available on record. Before addressing the respective arguments, it is proper to extract relevant submissions from para 4.1 of the impugned order advanced on behalf of the assessee.
“4.1 AR’s rejoinder: The A.R. has filed rejoinder to the remand report as under:-
1. 1. That in respect of comments / observations made by the A.O. for assuming the jurisdiction under section 147/148 of the I.T Act, no further comments are offered on this issue.
2. That regarding addition of Rs.41 lakh as unexplained investments u/s 69 of the I.T Act towards purchase of immovable property, it is kindly submitted that the assessee purchased an immovable property at Mohalla Om Nagar, Village Arthala, Loni, Distt. Ghaziabad on 13-10-2009 for a consideration of Rs. 41 Lac. The Sale-Deed was executed between the assessee and Shri Vikas Talwar S/o late Shri R.P. Talwar, R/o 27B, R-Block, Dilshad Garden, Delhi on 13-10-2009. The mode of payments are given below: i. Rs.5,00,000/- through cheque dated 12/05/2009 by assessee himself on his own account. ii. Rs.5,00,000/- through cheque by assessee’s father as gift. iii. Rs.20,00,000/- in cash direct to seller by Shri Kuldeep Singh on 28/07/2009.
5 iv. Rs.5,00,000/- in cash direct to seller by Shri Kuldeep Singh on 22/09/2009. v. Rs.3,00,000/- in cash on the date of registry (out of gift received from Shri Yashpal Singh, real uncle of assessee). vi. Rs.3,00,000/- in cash on the date of registry (out of sale proceeds of buffalos to Shri. Kalu Ram). In support of the aforesaid payments/ transactions, assessee has furnished the following documents in appeal proceedings and also before the assessing officer, Baraut in remand proceedings: i. Copy of bank statement of assessee from where cheque has been issued for Rs.5,00,000/- to the seller. Copy of ITR and form No. 16 of assessee’s wife who is an employee in Ordinance Factory, Muradnagar. ii. Copy of bank statement of assessee’s father Shri. Rampal Singh who has given a payment of Rs. 5,00,000/- through cheque to seller. Copy of Khasra/ Khatauni of Shri. Rampal Singh. iii. Copy of bank statement of Shri Kuldeep Singh who has given a loan of Rs.25,00,000/- in cash and paid directly to seller, Vikas Talwar on his request and with the consent of the assessee. iv. Gift deed of Rs.3,00,000/- in cash given by Shri. Yashpal Singh, uncle of the assessee. v. Receipt of payment of Rs.3,00,000/- in cash from Shri Kalu Ram on account of sale of buffalos. ...... ...... ...... ...... ..... ..... ..... ..... ..... ...... .....”
On consideration of the submissions of the parties before the Bench, the findings relied upon and taken into consideration by the tax
6 authorities as well as the ld. AR, it is seen, in the facts of the present case, that the assessee is admittedly an agriculturist which fact is found addressed in the impugned order itself (specific reference is made to para 3.1). It is seen that it is a fact that deed writer in the sale deed did not mention specific date on which money was advanced by Shri Kuldeep Singh to Mr. Vikas Talwar, the seller. It is also seen that availability of funds with Shri Kuldeep Singh is not in doubt. In the circumstances, the suspicion entertained by the tax authorities is not corroborated by any material on record. Considering the evidence on record and the explanation offered, I am of the view that the addition is to be deleted.
Ordered accordingly. Grounds Nos. 1 & 2 of the assessee are allowed.
Addressing the facts relatable to ground No. 3, the relevant discussion is available again at page 12 para (v) of the impugned order.
For ready reference, it is extracted as under :
“(v). Sale of Buffaloes for Rs.3,00,000/-. The assessee has also invested a sum of Rs.3 Lac in the property out of sale proceeds of his cattle (Buffaloes). In respect of sale proceeds, cash receipts dated 12.10.2009 issued by Shri Kalu Ram S/o Shri Hosihyara R/o Village Luhara, Distt. Baghpat was filed in remand proceedings. But the assessee could not produce him before the AO to substantiate his claim. Thus in absence of complete details of 7 cattle and proper evidence of sale proceeds, I find that in the interest of natural justice, an amount of Rs.1 Lac is acceptable on account of aforesaid sale proceeds.” 8. The ld. AR, relying upon the submissions advanced before the tax authorities, submitted that the transaction in cash for the agriculture related activities, as in sale of cattle, has been relied upon and simply because the assessee could not produce Shri Kalu Ram, it has been doubted. It was his submission that the very fact that part relief has been granted would show that evidences have been considered to be correct, though it still continued to be doubted.
The ld. Sr. DR relies upon the orders of the tax authorities.
I have considered the submissions of both the parties and perused the material available on record. The assessee in the present case has canvassed that Rs.3 Lacs are sourced from the sale of Buffaloes to Shri Kalu Ram. It appears that the tax authorities have not doubted the assessee’s ownership of Buffaloes. However, for want of producing Shri Kalu Ram, the assessee’s version has been partly believed. There is no material to show that the assessee after having sold his Buffaloes to Kalu Ram could exercise his authority, insisting Kalu Ram to appear before the 8 Assessing Officer. In the absence of any doubt on the ownership of Buffaloes, the addition sustained of Rs.2,00,000/- is directed to be deleted. The said order was pronounced in the open court.
In the result, the appeal of the assessee is allowed.
The order was pronounced in the open court.