TaxTMI 
TaxTMI 
2016 (1) TMI 112
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....0,000/- on account of undisclosed credit entry with savings bank account of Dena Bank; 2. deleting the addition of Rs. 13,00,000/- on account of undisclosed credit entry with saving bank account of Dena Bank; 3. deleting the addition of Rs. 9,00,000/- being credit in the name of Shri S.S.H. Naqvi and Rs. 5.90 lacs being credit entry in the name of Sheel Mehta on account of undisclosed credit entry with savings bank account of Dena Bank; 4. deleting the addition of Rs. 12,42,000/- on account of addition of unexplained cash peak credit, Rs. 12,42,000/- cash deposit in savings bank account, Rs. 9,15,000/- in HSBC bank and Rs. 15,20,000/- unexplained cash deposits in PNB bank account; 5. deleting the addition of Rs. 8,00,000/- on account of sale of property." The appeal of the assessee raises the following effective grounds in the instant year :- "1. That the Ld. CIT (A)-xxiv, New Delhi, erred on facts and in law in sustaining the addition of amount of Rs. 10,00,000/- being credits in Bank Account of the assessee received through account payee cheques from assessee's daughters. 2. That the Ld. CIT (A)-XXIV, New Delhi, erred on facts and i....
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....f the bank statement obtained from the Bank to the assessee and the assessee was asked to comply with the notice dated 06.12.2007 which remained uncomplied with. The AO observed that the assessee was maintaining a saving bank account with HSBC which he had not declared. The AO also called for the information u/s 133 (6) vide letter dated 06.12.2007 from HSBC regarding the home loan account maintained by the assessee and his wife jointly. The AO observed that assessee had made cash deposits of Rs. 9,15,000/- (on different dates) in the HSBC saving bank account and the AO show-caused the assessee to explain the said cash deposits and as to why the same should not be added back to the income u/s 68 of the Act, but the said notice also remained uncomplied with. The AO also observed from the information of HSBC that the assessee and his wife, Ms/ Manjusha were maintaining Punjab National Bank loan account to which an amount of Rs. 27 lakhs and Rs. 28 lakhs were released. The AO asked the information from Punjab National Bank and found that the assessee was maintaining Home Loan account in his name and another account in his wife's name and one joint account also which were not declared ....
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....remand report of the AO, partly allowed the appeal as under :- " Findings/ Decisions 5. The assessee moved application for admittance of additional evidence contending that the assessee was prevented by sufficient cause in not filing the same before the AO and the evidence go to the very root of the matter and have a direct and substantial bearing in determining the correct income and tax liability of the assessee for the year under consideration. The paper book containing various documents/submissions was forwarded to the AO for submissions of his comments. The AO objected admission of additional evidence vide his letter 11.11.2008 and 12.1l.2008 by stating various facts already mentioned in the assessment order. The AR placed reliance on the following judgments for admission of the additional evidence :- 1. Tara Devi Goenka v. CIT [(1980) 122 ITR 14(Cal)], 2. the facts of CIT vs. Babu Lal Jain [1989) 176 ITR 411, 413(MP)], 3. ITO vs. Sahebjadi Devi 205 Taxation 184 (Cal ITAT) (2007), 4. Shahrukh Khan vs DCIT 2007 13 SOT 61 (Mumbai ITAT), 5. CIT vs Poddar Swadesh Udyog (P) Ltd 295 ITR 252, 6. Badri Krishnamurt....
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....secured loans :- 1. SILKY TAYAL Silky Tayal is daughter of assessee who gave interest free loan by way of transfer entry on 08.02.2005. In the account of said lady there was a cash deposit of Rs. 3 Lacs on the same very date i.e. 08/2/2005 for which no satisfactory explanation tendered. 2. SVETA Sveta is a daughter of the assessee who gave interest free loan of Rs. 7 Lacs from her bank account through transfer entry on 08.02.2005. On perusal of bank of said lady there was cash deposit of Rs. 10 Lacs on 02.02.2005 and Rs. 2 Lacs on 08.02.2005 for which no satisfactory explanation tendered. 3. S.S.H. NAQWI Only the confirmed copy of account in the books of assessee was filed, no bank statement has been filed. Sh. S.S.H. Naqwi has stated that the transaction amounting to Rs. 10,51,000/- carried with Sh. Sukhnandan Premi were totally interest free transactions. It is seen that the assessee returned the amount of Rs. 10,51,000/- to Sh. Naqwi during the year itself. Hence no comments. 4. SH. SHEEL MEHTA & O.P. MEHTA In this regard notice u/s 133(6) issued to the property dealer namely M/s Perfect Properties, 47, Comm....
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....t does not contain the true affairs of the transactions. When it was specifically asked for the purpose behind submission of such bank statement by the appellant; the appellant, in person has admitted before me that he has not given the bank statement referred by the AO as fabricated bank statement in the assessment order. But this admission has never been brought before the AO during the assessment proceeding and or there after though the AO has referred it in his show cause notices. Hence, the AO's inference regarding submission of fabricated bank statement by the assessee has substance because why an assessing officer will put such documents on the record and call the explanation of the assessee. 5.4 The chart in respect of unexplained credit entries with Dena Bank Hari Nagar is as under:- Date Details Amounts (Rs.) 25/08/2004 1546 TRF 400000 28/08/2004 1589 TRF 250000 13/11/2004 123248 cheque 900000 13/11/2004 537873 cheque 5000 17/11/2004 1589 TRF 50000 04/12/2004 28470 cheque 2550000 16/12/2004 371127 cheque 2550000 08/02/2005 12188 TRF 300000 08/02/2005 1589 TRF 60000....
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....i. It has been demonstrated that the credits appearing in the bank account of Smt. Padma Bhandari is nothing but the sale consideration of immovable property received by her. The page 217 of the assessment record shows that the appellant has submitted the details in this regard during the assessment proceedings, but failed to file the confirmation from the lender. The assessment of Late Smt. Padma Bhandari for AY 2005-06 was completed u/s 143(3) of the Act. Therefore, it can not be ruled out that the bank accounts have not been examined the loan has been squared up/repaid during the year. Considering all facts and circumstances and various judicial pronouncements, I am of the considered view that this credit treated unexplained by the AO is not justified as all conditions of the section 68 get fulfilled. The addition on this score is therefore, deleted. Accordingly, the appellant gets relief of Rs. 50,50,000/-. 5.7 The sum of Rs. 13.00 lakhs credited in Dena bank is nothing but bank transfers from the accounts of Smt. Manjusha, w/o Shri S. N. Premi, the appellant. The AO has verified it during the remand proceedings. The relevant portion of the report is extracted as under....
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....Rs maturity details, etc. But the fact is that the bank accounts through which these transfers came reveal that these two persons have issued cheques in favour of the appellant by depositing cash to the equal sum in their accounts. Thus the loans were not out of any earlier savings and or deposits. Hence, the credit worthiness to the extent of cash deposits is not out of salary savings, FDRs, etc. Basically, it is from the gifts of Rs. 7.00 lakhs received by Ms. Silky and Ms. Sweta from Shri Pawan Kumar Jain and Smt. Pushpa Devi Jain w/o Shri Pawan Kumar Jain r/o 76/577, Kuli Bazar, Kanpur, UP (the donors have given Rs. 3.50 lakhs to each donee). In support of this the AR filed gift deeds, which are placed on the record. These gift deeds were dated 21.01.2005. These are not notarized documents but attested by the notary. These are not on stamp papers. The gifts are in cash. It is surprising to note that why the appellant has not submitted the copy of gift deeds before the AO when the AO has specifically asked to explain these credits. This raises doubts. Theses gift deeds show no acceptance of gifts by donees. The credit worthiness of donees was not filed to substantiate the genuin....
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.... placed at page 56 of the Paper Book (PB). The payments were done vide Ch. No. 165994 dated 15.11.2004 for Rs. 10 lakhs and Ch.No.179655 dated 19- 1-2005 for Rs. 10 lakhs drawn on Dena Bank Hari Nagar (PB 11 & 12 - Dena Bank Statement). Out of this, 7 ACs were sold for Rs. 7.00 lakhs in cash to Satyam Furnishers on 01.02.2005. The cash receipt of the same duly confirmed by the buyer was filed at PB 57 with PAN of Sat yam Furnishers, proprietor: Shri Narander : ADRPN8017E. The DG set was sold for Rs. 13.00 lakhs in cash to Shivam Enterprises on 31st January 2005. The cash receipt of the same was filed at PB 58 duly confirmed by the Shivam Enterprises: proprietor: Shri Mahender Kumar with his PAN: ADZPK0960B. The purchase of generator set and air conditioners are through cheques where as sale are in cash. The acquisition of these assets by the assessee gets established by the sale bill of the seller, M/s Sukhbir Properties Private Limited on 19.01.2005. Since these assets are not reflected in the statement of affairs of the assessee as on 31.03.2005, therefore, its sales can not be doubted as the appellant has shown all movable and immovable assets in his statement of affairs filed o....
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.... various bank accounts: Rs.38,43,500/- 6.6.1 The appropriation of these incoming cash as explained in the cash flow statement is purely mechanical when the house holds expenses and marriage expenses of the daughter of the appellant are considered during the relevant year. The total expenses/withdrawal for marriage i.e. Rs. 1,94,765/-. The house hold expenses have to be subdivided into following sub-heads for proper estimation per annum in the case of the appellant: house tax, water tax, electricity, telephone including mobiles, domestic help, food including milk, washing and washer man, common society security guard and sweeper, clothes, medical, charity, conveyance, entertainment including cable charges, news papers and magazines, miscellaneous not grouped above, etc, etc. After analyzing the house hold expenses in entirety and the cash savings/cash in hand with each individual, non uniformity of withdrawals and marriage expenses: engagement, ring ceremony, jewellery, cloth, food ing, reception, photography, videography, music, mehandi rasm, vehicle/conveyance, marriage venue place expenses, decoration and lights, barat accommodation, gifts, etc, etc, I am of....
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....33, Ring Road, Naraina, New Delhi sold to Sh. Mangtu Ram Gujjar for a consideration of Rs. 8 lacs. * The addition was made as the assessee failed to provide documentary evidence of his ownership prior to alleged sale ignoring the fact that the said property was duly been disclosed by the assessee in his statement of affairs of the last year i. e. A Y 2003-2004 & AY 2004-2005, copies of the same are at PB 72 & 73 showing the cost of the Property at Rs. 7,86,600/-. * The other documentary evidences could not be produced during the course of assessment as the assessee was not able to locate the same. These evidences of Purchase and Sale of this property are at PB 63-86 of the Paper Book. * Property No. CB-133 Naraina was shown in the assessee's Income Tax return for last several years at Rs. 7,86,000/- (PB 70-75) and. The said property was purchased by the assessee in 1980 at Rs. 48000/- (PB 63-69) and with subsequent improvements the cost in assessee's Statement of Affairs as on 31.3.2004 was Rs. 7,86,000/- as duly filed with his ITR for AY 2004-2005 (PB 70-75). Copy of documents regarding Purchase of said property is at PB 63-69. Copy of sale docum....
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..... On merits, the AO took note that all the credits from 25.08.2004 to 07.03.2005 are through cheques/transfer entries. He also took note of the fact that an amount of Rs. 23 lakhs are transfer entries from the bank accounts of the family members of the assessee who were his wife and daughters who were having account in the same branch of the Dena Bank. The remaining credits were through cheques from Smt. Padma Bhandari of Rs. 50,50,000/- , Shri S.S.H. Naqwi of Rs. 9 lakhs, rent of the property Rs. 5,000/-, Shri Sheel Mehta of Rs. 5,90,000/- and income-tax refund of Rs. 49,226/-. 7.1 In respect to the credit of Rs. 50,50,000/-, we find that the CIT (A) has called for the remand report which has been reproduced (supra in para 5.6 of the CIT (A)'s order) wherein, the AO had stated that the said Smt. Padma Bhandari has passed away on 18.04.2008 and the legal heirs of the assessee are not aware of this particular specific information. The AO's suspicion is only based on the fact that on the day the lady has given cheques to the assessee, similar amount was received by the lady on the same day through cheques for which no possible explanation was filed by the assessee. Other than the ....
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....t the said amount has been an interest free loan by Shri S.S.H. Naqwi to the assessee and the said amount borrowed has been repaid by the assessee also during the year under consideration, therefore, the transactions are genuine and so he directed to delete the same. Likewise, in the case of Shri Sheel Mehta too, an amount of Rs. 5,90,000/- was said to have been given as an advance and the said Shri Sheel Mehta was the tenant of the assessee and has given an advance for the said property. The AO took note of the fact that the said Shri Sheel Mehta later on changed his mind and did not want the property, so the amount of Rs. 40,000/- was taken as commission and the balance amount of Rs. 5,50,000/- was paid back to Shri Sheel Mehta during the same year. In the remand report, the AO had expressed his satisfaction about the repayment of the said advance taken from Shri Sheel Mehta. In the light of the said facts, the CIT (A) has held that the transactions of both the persons were genuine and, therefore, the amount which was credited in assessee's account cannot be termed as income from undisclosed sources and therefore, rightly deleted the said addition. Accordingly, we confirm the act....
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....aving Bank account from Dena Bank, Rs. 9,15,000/- in HSBC Bank account and Rs. 15,20,000/- as unexplained cash deposit in PNB Bank account (i.e. total Rs. 36,77,000/-) and ground no.5 is against deletion of Rs. 8 lakhs on account of sale of property and ground no.2 of assessee's appeal is against the sustenance of addition of Rs. 10 lacs. 9. The ld. CIT (A) has taken note that the AO has taken the peak of deposits in Dena Bank and cash deposits in PNB & HSBC Bank as unexplained and added to the income of the assessee. Before the ld. CIT (A), in order to substantiate the source of the cash which was deposited in assessee's various accounts, the following was furnished before him :- i. Sale of generator set and air conditioners : Rs.20,00,000/- ii. Sale of property situated at CB-133, Naraina for Rs.8,00,000/- iii. Rent receipts in cash : Rs.1,44,490/- iv. Receipt from Shri Ganpat Sharma : Rs.2,50,000/- v. Opening cash in hand : Rs.31,500/- vi. Cash received from Smt. Manjusha w/o the appellant: Rs.4,87,500/- vii. Cash received from Shri S H H Naqvi : Rs. 50,000/- viii. Bank withdrawals from various bank accounts....
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....0 lakhs cash deposited in the assessee's account stands explained and cannot be termed as undisclosed income from unknown sources. 9.1 The AO has not accepted the source of Rs. 8 lakhs which the assessee claimed to have earned by sale of property which he had shown in his return of income. The AO has stated that the property bearing no.CB- 133, Naraina was sold for a consideration foRs.8 lacs for which, according to the AO, the assessee had only produced copy of cash receipt for the said sum received from Shri Mangtu Ram Gujjar along with his address for sale of the said property comprising of two rooms with attached bath and one hall. The AO has made the addition on the sole ground that the sale deed copy was not produced and the summons sent to Shri Mangtu Ram Gujjar (purchaser) had come with postal remark that "the recipient is not there" and also on the ground that the assessee had failed to produce any documentary evidence of his ownership prior to the alleged sale of the said property for the cash receipt of Rs. 8 lakhs. During the appellate proceedings before the CIT (A), the assessee brought to the notice of the ld. CIT (A) that this property was purchased by the assesse....
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....ights of the aforesaid property which he had sold in the relevant A.Y. Taking this fact into consideration, the ld. CIT (A) had deleted the said addition. We find that the ld. DR could not controvert this factual aspect that has been brought out in the impugned order. In such a scenario, we have no other option but to uphold the order of the ld. CIT (A). Thus, we confirm the deletion of addition of Rs. 2,50,000/-. 9.3 The source of income from the rent has also been brought to the notice of the ld. CIT (A) that Rs. 1,44,490/- has also been found to be accepted. Therefore, by doing so, the ld. CIT (A) has accepted the source of income of Rs. 20 lacs on account of sale of DG set and air-conditioners found explained, Rs. 2,50,000/- on account of sale of roof rights and rent of Rs. 1,44,490/- also found explained, and sale of property of Rs. 8 lacs, therefore the assessee's cash of Rs. 31,94,490/-stands explained by the assessee. 9.4 However, we find that the ld. CIT (A) had, in para 6.6 of his impugned order, taken note of the statement of affairs as on 31.03.2004 of the assessee, the AO's remand report, bank withdrawals and other evidences brought to his notice and accepted the....
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....has accepted the claim of the assessee that he had received Rs. 20 lakhs from the sale of DG set and air-conditioners, Rs. 8 lakhs from sale of property and rent of Rs. 1,44,490/-, sale of roof rights of Rs. 2,50,000/-, thus amounting to Rs. 31,94,490/-. Therefore, once he has accepted the cash of Rs. 31,94,490/- which has come into the bank accounts of the assessee, then maximum sustenance that can be made to the difference of Rs. 36,77,000/- minus Rs. 31,94,490 i.e. Rs. 4,82,510/-. The total expenses/ withdrawals of March as per the cash flow statement submitted by the assessee is only Rs. 1,94,765/- for marriage expenses of his daughter, which, according to us, is also abysmal low figure when considering the assessee's income, status and business which he undertakes. Therefore, the amount of Rs. 4,82,510/- would be a reasonable amount to be sustained. Thus, the assessee's ground no.2 is partly allowed. 10. In the result, the appeal of the revenue for the assessment year 2005- 06 is dismissed and the appeal of the assessee for the assessment year 2005-06 is partly allowed for statistical purposes. 11. Now, we take up revenue's appeal (ITA No.3114/Del/2010) and cross objecti....
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....t deposited of Rs. 1,00,000/- dated 15th June, 2005 (vi) Copy of cash flow statement filed before the AO to demonstrate than Rs. 1 lakh of cash was available with the assessee during the year. Taking these evidences into consideration, we find that the CIT(A) has believed the claim of assessee that the property situated at E-24, Poorvi Marg, Vasant Vihar, New Delhi was sold by the assessee to Shri Vivek Titus and the property was finally sold on 12.06.2006 i.e. assessment year 2007-08. Therefore, the amount of Rs. 72,50,000/- which is remitted in the account of the assessee and claimed by the assessee should have been the advance for the said property, has been accepted by the ld. CIT (A). The ld. CIT (A) has come to the conclusion based on the evidences which had been for the first time produced before him as stated above. So we find force in the submission of the ld. DR that these documents should have been sent to the AO for seeking the remand report as prescribed under Rule 46A of the Rules. The ld. AR does not have any objection if we send the matter back to the file of the AO for verification. In the light of the above, we are inclined to set aside the order of the CIT ....