CHANDRA MOHAN BADAYA,JAIPUR vs. DCIT, CENTRAL CIRCLE , AJIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR

Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k
BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 1054/JP/2024
fu/kZkj.k o"kZ@Assessment Years : 2013-14
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEPPB8451D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. S. L. Gupta, CA jktLo dh vksj ls@ Revenue by : Sh. Anoop Singh, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing

: 29/01/2025

mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 12/02/2025

vkns'k@ ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM

The present appeal is because the assessee dissatisfied with the order of the Commissioner of Income Tax (Appeals), Jaipur -4 dated
19.06.2024 [here in after ld. CIT(A) ] for assessment year 2013-14. The said order of the ld. CIT(A) arise as against the order dated 30.12.2018
passed under section 143(3) r.w.s 153A of the Income Tax Act, by DCIT,
Central Circle-02, Jaipur.

2
2. In this appeal, the assessee has raised following grounds: -
1. The Ld. CIT Appeal AO has erred on fact law in law in upholding the addition of Rs.4,31,000/- on account of unexplained investment in purchase of agricultural land without considering the fact that the payment made by post dated cheque as mentioned in the registry but subsequently paid in cash on the date of cheque and cheque was not cleared. The payment was duly recorded in the books of accounts.

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Chandra Mohan Badaya vs. DCIT for an amount of Rs. 1,37,500/- as unexplained investments in purchase of plot of land at Chaksu. The relevant observations of the Assessing Officer while making the addition reads as under:-
7.14. SCN no Query no. 15:
The assessee has been found indulged in purchase of immovable properties in his prop. concern namely M/s A. R. Properties & Colonizers as well as sister concerns namely M/s Fortune Real Estates and M/s Laxmi Kripa Real
Estates Pvt. Ltd. Accordingly the assessee vide show cause notice dated 01-10-
2018 asked to furnish the source of investment. In the reply the assessee submitted that "In Point No. 15 of the show cause notice details of various properties purchased by the assessee and his concerns are noted. All these properties are duly recorded in regular books of accounts for which the conveyance deed is enclosed. The source of purchase of these properties is reflected in the books of accounts produced herewith and these properties are duly reflected in books of accounts of the related person. Copy of relevant ledger account enclosed herewith"

The reply of the assessee considered however same is found partly correct and investment in following immovable properties not found explained which is discussed as under:

(a) Agriculture land Khasra No 1726, Village Badli, Patwar Halka Badli, Kothun,
Teh. Chaksu, Jaipur: This land was purchased by the assessee on 30-07-2012
relevant to AY 2013-14 from Shri Ramsawroop. As per the sale deed payment of Rs. 4,31,000/- was paid through cheque and cash. The detail of which as under:

p ua@udn fnukad jkf'k cSad udn
06-03-2012
81]000@&

906955
27-12-2012
1]17]000@&
bUVhxzy vjcu dkW&vkijsfVo Csakd fy0’kk[kk nhukukFk th dk jkLrk] t;iqj
906956
27-05-2013
1]16]000@&
mDr
906957
27-10-2013
1]17]000@&
mDr dqy
4]31]000@&

However on verification the assessee could not furnished copy of bank statement of Integral Urban Corporative Bank limited, Jaipur from which the payment has been shown in the sale deed. Hence, it is quite evident that no such 4
Chandra Mohan Badaya vs. DCIT payment has been paid by the assessee through cheque as mentioned in the sale deed and all the transaction was paid through cash only and the detail mentioned in the sale deed is nothing but a coloring device to dupe the Department. Hence, the investment to the extent to Rs. 431000/- has been made by the assessee from his undisclosed income on the date of registration of sale deed i.e. 30-07-2012 and same is undisclosed investment of the assessee u/s 69
of the IT Act for AY 2013-14. (b) Plots at Surendra Nagar, Chaksu: The assessee has also purchased immovable property at plot no. 10, Surendre Nagar, Chaksu from smt. Bhagvati
Saini in his prop. concern A.R. Properties and Colonizers through a agreement dated 12-11-2012 for the consideration of Rs. 137500/-. However, on perusal of bank statement it is noticed that assessee has deposited cash of Rs. 1,50,000/- on 29-10-2012 and Rs. 1,00,000/- on 1-11-2012 in the bank account just before the payment of Rs. 55000/-, Rs. 55,000/- and Rs. 27500/- to the seller on 09-11-
2012 and 12-11-2012. Since, the assessee could not explain the source of cash deposited in the bank before payment to acquire the aforesaid property. Hence the same is held a unexplained investment of Rs. 137500/- u/s 69 of the I.T. Act for AY 2013-14. In view of the above total sum of Rs. 568500/- (Rs. 431000/- plus Rs. 137500/-) is held undisclosed investment u/s 69 of the I.T. Act for AY 2013-14. 4. Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:
Finding of ld. CIT(A) on unexplained of Rs. 4,00,000/-
AO u/s 69 of the Act.

Accordingly, this ground of appeal is hereby dismissed.

Finding of ld. CIT(A) on unexplained of Rs. 1,37,500/-

Even though it is held in the assessment order that the cash deposits are unexplained, surprisingly even in the appeal proceedings the appellant has not tried to explain the sources of said cash deposits. Further on the issue, the appellant has not submitted the copy of cash book for the period. It is also not verifiable whether the entries of cash deposit in bank account are recorded in the cash book or not. Further, from where the cash came with the appellant is also concealed by the appellant. The status of the books of accounts has already been discussed in the earlier ground of appeal wherein these books have been found to be unreliable and have been rejected.

In view of the above discussion the sources of the payment of the property in question remain unexplained as the banking channel payment is merely a layer as the sources are from the cash which was deposited in the bank account immediately before the making of these cheque payments by the appellant.
Accordingly, the addition made in the assessment order is hereby upheld and the appeal of the appellant on the issue is hereby dismissed.

Our submission:

GOA 1:

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Chandra Mohan Badaya vs. DCIT does not arise. The fact is verifiable from following document attached herewith as submitted during course of assessment proceeding:
• Copy of conveyance deed for purchases of land(page 1-7)
• Ledger account of purchases in books includes purchases of this land at cost
431000(page8)
• ledger account of seller Sri Ram Swaroop Gurjar with details of payment made against purchases in cash(page9)
•
Copy of cash book of relevant period for verification of payment made accounted in regular books(page 10-11)
•
ITR,Balance sheet and trading and profit and loss account, capital account.(Page 14-20)

Hence no addition can be made. As submitted above your honor is requested to kindly accept the appeal and delete the addition made.

S.No.
Particulars
Page No.
Before
AO/CIT(A)
1
Copy of sale deed from Ramswaroop
1-7

2
10-12

5
Copy of account of Bhagwati
13

Copy of bank account of relevant period of payment made to Bhagwati
14

Copy of ITR,Computation, balance sheet, profit and loss account
15-20

Copy of relevant page of show cause notice by A.O
21

10
7. The above purchase break up also filed by the assessee by filing the purchase account which reads as under:

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8. On the other hand, ld. DR relied upon the orders of lower authorities and vehemently argued that source of investments made by the assessee is the cash deposited by the assessee in his bank account and therefore, the investments so made by the assessee is correctly added in the hands of the assessee as unexplained investments and thereby, the ld. DR supported the orders of lower authorities praying therein to dismiss the appeal of assessee. The ld. DR also filed a detailed report of the ld. AO dated 24.01.2025 on the appeal filed by the assessee commenting on the grounds raised by the assessee. The report of the ld. AO reads as under :

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Sub:- In the appeal matter pending before the Hon'ble ITAT, Jaipur in the case of Sh.
Chandra Mohan Badaya Jaipur (PAN:-AEPPB8451D), ITA No. 1054/JPR/2024 for A.Y.
2013-14 - regarding

Sir,

Kindly refer to your good office letter no. 987dated 13.01.2025 on the above mentioned subject.
The requisite comments are as under: The Ground of appeal
(i) The Ld.CIT Appeal and AO has erred on fact law in law in upholding the addition of Rs.4,31,000/- on account of unexplained investment in purchase of agriculture land without considering the fact that the payment made by post dated cheque as mentioned in the registry but subsequently paid in cash on the date of cheque and cheque was not cleared. The payment was duly recorded in the books of accounts.

Comments of A.O -Agriculture land Khasra No 1726, Village Badli, Patwar Halka Badli, kothun, Teh. Chaksu, Jaipur: This land was purchased by the assessee on 30-07-2012
relevant to AY 2013-14 from Shri Ramsawroop. As per the sale deed (Paper book Page no 5)payment of Rs. 4,31,000/- was paid through cheque and cash. The detail of which as under:

The assessee has claimed that payments through cheques mentioned in sale deed were not actually made through bank account but made in cash and in this regard the assessee has furnished copy of cash book.

The assessee has furnished the copy of ledger account of Ramswaroop (paper book page no.9). From the ledger account of Ramswaroop Gurjar, it is seen that the purchase

13
Chandra Mohan Badaya vs. DCIT was done on the date of 30.07.2012, however the payments have been done much later. Payment of Rs. 1,17,000 is shown by the assessee on the date of 27-12-2012
which is the after a period of 5 months from the date of purchase. Further the payment of Rs. 1,16,000 is shown by the appellant on the date of 09-05-2013 which is after a gap of more than 9 months from the date of purchase of land. Final payment of Rs. 1,17,000
has been shown by the appellant on the date of 27.10.2013 which is after a gap of 15
months after the date of purchase of the property. These are very unlikely and natural and improbable way of payments. Firstly, why the purchaser would return the cheques?
The appellant is completely silent on that. Secondly, even if the purchaser is returning the cheques, in the normal scenario he would have insisted to take the complete cash payment immediately at the time of returning of cheques otherwise there is no security left with him and further there is no reason why he should delay the receipt of payment.
The appellant has submitted the cash book of Dec. 2012(paper book page no. 10) which is having 12 entries & March 2012 (paper book page no. 11) which is having 6 entries.
The appellant has shown an opening balance of Rs. 10,05,857/-as on 01.12.2012 and Rs 4,43,082/-on 01.03.2012 however the rearenomeans to find out whether this is genuine or not and what kind of transactions are shown in the cash book in the earlier months as the complete cash book is not submitted by the appellant for the year. The books of accounts were prepared by the appellant after the scarch and seizure action and are not audited. Further the appellant has not maintained such kind of ledger or cash books on a regular basis for all the years. Therefore, genuineness of the extract of cash book furnished by assessee reflecting cash payment made to Sh. Ramswaroop
Gurjar is not proved and the sources of payments remains unexplained and the explanation submitted by the appellant is not acceptable.

(ii) The Ld.CIT(A) has further erred on fact and in law in upholding the additions of Rs.1,37,500/- on account of unexplained investment in purchase of plot of land at Chaksu without considering the facts that the payment is duly made by cheque and recorded in the regular books of accounts.

Comments of A.O. The assessce made purchases of property at plot no 10 Surender
Nagar, Chaksu fiom Smt. Bhagwati Saini in proprietory concem of assessee M/S A.R.
Properties and colonizers through agreement dated 12-11-2012 at cost Rs 137500. The assessee claimed that payment has been made by account payee cheque and these cheque were en-cashed as under:

09-11-2012 PNI 55000

12-11-2012 INR 55000

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17-12-2012 PNB 27500

Copy of account of seller and bank account of relevant period submitted byappellant
(Paper book page no.13& 13) Appellant submitted bank statement only for transaction period. As on 01.11.2012 opening balance is Rs. 1,79,004 82/- but assessee has not given earlier bank statement so as to verify the source of this payment

However, it is noticed on perusal of order of Ld.CIT(A) that it is found from the bank statement that the appellant deposited cash of Rs.1,50,000 on the date of 29.10.2012
and the closing bank balance on the dite of 02.11 2012 is nearly the same which is Rs.
1,56,001. Then again, the appellant deposited cash of Rs. 1,00,000 on the date of 08.11.2012 and the closing balance as per bank statement is Rs. 2,56,001. Then out of these, the appellant made a cheque payment of Rs: 1,10,000 (two each of Rs. 55,000
on the date of 09.11.2012 and 12.11.2012) for the property. li is clear that the source of the payment for the property is from the cash deposited in the bank account a few days before the payment was made by the appellant to the seller of the property. Thus payment from the bank account is only a layering inserted for the cash which was deposited in the bank account. Indirectly the payment has been made by the appellant out of the cash which was deposited in the bank account. The assessee has not explained the source of cash deposit in the bank account, from which payment was made through bank account. Therefore, the source of payment made by assessee through bank account is not explained and claim of the assessee is not found acceptable.

Report submitted for kind perusal and necessary action.

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Chandra Mohan Badaya vs. DCIT to avoid the duplication. The bench that the contention of the ld. AO and that of the ld. CIT(A) was that while making the investment in the property the assessee has deposited the cash into the bank account and that is why the investment made by the assessee was considered as unexplained investment. The investment so made is duly reflected in the accounts of the assessee as stated herein above and is supported by an entry passed in the books of accounts. The income against which the assessee made an investment is duly recorded in the books of accounts which were not disputed and therefore, disputing the investment merely on the grounds that the assessee has deposited cash into the bank account as the immediate source of making the investment. If the revenue really considered the income as unexplained that they could have made the addition as unexplained credit but once the credit is not considered as unexplained the investment so made from the entry passed in the books of account cannot be added u/s. 69 as unexplained investment. Before us also the ld. AO did not dispute the fact that the assessee has paid the money through banking network but disputed the fact that the assessee deposited cash into the bank account before giving the cheque for investment. The ld. AO did not offer the comment as to the source of credit already reflected in the books of account if at all addition is required to be made it should have been made

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Based on this observation ground no. 1, 1.1, 2 & 2.1 raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 12/02/2025. ¼ Mk0 ,l- lhrky{eh ½
¼ jkBksM deys'k t;UrHkkbZ ½
(Dr. S. Seethalakshmi)
(Rathod Kamlesh Jayantbhai)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 12/02/2025
*Ganesh Kumar, Sr. PS
आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
1. The Appellant- Sh. Chandra Mohan Badaya, Jaipur
2. izR;FkhZ@ The Respondent- DCIT, Central Circle, Jaipur
3. vk;dj vk;qDr@ The ld CIT
4. vk;dj vk;qDr¼vihy½@The ld CIT(A)
5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत
6. xkMZ QkbZy@ Guard File (ITA No. 1054/JP/2024) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत