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2014 (6) TMI 603

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....rsons from whom security deposits were received. The assessee furnished confirmation from 19 parties. The total amount of security deposit outstanding against these parties was Rs 24,44,050/-. The assessee could not furnish confirmation or any other evidence to prove the creditworthiness of creditors in case of remaining 39 persons. Therefore, the Assessing Officer held that the assessee failed to establish creditworthiness of the security depositors and made addition of RS 71,14,300/- by invoking the provisions u/s 68 of the Act. 5. Before the CIT(A), the assessee vide letter dated 21.03.2011 submitted as under: "4. The Ld. A.O. has made addition of Rs. 7114300 being amount received as advance booking from the buyers and credited to the account of M/s. Adinath Non Trading Corporation as income of your appellant from undisclosed source. During the course of hearing it was explained to learned A.O. that your appellant has executed an agreement for development of scheme known as "Rajlaxmi Complex" on land owned by 4 NTCs in the year 1999. The construction of the said scheme was completed way back in 2001 and your appellant was acting as the agent of these all 4 NTCs to collect the ....

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....ooking amount received belongs to all Four NTCs and not to your appellant. Thus, it appears that the learned A.O. with some ulterior motive or prejudicial mind has framed the assessment without considering the facts or records submitted or going into details or making any further inquiry about the genuineness of the parties but has arbitrarily considered the entire amount of Rs. 7114300 as income of your appellant from undisclosed source even though information for Rs. 2434050 were given and was kept on record. 7. In view of what is stated above, the action of learned A.O. is unwarranted as he has neither made any enquiry about the identity, genuineness of the parties not had taken any action to verify the facts or the records submitted to him, but without going into details or making further enquiry has unceremoniously arrived at the conclusion that the entire amount is your appellant's income from undisclosed source. Besides, in case of cancellation of bookings, your appellant has made payment through account payee cheques for which confirmation with PAN were submitted during the course of hearing. 8. Thus the action of learned A.O is against the principle of natural justic....

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....e office of the Assessing Officer for further verification. The Assessing Officer vide letter dated 11.10.2012 submitted a detailed remand report after examining the additional evidences. He observed that the contents of the remand report were as under: "Kind reference is invited to your letter no. CIT(A)-XI/Remand Report/2011-12 dated 22.11.2011 directing a remand report in the above mentioned case. The only issue directed for investigation was addition of 71,14,300 made to the returned total income as "income from undisclosed sources'. 2. The facts of the case are that the assessee had shown in its balance ^sheet, liability of a sum of 71,14,300 as booking amount in respect of 48 Properties (Shops/Offices etc) from about 38 persons (neither property specification nor name of the person who booked for 2,17,200 mentioned). In the course of scrutiny assessment proceedings, the assessee could furnish confirmation etc. from 19 parties for 24,34,050 and for the balance of '46,80,250 assessee had furnished the names of 30 persons without PAN and confirmation. The A.O. treated the entire amount as income from undisclosed source and added 71,14,300 to the total income of the ass....

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....does not call for any comments from the appellant. It may be noted that when predecessor AO conducted enquiry, 17 persons had already confirmed booking advance whereas out of remaining 21 persons the summons was served properly but no response was received in case of 8 persons and the summons were received back in case of 13 persons. Therefore, the present AO carried out enquiry in respect of said 21 persons out of whom, he could contact 5 persons whereas remaining were the tenants of the shop. 2.3 Thus, the position emerging as a result of enquiries made by AO can be summarized as under: a) Persons replied through post And confirmed booking advance - 17 persons b) Ward Inspector enquiry confirmed - 5 persons The booking advance c) Persons could not be contacted - 16 persons Due to shops were let out In view of above, it is submitted that the contention of the appellant that the impugned amount was booking advance has been fully proved. Apart from it, it will be appreciated that the appellant has given complete details by way of identity proof i.e. PAN or Driving license or Election card as well as address and in many cases confirmation of account of the parties under dispute....

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....al (2001) 76 ITD 120 (Cal) Trib. The appellant will get benefit of the ratio of following cases 1. VTR Marketing vs ACIT 1 SOT 205 (Kol). 2. Rohini Builders vs DCIT 76 TTJ 521 (Ahd). Recently the Hon'ble Gujarat High Court in the case of CIT vs Ranchod Jivabhai Nakhava 208 Taxman 35 has held that once the assessee has disclosed PAN of the creditors, it is A.O.'s duty to ascertain from assessing officers of the lenders whether these loans are reflected in their Balance Sheet. 4.6 As mentioned above, the appellant has furnished confirmations in respect of 48 persons who had made security deposit of Fte;68,97,100/-. in view of above facts, I am of the considered view that the appellant has explained source of security deposits of Rs.68,97,100/- and to this extent addition made by the A.O. u/s.68 is untenable. Accordingly, the A.O. is directed to delete addition of Rs.68,97,100/-. The evidences placed on record further reveals that the appellant could not furnish confirmations from the parties from whom deposits of Rs. 2,17,200/- was received. Since the appellant has failed to discharge onus cast upon him by the provisions of sec.68 in respect of deposits of Rs. 2,17,200/-,....

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.... Sha, Sh Agarwal Avani Ashok Kumar, Shyamlal khanchand Rajvani and Lajwanti Hemanshu Parmar who confirmed giving security deposits of Rs 7,98,758/- to the assessee and on the basis of this test-check, the CIT(A) deleted the balance amount of advance received of Rs 18,88,600/- from all the 13 persons. He submitted that in the case of 8 persons, summons were properly served but no response was received from the said persons. The amount received from these persons totalled to Rs 18,45,250/-. Since the summons were duly served on such persons, therefore the CIT(A) deleted the amount of RS 18,45,250/- received from the said persons. The DR further submitted that in respect of the persons from whom amount of RS 2,17,200/- was received, the assessee could not furnish confirmations of deposits received from them and therefore, the assessee failed to discharge the onus cast upon him under the provisions of section 68 of the Act and hence, he sustained addition of Rs 2,17,200/-. The DR candidly admitted during the course of hearing that the appeal of the Revenue is liable to be dismissed and there was no material to show that any of the deposits out of Rs 68,97,100/- was not genuine. 11. On....