TaxTMI 
TaxTMI 
2022 (8) TMI 199
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs.38,00,000/- on account of profit of property and Rs.1,37,00,000/- on account of non-genuine liability vide its order dated 12-03-2013 passed u/s. 143(3) of the Act. Having aggrieved by the said order of AO, the assessee preferred an appeal before the CIT(A) challenging the additions and disallowances made by the AO in the assessment order. The CIT(A) having considered the written submissions dated 02-04-2014 of the assessee from pages 4 to 22 and the remand report dated 10-12-2014 which is reproduced from pages 22 to 27 of the impugned order. The CIT(A) confirmed the additions and disallowances made by the AO. Having not satisfied with the order of CIT(A), the assessee is before us. 3. Ground Nos. 1 and 2 raised by the assessee challenging the action of CIT(A) in confirming the addition of Rs.2,77,50,000/- on account of unexplained cash credit and disallowance of interest of Rs.3,42,022/- in the facts and circumstances of the case. 4. Since, the issue raised in ground Nos. 1 and 2 are interlinked, we proceed to adjudicate the same collectively. 5. Before us, the ld. AR, Shri Pramod S. Shingte filed synopsis of the case and submissions vide letter dated 30-05-2022. On pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st the entire amount received by Shri Gadekar on account of acquisition of his land was transferred to the account of the appellant on the same date i.e. 06/10/2009 as under: 1. Rs.1,33,89,000/- on 06/10/2009 2. Rs.2,77,50,000/- on 06/10/2009 3. Rs.17,10,000/- on 06/10/2009 Rs.4,28,49,000/- 4. On further enquiry by the A.O., Shri Gadekar stated that the appellant had taken blank cheques from his when he gave the amount of Rs.1.5 crores to him and the appellant had used these blank cheques to transfer the said amounts to his own bank account. The statement of Shri Gadekar may be summarized as under: 1. The appellant had transferred the amounts received by Shri Gadekar on account of acquisition of the land to his own bank account using blank cheques taken from Gadekar by the appellant when he gave the amount of Rs.1.5 crores as per the agreement dated l3/07/2007. 2. Cash were withdrawn from the bank account of Shri Gadekar by the appellant using the said blank cheques taken from him (Gadekar). 3. Shri Gadekar had explained to the AO. that he was not aware that the appellant had shown Rs.2,77,50,000/- as loan in his na....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dered instead of his statement. The appellant had also asked for cross examination of Shri Gadekar. The A.O. had tried to arrange the cross examination of Shri Gadekar several time, but he expressed his inability to attend the office of the A.O. due to ill health. He was not in position to face the cross examination. Instead, he sent a letter to the A.O. expressing his regret and reiterated that he had stated all the facts in his statement dated 07/02/2013 and in his earlier statement. He also stated that the affidavit with his signature submitted to the AO. was incorrect and false. This office has also received an affidavit dated 06/06/2014 purportedly signed by Shri R. D. Gadekar with a covering letter through the tapal. This office has not asked any assistance from Shri Gadekar. This office is not in touch with him even remotely. This affidavit dated 06/06/2014 appears to be foreged, if not mischievous. This affidavit is not to be admitted and thus ignored. 7. From the analysis of the facts discussed above, the following facts documents are considered important and crucial. They are discussed as under : The General Power of Attorney dated 13/07/2007 In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s our General Power of Attorney. By this General Power of Attorney, we have appointed you as our General Power of Attorney. 7. As our General Power of Attorney, you should carry out the following works in respect of said property for and on our behalf. 8. The Executors have obtained the order of the return filed as per the provision of Urban Land Ceiling Act of said property and as per the said order, all the area is declared as Non- Vacant. The Development Agreement is given with reference to the said full non-vacant declared area. i.e. the area of the property as mentioned in column 1 above. As per the said Development Agreement, the Executors have given all right to the Power of Attorney Holder, to carry out the following works in respect of the said property. If the said property is not released from the reservation, to give the possession of the said property as per the reservation to the Nashik Municipal Corporation and to accept full compensation amount for the acquisition of said property, in the name of Power of Attorney Holder by cheque, to deposit the said cheque in the name of Power of Attorney Holder in his account. But before that, the Power....
X X X X Extracts X X X X
X X X X Extracts X X X X
....claimed. The Department had issued the refund and the same was deposited in the account of Shri Gadekar with PNB on 07/05/2011. However, the same was again transferred to the appellant's account on 09/05/2011. This transaction also demonstrates that Shri Gadekar has to receive Rs.1.51 crores only as agreed as per the power of attorney dated 13/07/2007 and nothing more. There is no genuine loan and no amount is payable to Shri Gadekar. It also appears that Shri Gadekar does not know anything about the returns of income being filed and refund being deposited in his account and transferred to the account of the appellant using blank cheques as stated by Shri Gadekar in his statements recorded u/s 131 of the Act. Even after many years, the said loan has not being repaid to Shri Gadekar. 7.4 After considering the facts and circumstances of the case in totality and the materials on record, I am of the considered view that the addition of Rs.2,77,50,000/- as unexplained cash credit u/s 68 of the Act and the disallowance of Rs.3,42,022/- on account of interest being non-genuine are justified and the same are confirmed." 6. The main contention before us advanced by the ld. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reiterated the same what had stated in the first statement on 15-01- 2013 in his second statement on 07-02-2013. There is no rebuttal by the assessee regarding the two statements of said Mr. Rangnath Dattatraya Gadekar except contending that there was no cross-examination, in our opinion, is not tenable. On perusal of the impugned order relating to ground Nos. 1 and 2 we find the CIT(A) discussed the issue in detail by recording reasons taking into consideration all the evidences on record which were also filed before us by way of paper book by the ld. AR. 8. The ld. AR relied on the decision of Hon'ble High Court of Bombay in the case of Gaurav Triyugi Singh reported in 121 taxmann.com 86 (Bombay) for the proposition since the loan amount was received by the assessee through cheque and the identity of creditor and genuineness of the transaction is proved and argued when the source of credit is established and the addition u/s. 68 of the Act is not maintainable. We note that in the present case we held the loan itself is not genuine as the loan creditor himself stated in the cross-examination and through affidavit he did not give any loan to assessee. The facts before the Hon'b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... they stated that they did not receive amount of Rs.92,00,000/- as claimed by the assessee except Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively. The assessee requested the AO to allow him to cross-examine the said three persons and in the crossexamination the above said three persons reiterated what they stated in their statements about the receipt of above stated amounts only, but not as claimed by the assessee of Rs.92,00,000/-. The CIT(A) recorded his reasoning to this effect at Para No. 8.5 of the impugned order after verifying the discussion made by the AO in this regard from the record. We find the cross-examination which was reproduced by the CIT(A) at Page No. 43 of the impugned order and on perusal of the cross-examination of the above said three persons, we note that they clearly stated that they wanted to receive entire amount of money which was deposited in their account against the acquisition of their land. They also stated they did not receive any amount from the assessee as claimed by him except Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively. On perusal of the impugned order and also written submissions as filed by the ld. AR vide letter dated 30-05....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and by recording his reasons at Page No. 43 of the impugned order, confirmed the order of AO in disallowing Rs.1,37,00,000/- by holding that the liability is not crystallized. The relevant portion at Page No. 47 to 49 is reproduced here-in-below : "Regarding the amount of Rs.1,37,00,000/- payable to the three Jadhav family members, the following facts have emerged: 1. The appellant has claimed that the said amount of Rs.1,37,00,000/- is payable to the said three Jadhav family members and therefore, allowable expenditure as the appellant is following mercantile system of accounting. According to the appellant, the said amount is crystallized and ascertained liability. 2. On the other hand, the A.O. is of the view that the amounts claimed to be payable to the Jadhav family members are not crystallized and are not ascertained liability. 3. The three jadhav family members were not aware of the fact that the acquisition amounts were deposited in their bank accounts and the same were transferred to the appellant's bank account. They were also not aware that the appellant had claimed Rs.1,37,00,000/- as payable to them in the balance sheet and books....