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2022 (8) TMI 1077
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....ugh CASS and a notice u/s.143(2) of the Act was issued by the Assessing Officer to the assessee on 30/08/2011. 3.1. As noted by the Assessing Officer, during the course of assessment proceedings, the assessee had received loans/deposits aggregating to Rs.2,88,85,846/- from 28 parties during the year under consideration which were also refunded back. In this regard, he required the assessee to produce the confirmations of the concerned creditors/depositors along with proof showing the availability of funds to give the loans/deposits to the assessee. As noted by the Assessing Officer, the assessee, however, failed to comply with the said requirement, the Assessing Officer therefore treated the loans/deposits aggregating to Rs.2,88,85,846/- as unexplained cash credits and addition to that extent made by him to the total income of the assessee u/s.68 of the Act in the assessment completed u/s.143(3) of the Act vide an order dated 28/03/2013. 3.2. The addition made by the Assessing Officer u/s.68 of the Act was challenged by the assessee in appeal filed before the Ld.CIT(A). During the course of appellate proceedings before the Ld.CIT(A), additional evidence in the form of copies of r....
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....e the original receipts of donation of Rs. 50,000/- paid for verification, (iii) Please produce the evidences such as bills/vouchers etc. regarding the payment of Road side labour expenses of Rs. 1,54,716/- (iv) Please produce the evidences such as bills/vouchers, etc. regarding the payment of Road side salary expenses of Rs. 1,57,500/- 1. In response to above, the assessee has produced following persons with their identity proof, the bank statement, return of income and proper confirmation of loan advanced for the relevant, assessment year:- (a) Pankajsinh Natwarsinh Rajewar, (b) Chandresh Maheshchandra Jani, (c) Kunjan J. Patel (d) H.M. Patel. In the case of Rupal K.Patel his Husband Shri Parth H. Patel attended the office and gave statement on her behalf due to medical reasons. In the case of Nupur Patel also, she has submitted medical certificate along with proof such as return of income, bank statement, identity proof and proper confirmation loan advanced to Shree Ganesh Construction. During the course of assessment proceedings, the A.O. asked specific confirmation in respect of squared up loans. However, the assessee had not submitted the same therefore addition....
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....ly and satisfactorily proved. Also the amounts have come from the respective bank accounts of the depositors who have also been filing their income tax returns and are thus on the record of the Department. Thus their creditworthiness stand explained. The initial onus under section 68 is thus discharged and in turn, it was for the AO to verify those evidences. The AO has verified the above documentary evidences and also made inquiry with regard to some of the depositors by calling them in person and examining them by enforcing their attendance with their bank statements and I.T returns. No material is found during such inquiry which can prove that the amounts received was appellant's unexplained income. I am therefore of the opinion that the appellant has satisfactorily explained the receipt of amount-from the depositors in respect of squared up accounts and therefore addition made by the AO cannot be sustained. As rightly submitted 'by the appellant, it is settled position as considered by the jurisdictional ITAT in the case of Smt Mamtadevi L Raol vs ITO ITA No: 3619/Ahd/2007 a copy of which is furnished by the appellant, in which by following judgment of Gujarat High Cour....
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....eir funds lying elsewhere and such transactions can be explained by them only. No specific instance regarding any such transaction is reported by AO. Moreover, the AO has also examined some of the depositors and is any such transactions are there the same could be inquired from them who alone could explain the entries in their bank accounts. No such transactions are reported by AO and since the initial onus stands discharged by the appellant, no addition can be made in respect of such transactions u/s 68 of the Act. In the Remand Report submitted by the AO, no adverse findings have been mentioned. In view of above discussion, and considering the totality of facts and the legal position stated above, I hold that the addition of Rs.2,88,85,846/- is not justified. The same is therefore deleted. This ground is allowed." 4. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the loans/deposits aggregating to Rs.2,88,85,846/- received and refunded back by the assessee during the year under consideration were treated by the Assessing Officer as unexplained cash credits and added to the total income of the assesse....
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.... appropriate enquiry. Reliance was also placed by the Ld.CIT(A) in his impugned order on the judgement of Hon'ble Gujarat High Court in the case of DCIT vs. Rohini Builders reported in 256 ITR 360(2002) and in the case of CIT vs. Ranchhod Jivabhai Nakhava reported in 208 Taxman 35 (Guj)[2012] to hold that the assessee having filed the relevant documentary evidences including the confirmations of the creditors giving the required details and proved that amounts were received by A/c. Payee Cheque drawn from bank accounts from creditors, the primary onus that lies on the assessee was duly discharged to explain the cash credits in terms of section 68 of the Act and the addition u/s.68 of the Act was not sustainable. 4.1. At the time of hearing before us, the Ld.DR has not been able to dispute the fact that on verification of relevant details and documents furnished by the assessee, no adverse finding was recorded by the Assessing Officer in the remand report submitted to the Ld.CIT(A). He has only pointed out that there were credits found in the bank accounts of the concerned creditors/depositors just before giving loans/advances to the assessee in many cases. However, as noted by the....
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....and disallowance of interest of Rs.15,000/- paid thereon were challenged by the assessee in the appeal filed before the Ld.CIT(A) and after considering the submissions made by the assessee and the material available on record including the remand report submitted by the Assessing Officer, the Ld.CIT(A) deleted both the additions vide paragraph No.7.2 of his impugned order as under: "7.2. Regarding ground No.2 in respect of the addition of Rs.10 lacs along with interest amounting to Rs.15,000/- in the case of Miss Pooja Manoj Haria also, the addition is made on the ground that there was some difference in the signature of the said depositor as found on the cheque issued and Form No.15G. It is seen that full residential address of the depositor along with PAN and Landline and Mobile Telephone Number is provided. She has furnished an affidavit notarized before Notary in which confirmation is given as also the clarification regarding different signature being appended for different purposes is also stated in the said affidavit on oath. The AO has stated in the Remand report that affidavit was not made available. However, neither any notice was given to the appellant nor any attendanc....
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....ed creditors as well as genuineness of the relevant transaction was duly discharged by the assessee and having regard to the relevant findings of fact recorded by the Ld.CIT(A) in his impugned order, which have unrebutted by the Ld.DR, we are of the view that the addition made by the Assessing Officer u/s.68 of the Act along with disallowance of corresponding interest of Rs.15,000/- was rightly deleted by the Ld.CIT(A). We therefore find no merit in ground No.2 of Revenue's appeal and hence the same is dismissed. 6. As regards the issue raised in Ground No.3 relating to the deletion by the Ld.CIT(A) of the addition of Rs.25,000/- made by the Assessing Officer on account of disallowance of assessee's claim for deduction u/s.80G of the Act, it is observed that the deduction claimed by the assessee u/s.80G of the Act amounting to Rs.25,000/- in respect of donation of Rs.50,000/- made to Chief Minister Kanya Kelvani Nidhi was disallowed by the Assessing Officer for want of original receipt since the assessee failed to submit the donation receipt. The Ld.CIT(A) however, deleted the disallowance vide paragraph No.7.3 of his impugned order as under:- "7.3. Regarding ground No.3 in resp....