AI Drafter 
TaxTMI 
TaxTMI 
2018 (7) TMI 1879
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....e disallowance of Rs. 4,92,000/- made by AO on account of agricultural income. ii) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in admitting the additional evidence with respect to the assessee's claim of agricultural income without giving an opportunity to the AO to examine the same. iii) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 26,90,000/- made by the AO on account of unexplained cash credits under section 68 of the Income Tax Act, 1961. iv) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in holding the cash flow statement to be correct when it is merely a self serving document and the source of cash deposits was not explained before the AO. v) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in allowing the assessee to claim business loss of Rs. 3,62,384/- when no details thereof were furnished before the AO. vi) The order of the CIT(A) is erroneous and is not tenable on facts and in law. vii) The appellant craves leave ....
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....how cause notice u/s. 276CC of the Act was issued to the assessee on 7.11.2012 and fixed the case for hearing on 23.11.2012. The assessee vide letter dated 19.11.2012 had requested to allow further time to file the return of income for the year under consideration and to withdraw the show cause notice issued. The assessee filed the return of income for the year under consideration received in this office on 10.12.2012 declaring an income of Rs. 5,48,670/-. Notice u/s. 143(2) of the Act was issued on 31.12.2012 and fixed the case for hearing on 4.1.2013. During the assessee has declared income from agricultural at Rs. 4,95,000/-. The agriculture land is in the name of deceased father of the assessee at Dholpur. Assessee has not filed any proof regarding the agricultural activity carried on the agricultural land or any sale bill of the agriculture produce. Therefore, the entire agricultural income shown by the assessee is added in the taxable income of the assessee as income from undisclosed sources. AO further observed that assessee is maintaining bank account with Axis Bank and cash amounting to Rs. 7,56,54,052/- was found credited in the Axis Bank. The assessee has filed the cash ....
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....not been proved. No reason has been given why the amount was advanced to the assessee in cash. It was claimed that the amount was received on account of pledging of some shares of TIDCO. However, no details of cash withdrawn from account of AOP and evidence of cash handed over to the assessee has been filed. (iv) No attempt has been made to co relate cash received with the cash deposited in bank account of the assessee A. Y. 2007-08 4. Cash of Rs. 26,90,OOO was found deposited in the bank account of the assessee. The Ld. CIT(A) has accepted contention of the assessee that cash of Rs. 39,OO,OOO was received from Mittal Traders. No evidence has been filed of cash withdrawn from Mittal Traders. No justification has been filed as to why the amount was received in cash. Similarly, no justification has been filed as to why the amount was received in cash from Smt Raj Kumari In the above case, it is humbly submitted that the following decisions may kindly be considered with regard to addition made u/s 68 of I.T. Act: 1. PCIT Vs Bikram Singh [ITA No.55/2017] (Delhi) (Copy Enclosed) where Hon'ble Delhi High Court held that even if a ....
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.... such the assessee completely discharged its initial onus under Section 68 of the LT. Act 1961. 2. Jalan Timber vs CIT(1997) 223 ITR 11 (Gauhati H.C.) In the instant case, the amounts were shown in the income tax return of the assessee. Besides, the creditor had also shown in the return about giving of the loan to the assessee. Strangely, the Income Tax Officer while making the assessment in respect of the three creditors above named accepted the returns. This itself will go to show that the amount received by the assessee was at least prima facie genuine. As the Income Tax Officer' had accepted the returns of the three creditor? it should go to mean that the amounts given by those creditors were also genuine. 3. Neeru Devi Kothari vs ITO(2001) 116 Taxman 224 (Jodhpur) Where the creditor was an income tax assessee and had filed confirmation letter, credit in his account could not be added to the assessee's income on the ground that assessee-has filed to prove the creditworthiness of the creditor. 4. Sarogi Credit Corporation vs CIT(1976) 103 ITRE 344 (Patna HC) Once the identity of the third party is established before the Income....
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....of the creditor. Nemi Chand Kothari vs CIT [2004] 136 Taxman 213 (Goa) 6. Inability of the department to verify the explanation offered by the assessee is not sufficient ground for rejection of explanation. S. Hastimal vs CIT 49 ITR 272 7. An explanation prima facie reasonable cannot be rejected on arbitrary grounds or on mere suspicion or on imaginary or irrelevant grounds. The ITO cannot merely reject a reasonably good explanation and convert good proof into no proof. CIT vs K.S. Kannan Kunhi87 ITR 3958. 8. Credit in the name of close relative, the assessee cannot be presumed to have knowledge of the source from which depositor has obtained money. Tola Ram Daga vs CIT 59 ITR 632 (Assam) and CIT vs Daulat Ram Rawat Mal 87 ITR 349 9. CIT vs Pithampur Conzima (P) Ud.(2000) 244 ITR 442 (MP High Court Where in appeal before Tribunal, the assessee showed that the credit given to the assessee company were duly declared by the creditors in their respective returns, whereupon the Tribunal concluded that the investment in the assessee firm was duly explained and no addition was called for in the hands of the assessee and deleted the addition. ....
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....undisclosed sources is not correct, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) and reject the ground no. 1. In view of above, it is established that AO's action in treating the agricultural income as income from undisclosed sources, appears to be against the principle of consistency and therefore, is squarely covered by the decision of the Hon'ble Supreme Court in the case of Radhaswami Satsang vs. CIT (1992) 193 ITR 321 (SC), therefore, the case laws cited from both the sides are on distinguished facts. 8.1 As regards ground no. 2, 3 & 4 relating to addition of Rs. 7,56,54,052/- made on account of unexplained cash credits u/s. 68 of the Act is concerned, we find that during the year under consideration, assessee has deposited an amount of RS.7,56,54,052/- in its bank account. The bank statement of the assessee in this regard is enclosed at PB 97 -100. It was submitted by the assessee before the AO that the said deposits were out of the cash received by the assessee on various accounts, which has also been disclosed in the cash flow statement provided by the assessee to the AO, enclosed at PB 22-24. A perusal of the cash flow ....
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....sed in the case of Veerandra Kumar (AOP) in respect of AY. 2006-07, which are enclosed at PB 77 - 84. The assessee, before the Ld. CIT(A), has also submitted the copies of returns of income along with computation of income of the partners of the said AOP, which are enclosed at PB 125 -725. The Ld. CIT(A) has duly appreciated the fact that M/s Veerandra Kumar (AOP) was having 52 partners with a capital of RS.7,42,50,000/-, out of which the sum of Rs. 5,09,00,000/- was paid to the appellant for purchasing the shares of TIDCO held by the assessee. The said documents were also forwarded by the Ld. CIT(A) to the AO, however, even after sending 4 reminders to the AO, the AO chose not to send its report on the said documents. Therefore, the Ld. CIT(A) has accepted the said additional evidences filed by the assessee and after considering the same, has decided the case on merits. These facts are clearly evident from Page 13 - 14 of the Ld. CIT A 's order. It is also pertinent to mention here that the Ld. CIT(A) duly sent a letter to the DIT(Systems) to check the reliability of the Acknowledgment of ITRs filed by the assessee, in response to which, it was submitted that almost all the pa....