PRAFULLA KUMAR BIDHARA,BHUBANESWAR vs. ITO, WARD 5(1), BHUBANESWAR, BHUBANESWAR

Shri S. K. Sarangi, AR represented on behalf of the assessee and Shri Shakeer Ahamed, Sr. DR represented on behalf of the revenue. was submitted by the ld. AR that there are three issues in the appeal of the assessee. The first issue is regarding advance received on the agricultural land which was ancestral property owned by the assessee. It was the submission that the assessee has received Rs.64,50,000/- from five persons. It was the submission that the statements have been recorded from the said five persons in the course of original assessment proceedings. The ld. AR drew our attention to the statements recorded from Prafulla Kumar Bidhar on 21.03.2014, Sashi Bhusan Harichandan on 18.03.2014, Bimal Kumar Rout on 18.03.2014, Rabindra Rout on 18.03.2014. The statements recorded read as follows:

In reply, the ld. Sr. DR submitted that though admittedly all the five persons have confirmed the transaction but they have not given the source of their money for giving advance. It was the submission that in the absence of the assessee to prove the source of the source, the addition is liable to be upheld.

We have considered the rival submissions. A perusal of the fact of the present case clearly shows that the persons who have given the advance have confirmed the transaction and also have given the details of all the payments. It is also evident that the statements were recorded by the Assessing Officer at the office of the Assessing Officer. These are not identical printed out statements produced by the assessee. The persons who have given the advances have given statements before the Assessing Officer and also agreed of paying the amount. The Assessing Officer has not asked any question regarding the source. Just because the Assessing Officer does not feel convinced, the additions cannot be made. The persons have admitted to the transactions which was very much available to the Assessing Officer and if he has any doubted with regard to the source, he can assess those individuals. The assessee has discharged its responsibility in providing the name and addresses and also the persons before the Assessing Officer and the persons have also confirmed the transaction. The onus now shifts to the revenue and the same has not been discharged by the revenue. This being so, the additions as made by the Assessing Officer and confirmed by the ld. CIT(A) of Rs.64,50,000/- stands deleted.

It was submitted by the ld. AR that the second issue is against the addition made by the Assessing Officer in regard to the advance for the construction of Boundry wall to the extent of Rs.16,88,000/-. It was fairly agreed by the ld. AR that the assessee had given the list of the persons from whom he has received this amount in the course of original assessment and the same is recorded in the original assessment at page 7. It was the submission that now it is a very old matter and the assessee is unable to produce any further evidence.

In reply, the ld. Sr. DR submitted that the assessee is unable to produce the details and the addition is liable to be confirmed.

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the Assessing Officer has treated this amount of Rs.16,88,000/- as advance of construction of boundry wall. This being so, considering the fact that the assessee is in the business of construction of real estate and that the Assessing Officer has also in other transaction assessed the income of the assessee at 8%, therefore, the Assessing Officer is directed to assess the income of the assessee at 8% of the amount of Rs.16,88,000/-. This ground of the assessee stands partly allowed.

It was the submission that the third issue is with regard to addition of Rs.17,00,000/- relating to cash withdrawal and deposits in the bank account. The ld. AR drew our attention to the cash flow statement at annexure-4 of the paper-book. It was the submission that this was the amount drawn from the bank account of the assessee and re-deposited. It was prayed that no addition is called for.

In reply, the ld. Sr. DR vehemently supported the order of the ld. CIT(A).

We have considered the rival submissions. As it is noticed that the said amount represents the amount which has been withdrawn from assessee’s bank account and again re-deposited. We are of the view that no addition on this count is liable to be sustained. Thus, the addition of Rs.17,00,000/- stands deleted. Thus, this ground of the assessee is allowed. appeal filed by the assessee against the penalty u/s 271(1)(c) for the assessment year 2011-12. It was submitted that out of the three additions made, the Tribunal has confirmed only an addition @8% of the advance in regard of boundry wall. It was prayed that it is estimated addition, no penalty is liable.

In reply, the ld. Sr. DR supported the orders of the Assessing Officer and ld. CIT(A).

We have considered the rival submissions. A perusal of the facts of the present case clearly shows that in the quantum appeal, the Tribunal has confirmed the addition @8% only on advance for construction of boundry wall. It is admittedly an estimated addition and the other two additions have been deleted. On estimation addition, no penalty is liable. This being so, the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A) stands deleted.