TaxTMI 
TaxTMI 
2016 (4) TMI 1045
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....claring loss of Rs. 16,143/- along with agricultural income of Rs. 84,000/-. Subsequently, a notice u/s 148 of the Income-tax Act, 1961 (in short 'Act') was issued to the assessee on 20/07/05. The Assessing Officer had determined the total income of the assessee at Rs. 40,86,260/-. 3.1 The assessee is an individual and had constructed a warehouse under 'Grameen Bhandar Yozana' Scheme at Gundaram Village of Nizamabad District. The total cost of the warehouse was Rs. 77,96,876/-. Assessee has borrowed loan from ICICI Bank to construct the warehouse. When the Assessing Officer asked the assessee to explain the sources for the funds for making the investment, there was no proper compliance from the assessee and the Assessing Officer after considering the evidence available on record made the following additions: 1. Rs. 39,04,888/- as unexplained investment u/s 69 of the Act. 2. 1,89,330/- towards unexplained expenditure for repayment of interest on bank loan u/s 69C of the IT Act. 4. Aggrieved by the order of Assessing Officer, the assessee preferred an appeal before the CIT(A). 5. In the course of appeal proceedings, the assessee had submitted that to constr....
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....since the assessee is a house wife and she need not have to spend household expenditure and savings of Rs. 6.20 lakhs out of this source is genuine and reasonable. 8.1 With regard to sundry creditors, the ld. AR submitted that all these sundry creditors were genuine and the advances taken from the creditors were incurred for construction of warehouse building. These sundry creditors are consist of small agents, who are dealing with the construction materials. There is a total of 38 creditors and confirmations from them were already filed before the Assessing Officer. These are all small farmers in and around the village of the assessee. These sundry creditors were genuine because these creditors were settled in the subsequent FY by taking further loan from Andhra bank and out of rental income from warehouse. Ld. AR further submitted that assessee has entered into an agreement to sell a land property and mobilised further sum of Rs. 6.50 lakhs, for which agreement for sale was already submitted before the Assessing Officer. 8.2 Ld. AR submitted that the assessee had also received a gift from her brother Shri D. Ramamohan Rao. He submitted that the donor has capacity to give a gif....
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....essee has already submitted the confirmations from the creditors and they are from the small farmer community and the assessee is hailing from a small village and moreover no involvement of bank. In our view, the assessee has already established the genuineness of the creditors and the transaction may be under scrutiny due to the fact that in villages, funds are settled in cash. Since it is a small village and involvement of small farmers, we are inclined to accept the submissions of the assessee in this regard. Accordingly, we delete the addition made on this count. 10.2 With regard to advance received for sale of land of Rs. 6.5 lakhs, the assessee has submitted agreement for sale executed in favour of Smt. Y. Nalini, who is stated to be residing in USA. We are not in a position to accept the genuineness of the transaction as the assessee has claimed to have received Rs. 6.5 lakhs and also continue to hold the land. There is no evidence to show that the above land was transferred or the money taken as advance is returned. Also in the sale agreement clause, it was stated "that it is agreed between the parties that the balance sale consideration shall be paid within three years fro....
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....ned expenditure u/s 69C of the Act on account of payment of interest on loan to ICICI. 16. The assessee, therefore, is in appeal before us and has raised the grounds pertaining to the above claims, which were confirmed by the CIT(A). 17. As regards the past salary savings, the facts are that the assessee worked as Dy. Executive Engineer with the Govt. of AP and retired in February, 2002. He produced his last pay certificate indicating his last pay draw at Rs. 21,321/-. For the month of February, 2002. He furnished year-wise particulars of pay drawn by him including the net pay after deductions. During the period from 1990-2002, he claimed to have been received net salary of Rs. 14,30,390/-. According to him, he had salary savings of Rs. 9,29,754/- after meeting domestic expenditure of Rs. 5,00,637/-. He submitted that he always received the salary in cash and never maintained a bank account. Out of salary savings, he claimed to have invested an amount of Rs. 8,80,000 in construction of warehouse. The Assessing Officer rejected the submissions of the assessee and rejected the said claim of assessee. 18. The CIT(A) observed that the claim of the assessee was found to be disp....