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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM &DR. A.L.SAINI, AM
सुनवाईकीतारीख/ Date of Hearing : 13/01/2022 घोषणाकीतारीख/Date of Pronouncement : 25/02/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee pertaining to the assessment year 2013-14, is directed against the order passed by the Commissioner of Income Tax(Appeals)-Valsad [‘CIT(A)’ for short] dated 04.08.2017, which in turn arises out of an assessment order passed by the Assessing Officer (‘AO' for short) u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide order dated 29.03.2016.
Grounds of appeal
raised by the assessee are as follows:- “1. The Ld. CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in making addition of Rs.7,02,896/-. 2.Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and principles of natural justice and therefore deserves to be quashed.
3. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in levying interest u/s 234A/B/C of the Act.
4. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in initiating penalty u/s 271(1)(c) of the Act.”
Brief facts qua the issue are that assessee is an individual and engaged in business of construction and filed his return of income in ITR Form-4 in which the assessee mentioned all figure of balance sheet and profit & loss account. During the assessment year under consideration the assessee has purchased land at Unn with six co-owners. On verification of purchased documents and on verification of cash book, it was observed by the AO that the assessee made excess cash payment for purchase of land against balance available in cash book. The assessee produced personal balance sheet before the AO to prove that he has excess cash balance and payment for purchase of land was made out of such fund. On verification of personal balance sheet of the assessee for the year ended as on 31.03.2012 and 31.03.2013, the assessee has shown cash balance of Rs.7,02,896/- and unsecured loan of Rs.6,00,000/- which were outstanding as on 31.03.2012. On verification of personal cash book, it was noted by the AO that only withdrawal and cash payment for land were made. No inflow arose during the whole year under consideration. Further, the unsecured loan was received during F.Y 2011-12 from Pareshbhai Kantilal Patel (HUF). However, unsecured loan was not reflected in the balance sheet of the assessee as well as return filed by the assessee. It was also noted by AO that the assessee has not provided any details regarding purchase of the assets during the year under consideration in his return of income. Since the assessee failed to explain the transactions, therefore AO made addition of Rs.7,02,896/- and Rs.6,00,000/- u/s 69 and 68 of the Act respectively.
On appeal, Ld. CIT(A) deleted the addition of Rs.6,00,000/-, however, confirmed the addition of Rs.7,02,896/-. Aggrieved the assessee is in appeal before us.
We have heard both the parties and perused the materials available on record. Before us Ld. Sr.DR for the Revenue relied on the findings of the Assessing Officer. However, Ld. AR of the assessee submitted that assessee has made self-statement of cash of Rs.7,02,896/-, therefore, addition sustained by Ld. CIT(A) may be deleted. We note that the AO has noted that the unsecured loan of Rs.6 lacs was outstanding on 31.03.2012. Even the evidences of loan received from Shri Paresh K Patel (HUF) indicated that the loan was given by him on 31.01.2012. Thus, there is no fresh loan of Rs.6 lacs in the current A.Y. Hence, the assessee’s contention that no addition of Rs. 6 lacs as unsecured loan u/s 68 of the Act was warranted for the current A.Y. was accepted by Ld. CIT(A).
As regards the addition of Rs.7,02,896/- being cash balance, the AO has noted that the cash payment for the land was explained by the assessee out of his cash balance from past business which was not accepted by the AO and added u/s 69 of the Act. From the copy of bank statement of the assessee with Corporation Bank and the land purchase ledger account, it is apparent that the assessee made total cash payment of Rs.4,33,334/- towards land purchase and incurred cash expenses Rs.58,250/- (stamp duty), Rs.11,044/- (registration charges) and Rs.706/- (vakil fee).Thus, total cash expenses for land purchase during the year was Rs.5,03,334/-. The assessee had also made payment of Rs.6,66,666/- (two cheque of Rs.1,83,333/- and three cheque of Rs. 1 lacs each for land purchase apart from cash payment of Rs.4,33,334/-.The copy of bank statement for F.Y 2012-13 with the Corporation Bank indicate that the assessee has deposited on 14.07.2012 Rs.3,68,500/- by way of cash. Thus, during the current A.Y the assessee has brought in Rs.8,71,834/- (Rs.5,03,334/- + Rs.3,68,500/-) by cash for land purchase. The assessee had no explanation for the source of this cash fund brought in during the current assessment year except for self made cash summary statement of Rs.7,02,896/- as cash saved from misc. milk sale business for nine years starting from 2003. There is no supporting evidence for accumulation of such cash by the assessee as noted by Ld. CIT(A). Also for the sales turnover of Rs.9,92,550/- from milk sale in the last nine years, the expenses claimed for all these nine years are only Rs.1,11,611/-. Thus cash summary working itself shows imaginary figures put in by the assessee. Thus, the explanation pertaining to cash balance of Rs.7,02,896/- was not accepted by Ld. CIT(A). As the assessee has incurred total cash expenses Rs.8,71,834/- during the current A.Y for which there