I.T.O., WARD-1, ALIGARH vs. SAHRA CITY HOMES ALIGARH, ALIGARH

PDF · subscribers
ITA 429/AGR/2011Status: DisposedITAT Agra16 November 2017AY 2006-075 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the funds were provided by Sahara India Commercial Corporation Ltd. (SICCL) as loans to the members for land purchase, and the AO did not question SICCL's capacity or the banking channels used. The identities of the members were also not disputed.

What were the facts?

The Assessing Officer (AO) added Rs. 1,83,42,016 as unexplained cash credit to the assessee AOP's income, relating to capital contributions from three members. The CIT(A) deleted this addition, which the Revenue appealed.

What were the issues?

Whether the CIT(A) erred in deleting the addition on account of unexplained cash credit by accepting the genuineness, creditworthiness, and identity of the members and the source of funds.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH: AGRA

Before: SHRI A. D. JAIN, & DR. MITHA LAL MEENA

For Appellant: Shri Sumit Kumar Agarwal, AR
For Respondent: Shri Waseem Arshad, Sr. DR, Shri Sumit Kumar Agarwal, AR
Hearing: 30.08.2017Pronounced: 16.11.2017

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA

BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER

I.T.A No. 429/Agra/2011 (ASSESSMENT YEAR-2006-07)

ITO, (AO) Vs..Sahara City Homes, Ward-1, Aligarh, Vill.- Aligarh. Bhukravali, Sidandarpur, Khera Khushkabar, Pargana Koil, Aligarh. PAN No.AACAS2123B (Revenue) (Assessee)

Revenue by Shri Waseem Arshad, Sr. DR. Assessee by Shri Sumit Kumar Agarwal, AR.

Date of Hearing 30.08.2017 Date of Pronouncement 16.11.2017

ORDER PER A. D. JAIN, JUDICIAL MEMBER:

This is Department’s appeal for A.Y. 2006-07, raising the following sole ground of appeal:

“The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.1,83,42,020/- on account of unexplained cash credit u/s 68 of the IT Act, 1961 by accepting the genuineness,

I.T.A No. 429/Agra/2011 2

creditworthiness and identity of the members of AOP and treating the fund contributed as explained in the hand of members.”

2.

The appeal was filed on 15.11.2011. It has, thus, been hanging fire for almost six years. It was lastly adjourned on 1.08.2017 for 30.08.2017, which date, as is available from the Order Sheet noting dated 01.08.2017, stands noted by Shri Sumit Kumar Agarwal, on behalf of the assessee. However, on 30.08.2017, the last of numerous applications for adjournment, dated 29.08.2017, was put up. As per this application, Shri Jeevanji Mehrotra, FCA, the applicant, was not in the know of the date (30.08.2017) for which the appeal was adjourned, due to which he remained in Calcutta and could not be present before us.

3.

As per the Power of Attorney available on record, both Shri Jeevanji Mehrotra, FCA and Shri Sumit Kumar Agarwal, have been authorized by the assessee to represent the assessee before this Bench in the present appeal. In view of these facts, the application for adjournment was rejected.

4.

The AO made addition of Rs.1,83,42,016/- as unexplained cash credit, by holding that the AOP had failed to prove its capital of this amount, shown in the names of three persons, i.e., Sarv Shri Raja Ram, Rajesh Babu and Ram Jeevan. The ld. CIT(A) has deleted this addition.

I.T.A No. 429/Agra/2011 3

5.

The ld. DR contended that the Ld. CIT(A) has erred in law and on facts in

deleting the addition of Rs.1,83,42,020/- on account of unexplained cash credit u/s

68 of the IT Act, 1961 by accepting the genuineness, creditworthiness and identity

of the members of the AOP and treating the fund contributed as explained in the

hand of the members.

6.

The ld. Counsel has placed strong reliance on the impugned order.

7.

We have heard both the parties and have perused the material on record. The

following are the undisputed facts. The assessee AOP consists of thirteen

members. The amounts in the names of ten members were not added by the AO.

Addition was made only in respect of the aforesaid three members. The assessee,

during the year under consideration, was developing a township in the name of

Sahara City Homes at Village Bhukravali, Aligarh, under a joint venture with

Sahara India Commercial Corporation Ltd. (SICCL). SICCL was authorized by all

the members of the AOP for the overall management of the project. SICCL

provided the funds to all the members of the AOP, from its bank account. The

money was provided by way of loans, for purchasing of land. It was given directly

to the seller. All the bank drafts for the purchase of the land in the names of the

members of the AOP were made from the account of SICCL. The AO did not

question the capacity of SICCL to advance the loans. The source of the

I.T.A No. 429/Agra/2011 4

funds/credit entries in the books of the AOP stand explained, because the identity

of SICCL was not questioned. The factum of the funds having travelled through

genuine banking channel from SICCL was not challenged. The creditworthiness of

SICCL stood explained. The identities of the aforesaid Sarv Shri Ram Jeevan,

Rajesh Babu and Raja Ram were also not called in question by the AO. They

confirmed all the members of the AOP having bought the land through registered

sale deeds out of the loans provided by SICCL. The AO did not allege that these

three persons had introduced their own funds and that thereby, unexplained or

unaccounted money stood laundered. Moreover, a substantial portion of the capital

contribution stood made in the earlier financial year, vide agreement dated

09.02.2005, whereby, the assessee AOP came into existence. In the AOP, SICCL

holds 86.35% shares. Sarv Shri Rajesh Babu, Ram Jeevan and Raja Ram, on the

other hand, have holdings to the extent of 0.10% to 0.75% only. The factum of the

payment for the purchase of land having come from SICCL stands accepted by the

AO himself.

8.

All these facts have duly been taken into consideration by the ld. CIT(A) and

there is no rebuttal thereto before us.

I.T.A No. 429/Agra/2011 5

9.

For the above, finding no merit therein, the grievance sought to be raised by

the Department is rejected and the well reasoned order of the ld. CIT(A) is

confirmed.

10.

In the result, the appeal is dismissed.

Order pronounced in the open court on 16/11/2017.

Sd/- Sd/- (DR. MITHA LAL MEENA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 16/11/2017 *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →