TaxTMI 
TaxTMI 
2018 (10) TMI 1162
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....loan. 3. That under the facts and circumstances of the case, the learned CIT(A) has erred in sustaining the addition of Rs. 2,85,313/- u/s 56(2)(vii)(b)(ii) of the Income Tax Act, 1961 by wrong adopting the valuation of property taken by the registering authority and without consideration the submission of the assessee." 2. Regarding Ground No. 1, the relevant facts and findings of the ld. CIT(A) are as under:- "4.3 I have carefully considered the observation made by the Assessing officer in the assessment order, submission filed by the A/R of the appellant and cited case laws. I find that the Assessing officer pointed out defects in the books of accounts. The appellant is not having any stock register. The assessee has also not maintained the quantity wise and quality wise day to day purchases / sales and stock. In these facts verification of the declared opening and closing stock and receipts and payment are not possible. The electricity and power expenses are comparatively higher side as compare to the expenses claimed in the preceding year despite the fact that the turnover shown in the year under consideration is too low. The A/R of the appellant ....
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....ns to Rs. 25,000/- without specifying any reasons for such sustenance. 4. The ld DR is heard who has relied on the order of the lower authorities and has submitted that in view of the defects noticed by the AO, the books of accounts have rightly been rejected and thereafter, the AO has made an addition of Rs. 50,000 which has already been reduced to Rs. 25,000 which is reasonable given the facts and circumstances of the case. 5. We have heard the rival contentions and perused the material available on record. The books of accounts have rightly been rejected u/s 145(3) of the Act for reasons stated by the AO and the ld CIT(A). However, mere rejection of books of accounts cannot be a basis for making the addition as has been held by the Courts from time to time. In the instant case, the declared gross profit is better than last two years as available on records. In the result, the addition of Rs. 25,000 is hereby deleted. 6. In Ground No. 2, the assessee has challenged the addition of Rs. 2,50,000/- u/s 68 r.w.s 115BBE of the Income Tax Act. The relevant facts and findings of ld. CIT(A) are reproduced as under:- "5.3 I have carefully considered the observation....
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....sh in the bank account of Smt.Santosh Devi Jangid and thereafter, he had get it transferred to his bank account just to give it the color of unsecured loan/cash credits. Therefore considering the above observation I am the view that Assessing officer rightly treated Rs. 2,50,000/- as unexplained cash credit and treated income of the assessee u/s 68 of the I.T. Act 1961 read with section 115BE of the I.T. Act. So I confirm the addition of Rs. 2,50,000/- as unexplained cash credit u/s 68 of the I.T.Act 1961 read with section 115BBE of the I.T. Act. This ground is not allowed." 7. The ld. AR has submitted that during the assessment proceedings, the assessee has submitted copy of confirmation, ITR and computation of income of cash creditor Smt Santosh Devi Jangir who is also assessed to income tax with Income Tax Officer, Ward-7(3), Jaipur and regularly filing income tax return. Copy of bank passbook was also furnished before the Learned Assessing Officer. She has deposited Rs. 2,50,000/- in her bank account. The immediate source of cash deposit in bank account is out of dairy & agriculture income and cash saving. The bifurcation of cash received was as under: - (i) ....
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.... 10. We have heard the rival contentions and perused the material available on record. We find that the assessee has submitted copy of confirmation, ITR and computation of income of Smt Santosh Devi Jangir assessed under Income Tax Officer, Ward - 7(3), Jaipur. In the return of income, she has disclosed diary income of Rs. 2,65,200 and agricultural income of Rs. 3,10,200 which reasonably explains the source of cash deposit in her bank account of Rs. 2,50,000. In the result, necessary onus in terms of creditworthiness which has been challenged by the Revenue is satisfied in the instant case. The decisions relied upon by the ld DR are distinguishable on facts as in those cases, the source of cash deposits was not explained which is not the case before us. In the result, the ground of appeal is allowed. 11. Regarding Ground No. 3, the facts and the findings of the ld. CIT(A) are reproduced as under:- "6.3 I have carefully considered the material before me. I find that the appellant himself has admitted the addition, these is no dispute in the matter as per the sale deed dated 01.11.2013 the sub-register Ajmer Jaipur has adopted the sale value of the property for the pur....