DASHRATH KUMAR SHARMA, JPR ,JAIPUR vs. ITO WD 7(4), JPR, JAIPUR
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES,”A” JAIPUR
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BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 647/JP/2024
fu/kZkj.k o"kZ@Assessment Year : 2014-15
Shri Dashrath Kumar Sharma
73, Pancholiya Ka Mohalla,
Kanota, Jaipur – 303 012
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: EAJPS 0594A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya, Advocate &
Shri Hemang Gargieya, Advocate jktLo dh vksj ls@ Revenue by : Shri Arvind Kumar, CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 01/01/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 17/03/2025
vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM
By way of the present appeal the assessee challenges the order of the learned National Faceless Appeal Centre [ for short (NFAC)/CIT(A) ]
dated 25-04-2024 for the assessment year 2014-15. That order was passed because the assessee challenges the order of the assessment by filling an appeal. The order of the assessment was passed 26.12.2016 by Income Tax Officer, Ward 7(4), Jaipur [ for short AO ] as per provision of section 143(3) of the Income Tax Act [ for short Act ].
In the present appeal the assessee has raised following grounds of appeal : 1. The impugned order u/s 143(3) dated 26.12.2016 is bad in law and on facts of the case, for want of juri iction and various other reasons and hence the same kindly be quashed.
Rs. 2,56,03,777/- (wrongly typed as Rs.2,58,03,777/-): The ld. CIT (A) erred in law as well as on the facts of the case in confirming the addition made of Rs. 2,56,03,777/- u/s 68 of the Act on account of increase in capital. The impugned addition so made and confirmed, being totally contrary to the provisions of law and facts of the case, kindly be deleted in full.
Rs. 15,32,337/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition made of Rs. 15,32,337/- u/s 56(2)(vii)(b)(i) of the Act alleging that total purchase consideration of the properties is less as compared to the DLC value as income from other sources. The impugned addition so made and confirmed, being totally contrary to the provisions of law and facts of the case, kindly be deleted in full.
Rs. 38,76,456/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition made of Rs. 38,76,456/-on account of agricultural income declared initially ignoring the fact and legal position that the same was declared at NIL in the revised ROI and without bringing any evidence on record to show that there was an undisclosed income, making of the impugned addition and confirmation thereof, being totally contrary to the provisions of law and facts of the case, kindly be deleted in full.
The ld. CIT(A) erred in law as well as on the facts of the case in charging interest u/s 234A, 234B, 234C & 234D of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full.
The appellant prays your honor to add, amend or alter any of the grounds of the appeal on or before the date of hearing.
The brief facts related to the disputes are that the assessee efiled return of income on 30.03.2015 declaring total income of Rs. 2,05,280/- and agricultural income of Rs. 38,76,456/- which was included for rate purposes. The case of was selected for limited scrutiny though CASS. After issuance of notice u/s. 143(2) of the Act on 31.08.2015, the assessee filed revised return of income on 30.03.2016 declaring total income of Rs. 2,05,280/- and Nil agricultural income. Ld. AO noted that the revised return of income filed by the assessee was not a valid return of income as the original return of income was not filed as per the provisions of section 139(1) of the Act and therefore, he considered the revised return of income as a further information filed by the assessee. 3.1 Ld. AO noted that the assessee has shown total fixed assets of Rs. 2,85,69,394/- and current assets of Rs. 6,60,049/- as compared to fixed assets of Rs. 18,60,416/- and current assets of Rs. 17,79,337/- shown in the immediate preceding year. Therefore, there was an addition of Rs. 2,55,89,690 in the fixed assets and currents assets in the year under consideration. Regarding the source in the original return of income assessee claimed secure loan of Rs. 9,74,848/- and unsecured loan of Rs. 1,68,00,000/-, agricultural income of Rs. 38,76,456/- and capital of Rs. 42,44,387/-. Whereas in the revised balance sheet filed during the year under consideration the assessee claimed receipt of gift of Rs. 2,10,00,000/- from his father, unsecured loan of Rs. 18,00,000/-, secured loan of Rs. 6,72,987/- capital of Rs. 47,56,456/- and sundry creditors of Rs. 10,00,000/-. 3.2 Looking to the discrepancies and huge additions in the assets, proposal for conservation of the case from limited to complete scrutiny was made before the Principal Commissioner of Income Tax, III, Jaipur was made on 04.10.2016 by the ld. AO and the same was approved on 10.11.2016. 3.3. The AO issued a summons to Shri Mohan Lal Sharam, from whom the assessee claimed to have obtained a unsecured loan of Rs. 18,00,000/-. His statement was recorded and given a copy to the assessee. The assessee was required to furnish the reply as to why the unsecured loan of Rs. 18,00,000/- may not be treated as his unexplained income in view of the statement of Shri Mohan Lal Sharma. The assessee did not furnish any explanation to the ld. AO. 3.4 Since the assessee remained non-compliant ld. AO proceeded to complete the assessment based on the information available on record and ultimately completed the assessment by making the following addition in the return of income so filed by the assessee:
Sr.
No.
Particulars
Amount Rs.
1
Total income as declared in the return of income
2,05,280
2
Addition u/s 68 of the Act on account of increase in capital
2,56,03,0777
3
Addition on account of business income
17,24,000
4
Unexplained unsecure loan
18,00,000
5
Unexplained sundry creditors
10,00,000
6
Addition as per provision of section 56(2)(vii)(b)(ii) of the Act
15,32,337
7
Income from other sources
38,76,456
Total assessed income
3,57,41,850
Aggrieved from the above order of the assessment the assessee preferred an appeal before the ld. CIT(A). Apropos to the various grounds of appeal so raised by the assessee the relevant finding of the ld. CIT(A) is reiterated here below: ‘’4. Decision Ground No. 1:- This ground is general in nature and does not require any adjudication.
Ground No.2: The ground of appeal has been raised on account of addition of Rs.2,56,03,777/- by the Ld.AO u/s 68 of the Act.
From the facts of the case, it is seen that the limited scrutiny of the assessee was converted into a full scrutiny case on account of various discrepancies observed in the submissions and the ITR of the assessee It is seen that the appellant had filed his original return of income on 30.03.2015 declaring total income of Rs.2,05,280/- and an agricultural income of Rs.38,76,456/- for rate purposes. However, after the case of the assessee was selected for scrutiny, he preferred to revise his return of income on 30.03.2016 hence declaring total income of Rs.2,05,280/- and Nil agricultural income. The appellant has not raised any ground of appeal for considering his revised return as the true and correct statement of affairs. Since, the Ld. AO had treated the revised return just has an information filed by the assessee, the adjudication of this appeal is being done by considering the facts as stated in the original ITR of the assessee/appellant.
During the course of assessment proceedings, the Ld. AO had observed that the assessee has shown an increase of capital of Rs.2,56,03,777/- in his capital account as on 31.03.2014. The appellant justified the source of increase of his capital on account of receipt of a gift of Rs.1,50,00,000/- from his late father Sh.
Kalyan Sahay Sharma on 13.06.2013 (as shown in the revised ITR). The Ld. AO added a sum of Rs.2,56,03,777/- as unexplained cash credits u/s 68 to the income of the assessee.
During the course of appellate proceedings, the appellant has provided the details of the sources of the cash credits as gifts received from his father- Rs.25,00,000/-
(during A.Y. 2013-14) and Rs.27,00,000/- (during A.Y.2014-15) respectively, a gift of Rs.11,00,000/- from his wife, during A.Y. 2013-14 and a gift of Rs.5,00,000/- from his natural father (during Α.Υ.2013-14).
Further, the appellant has stated that he has received unsecured loans amounting to Rs. 18,00,000 from Sh. Mohan Lal Sharma and another unsecured loan amounting to Rs.5,18,800/- from various parties. An advance against land situated at Kishanpura was also received amounting to Rs. 18,00,000/-
Hence, the details of total cash credits amounting to Rs.1,09,18,800/- only have been provided by the appellant out of the total addition of Rs.2,56,03,777/- The appellant has attached various confirmations and gift deeds to support his arguments.
The submissions of the appellant have been perused. It is seen that the appellant had at the time of assessment proceedings only stated to have received
Rs.1,50,00,000/- from his late father as the source of the purchase of capital assets. Now, he has changed his submissions and has given cash credits to have been received as gifts from his blood relatives, acquaintances and through unsecured loans. Hence, the submission of the appellant are not only diverging but are totally unconvincing. The appellant has not submitted the copies of ITRs of the relatives from whom he has received gifts alongwith their statements of affairs and bank statements to prove the identity, creditworthiness and the genuineness of the transactions. All the documents submitted by the appellant are self-serving and cannot be accepted to have discharged the onus of proving the transactions of cash credits u/s 68 of the Act.
In view of the foregoing, the addition of Rs. 2,58,03,777/- made by the Ld. AO is hereby upheld.
The ground of appeal no. 2 is dismissed.
Ground No.3:- The ground of appeal has been raised in respect of addition of Rs.17,24,000/- on account of alleged difference in profit declared at Rs.2,58,515/- and the profit computed by the Ld. AO at Rs. 19,82,515/-.
Since, the turnover of the appellant is less than the limit mandated for audit of accounts u/s 44AB of the Act, the appellant was not required to maintain any books of accounts or explain the expenditures thereof. Hence, no addition is warranted on account of the business of the appellant.
The Ld. AO is directed to delete the impugned addition of Rs. 17,24,000/-.
The ground of appeal no.3 is allowed.
Ground No.4:- The ground of appeal is account of addition of Rs. 18,00,000/- u/s 68 of the Act which is unsecured loan received from Sh. Mohanlal Sharma by the appellant.
The cash credits received from Sh. Mohanlal Sharma have already been included for addition u/s 68 of the Act by the Ld. AO. The same has been again added to the income of the appellant by the Ld. AO making it a double addition. The addition hence made by the Ld. AO is unsustainable and is directed to be deleted.
The ground of appeal no.4 is allowed.
Ground No.5: The ground of appeal is account of addition of Rs. 10,00,000/- u/s 68 of the Act which are sundry creditors of the appellant.
The sundry creditors are nothing but unexplained cash credits which have already been included for addition u/s 68 of the Act by the Ld. AO while making the addition of Rs.2,56,03,777/- The same has been again added to the income of the appellant by the Ld. AO making it a double addition. The addition hence made by the Ld. AO is unsustainable and is directed to be deleted.
The ground of appeal no. 5 is allowed.
Ground No.6 : The ground of appeal is account of addition of Rs. 15,35,337/-by the Ld. AO u/s 56(2)(vii)(b)(ii) of the Act.
From the assessment order, it is seen that the impugned addition has been made on account of purchase consideration being less than the value adopted by sub