TaxTMI 
TaxTMI 
2018 (1) TMI 974
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....d addition be deleted. 3. In the facts and circumstances of the case and in law, the learned Assessing Officer and the learned C.I.T.[A] both, have failed to appreciate that the appellant has received an amount of Rs. 1,80,00,000.00 from its various customers as advance for sale of sand to them and hence the said advances were outside the scope and purview of the provisions of Section 68 of the I. T. Act 1961 and therefore the impugned addition may please be deleted. 4. The impugned addition of Rs. 1,80,00,000.00 made u/s. 68 of the I.T. Act 1961 being made by both the lower authorities in violation of principles of natural justice the same is bad in law and void ab initio and hence the same may please be deleted. 5. Without prejudice to above grounds of appeal and by way of an alternate submission in the matter, the appellant submits that the impugned order may please be set aside and the matter may please be restored to the file of the learned Assessing Officer with a direction to reframe the assessment after giving proper, due and reasonable opportunity of being heard to the appellant." 3. The above grounds revolve around the addition of Rs. 1.80 cr....
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....00,000.00 -- Janaradan G. Khairnar -- -- 4,00,000.00 -- Jitendra D. Hahiray -- -- 4,00,000.00 -- Jitendra N. Bambare -- -- 4,00,000.00 -- Kiran K. Pandit -- -- 4,00,000.00 -- Madhukar R. Bacchav -- -- 4,00,000.00 -- Nitin R. Chaudhary -- -- 4,00,000.00 -- Prahalad K. Nikam -- -- 4,00,000.00 -- Prakash D. Bacchav -- -- 4,00,000.00 -- Prakash N. Khairnar -- -- 4,00,000.00 -- Prashant B.Pawar -- -- 4,00,000.00 -- Prashant S. Sonawane -- -- 4,00,000.00 -- Prashant T. Jagtap -- -- 4,00,000.00 -- Pravin A. Bhamre -- -- 4,00,000.00 -- Pravin D. Salunke -- -- 4,00,000.00 -- Pyaralal B. Shelar -- -- 4,00,000.00 ....
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....ation of the assessee regarding the conditions of identity, credit worthiness, genuineness of the transactions and discharge the onus of assessee on the said conditions specified in section 68 of the Act. 6. In response, the assessee submitted confirmation letters in most of the cases and also the affidavits in all cases confirming the said payment of Rs. 4 lakh each in cash to the assessee. Lack of credit worthiness and genuineness of the transactions etc. were scrupulously examined by the AO. Unsatisfied with the explanation of the assessee, AO issued summons to all the 45 payees. Out of this, only 18 persons made appearance before the AO and of course, confirmed the basic transaction of payment of Rs. 4 lakhs in cash. However, they could not confirm the extent of payment and there are no confirmation about the cash transactions of Rs. 20,000/- each transaction. On finding in most of the cases, sources of the income is Agriculture and the documents of 7/12 extracts is the only evidence in respect of the said 27 persons out of 45 payees. AO found discrepancies in the reply given by the payees in the proceedings u/s.131 of the Act. Considering the discrepancies found in the stat....
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....20 days for meeting the deadline/requirement of making the payments to the Government for getting the sand contract. It is also a fact that these 45 persons were the beneficiaries of the said contract. To that extent, the cash transactions are not to be considered at arm's length and independent ones. 9. During the First Appellate proceedings, assessee could not improve his case. CIT(A) decided the issue against the assessee as per the discussion given in Para Nos. 6 to 11. In the said paragraphs, CIT(A) highlighted (1) the urgency of raising the capital of Rs. 1.80 crores in short time and (2) considered only 27 persons making appearance to the AO's office in response to the notice u/s.131 of the Act. CIT(A) also discussed the failure of the payees to confirm the exact amounts and the denial of making the payment in cash of Rs. 20,000/- per day from 18-12-2009 to 06-01-2010, ownership of the loans so relied upon by the payees as the source of income of their HUF's was also discussed. In Para No.7 of his order, the CIT(A) discussed the fact of calling for a detailed report by the AO by sending the income-tax inspector for cross verification and his adverse report was also relied....
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..... Cash Adv. rec. Receipt 474 20,000.00 03-01-2010 Dr. Cash Adv. rec. Receipt 505 20,000.00 04-01-2010 Dr. Cash Adv. rec. Receipt 536 20,000.00 05-01-2010 Dr. Cash Adv. rec. Receipt 567 20,000.00 06-01-2010 Dr. Cash Adv. rec. Receipt 598 20,000.00 10. Eventually, the CIT(A) confirmed the addition of Rs. 1.80 crores as per the discussion given in Para No.11 of his order and the same reads as under : "11. A perusal of the facts clearly reveals that the appellant had manipulated the availability of cash of Rs. 1,80,00,000/- that he was required to deposit with the collector's office, Nashik to obtain the sand mining contract. It is not a sheer coincidence that each of the 45 persons has deposited Rs. 20,000/- in cash daily from 18/12/2009 to 06/01/2010. No agriculturist would have availability of cash in such a fashion. I have gone through the statements of some of the 27 persons recorded by the AO u/s 131 of the Act. Prima facie I find that none of the person....
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....ved cash advances for sale of sand. The appellant's contention that cash advances were received against sale of sand is devoid of merit and hence not acceptable. In view of the above the appellant's contention that AO was not justified in invoking the provisions of sec. 68 of the Act is also dismissed. Appellant's reliance on various case laws in this regard is misplaced as the nature of cash advances, alleged to have been received against sale of sand, is found to be that of cash credits. It is a clear case of introduction of unexplained cash. These 45 persons have tried to accommodate the appellant in explaining the source of Rs. 1,80,00,000/- in his hands by furnishing fictitious affidavits. While the identities of these persons may have been proved, their creditworthiness and genuineness of the transactions are clearly found to be bogus. In view of the above, I am of the opinion that AO was justified in making the addition of Rs. 1,80,00,000/- in the hands of the appellant u/s 68 of the Act. The same is hereby confirmed." 11. Aggrieved with the above order of CIT(A) the assessee filed the present appeal with the ground referred above. 12. Before us, Ld. Counse....
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....ess which is not fully evidenced by the assessee. From this point of view, assessee failed to discharge the onus about the credit worthiness of these payees. He also submitted that the law allows the payments to assessee to compositely fulfil all the conditions specified in the provisions of section 68 of the act. 15. We heard both the parties and perused the orders of the Revenue. We have examined the facts of this case and found there is no dispute about the receipt of the payment in installments of Rs. 20,000/- each per day from each payee. There is also no dispute about the cash payments. It is an admitted fact that the payees are never subject to income-tax. It is also a fact that all the payees never made appearance before the AO in response to the summons u/s.131 of the Act. Least of all, these payees could have demonstrated the exact amount paid by them to the assessee and the manner of payment of Rs. 20,000/- per day. They are ignorant about the fact relating to payment of cash of Rs. 20,000/- per day including the weekends. The 7/12 extracts furnished by the assessee could never demonstrate conclusively that the lands belong to the individual payees and the income is a....