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Income Tax Appellate Tribunal, BANGALORE BENCH ‘B’, BANGALORE
Before: SHRI A.K.GARODIA, AM (SMC)
This is assessee’s appeal directed against the order of the ld.
CIT(A)-7, Bangalore dated 31-05-2013 for the assessment year 2011- 12.
The assessee has raised the following grounds:
“1. The ld. AO has erred in passing the order in the manner passed by him and the ld.CIT(A) has erred in confirming the same, the orders passed being bad in law and are liable to be quashed.
2. In any case, the ld,. AO has erred in making the additions to the income returned by the appellant and the ld. CIT(A) has erred in confirming the same. On proper appreciation of the facts of the case and the law applicable the additions as made/sustained are to be deleted.
3. The ld. AO had erred in adding a sum o Rs.1,45,000/- holding that the appellant had failed to prove the source for investment in purchase of property to that extent and the ld.CIT(A) has erred in confirming the same. On the facts and circumstances o th3e case and the law applicable, the investment in property is duly sourced and such source is explainable. The addition as made/sustained is totally on erroneous premise and is to be deleted. 4. The ld. AO had erred in making an addition of Rs.7.50 lakhs being the amount of realization from debtors u/s 68 of the Act and the ld. CIT(A) has erred in confirming the same on the ground that nature and source of the said sum remained unverified and unexplained. There is no unexplained cash credit at all. The amounts were realized from debtors. The conclusion drawn y the authorities below being contrary to facts and law is to be disregarded and the addition as made/sustained is to be deleted. 5. In view of the above and on other grounds to be adduced at the time of hearing it is requested that the impugned order be quashed or at least the additions
made/sustained be deleted and income as returned be accepted”.
It was submitted by the ld. AR of the assessee that on page-28 of the paper book is complete list of 16 persons to whom the amount was given by the assessee and the amount lying outstanding as receivable on 31-03-2010 was Rs.11.40 lakhs. He also submitted that confirmations of six persons are available on pages 58 to 63 of the paper book who had appeared before the AO in this connection. Thereafter, he submitted that on page-75 of the paper book is the balance sheet of the assessee for the year ending 31-03-2010 in which the debtors appearing on asset side is at Rs.1,269.398/-. Thereafter, he submitted that the submissions of the assessee that out of this amount, some money was received back by the assessee in the present year and this money was used for acquiring the property in question. But, in spite of full details given to the AO, he has issued summons only to six persons as noted by him as per para-3 of the assessment order and out of these six persons from whom an amount of Rs.5.20 lakhs was received back by the assessee, he has made addition only of Rs.1.45 lakhs on this basis that one person has denied the transaction of Rs.1.10 lakhs and one person has confirmed only Rs.0.15 lakhs as against the claim of the assessee that he has received Rs.0.50 lakhs from this person. He submitted that since no summon was issued to the remaining persons for which addition of Rs.7.50 lakhs was made by the AO and confirmed by the ld.CIT(A), the entire matter may be restored back to the file of the AO for fresh decision after issuing summons to all these persons. As against this, the ld. DR of the revenue supported the order of authorities below. She also submitted that even if the matter is restored back to the file of the AO for fresh decision in respect of the addition of Rs.7.5.0 lakhs, the addition of Rs.1.45 lakhs should be confirmed because these two persons were already examined by the AO and the assessee was given an opportunity of cross examination also.
I have considered the rival submissions. I find force in the submissions of the ld. AR of the assessee that in respect of addition of Rs.7.50 lakhs, the matter should be restored back because when the AO issued summons to six persons and out of these six persons from whom the assessee had received Rs.5.20 lakhs against re-payment of earlier advances by the assessee to these persons and they have accepted the explanation in respect of four persons in full and one person is part, the AO should have issued summons to the remaining 10 persons also if the AO wanted further evidence. Hence, I set aside the order of the ld. CIT(A) regarding this addition of Rs.7.50 lakhs in respect of 10 persons and restore this matter back to the file of the AO for a fresh decision after issuing summons to those 10 persons and after verifying from them regarding the claim of the assessee and if these persons deny then, he should provide an opportunity of cross examination to the assessee and then decide the matter.
Regarding the addition of Rs.1.45 lakhs in respect of two persons of Rs.1.10 lakhs and Rs.0.35 lakhs, I find that these two persons have duly appeared before the AO and one person Shri Vittal Rao has denied the transaction of Rs.1.10 lakhs claimed by the assessee and one person Md.Iqbal Babu confirmed the transaction of Rs.0.15 lakhs as against the claim of the assessee that there is a transaction of Rs.0.50 lakhs with this person. It is also noted by the AO in Para- 2.5 of the assessment order that the ld. AR of the assessee was provided an adequate opportunity of cross examination and in cross examination also, the stand of these two persons were same. No further evidence have been filed by the assessee before the AO or before me and hence, in respect of addition of Rs.1.45 lakhs, I find no infirmity in the order of the ld. CIT(A) and the same is confirmed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on the date mentioned in caption page.