TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 332
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....t. This action of Ld. CIT(A) is illegal and without jurisdiction firstly because the same has been done without issuance of any notice and secondly the same has been done mechanically without any application of mind. 3. The Ld. CIT (A), has erred in law and on the facts by confirming the action of AO in making addition of Rs. 46,24,400/- u/s 69 of the Act on account of alleged unexplained investment in purchase of agriculture land at Block/Survey No. 125 Prantij Sabarkantha. 4. The Ld. CIT (A), has erred in law and on the facts by confirming the action of AO in making addition of Rs. 23,91,488/- u/s 69 of the Act on account of alleged unexplained investment in purchase of agriculture land at Block/Survey No. 124 Prantij Sabarkantha. 5. The Ld. CIT (A), has erred in law and on the facts by confirming the action of AO in making addition of Rs. 9,17,900/- u/s 69 of the Act on account of alleged unexplained investment in purchase of agriculture land at Block/Survey No. 143 Dhandhuka. 6. The Id. CIT (A), has erred in law and on the facts by confirming the action of AO in making addition of Rs. 4,00,000/- treating the agriculture income as income from other sources. 7. Without ....
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....il. The assessee with respect to amount received from Shri Mithilesh Kumar P. Patel, Shri Parshottambhai Mohanbhai Patel and Kamleshkumar Parshotttambhai Patel submitted that he has received loan amount of Rs. 2 Lacs, Rs. 4.85 Lacs and Rs. 31.3 Lacs respectively through banking channel. These 3 parties are his relatives and engaged in agricultural activity and they have provided loan to him out of personal saving kept in the form of fixed deposit with Banks which were matured during the year. The assessee in support of his claim with respect to these parties furnished copy of PAN, Copy bank statement of parties, copy of maturity of fixed deposit and copy of 7/12 for having agricultural land. Accordingly the assessee prayed that it has discharged the onus cast under section 68 of the Act. 6. The learned CIT-A after considering the fact in totality has deleted the addition in part and enhanced the addition made by the AO for Rs. 1.85 Lacs with respect to the loan party namely Shri Parshottambhai Mohanbhai Patel. The amount of addition deleted, confirmed and enhanced are as detailed below: S. No. Party name Addition by the AO Enhance/decrease by The CIT-A Total as per the CI....
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....y the learned CIT-A after making the enhancement of Rs. 1.85 lacs. As per the learned AR, the amount of addition was enhanced by the learned CIT-A without giving any opportunity to the assessee which is in violation of the provisions of section 251(2) of the Act. Accordingly, the learned AR contended that there cannot be any addition to the tune of Rs. 1.85 lacs in the hands of the assessee. Likewise, the learned AR on merits submitted that the assessee has filed confirmation along with the PAN of the party, bank statement of the lender to justify the source of money. Accordingly, as per the learned AR, the assessee is not answerable to justify the source of source in the hands of the lender. 8.1 The learned AR made the similar submissions on merit with respect to loan from Shri Kalpeshkumar Parshottambhai Patel. 9. On the other hand, the learned DR vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates to the loan taken by the assessee from various parties which can be summarized as under: S. No. Loan Parties Amount of loan Ad....
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....n from the party namely Shir Kalpeshkumr Parshottambhai Patel stands at Rs. 31.3 Lacs only against the addition made by the AO at Rs. 33.15 Lacs. 10.4 Based on the above submission of the assessee, the learned CIT-A confirmed the addition made by the AO to the tune of Rs. 1.85 Lacs with respect to the loan shown from the party namely Shri Parshottambhai Mohanbhai Patel. As such, the learned CIT-A was pleased to delete the addition of Rs. 3 Lacs from the said party which is not in dispute before us. 10.5 The learned AR with respect to the addition of Rs. 1.85 lacs has made two fold contentions. Firstly, the learned CIT-A have enhanced the addition by Rs. 1.85 lacs without following the procedures specified under the provisions of section 251(2) of the Act. Secondly, the assessee has discharged the onus by furnishing the necessary details in support of genuineness of such loan. Furthermore, the assessee was not under the obligation to explain the source of source in the hands of the lenders. 10.6 As regards the 1st contention of the learned AR of the assessee that there was the enhancement of addition made by the learned CIT-A, we disagree with the contention of the learned AR. It....
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....shottambhai Patel, we note that, the addition made by the learned CIT-A is uncalled for the identical reasoning as discussed above in the case of the loan taken from Shri Parshottambhai Mohanbhai Patel Rs. 1.85 lacs. Thus, we set aside the addition made by the AO with the direction to the AO to delete the addition made by him. In view of the above and after considering the facts totality, the additions made by the AO for Rs. 1.85 Lacs and Rs. 15.8 Lacs for the loan received from the parties namely Shri Parshottambhai Mohanbhia Patel and Shri Kalpeshkumar Parshottambhai Patel is hereby deleted and the addition on account of loan from the other parties for the amount of Rs. 15,42,640/- is hereby confirmed. Hence the ground of appeal of the assessee is partly allowed. 11. The 2nd issue raised by the assessee in ground Nos. 2 to 5 is common and interconnected. Therefore, we have clubbed all of them together for the purpose of adjudication for the sake of brevity and convenience. The interconnected issue raised by the assessee is that the learned CIT-A erred in confirming the addition made by the AO for Rs. 79,33,788/- on account of investments made in different properties. 12. The as....
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....e, the assessee has not furnished any information whether the loan parties have filed the income tax return. Accordingly, the AO doubted on the creditworthiness of the parties. Thus the AO treated the impugned amount of loan entries shown by the assessee as unexplained cash credit under section 68 of the Act except the sum of Rs. 2 lacs and added the remaining amount of Rs. 46,24,400/- to the total income of the assessee. Survey No. 124 12.4 The assessee has purchased the impugned survey number at a price of Rs. 2,11,90,400/-. As per the assessee, the payment against the purchase of survey number was made directly by different persons from their respective bank accounts as detailed below: Sr. No Name of the party Bank Name Cheque No/ date Amount 1 Narendra B. Pate! Axis Bank. Himatnagar 166567 1/3/2011 20.00,000/- 2 Narendra B. Patel Axis Bank, Himatnagar 166566 1/3/2011 27,98,912/- 3 Prakash Babaldas Patei Axis Bank. Himatnagar 006226 1/3/2011 1 ,40,00,000/- 4 Dilipbhai Zala SBI.Mithakhali 602878 1/3/2011 10.00.000/- 5 Mr. Deepak Ganpatlal Sharma ICICI Bank, JMC. House 393200 1/3/2011 3,50 ,000/- 6 DevaDhai Patel Bank of....
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....ment for purchase of land on his behalf. Such details include the copy of PAN, confirmation letter, bank statement, copy of sale/purchase deed where cheque numbers were mentioned which is sufficient enough to prove the identity, genuineness of transaction and creditworthiness of the parties and to establish the source of money paid for the investment in the property bearing survey No. 125 and 124. But the AO without pointing any defect in the document submitted and without requiring any other document for his satisfaction treated the part of investment in property in above mentioned survey numbers as unexplained investment under section 69 for Rs. 46,24,400 and Rs. 23,91,488/- respectively. 14.1 With respect to the purchase of property at taluka Dhanduka bearing survey number 143, the assessee before the learned CIT(A) submitted that purchase consideration of Rs. 8,75,000/- was paid by Shri Kuldipsinh Mahipatbhai Jadeja through account payee cheque dated 19-01-2011. Further stamp duty charges of Rs. 42,900/- was also paid by him as per purchase agreement. 14.2 The assessee accordingly prayed that no addition under section 69 of the Act is required to be made in his hands on accou....
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.... not been received in foreign exchange. In view of these tacts, The appellant has not fully discharged its onus of giving suitable explanation regarding the amount given on his behalf to the other party for purchase of property. The addition made responding to this payment is therefore, upheld. iii. The appellant has claimed that a payment of Rs. 5 lakh has been made by one Deepali Bhadresh Modi, as per the details mentioned at serial number five of the above table, to Jayanfi Distributors Private Limited on behalf of the appellant. It is noted that the appellant has not been able to file any confirmation from the above person nor any source of deposit from that person has been given by the appellant. Mere mention of cheque in the sale deed is net a sufficient discharge of the onus. The addition made by the AO is therefore, upheld in respect of this payment made on behalf of the appellant. iv. The appellant has claimed that the payment of Rs. 15 lakh has been made by one Shri Maunik Ishwerbhai Bhavsar, as per the details given at serial No. 6 & 7 seven of the above table, !o Jaycrtti Distributors Private Limited on behalf of th appellant. It is noted that the appellant has give....
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....posit in the bank account. vi. The appellant has claimed that another payment of Rs. 9744QO/-has been made by one Mr Deepak Ganpatlal Sharma as per the details given at serial number 11 of the above table. The appeiiant has given confirmation from the above person. It is also given a copy of the PAN and driving licence of the person. The payments have been issued through cheque drawn on a bank account in ICICI bank. Further examination of the bank account No. 002401C76917, which is with ICICI Bank, Parima! Garaen, Ahmedabad branch, show that the money has been credited in the bank account in US dollars and the cheques have been issued out of that credit available with the person. However, it is noted that there are several entries of cash deposit and issue of cheques in the same bank account on several dates. It appears that the account is being used by the depositor for the purpose of accommodation entries. The sources of funds in the bank account are not clear. Though the person appears to be a non-resident Indian his source of income in America is not clear as to whether from this money has come. Over all facts and circumstances related to this depositor clearly show that the ....
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....llant is on account of cash deposit of Rs. 3.2 lakh and transfer of funds from other bank account. The sources of these funds are not clear and the appellant has MOT given any information regarding these funds. Though the person holds a PAN no details regarding filing of returns are available on record. The depositor is apparently not filing his return of income, if appears that the depositor is utilising this account for the purpose of issuing accommodation entry. In view of these facts, I am of the considered opinion, the appellant HOS not discharged its onus of proving the source of payment from that person. The addition made by the AO is therefore, upheld. To sum up the addition of Rs. 2391488A is upheld. Property at Ta Dhanduka survey no. 143 3. Addition of Rs. 9,17.900/- The appellant has also purchased another property for a consideration of Rs. 9,17,900/-. It is noted that the appellant has not been able to explain the source of investment in respect of purchase of that property. The explanation was not given before the AO during the course of assessment proceedings nor any explanation has been filed by if during the course of appellate proceedings. The appellant has....
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....patani 6,00,000/- 125 4. Deepak Ganpatlal Sharma 6,24,400/- 125 5. Deepak Ganpatlal Sharma 3,50,000/- 124 6. Devbhai Patel 10,41,488/- 124 7. Total 51,58,888/- 17.1 The learned AR further submitted that the assessee has received a gift of Rs. 2,04,20,000/- which has been accepted as genuine. The amount utilized for the impugned investments out of such gift is of Rs. 1.4 crores only leaving a surplus balance of Rs.64,20,000/- which can be treated as source of investments against the loan of following parties/investments: S. No. Name of persons Amount of loan (Rs.) Invested in survey no 1. Sanjaybhai Jadeja 4,00,000/- 125 2. Dipali Bhadresh Modi 5,00,000/- 125 3. Dilipbhai Zala 10,00,000/- 124 4. Investment in property at Dhanduka as per AIR 9,17,000/- - 5. Total 28,17,900/- 18. On the other hand, the learned DR vehemently supported the order of the authorities below. 19. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates to the source of investment made by the assessee in the properties as discussed above. ....
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....submission, it is transpired that it was the assessee who has change the stand before the learned CIT-A. Meaning thereby, the assessee was aware of the proceedings before the learned CIT-A. It is not a case that the assessee made the submissions considering the provisions of section 68 of the Act rather it is a case where the assessee has made the submissions in accordance with the provisions of section 69 of the Act. Therefore, we find it difficult to convince ourselves with the contention of the learned AR for the assessee. Accordingly, we reject the contention of the learned AR for the assessee. 19.3 As regards merit of the case, with respect to investment in survey No. 125 and 124, for Rs. 70,15,488/- (Rs. 46,24,000 + 23,91,488), we note that the assessee has furnished the necessary details such as confirmation, PAN, license, bank statement of the lender, the cheque number as appearing in the conveyance deed and confirmation, light bill, banks statements etc. about the parties from whom the assessee has taken the unsecured loan. These details are placed in the paper book. The details of such parties stand as under: S. No. Name of persons Amount of loan (Rs.) Invested in....
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....refore, in view of the above discussion and case law we hereby held that the assessee has discharged his onus casts for explanation of investment to the extent of Rs. 51,58,888/- in property bearing survey numbers 125 and 124. Hence the addition of Rs. 51,58,888/- cannot be sustained. 19.6 Before parting, it is important to note that the assessee has claimed to have made investments in the properties bearing survey numbers 125 and 124 out of the money received from three other parties as detailed below: 1. Sanjaybhai Jadeja Rs. 4,00,000/- 2. Dipali Bhadres Modi Rs. 5,00,000/- 3. Dilipbhai Zala Rs. 10,00,000/- 19.7 However, at the time of hearing the learned AR has changed his stand by contending that there was a gift of Rs. 2,04,20,000/- which was accepted as genuine. As per the learned AR only a sum of Rs. 1.40 crores was utilized towards the investments in the impugned properties. Therefore the balance amount of Rs. 64,20,000/- should be treated as against the loan taken from the 3 parties as discussed above. However, we are unable to convince ourselves with the contention of the assessee. It is for the reason that the assessee on one hand claims to have invested....
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.... as income from other sources. 22. Aggrieved assessee preferred an appeal to the learned CIT-A. 23. The assessee before the learned CIT-A contended that the agricultural land available with him is 6.67 hectare but inadvertently failed to bring to the notice of the AO during the assessment proceedings. Accordingly, the assessee before the learned CIT-A filed the additional evidences in support of his claim. As such it was the contention of the assessee that even the rate as adopted by the AO for the production of agriculture crop is taken then also the agricultural income of the assessee stands at Rs. 6,67,000/- only. 24. However, the learned CIT-A confirmed the order of the AO by observing as under: After carefully examining all the evidences produced by the AO it is noted that the appellant had not furnished the details of land which he is now seeking to produce in the appellate proceeding. During the course of assessment proceedings, it had informed +he AO about only for pieces of land of different survey number however during the appellate proceedings he has claimed that it has 8 pieces of land and his share would come to 6.67 hectare. The submission of the appellant cannot....
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....e Act, then there cannot be any addition to the extent of such amount invested in the unexplained properties in the manner provided under section 69 of the Act, otherwise, it would lead to the double addition. As such, the learned AR before us prayed to grant the benefit of telescoping if any. 30. On the other hand, the learned DR opposed to give the benefit of telescoping on the reasoning that the assessee failed to establish the nexus between the amount of unexplained cash credit viz a viz the investment made in the unexplained properties. 31. We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that there cannot be double addition under the provisions of Act for the same item of income. In other words, if any addition has made under the provisions of section 68 of the Act then its application cannot be made subject to tax under the other provisions of the Act. For example, the assessee has been made subject to the addition of Rs.10 Lacs under the provisions of section 68 of the Act. Simultaneously, the assessee has purchased the property of Rs.10 Lacs of which the assessee failed to explain the source for su....