TaxTMI 
TaxTMI 
2020 (11) TMI 812
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....ances of the case and in law, the ld. CIT(A) grossly erred in sustaining an addition of Rs. 5,11,000/- by treating the advance taken against sale of property from Shri Ram Swaroop Mali the source of which was truck sold by his son as bogus. 4. That on the facts and circumstances of the case and in law, the ld. CIT(A) grossly erred in not quashing the invocation of the provisions of Section 115BBE of the Income Tax Act, 1961 to the additions sustained. 5. That the appellant craves leave to add, amend, alter, modify, substitute or delete any ground or grounds of appeal on or before the hearing of the appeal." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. Briefly stated facts of the case are that the assessee filed her return of income in response to notice issued U/s 148 of the Income Tax Act, 1961 (in short, the Act) on 29/06/2018 declaring income from business and profession U/s 44AE of the Act. Income from house property and income from other sources at the same income declared initially u/s 139 of the Act. The assessment in the present case was reopened U/s 147 of the Act....
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....rce of investment in property or cash deposit in bank account. Reliance is being placed on the judgment of CIT Vs. Maniben Valji Shah (2006) 283 ITR 453 (Bom), wherein Hon'ble Bombay High Court held that AO cannot reopen assessment u/s 147 for verification of source of purchase of flat by the assessee as there is no reason to believe that any income has escaped assessment. Copy of the judgment is submitted herewith at paper book page no. 36 to 38, relevant para no. 8 at page no. 38, which is also reproduced hereunder :- "8. Having heard Shri Desai, the learned senior counsel for the Appellant, as well as Shri Bhujale, the learned counsel for the Respondents, it is an admitted position that the assessee had invested a sum of Rs. 2,50,000/- for the purpose of purchasing the flat and what was sought to be investigated was the source of income. A bare perusal of the aforesaid notice dated 10.10.1991, clearly indicates that the Officer was wanting to know the details with regard to the source of funds with regard to purchase of the said flat for a sum of Rs. 2,50,000/-. Obviously in the above, there is no question of the assessing officer having any basis to reasonably....
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....O. Although, it has been submitted by the ld AR that the reasons behind reopening of assessment was void and illegal as merely because property was purchased by the assessee, it does not at all lead to an inference that the income has escaped assessment. It was submitted that there must be 'reasons to believe' and not 'reason to suspect' that income chargeable to tax has escaped assessment. In this regard, the ld AR has relied upon the decision of Hon'ble Bombay High Court in the case of CIT Vs Maniben Valji Shah (2006) 283 ITR 453 (Bom) and also the decision rendered by the Hon'ble Supreme Court in the case of Sheo Nath Singh Vs AAC (1971) 82 ITR 147 (SC). However, after considering the decisions relied upon the assessee, we found that the facts of the cited cases are distinguishable from the facts of the present case, therefore, the judgments relied upon by the assessee are not applicable to the facts of the present case. As far as the present case of the assessee is concerned, we are of the view that the material before the A.O. was relevant and affords a live link or nexus to the formation of a prima facie belief that income chargeable to tax has escaped assessment in the hands....
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....isions of law. For purchase of immovable property, the appellant took loans from her relatives. Detail of loans is summarized as under :- S.No. Name Loan taken(Rs.) Additions made by ld. AO (Rs.) 1 Sh. Harish Gyanani 75,000 0 2 Sh. Naresh Gyanani 50,000 0 3 Sh. Diksha Gyanani 2,50,000 2,50,000 Deleted by CIT(A) 4 Sh. Kamala Tahaliyani 5,00,000 5,00,000 Under this Appeal 5 Sh. Lal Chand Parchani 4,00,000 4,00,000 Deleted by CIT(A) Total 12,75,000 11,50,000 Following documents are furnished herewith in support of the loan transactions :- S.No. PARTICULARS PAGE NOS. 1 Confirmation of Kamla Tahaliyani 6 2 Bank statement of Kamla Tahaliyani 7 to 11 3 Purchase Deed dated 12.07.2012 12 to 19 4 Copy of Bank Account Pass book of Meera Devi Reply letters by the Assessee to The A.O during 20 to 22 5 Assesment proceedings 23 to 25 From the documents submitted as above, it is amply evident that the loan is genuine & the creditor had capacity to advance the loans. Moreover, merely because cash is deposited in the bank accounts....
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.... bank account are totally sourced by the cash withdrawals made earlier, hence any adverse inference in these facts is unwarranted. The ld. CIT(A) erred in sustaining the addition without considering this fact that the cash deposits in bank account were fully sourced from the earlier cash withdrawals from the same bank account. Hence, the finding of the ld. CIT(A) that immediate source of advancing money is unverifiable is perverse. 6 7 to 11 10, 11, 25 1.1 IDENITITY, CAPACITY OF CREDITORS AND GENUINENESS OF TRANSACTION STANDS ESTABLISHED APPELLANT HAS DISCHARGED ITS ONUS. It is humbly submitted that the appellant has established the identity and capacity of the loan creditors as well as the capacity & genuineness of the transactions. This is evident from the following :- a) The identity of the loan creditors has been established by filing confirmations, bank pass books, etc. b) The capacity of the loan creditors is proved through bank pass books wherein they had sufficient balance to advance loans to the appellant. ....
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....h banking channels does by itself constitute to be non-genuine? - Held No. c) Also held that once assessee has discharged its onus, it is for the department to bring on record sufficient evidence to prove that creditors are persons of no means and transactions are not genuine. 1.5 SOURCE OF SOURCE NEED NOT BE PROVED. The issue under consideration in this appeal is squarely covered by the judgment of the Hon'ble Rajasthan High Court in the case of M/s Aravali Trading Co. Vs. Income Tax Officer reported at (2008) 8 DTR 199, wherein it was held that once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee's onus stands discharged and the latter is not further required to proves the source from which the creditors could have acquired the money deposited with him either in terms of section 68 or on general principle. Merely because the depositor's explanation about the sources of money was not acceptable to the AO, it cannot be presumed that the deposit made by the creditors is money belonging to the assessee itself. Hence, it is now a well established law that in case of....
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....n taken from Smt. Kamla Tahaliyani merely on the ground that cash was deposited in the bank account of the creditor before issue of cheque. We are of the view that merely because cash was deposited in the bank account of the creditor does not necessarily implied either the cash does not belong to the creditor or the creditor does not have capacity to deposit such amount in her bank account. In the case of Smt. Kamla Tahaliyani, cash was deposited in the bank account, but it was fully sourced from the cash withdrawn from the bank account on earlier occasion few days ago. In this respect, we have seen that the bank statement of the said creditor wherein it has been shown that the cash of Rs. 6.00 lacs were withdrawn by the loan creditor from her own bank account on 18/05/2012 and 19/05/2012 which was subsequently deposited back in the bank account on 31/05/2012 before advancing a sum of Rs. 5.00 lacs to the assessee. Therefore, in such circumstances, we are of the view that the cash deposited in the bank account is totally sourced by the cash withdrawals made earlier. Hence, adverse inference drawn by the revenue authorities under these peculiar facts and circumstances is unwarranted....
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....s:- S.NO. PARTICULARS PAGE NOS. 1 Copy of Aadhar Card of Ramswaroop Mali 26 2 Affidavit of Ramswaroop Mali 27 to 28 3 Agreement to sell date 04.07.2012 wherein Rs. 10 Lakhs cash was received 29 to 31 4 Cancellation Agreement dated 05.04.2013 32 to 33 5 Documents pertaining to Truck in the case of Son of Ramswaroop Mali 34 to 35 It is further submitted that the ld. CIT(A) sustained the part addition amounting to Rs. 5,11,000/- pertaining to sale of truck by son by holding at para no. 4.3 (page no. 19-20) of the appellate order as under:- "I find that that the truck was sold by the son of Shri Ramswaroop Mali and not by Ramswaroop Mali. There is no evidence that the son gave the amount to Shri Ramswaroop Mali. Therefore, the source to the extent of Rs. 5,11,000/- cannot be accepted and is correctly added by the Assessing Officer. The balance amount of Rs. 4,89,000/- is deleted. This ground of appeal is partly allowed." It is most respectfully submitted that Shri Ramswaroop Mali has accepted the payment of money to the appellant before the ld. A.O. by way of his statements recorded during the ass....
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....e identity, capacity and genuineness of a loan transaction is proved by the assessee, the primary onus which lay upon him is discharged and is shifted on the revenue. The assessee need not to prove the source of source of the loan transaction. Reliance is also being placed on the following judgments in this regard :- S.No. Particulars Citation Hon'ble Court/Tribunal 1 CIT Vs. First Point Finance Ltd. 286 ITR 477 Raj. High Court 2 ACIT Vs. Rajasthan Asbestos Cement Co. XLI Tax World 153 ITAT, Jaipur Bench It is further submitted that merely because the receipt and payment by the appellant are claimed to have been made in cash, it does not mean that transaction made between the appellant and Shri Ramswaroop Mali are not actual/genuine. Hence, treating of advance payment as bogus brushing aside all the material evidences on record by the ld. A.O. is illegal, unjustified and deserves to be deleted. 13. On the other hand, the ld DR has relied on the order passed by the ld. CIT(A). 14. We have heard the ld. Counsels of both the parties and have perused the material placed on record. We have also deliberated upon the decisi....