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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 21.03.2024 for Assessment Year 2017-18.
The Assessee has taken the following grounds of appeal:-
“1. The Assessing Officer as well as Ld. CIT (Appeals) both have erred in law in making/confirming the addition of Rs. 17,80,870/- which is cash withdrawn from bank on the ground of unexplained credit in the bank. 2. The Assessing Officer has also erred in law in levying tax u/s. 115BBE on the addition in income. 3. The order of Assessing Officer is illegal against the natural justice and good conscience. 4. The appellant preserves right to add, alter or amend any or more grounds of appeal.”
3. The brief facts of the case are that the assessee filed an e-return of income on March 29, 2018, declaring a total income of ₹3,16,730/- which was processed under Section 143(1) of the Income Tax Act. The case was selected for limited scrutiny under 'CASS' to verify the reason for "cash withdrawals." Accordingly, notices under Section 143(2) and under Section 142(1) were issued, requesting various details and documents from the assessee to verify the reasons for the cash withdrawals. In response, the assessee stated that he had earned salary and interest income during the year under consideration and explained that the cash withdrawals were made for levelling and developing land near the Mahisagar river. However, as per the Ld. Assessing Officer, the assessee failed to provide any documentary evidence to support this claim. The Ld. Assessing Officer was of the view that the explanation that the cash withdrawals were used for land development was not acceptable due to the lack of supporting evidence. Additionally, the assessee failed to disclose the source of the cash credits in his bank account from which these substantial withdrawals were made. As a result, the unexplained cash withdrawals amounting to ₹49,02,070/- (after adjusting the declared income filed by the assessee) were added to the total income of the assessee as unexplained cash credits, by the Ld. Assessing Officer.
4. In appeal, Ld. CIT(Appeals) observed that the AO had added ₹49,02,070/- to the income of the assessee due to unexplained cash withdrawals from his Corporation Bank account (No. SB/01/001679). During the appellate proceedings, the assessee explained that he owned land near the Mahisagar river in Valvod Village, Gujarat, and had entered into an Riteshkumar Jayantibhai Patel vs. ITO Asst.Year –2017-18 - 3– agreement with Sakar Infracon LLP for its sale. The appellant claimed that he needed to level the land before transferring it to the company and had received advances from the company for this purpose. The assessee submitted that the cash withdrawals were used for land levelling expenses and personal expenses. The assessee provided supporting documents, including a ledger account from Sakar Infracon LLP to demonstrate that the assessee had received advances from Sakar Infracon LLP and also furnished details of the land levelling expenses to Ld. CIT(Appeals). The Ld. CIT(Appeals), on a review of submissions filed by the assessee, observed that while the assessee received a sum of ₹31,50,000/- from Sakar Infracon LLP, he incurred expenses totalling to ₹45,23,439 towards land leveling. Ld. CIT(Appeals) noted that the assessee failed to provide any sources for the balance amount of ₹13,73,439 (₹45,23,439 less ₹31,50,000) and did not furnish a copy of the sale agreement with Sakar Infracon LLP as well. In view of the above, while Ld. CIT(Appeals) accepted the explanation in respect of the sum of ₹31,50,000/-(and deleted the addition for this amount), however, for the remaining amount of ₹13,73,439, the additions were confirmed by Ld. CIT(Appeals), since the assessee failed to provide sources or reasons for the cash withdrawals. As a result, Ld. CIT(Appeals) partly allowed the appeal of the assessee.
5. The assessee is in appeal before us against the order passed by Ld. CIT(Appeals), partly confirming the additions made by the assessing officer. Before us, the counsel for the assessee submitted that the assessee holds land near Mahisagar river in Valvod village, Gujarat. The assessee entered into an agreement with Sakar Infracom LLP to sell this land, which Riteshkumar Jayantibhai Patel vs. ITO Asst.Year –2017-18 - 4– was later planned to be developed into a project titled "The Enjoy City" by the latter. Since the land was uneven, the assessee was required to level it before transferring ownership of the land, to the company. For the purpose of levelling the land, the assessee received an advance of ₹31,50,000/- from Sakar Infracom LLP. The same was duly supported / evidenced by a copy of the ledger account and the PAN card of Sakar Infracom LLP. Accordingly, for this amount CIT (Appeals)had granted relief to the assessee. However, in addition to the above, the assessee also obtained loans from Rajeshkumar Maganbhai Golaviya, which were repaid in the financial year 2018-19. The details when repayment of loan which was done by the assessee, were stated to be as below:
₹1,65,000 on 13/04/2018 ₹3,00,000 on 20/06/2018 ₹2,20,000 on 07/07/2018
The assessee provided a letter of confirmation of the loan, PAN card of the lender, and copies of bank statements as evidence.
Regarding the amount of ₹15,00,000/-, the Ld. Counsel for the 7. assessee submitted that the same was received from Shri Vipulkumar Chhaganbhai on 10/06/2016 towards the sale of land. Therefore, the counsel for the assessee submitted that if given an opportunity, the assessee is in a position to give/furnish details in support of amount received from Shri Vipul Kumar, towards sale of land amounting to ₹ 15 lakhs. The Ld. Counsel for the assessee submitted before us that Ld. CIT(Appeals) has erred in not considering various details/evidences, which the assessee was in a position to furnish regarding the source of balance cash deposits as well, in his bank account.
In response, Ld. DR placed reliance on the observations made by Ld. CIT(Appeals) in the appellate order.
We have heard the rival contentions and perused the material on record. On going to the facts of the instant case, we observe that the assessee has submitted a chart before us giving details of loan taken from Shri Rajesh Kumar for a sum of ₹ 7,63,000/- during the impugned year under consideration, which was also repaid back to Shri Rajesh, during Financial Year 2018-19. The counsel for the assessee also furnished, for our perusal, copy of confirmation of loan, PAN card of lender, copy of bank statement in support of the aforesaid amount taken from Shri Rajesh. Further, the counsel for the assessee further submitted that the assessee had also received a sum of ₹ 15 lakhs on 10-06-2016 from Shri Vipul towards sale of land. The counsel for the assessee also furnished proof of sale of land with name of seller i.e. the assessee and name of purchase (Shri Vipul) as evidence/proof of deposit of sum of ₹ 15 lakh in his bank account as advance to received towards sale of land. The counsel for the assessee submitted before us that the aforesaid evidences have not been appreciated by Ld. CIT(Appeals).
Accordingly, looking into the instant facts, and the arguments and evidences placed before us, in the interest of justice, the matter is restored to the file of Ld. CIT(Appeals) to examine the source of cash deposits in the bank account held by the assessee, with regards to the balance amount, for which the assessee has placed evidence before us in support of the same. The assessee would be at liberty to furnish any other evidence/supporting documents in support of the proof of cash deposits in its bank account in the proceedings before Ld. CIT(Appeals).
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 29/08/2024
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 29/08/2024 TANMAY, Sr. PS TRUE COPY आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,