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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 873/JP/2019
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR MkWa- ,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, AM vk;dj vihy la-@ITA. No. 873/JP/2019 fu/kZkj.k o"kZ@Assessment Years : 2007-08 ACIT, cuke Shri Madan Lal Meena S/o Shri Ram Lal Meena Vs. Circle-2, Kota. Village- Manpura, Kota. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAHPL 3510 D vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya (Adv.) jktLo dh vksj ls@ Revenue by : Ms. Runi Pal (Addl.CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 26/07/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 29/08/2022
vkns'k@ ORDER
PER: DR. S. SEETHALAKSHMI, J.M. This appeal by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals)- Kota, [hereinafter referred to as ‘CIT(A)’] dated 25.03.2019 for the Assessment Year 2007-08.
The assessee has raised the following grounds:- “1. The impugned order u/s 147 r.w.s. 143(3)/263 dated 31.08.2015 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence the same may kindly be quashed and in any case, the impugned addition/s be deleted.
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2.The very action taken u/s 147 is bad in law without jurisdiction and being void ab-initio, the same kindly be quashed. Consequently, the impugned assessment framed u/s 147 r.w.s. 143(3)/263 dated 31.08.2015a1so kindly be quashed. 3.Rs. 16,00,000/-:The ld. CIT(A) further erred in law as well as facts of the case in confirming the addition made by the AO on account of alleged deposit of Rs. 16,00,000/- in Bank Account u/s 68 of the Act. The addition so made and confirmed being contrary to the provisions of law may kindly be deleted in full. 4.The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B85234C of the Act. The appellant totally denies its 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. 5.The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.
The assessee has raised the additional grounds:-
"5.1 Rs. 16,00,000/-: The ld. CIT(A) erred in law as well as facts of the case in confirming the addition made by the AO on account of taxing the gain arising from the sale of agricultural land as Short- Term Capital Gain, ignoring the fact that it was patently case of Long-term Capital Gain and the assessee was entitled to the exemption u/s 54B. The addition so made and confirmed being contrary to the provisions of law and facts may kindly be deleted in full.
5.2 Alternatively and without prejudice to the above, the Ld. CIT(A) erred in law as well as on the facts of the case not deciding the ground by alleging that the same did not arise from the present appellate order hence, was not admissible. The same ground of appeal, when taken while filing appeal against the Assessment Order u/s 147/ 143(3) dated 14.03.2013 was rejected by the Ld. CIT(A) vide his earlier order dated 27.12.2016 Thus, the appellant has been completely denied the right of appeal and hearing by merely going into the technicalities. Hence, the Ld. CIT(A) kindly be directed suitably.
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6.1 The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the impugned addition made by the AO of Rs. 5,46,808/- u/s 68 of the Act as unexplained cash credit ignoring the legal position and the facts available on the record. The addition so made and confirmed being contrary to the provisions of law and facts may kindly be deleted in full."
6.2 Alternatively and without prejudice to above, the Ld. CIT(A) erred in law as well as on the facts of the case not deciding the ground by alleging that the same did not arise from the present appellate order hence, was not admissible. The same ground of appeal, when taken while filing appeal against the Assessment Order u/s 147/ 143(3) dated 14.03.2013 was rejected by the Ld. CIT(A) vide his earlier order dated 27.12.2016. Thus, the appellant has been completely denied the right of appeal and hearing by merely going into the technicalities. Hence, the Ld. CIT(A) kindly be directed suitably.”
Brief facts of the case are that assessee is an individual who mainly derives his income from agricultural activities. During the year under consideration i.e. A.Y. 2007-08 the appellant did not file ROI as his income was below taxable limit. Proceedings u/s 147 of the Income Tax, 1961(hereinafter referred to as the Act)were initiated by issuing notice u/s 148 on 28.03.2012 and assessment u/s 147/ 143(3) of the Act was completed on dated 14.03.2013 at the total income of Rs. 25,58,310/-. The additions made therein were on account of income under the head of Short Term Capital Gain (on the sale of agricultural land) Rs. 20,00,000/-, Unexplained Cash Credits made in the bank account u/s 68 of the Act. Rs. 5,46,808/- and Income from other sources Rs. 11,505/-, totaling to Rs. 25,58,313/-. Thereafter, the Pr. CIT acting u/s 263 of the Act vide order dated 30.03.2015 set aside the assessment order dated 14.03.2013 and directed the AO to frame a (fresh)re-assessment
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Order. Accordingly, a fresh Assessment Order u/s 143/263 was passed on 31.08.201 (under challenge)where under the Assessing Officer repeated the all additions of Rs. 25,58,313/- (Rs. 20 Lakh + Rs. 5,46,808 + Rs. 11,505/- as per the original Assessment Order u/s 147/143 dated 14.03.2013)and also made a new addition of Rs. 16 Lakh being the amount of loans received from his various family members of Sukhvinder Singh as was directed by the Pr.CIT in its order u/s 263.
On the other hand, aggrieved by the (initial) Assessment order dated 14.03.2013 u/s 143/147, the assessee filed first appeal wherein the ld. CIT(A) vide its order dated 27.12.2016 (PB 100-12) declared the appeal as infructuous, while not deciding any grounds of the appeal separately.
Further, against the impugned reassessment order dt 31.08.2015, where the ld. AO repeated all the additions made in the earlier order of the Rs. 25, 58,313/- and the new addition of Rs.16 lac totaling to Rs. 41,58,313/-, the assessee came in appeal, challenging all the four addition, which was decided by the ld. CIT(A) vide order dt 25.03.2019 (under challenge). The ld. CIT(A) rejected all the grounds. The three grounds relating to the additions made in the earlier order were dismissed holding that they were not arising from the assessment order under the appeal and were not admissible (at page 7-8 of the appellate order). The addition of Rs. 16 lac was also confirmed for the reasons stated in his order. Hence, this appeal. 7. The AO arrived the findings in the year under consideration, the assessee has deposited Rs. 16,00,000/- in his bank account on 28.04.2006. During the assessment proceedings, the assessee was asked to explain the source of above deposit. In reply, assessee has stated that he has taken loan of Rs. 16,00,000/- from the Sukhvinder Singh, to verify the genuineness of the
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transaction, vide this office letter dated 31.07.2015 the assessee was asked to produce confirmation documents and present shri Sukhvinder Singh with complete details of his identity, proof of genuineness of transactions by him and proof of credit worthiness of Shir Sukhvinder Singh, in response to above, the assessee neither filing any confirmation certificate nor presenting Shri Sukhvinder Singh in his reply written on dated 26.08.2015, has stated that- “As mentioned in our earlier letter that assessee has taken loan of Rs. 16,00,000/- from Sukhvinder Singh on dated 28.04.2006 through Account Payee Cheque. Since matter was very old and the Sukhvinder Singh has left the Kota along with his family it is not possible to produce any confirmation in this regard.” Since, the assessee has failed to present Shir Sukhvinder Singh and not produce identity, credit worthiness, genuinely confirmation, details etc. of the Sukhvinder Singh. It seems that the said amount Rs. 16,00,000/- was of the assessee and assessee has deposited the said amount in the bank account of other person and shows loan taken from Shri Sukhvinder Singh by cheque. Therefore, this amount Rs. 16,00,000/- treated the deemed income u/s 68 of the I.T. Act, 1961, a loan as cash credits of the assessee from the undisclosed sources and added to the total income of the assessee. The assessee has concealed particulars of his incomes hence penalty proceedings has been initiated separately by issuing notice u/s 271(1)(c) of the I.T. Act, 1961. With the above discussion, total income of the assessee is recomputed as under:- Total income as per order u/s 147/143(3) dated 14.03.2013 Rs. 25,58,313/- Add: Undisclosed income as discussed above Rs. 16,00,000/- Total income Rs. 41,58,313/- Rounded off Rs. 41,53,310/-
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Assessed at total income of Rs. 41,58,310/- issued, demand notice and challan. Charged interest u/s 234A, 234B, & 234C as per Income Tax act, 1961. Penalty notice 217(1)(c) issued separately for filing the inaccurate particulars of income, thereby concealing the true particulars of his income.
Being aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee has reiterated its arguments. The ld. CIT(A) for the reasons stated in his order has rejected the arguments and submissions made by the assessee.
Aggrieved by the CIT(A) order, the assessee is in appeal before us. Before the CIT (A), the assesee has reiterated that his submissions, which was not taken on record by the CIT (A). Before us the ld. AR for assessee submitted a detailed written submissions which are as under:-
“1.Initial onus stands duly and fully discharged:
1.1It is submitted that it is only initial onus, which lay upon the assessee to prove the identity and the capacity of the creditor and the genuineness of the transaction and once this initial onus is discharged, it shifts to the ld. AO to rebut/disprove the same for making a valid addition u/s 68. Kindly refer CIT v/s Shree Barkha Synthetics (2003) 182 CTR 175 (Raj), Shanker Industries v/s CIT (1978) 114 ITR 689 (Cal) and First Point Finance Ltd (2006) 286 ITR 477 (Raj).
1.2.1 Identity Established: In the present case the facts are not denied that the assesse had alreadysubmitted Affidavits (duly notarized and attested) of Mr. Sukhvinder Singh and theother threecreditors as also their identity proof (Aadhar Card, Voter ID etc.)and copies of jamabandi(PB 1-20) which is the best evidence to prove the identity of a Creditor. Moreover, the aforementioned loans of Rs. 16,00,000/- were taken through account payee cheque only and also returned through account payee cheque only.Thus, their identity is fully established.
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1.2.2 Genuine Transactions: The genuineness of the transaction is fully established in as much as all the borrowings were made through account payee cheque only.Assessee in his Written Submissions dated 03.08.2017also mentioned that he has taken the loans for purchase of agriculture land and after receiving the sale proceeds he returned the amount taken on loan. All the transactions were through account payee cheque and there should be no doubt regarding genuineness of the transaction. (PB 86-87). It is not the case of the revenue that the borrowing was made in cash so as to justify any suspicion thereto.
1.2.3 Capacity Proved: It is submitted that all the creditors belong to the old family of the Jamindars farmers and they were having large number of land holdings carrying out agricultural activities having huge net agricultural income of Rs. 4-6 lacs per annum. This is only the current years income but in the past since several years, they are in the receipt of huge agricultureincome., stood accumulated over a period of time as past savings and were available for onward investment/use. In their respective affidavits they catgorily owned the subjected amount of loan and also affirmed having given the same to the assesse, with the further assertion of receiving back the loan so given. An at a glance chart of various creditors is enclosed herewith as Annexure A
Pertinently, all the copies of the affidavits along with land holdings- jamabandi were forwarded by the ld. CIT(A) to the ld. AO. However, the AO did not at all adversely comment on the creditworthiness or otherwise. Thus, the creditworthiness of the Creditors, also stands fully established in as much as the copies of jamabandi were furnished with the affidavits.
Source of source cannot be asked:
2.1 The ld. CIT(A) rejected the confirmations and the affidavits and wanted to go deeper in the aspect of the source of source. Whereas, the law is trite that the AO cannot ask the source of source.
2.2 Supporting Case Laws:
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2.2.1Kindly refer Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.)(DPB 1-6)held that
“Cash credit- burden of proof- identity of the creditors established and the confirmed the credit. This discharged the burden of appellant to prove genuineness. However, capacity of the lender to advancement money to appellant was not a matter which the appellant could be required to establish and that would amount to calling upon him to establish the source of source. Hence addition cannot be sustained.”
2.2.2 In Aravali Trading Co. v/s ITO (2008) 8 DTR 199 (Raj) (DPB 7- 13)held that:
“Once the existence of the creditors is proved and such persons own the credits which are found in the books of the appellant, the appellant’s onus stand discharged and the latter is not further required to prove the sources from which the creditors could have acquired the money deposited with him and, therefore the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the appellant itself.”
2.2.3 CIT v/s Jai Kumar Bakliwal (2014) 101 DTR 377(Raj.). The Hon’ble court held as under: “18. The logical interpretation will be that while the petitioner assessee has to prove as special knowledge i.e. from where he has received the credit and once he disclosed the source from which he has received money, he must also establish that so far as his transaction with his creditor is concerned, the same is genuine and his creditor had the creditworthiness to advance the loan which the petitioner assessee had received. When the petitioner assessee discharges the burden so placed on him, onus then shifts to the AO, if the AO assesses the said loan as the income of the petitioner assessee from undisclosed source he has to prove either by direct evidence or indirect/ circumstantial evidence that the money which the petitioner assessee received from the creditor actually belong to and was owned by the petitioner assessee himself.
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If there is direct evidence to show that the loan received by the petitioner assessee actually belong to the petitioner assessee, there will be no difficulty in assessing such amount as the income of the petitioner assessee from undisclosed source but if there is no direct evidence in this regard, then the indirect or circumstantial evidence has to be conclusive in nature and should point to the petitioner assessee as the person from whom the money has actually flown to the hands of the creditor and then from the hands of the creditor to the hands of the creditor.” The ratio laid in these cases squarely apply to the facts of present case.
Failure to produce creditor not a valid basis of addition: 3.1The lower authorities repeatedly stressed upon the non-production of the creditors. However, they did not appreciate thatSukhwinder Singh and his family left Kota long back and they were not within the reach. It has to be appreciated that the lender always have upper hand whereas the bower (the assesse) a lower hand and is dictated by the lender. It’s a matter of common knowledge that after lapse of substantial time period ofaround 12 years, it is too much to expect from any person and equally too difficult for the asseesee to now produce the creditors in the re- assessment proceedings. Thus, it was an impossibility of performance.The authorities did not doubt such explanationwhen was dully submitted before them nor any facts contrary there to was bought on record. Once it is so, the authorities below could not have ignored the other directly relevant and cogent evidencesadmittedly available on the record. The very fact of receiving and repaying the amounts of loan through account payee cheque admittedly finding place in the same very bank statement which is under consideration and which is the starting point of the assessment proceedings, could not have been ignored so lightly, as the authorities below have done. In other words, if one of the evidence like non-production of the creditors, is absent, this does not ifco facto entitles the authorities to close their eyes towards the other evidences even though available and an evidence on record cannot be converted in no evidence.
3.2 On the other hand, the Ld. CIT(A), remanded the matter back to the AO to verify the confirmations with a direction to summon the creditors and also give opportunity to the assessee however, the AO did nothing. He neither summoned any creditor u/s 131 or otherwise nor he gave any
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opportunity to the assessee. On the contrary, he simply raised objection against the very admission of the additional evidences under rule 46A which request was however turned by the Ld. CIT(A). the department not having challenged this part of the order of the CIT(A), this aspect has attained finality. However, he did not comment anything adverse on the explanation furnished, on the contents of the affidavits and jamabandi etc, which implied that AO was satisfied with the explanation submitted u/s 68. Further, if the AO chose not to summon the creditors the evidences in the shape of affidavit, jamabandi, bank statement of the assessee fully established the assesse’s case and the impugned addition deserves to be deleted.
4.It is settled that in the cases where affidavits have been filed yet the contents thereof have not been rebutted by the AO, the facts mentioned therein have to be read as the facts binding upon the Income Tax authorities. Kindly refer Mehta Parikh & co. v/s ITO (1956) 30 ITR 181 (SC) followed by Jaipur and Jodhpur Benches of ITAT also in the cases of ITO v. Dr. Tejgopal Bhatnagar 20 TW 368 (JP) Paras Cotton Company vs. CIT (2003) 30 TW 168 (JD). However, in this case the averments made in the affidavits so filed, completely remained unrebutted and therefore, the AO and CIT(A) were bound by them.
5.Decision cited by department:Not applicable in as much as the same were rendered in different factual context not available in the present case. It is not demonstrated as to how the ratio laid in those case are applicable in the present case.
Thus in the light of the above submission, the addition of Rs. 16,00,000/- made u/s 68 of the Act should be deleted
Additional Grounds of Appeal - GOA: 5.1 to 6.2 : The Ld. CIT(A) at page 7 and 8 has dismissed these grounds merely saying that they did not arise from the assessment order under challenge before him and hence the same were not admissible. However, on the contrary a bare look upon the impugned Assessment Order dated
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31.08.2015, clearly shows that the AO started with all the three additions of Rs. 25,58,310/- made in the earlier Assessment Order u/s 147/143 dated 14.03.2013.The total assessed income of Rs. 41,58,313/- consisted of the same. Hence it can’t be said that these additions did not arise from the Assessment Order under challenge. Moreover, the Ld. CIT(A) in its order dated 27.12.2016(PB 99-102) against the earlier Assessment Order dated 14.03.2013 dismissed the appeal of the assessee holding the same to be infructuous in as much as the said assessment order does not stand in view of the set aside directions issued by the Pr. CIT, Kota while passing order u/s 263 to make Assessment De-Novo. Thus, the earlier assessment Order having been merged with the Reassessment Order passed u/s 147/143 r/w 263 dated 31.08.2015 (under challenge), all these grounds were available to the assessee and therefore the same were rightly agitated before the Ld. CIT(A). The Ld. CIT(A) therefore, was supposed to have adjudicated all the grounds taken before him relating to the addition of Rs. 16,00,000/- pertaining to Capital Gain and Rs. 5,46,808/- made u/s 68. Not having decided/adjudicated, the same may be kindly restored to the file of the CIT (A) for a decision afresh on these issues, after hearing the assesse.”
In first appeal the CIT(A) has confirmed the action of the AO by observing as under:- “As regards No. 5, related to the only addition made in the order u/s 143(3) rws 263, on the request of the appellant, the matter was referred to the A.O. to verify the confirmation filed in support of the credit of Rs. 16 lakhs on 20/12/2017. In response, the A.O. sent a report dated 11.01.2018 through joint CIT, Range-2, Kota after giving opportunity of being heard to the appellant. The report was received through Pr.CIT, Kota. In this said remand report, the A.O. has mentioned that in respect of the affidavits filed from various persons during the appeal proceedings were not admissible as not covered u/s 46A. A.O’s report vide letter dated 11.01.2018 as under:- mijksDr fo"k; ds lanHkZ esa fuosnu gS fd djnkrk Jh enu yky ehuk iq= Jh jkeyky eh.kk ¼AAHPL3510D½ fu/kkZj.k o"kZ 2007&08 dk fu/kkZj.k आदे’ा धारा 147 त.ू.े. 143¼3½ आयकर कानून 1961 के तहत दिनंाक 14-03- 2013 कायार्लय सहायक आयकर आयुक्त] व`त्त&2] काेटा के }ारा पास हुआ
12 ITA No. 873/JP/2019 Shri Madan Lal Meena FkkA fu/kkZj.k dk;Zokgh ds nkSjku fu/kkZfjfr dks bl dk;kZy; ds i= Øekad la-vk-vk-@o`Rr&2@dksVk@2015&16@225 fnuakd 31-07-2015 dks ,d i= iz’ukoyh ds lkFk Hkstk x;k FkkA ftlesa fu/kkZfjfr ls fnuakd 28-04-2006 dks :i;s 16]00]000@& ds ckjs esa iwNkk x;k FkkA fdUrq fu/kkZfjfr us fu/kkZj.k dk;Zokgh ds nkSjku bl i= dk tokc rFkk :i;s 16]00]000@& ds ysu nsu ds ckjs esa dksbZ Hkh Li"Vhdj.k@izek.k bl dk;kZy; esa izLrqr ugh fd;k FkkA tcfd vkids dk;kZy; ds i= Øekad vk-vk- ¼vihYl½@dksVk@2017&18@2189 fnuakd 20-12-2017 ds lkFk 'kiFk i=ksa ds }kjk fuEufyf[kr O;fDr;ksa ds }kjk lgk;rk ds :i esa nsuk crk;k x;k gS tks fd fuEu gS% 1- Jh lq[knhi dkSj ifRu Jh ve`r iky flag tkfr fl[k fuoklh xzke ekuiqjk rglhy ykMiqjk ftyk dksVk ¼jkt-½ ds }kjk :i;s 4]00]000@& t;sZ pSd ua-169718 LVsV cSad vkWQ ifV;kykA 2- Jh xq:nso flag iq= Jh vtk;c flag tkfr fl[k fuoklh xzke ekuiqjk rglhy ykMiqjk ftyk dksVk ¼jkt-½ ds }kjk :i;s 5]00]000@& t;sZ psd ua-382093 LVsV cSad vkWQ ifV;kykA 3- Jh lq[kfoanj flag iq= Jh gjusd flag tkfr fl[k fuoklh xzke ekuiqjk rglhy ykMiqjk ftyk dksVk ¼jkt-½ ds }kjk :i;s 5]00]000@& t;sZ psd ua-468681 LVsV cSad vkWQ ifV;kykA fu/kkZj.k dk;Zokgh ds nkSjku fu/kkZfjfr us fnuakd 16-06-2006 dks viuh ifRu Jhefr eksguh ckbZ ,oa iq= o/kq iq"ik ckbZ ds uke ls ds’kojk;ikVu esa :i;s 22]00]000@& esa ,d tehu [kjhnuk crk;k x;k gsA tks fd xzke ekuiqjk esa fLFkr iSf=d Hkwfe :i;s 20]00]000@& esa cspdj [kjhnuk crk;k x;k gSA fdUrq fu/kkZfjfr }kjk fopkj.kh; o"kZ ds nkSjku fu/kkZfjfr ds cSad [kkrs esa :i;s 41]87]000@& tek djok;s gSa rFkk fnuakd 16-06-2006 dks tehu [kjhnus gsrq 38]00]000@& :i;s cSad ls fudyok;s gSa tcfd fu/kkZfjfr us tehu dsoy :i;s 21]57]000@& esa [kjhnh gS rFkk cdk;k :i;s 16]43]000@& ds ckjs esa fu/kkZfjfr }kjk dksbZ Hkh nLrkost@Li"Vhdj.k bl dk;kZy; esa izLrqr ugh fd;s gSA bl laca/k esa fu/kkZfjfr }kjk fnuakd 26-08-2015 dks tokc izLrqr fd;k x;k ftlesa 16]00]000@& Jh lq[kfoanj flag ls _.k ysdj fnuakd 28-04-
13 ITA No. 873/JP/2019 Shri Madan Lal Meena 2006 dks vdkm.V is;h psd }kjk tek djokuk crk;k x;k gSA ¼i= layXu½ Jheku~ th ls fuosnu gS fd fu/kkZfjfr }kjk tks 'kiFk i= vkids dk;kZy; esa izLrqr fd;s x;s gSa og fu/kkZj.k dk;Zokgh ds nkSjku fu/kkZj.k vf/kdkjh ds dk;kZy; esa izLrqr ugh fd;s x;s FksA vk;dj fu;eksa dk :y 46A bl ekeys esa izHkkoh gksxk D;ksafd fu/kkZj.k izfØ;k ds nkSjku fu/kkZfjfr }kjk dksbZ nLrkost ,oa dUQesZ’ku izLrqr ugh fd;s x;sA fu/kkZfjfr vk;dj 46A fu;e ds mifu;e 46A¼4½¼aa½]¼b½]¼c½ ,oa ¼d½ esa of.kZr ifjfLFkfr;ksa es Hkh nkosnkj ugh gSA
Thus, the A.O. has not examined the matter afresh during the remand proceedings. The affidavits are dated April, 2016 while the assessment order was passed on 31.08.2015. While I am not in agreement with the A.O’s Act in not providing opportunity to the appellant to justify the later filing of documents, but at the same time, the credit worthiness or the genuineness of the deposit cannot be ascertained only on the basis of these affidavits which can be termed as self serving at best. Unless the appellant produced corresponding lender for examination or copies of their bank account from where cheques were claimed as issued, when 86 how these were returned, the capacity, merely based on some combined land holdings in which several persons were co owners and there being several persons claiming to have contributed the consolidated amount of Rs. 16 lakhs, merely on the submissions made in appellate proceedings, the genuineness of the credit could not be accepted. In fact the initial mention of claim of credit being from Sukhwinder Singh further got bifurcated into several creditors in the later proceedings.
HIGH COURT OF KARNATAKA in Suresh Kumar T. Jain v. Income-tax Officer, Ward 2(1), Bengaluru [2019] 101 taxmann.com 164 (Karnataka) held- Addition made under section 68 was to be confirmed where assessee failed to prove that amount deposited in bank was in fact loan taken from various creditors
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In the case of Riddhi Promoters (P) Ltd. v. CIT (2015] 377 ITR 641/232 Taxman 430/58 taxmann.com 367 (Delhi) it has been held that the assessee has not only to establish identity of the creditor but genuineness as well as creditworthiness is to be established u/s. 68 of the Act. In the case of CIT v. Nipun Builders & Developers (P) Ltd. 120131 350 ITR 407/214 Taxman 429/30 taxmann.com 292 (Delhi), the Hon'ble Court has held that mere furnishing of bank statement of share of applicant, is not sufficient to prove the creditworthiness. The Hon'ble Delhi High Court in these cases has considered Section 68 against share money after considering the decision in the case of Lovely Export (P.) Ltd. (J2008] 216 CTR 195 (SC)) where the onus on the applicant is limited but cash creditor shown in form of loan where the assessee is required to prove all the ingredients of Section 68 of the Act.
The Apex Court in Roshan Di Hatti v. CIT j1977] 107 ITR 938 held that onus of proving the source of a sum of money found to have been received by an assessee is on him. When the nature and source of money or otherwise cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee. Thus, on a totality of the facts involved, I am of the opinion that since the source of the credit of Rs. 16 lakhs in the account of the appellant Sh. Madan Lal Meena is not distinctly verifiable for both creditworthiness as well as genuineness, I am not inclined to interfere in the addition of this amount made by the A.O. as undisclosed income u/s 68. This ground of appeal is being dismissed.”
On the other hand, the ld. DR supported the order of the lower authorities.
We have heard both the parties, perused materials available on record. We feel that substantial justice should be met to the party in accordance with law. In this case, the Bench noted that the ld. CIT(A) has dismissed the appeal
15 ITA No. 873/JP/2019 Shri Madan Lal Meena of the assessee. However, the ld. AR during the course of argument submitted that the earlier assessment Order had been merged with the Reassessment Order passed u/s 147/143 r/w 263 dated 31.08.2015 (under challenge). He further submitted that all these grounds were available to the assessee and therefore the same were rightly agitated before the Ld. CIT(A). The Ld. CIT(A) , was supposed to have adjudicated all the grounds taken before him relating to the addition of Rs. 16,00,000/- pertaining to Capital Gain and Rs. 5,46,808/- made u/s 68. The ld. AR further prayed that ld. CIT(A) had not adjudicated upon these grounds, therefore the same the same may be kindly restored to the file of the CIT (A) for a decision afresh on these issues, after hearing the assesse. Taking into consideration, the above facts and circumstances of the case and submissions of the ld. AR of the assessee, we restore the issue to the file of the ld. CIT(A) for afresh decision in view of the submissions of the assessee. Thus the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 29/08/2022. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalashmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/08/2022. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Madan Lal Meena, Kota. 1. izR;FkhZ@ The Respondent- ACIT, Circle-2, Kota. 2. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत.
16 ITA No. 873/JP/2019 Shri Madan Lal Meena
xkMZ QkbZy@ Guard File { ITA No. 873/JP/2019} 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत