SH. SUNIL DUTT JAIN, PROP. M/S JAIN FOOD PRODUCTS,,266/33, DIGGI CHOWK, AJMER vs. ACIT, CENTRAL CIRCLE,, AJMER
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: HON’BLE SHRI SANDEEP GOSAIN, JM &
PER BENCH :
This appeal by the assessee is directed against the order dated 21.03.2023 of ld. CIT (A), Udaipur-2 passed under section 250 of the IT Act, 1961 for the assessment year 2013-14. The assessee has raised the following grounds :-
The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 2 lacs on account of unexplained investment in property u/s 69A of the Act by not accepting the explanation of assessee that source of same is out of earlier year income & DLC difference of property sold during the year by making irrelevant observations. 2. The appellant craves to alter, amend and modify any ground of appeal. 3. Necessary cost be awarded to the assessee.
2 ITA No. 306/JP/2023 Shri Sunil Dutt Jain, Ajmer.
The brief facts of the case are that the assessee is engaged in
manufacturing, wholesale and retail business of Namkeen and Sweet products in
his proprietary concern M/s Jain Food Products. This is the family business of
assessee which he carries out along with his brother Shri Kamal Kant Jain. He filed
the original return of income on 21.09.2013 declaring total income of
Rs.30,19,200/-(PB 78-81).A search and survey was carried out on 12.09.2018 at
the residential and business premises of assessee. The assessee in response to
notice u/s 153A filed the return of income on 12.06.2019 declaring returned
income. During the course of search a sale agreement dt. 30.11.2012 (PB 75-77)
marked as Pg 4-6 of Exhibit-16 of Annexure-AS was found as per which assessee
has entered into an agreement with Smt. Navratan Mehta for purchase of
‘Chabutari’ for Rs.18 lacs out of which he has made advance payment of Rs.2 lacs
in cash. In course of assessment proceedings assessee submitted that the deal
could not be finalized and got cancelled. The source of advance payment of Rs.2
lacs is stated to be out of additional funds of Rs.13.63 lacs received in cash on sale
of Green City Property in Jaipur. The AO did not accept the contention of assessee
by holding that since the issue of sale of Green City Property has itself remained
unverified and has not been considered during the course of assessment
proceedings, the source of advance payment of Rs.2,00,000/- also remained
unverified. Accordingly he made addition of Rs.2 lacs in the hands of assessee u/s
69A of the Act on account of unexplained investment in property.
2.1 The Ld. CIT(A) confirmed the addition made by AO by holding that (a) there
was search conducted on the premises of the appellant and no evidence of
availability of cash with the appellant from any other transaction as claimed was
3 ITA No. 306/JP/2023 Shri Sunil Dutt Jain, Ajmer.
found (b) the appellant has not paid due taxes on the so claimed transactions and
hence not reliable (c) the claim of the appellant with regard to adoption of value as
per provisions of section 50C in place of actual value mentioned in the registered
agreement and showing it in the return of income is because of deeming fiction of
law and it do not prove availability of cash in the hands of appellant.
Now the assessee is in appeal before us.
Before us, the ld. A/R of the assessee submitted that during the year
assessee has sold the property Plot No.311, Green City, Sikar Road, Jaipur to Smt.
Amrita vide sale deed dt. 26.12.2012 (PB 82-93). The actual sales consideration at
which the property is sold is Rs.20,88,000/- which is also the DLC value(PB 89)but
at the insistence of buyer the same has been shown in the sale deed at
Rs.7,25,000/-(PB 88).Thus assessee has received additional consideration of
Rs.13.63 lacs (20,88,000-7,25,000) in cash. Though sales consideration of
Rs.7,25,000/- is recorded in the sale deed but tax has been paid by assessee by
taking the sale consideration at Rs.20,88,000/- as evident from the return (PB 80).
Thus the source of advance payment of Rs.2,00,000/- for purchase of ‘Chabutari’ is
out of the additional consideration of Rs.13.63 lacs received by the assessee in
cash.The assessee has also filed an affidavit dt.06.03.2021 (PB 94-96)during
assessment proceedings where at Point No.3(PB 95)all these factshas been
mentioned. Hon’ble Supreme Court in case of Mehta Parikh & Co. Vs. CIT 30 ITR
181 at Pg 187 has held that the rejection of affidavit filed by the assessee is not
justified unless the deponent has either been discredited in cross examination or has
failed to produce other supporting evidence when called upon to do so. This is also
reiterated by Hon’ble ITAT, Jaipur Bench in case of Kuldeep Chand Garg Vs. ITO 37
4 ITA No. 306/JP/2023 Shri Sunil Dutt Jain, Ajmer.
Tax World 127 where it held that contents of duly sworn and affirmed affidavit are
to be accepted as such unless the deponents are examined to established other-
wise. The observation of Ld. CIT(A) that no evidence of availability of cash with the
appellant from any other transaction was found and the appellant has not paid due
taxes on the claimed transactions is incorrect. Further the observation of Ld.
CIT(A) that the actual value shown in the return of income is because of deeming
fiction of law and it do not prove availability of cash in the hands of appellant is
also incorrect considering the fact that affidavit of assessee is not controverted.
In view of above, addition of Rs.2 lacs confirmed by Ld. CIT(A) be directed to
be deleted.
On the other hand, the ld. D/R supported the orders of the revenue
authorities.
We have heard the rival contentions, perused the material on record and
gone through the orders of the lower authorities. We note that as per the sale
agreement dated 30.11.2012 found and seized during the course of search and
seizure action, assessee entered into agreement for purchase of ‘Chabutari’ for
Rs.18,00,000/- against which an advance payment of Rs.2,00,000/- was made in
cash. The assessee claimed that the source of such payment is out of the additional
funds of Rs.13.63 lacs received in cash on sale of Green City property at Jaipur but
the same was not accepted by the lower authorities on the ground that sale
consideration as per sale deed is Rs.7,25,000/- received by cheque. We find that in
the return of income the assessee has declared the capital gain by taking the sale
consideration of property at Green City at Rs.20,88,000/-. Assessee has also filed an
affidavit dated 06.03.2021 wherein he has specifically admitted that as per the sale
5 ITA No. 306/JP/2023 Shri Sunil Dutt Jain, Ajmer.
deed the sale consideration is Rs.7,25,000/- but actual consideration is
Rs.20,88,000/- on which stamp duty was paid and thus on such sale extra amount
of Rs.13,63,000/- was received. He further affirmed that in Financial Years 2010-11
& 2011-12 also he received Rs.38,63,000/- on sale of some shops for which
documents were found in search. This affidavit is not discredited by the AO. The
Hon’ble Supreme Court in case of Mehta Parikh & Co. vs. CIT, 30 ITR 181 at Page
187 has held that the rejection of affidavit filed by the assessee is not justified
unless the deponent has either been discredited in cross examination or has failed to
produce other supporting evidence when called upon to do so. The coordinate bench
of the Tribunal, Jaipur in the case of Kuldeep Chand Garg vs. ITO, 37 Tax World 127
held that contents of duly sworn and affirmed affidavit are to be accepted as such
unless the deponents are examined to established otherwise. Considering all these
facts, we are of the view that source of investment of Rs.2,00,000/- is out of
additional funds received in cash on sale of Green City Property in Jaipur and funds
received from sale of shops. Hence, we delete the addition. The ground of the
assessee is allowed.
In the result, this appeal of the assessee is allowed.
Order pronounced in the open court on 29/08/2023.
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6 ITA No. 306/JP/2023 Shri Sunil Dutt Jain, Ajmer.
आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Sunil Dutt Jain, Ajmer. 2. izR;FkhZ@ The Respondent- The ACIT, Central Circle, Ajmer. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 306/JP/2023}
vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत
