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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 22/02/2013 of the ld. First Appellate Authority, Mumbai.
During hearing of this appeal, the ld. counsel for the assessee, Shri Anant N. Pai did not press ground no.3 with respect to direction to the Assessing Officer to take appropriate action in assessment year 2006-07 on the advances received by the assessee. The ld. DR, Shri Aarsi Prasad had no objection to the request of the ld. counsel for the assessee, therefore, this ground is dismissed as not pressed.
2.1. The only ground argued by the ld. counsel for the assessee is with respect to confirming the amount of Rs.19,29,904/- treating the same as unexplained cash credit u/s 68 of the Income Tax Act, 1961 (hereinafter the Act) as there was no such receipt or payment in the current year. The ld. counsel for the assessee advanced arguments which is identical to the ground raised by submitting that confirmation from the concerned parties were duly submitted by the assessee, therefore, the addition was arbitrarily made by the Assessing Officer. On the other hand, the ld. DR defended the addition.
2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee partnership firm, at the relevant time, was engaged in the business of builder and developer declared loss of Rs.6,501/- on 30/03/2010 and capitalize all other expenses as lower parel projects. From the details, filed by the assessee, it was noticed by the ld. Assessing Officer that the assessee had shown Rs.13,84,47,219/- as loans/funds from the partners and relatives and further shown Rs.13,65,17,315/- as loans given. The Assessing Officer observed from the confirmation, filed by the assessee that not a single partner or relatives names is appearing in the list of unsecured loans. He held that assessee was holding cash worth Rs.13 crores which was never utilized for development nor gave loan to anybody, therefore, the amount of Rs.19,29,904/- was treated as unexplained cash credit. On appeal, the ld. Commissioner of Income Tax (Appeals) affirmed the stand of the ld. Assessing Officer against which the assessee is in further appeal before this Tribunal.
2.3. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, It is noted from the statement of facts, even filed before the ld. Commissioner of Income Tax (Appeals), the assessee has challenged the addition made u/s 68 of the Act. It is further noted from the assessment order that the loan confirmations were duly filed by the assessee. It is also noted that the ld. Assessing Officer made the addition of Rs.19,29,404/- as unexplained cash credit on estimate basis being the difference between the total amount of unsecured loans and advances recoverable in cash or kind. The details of unsecured loans is available at page-4 of the impugned order. It seems that the only basis of addition by the Assessing Officer is that confirmation were not filed by the assessee, however, in para 6 of the assessment order, the ld. Assessing Officer himself has mentioned that “it has been seen from the details filed by the assessee” and further “since no other details other than loan confirmations of four parties as furnished by the assessee, I estimate Rs.19,29,904/- , the difference between the total amount of unsecured loans and advances recoverable in cash or kind ……. as unexplained cash credit”. Such a approach of the ld. Assessing Officer cannot be said to be justified as the addition was made merely on the basis of estimation. It is also noted that the assessee vide letter dated 19/12/2011 (page -1 of the paper book) submitted the details such as copy of income tax return (page-2), copy of balance sheet of profit & loss account (pages 3 to 5 of the paper book), details of loans and borrowing (page-6), confirmation for new loans taken given (pages 7 & 8), details of loans and advances account, shown asset side of the balance sheet (pages 9 to 11) and bank summary (pages 12 to 14 of the paper book). This factual matrix was not controverted by the Revenue. In view of this fact, we are of the view that the addition made as unexplained cash credit u/s 68 of the Act cannot said to be justified. The assessee has discharged its onus cast upon it and if the ld. Assessing Officer was not satisfied with the explanation of the assessee, he is expected to prove otherwise. As per section 68 of the Act, the burden is upon the assessee to prove the source of receipt and once it is discharged, no addition is expected to be made u/s 68 of the Act. The totality of facts, clearly indicates that the addition was made merely on estimate basis, which cannot be sustained, thus, this ground of the assessee is allowed.
Finally, the appeal of the assessee is partly allowed.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 08/02/2016.