TaxTMI 
TaxTMI 
2022 (8) TMI 951
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.... deleted or, as the case may be, confirmed in first appeal by the ld. CIT(A) per the impugned order. We shall, taking the assessee's appeals first, i.e., in the order argued before us, take up each. The Assessee's Appeal 3.1 The assessee's first ground is in respect of confirmation of the assessment of the returned agricultural income of Rs. 9,73,088 as income from other sources by the assessing authority (AO) at Rs. 5,50,000, so that both the parties are in appeal. The basis for the said adjustment by the AO was a complete non-substantiation of it"s claim of the said income as arising from agricultural operations, sale of receipt of Rs. 14,97,188, claimed to be the sale of Masoor Dal, from Krishi Upaj Mandi Samiti, Tendukeda, Dist. Narsinghpur, notwithstanding, even as the AO had by mistake, as was a common ground before us, regarded the entire of it (Rs. 14.97 lacs) as income. The part relief by the ld. CIT(A) was on the basis that the assessee had a past history of acceptance of agricultural income, beginning AY 2012-13 (at Rs. 4.61 lacs); AY 2013-14 (at Rs. 1.93 lacs), with the latter being per a sec. 143(3) order. Even for the subsequent year, i.e., AY 2015-16, the claim of....
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....e returned income of Rs. 9.73 lacs is, accordingly, directed to be assessed as income from other sources. 3.3 We decide accordingly, also disposing Revenue"s Ground 1. 4.1 The next (second) ground is in respect of addition in the sum of Rs. 170 lacs. The assessee's, who had given an unsecured loan to M/s. Vanshika Sugar and Power Industries Ltd. (VSPL), books reflected the balance of the lendee at Rs. 2134.74 lacs, while that of the latter reflected a credit balance of Rs. 2304.74 lacs, i.e., in excess by Rs. 170 lacs. In appeal, it was explained that while debtor (VSPL) had recorded all the sums advanced to it, it had, by mistake, in addition, also credited Rs. 167 lacs advanced by the assessee on behalf of it"s partners, and another Rs. 3 lacs from others. This was found on comparing the accounts of the lender and the lendee in each other"s books; all the transactions being through the banking channel. The debit to the partners" respective accounts in the assessee's accounts, at an aggregate of Rs. 167 lacs, was also shown. Further, the debtorcompany had in the immediately succeeding year (i.e., fy 2014-15), reversed the excess credits, transferring the same (Rs. 167 lcas) to t....
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.... the assessee, is for the balance credit of Rs. 3 lacs. The ld. CIT(A) confirmed the same in the absence of any corroborative evidence furnished by the assessee. How could, one wonders, the assessee furnish one such, when, as per it, it has not made any investment, nor does the Revenue have any evidence in respect of the said investment as being by the assessee? The burden of proof in relation to a sum representing a transaction of the nature specified under s. 69/69A/ 69B/ 69C, etc., is on the Revenue. It is only when the Revenue has with it material exhibiting an investment/asset/expenditure, etc. qua the assessee, that the latter can be called upon by it to explain the nature and source thereof and, in the event of it being not satisfactorily explained, deem it as the assessee's income. In the instant case, the evidence relied upon, being a credit in the assessee's name in the books of a lendee, stands explained by the assessee - who cannot be called upon to prove a negative, as not attributable to it, and which stands identified by the debtor-lendee, a related concern, as being received from another, correcting it"s accounts in admission of the mistake, corroborating the assess....
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....ed the amount as unexplained debit (asset, expenditure, etc.). In appeal, the ld. CIT(A) found that the assessee had in fact reconciled the difference in accounts. The same was explained as comprised of three amounts, as under:- a) Rs. 30 lacs, being demand draft (DD) No. 608288, dated 23/03/2013, in favour of M.P. State Mining Corporation, Bhopal (MMC) b) Rs. 50 lacs, being DD No. 608287, dated 23/03/2013 favouring MMC c) Rs. 29.5 lacs, being cheque (No.482096) drawn on the assessee" bank account with State Bank of India (a/c No. xxxx 3799, from which account DDs were also purchased), dated 16/04/2014, favouring MRI toward, as stated, mining royalty payable to MMC. Further, all the amounts were debited in the assessee's accounts to the account of MMC, being, as stated, toward royalty instalments, though no expenditure in its respect had been claimed for the relevant previous year ((PB pgs.142-15, 153 & 154) . The ld. CIT(A) found that the difference was thus suitably reconciled, and the confirmation issued by it"s partner (for and on behalf of firm) as being issued without verifying the accounts and, thus, retracted for bona fide reasons. The addition, in his opinion, if at....
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....er, the confirmation itself, and on the basis of which the credit was regarded as suitably explained, is rendered of no consequence as, despite each of the credits being admitted and originating from the assessee's bank account (with SBI/PB pgs. 145, 149, 153-154), the same has been, in the assessee's accounts, debited to account of MMC, so that it is either recoverable therefrom or to be adjusted against future dues, i.e., paid in advance thereto. There is no question of the assessee being allowed credit by a third party, to whom in fact the third amount (Rs. 29.5 lacs) has been paid by issuing cheque in it"s favour, and which has banked the same, as evident from the copy of the assessee's account in it"s books (PB pg.152), wherein the same is, as stated, in respect of royalty and, accordingly, debited in it"s accounts to the account of MMC? Where, one may ask, is the question of the assessee handing over the drafts favouring MMC to MRI for the latter to account for the same? In other words, though the source of amount has been, without doubt, explained by the assessee, the nature of the transactions has definitely been not, and it is only on a satisfactory explanation qua both, t....
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....justed in the assessee's accounts in future, with even the account for the current year, i.e., f.y. 2013-14, being conspicuous by its absence, is also relevant. The matter requires a thorough and proper examination, also bringing on record, where and the extent required, evidence from both MMC & MRI; the assessee being wholly unable to explain the transactions and, as appears to us from his submisions by Shri Usrethe, in a confused state of mind. 9.5 In view of the foregoing; the matter being wholly indeterminate, we, vacating the findings by the first appellate authority, set aside the matter for fresh adjudication by the AO, who shall decide it in accordance with law upon issuing definite findings of fact, and after allowing the assessee a reasonable opportunity of being heard, as well as, as afore- stated, seeking evidence from MMC & MRI in the matter. We decide accordingly. 10. The third and final ground of the Revenue"s appeal relates to the deletion of a disallowance for Rs. 6.40 lacs by the AO, i.e., to the extent of Rs. 6.25 lacs. The verification of the said payment, being bonus payable, recorded in the assessee's accounts on 30/06/2014, revealed that against the names o....