TaxTMI 
TaxTMI 
2022 (11) TMI 120
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....ustified in deleting the addition of Rs. 2,10,00,000/- made by the -AO u/s. 68 of the I.T. Act on account of impugned advance received from M/s. Tirthyatra Investment & Properties Ltd. for sale of land.?" 3. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- when the assessee had failed to discharge his primary onus to justify the cash credits on account of impugned advance received against sale of land and impugned advance from customers by producing necessary documents/evidences in this respect?" 4. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- made by the AO on account of impugned advance from customers & M/s Tirthyotra Investment & Properties Ltd., by ignoring the evidence brought on record by the AO that the assessee failed to prove the identity, creditworthiness and genuineness of transaction as per legal parameter of the provisions u/s. 68 of the IT Act? 5. "Whether on points of law and on facts & circumstances of the....
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....evant amount is the income of the assessee, it is not necessary for the Department to locate its exact source?" 9. Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- made by the AO on account of impugned advance from customers & M/s. Tirthyatra Investment & Properties Ltd., thereby without considering and distinguishing the ratio of the judgment of the cases such as Rameshwar Prasad Bagla 68 ITR 653(Allahabad) & Homi Vs CIT 41 ITR 135, 142 by (Supreme Court) wherein it is stated that the totality of circumstances must be considered in a case of circumstantial evidence & the totality of the circumstances has to be taken into consideration and the combined effect of all those circumstances is determinative of the question as to whether or not a particular Act is proved?" 10. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the disallowance of Rs. 6,52,712/- made u/s. 14A of the IT Act r.w.s 8D of the IT Rules made by the AO?". 11. "Whether on points of law and on facts & circumstances of t....
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....rom whom advances were received through various modes like cheque/RTGS/cash, as under: Particulars Amount Amrik Singh Land Adv. 100000.00 Anil Verma Land, Adv. 500000.00 Anita Chandel 500000.00 Chhaya Yadav 400000.00 Kamlesh Sahu S/o. Pitamberlal Land Adv. 500000.00 Kishor Agrawal Land Adv. 400000.00 Lakhan Yadu 3200000.00 Modi Resources Pvt. Ltd. 1500000.00 Mohit Agrawal 400000.00 Monika Agrawal 500000.00 Naresh Singhania 850000.00 Preeti Sahu Land Adv. 300000.00 Raju Bag Adv. Land 500000.00 Rakesh Madan 400000.00 Ram Bhawan Pandey Land Adv. 500000.00 Sanjay Pandey 500000.00 Sanjeevan Lal Shoury 2200000.00 Santan Sahu Land Adv. 500000.00 Shantilal Meghraj Parakh HUF ( Land Adv.) 1000000.00 Subodh Singhnia HUF ( Land Adv.) 250000.00 Suchi Aurara Land Adv. 500000.00 Sudha Chandel Land Adv. 500000.00 Tirthayatra Properties and Finance Pvt. Ltd. 21000000.00 Total 37,000,000.00 It was observed by the A.O that the aforesaid "agreements to sell" in case of 18 parties were executed on stamp papers sold by Shri Zafar Ali, Stamp vendor. The....
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.... P-580385 299 of 01.05.2013 3200000/- 8. Monika Agrawal P-580382 1394 of 05.09.2013 500000/- 9. Naresh Singhania P-580386 631 of 20.05.2013 850000/- 10. Ku. Preeti Sahu P-580388 367 of 10.05.2013 300000/- 11. Raju Bag P-580390 - 500000/- 12. Rakesh Pilakandi P-580290 816 of 22.02.2013 400000/- 13. Rambhawan Pande P-580396 434 of 13.05.2013 500000/- 14. Sanjay Pandey P-580428 325 of 03.05.2013 500000/- 15. Sanjeevan Lal Sori P-580430 278 of 30.04.2013 2200000/- 16. Santan Sahu P-580379 -- 500000/- 17. Smt. Suchi Arora P-580380 321 of 03.05.2013 500000/- 18. Smt. Sudha Chandel P-580381 322 of 03.05.2013 500000/- Total Amount 1,28,50,000/- The A.O on the basis of his aforesaid observations called upon the assessee to explain that now when the stamp papers on which the impugned "agreements to sell" that were claimed to have been executed with the aforementioned 18 parties were proved to be fake, therefore, why the amount of Rs. 1,28,50,000/- that was shown to have been receive....
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....sessee to have been received from M/s. Tirthyatra Investment & Properties Pvt. Ltd., Raipur as an unexplained cash credit u/s. 68 of the Act for the following reasons: "(a) The stamp used for making agreement is fake as per copy of register provided by the Registrar, Raipur. It is worthwhile to mention here that it is compulsory for a stamp vendor to give his complete details of every stamp about whom who had sold the stamp and after the year ended, it will be submitted to the office of the Sr. District Registrar. (b) The writing in back of stamp, which is written by the stamp vendor is same as used in the above case of Zafar Ali, Stamp Vendor. (c) The assessee in his submission dated 26.12.2016 in para 10.1 of page no 13, it is submitted that he is enclosing the ledger account and bank statement of the M/s. Trithyatra Investment & Properties Ltd., Raipur but the submission was only supported with ledger account of the purchaser company. (d) Looking to the status of the purchaser company it is not possible to give such a huge amount to the assessee. (e) The purchaser company has cancelled the agreement and not purchased the land for whic....
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.... under consideration all the parties had duly confirmed the transactions of having advanced the respective amounts to the assessee towards purchase of the respective pieces of land by them which though did never materialize. It was further observed by him that the A.O had neither raised any doubt as regards the "affidavits" which were filed by the aforesaid parties nor carried out any independent enquiries on his own, but had summarily discarded the duly substantiated explanation of the assessee and added the amounts received from the aforementioned parties as unexplained cash credits u/s. 68 of the Act. The CIT(Appeals) was also not persuaded to subscribe to the adverse inferences which were drawn by the A.O by relying on the standalone statements of the stamp vendors. The CIT(Appeals) observed that the duly substantiated claim of the assessee of having received the aforesaid amounts towards advance/earnest money from the aforementioned 18 parties could not have been dislodged only for the reason that the stamp vendor concerned had acted in an irresponsible manner and not properly maintained his records. In fact, it was observed by him that now when all the 18 parties had themselv....
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....ord an opportunity to the assessee to cross-examine the said person. Apart from that, the CIT(Appeals) was of the view that now when both the parties to the respective agreements had confirmed the transactions in question, then, adverse inferences could not have been drawn merely for the reason that the A.O carried certain doubts as regards the genuineness of the transaction of purchase of stamp papers. Also, the CIT(Appeals) was of the view that there could be multiple reasons as to why Shri Zafar Ali (supra) had denied of having sold the stamp papers under consideration. Also, the CIT(Appeals) was of the view that though Shri Zafar Ali (supra) had claimed that he had restarted his work of purchase/sale of stamp papers from 31.03.2014, however, there was no material available on record which would irrefutably evidence that he was not carrying out the activities prior to the said date. The CIT(Appeals) on the basis of his aforesaid observations concluded that there was no justifiable reason for the A.O to have drawn adverse inferences as regards the receipt of advance/earnest money by the assessee on the basis of the respective "agreements to sell" from the aforementioned parties. ....
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.... warranted in its case. Accordingly, in terms of our aforesaid observations the vacating of the disallowance of Rs. 6,52,712/- by the CIT(Appeals) is upheld. Thus, the Grounds of appeal No. (s) 10 to 11 & Ground No. 12 (to the extent relevant) raised by the revenue are dismissed in terms of our aforesaid observations. 13. We shall now deal with the grievance of the revenue that the CIT(Appeals) had erred in vacating the addition of Rs. 338.50 lac made by the A.O u/s. 68 of the Act. Before adverting any further, we may herein observe that the aforesaid addition of Rs. 338.50 lac comprises of two parts, viz. (i) addition towards advances received by the assessee from 18 parties : Rs. 1,28,50,000/-; and (ii) addition towards advance received by the assessee from M/s. Tirthyatra Investment & Properties Pvt. Ltd. Raipur.: Rs. 2,10,00,000/-, which are being dealt with as under: (A) Advance received by the assessee from 18 parties: Rs. 1,28,50,000/- 14. On a perusal of the records it transpires that the assessee was in receipt of an amount of Rs. 1.60 crore from 22 parties. The A.O accepted advances of Rs. 31.50 lac that were received by the assessee from four parties. Accordingl....
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....d advances from the aforementioned 18 parties (supra) which he had substantiated on the basis of their respective confirmations/'affidavits' could not have been summarily scrapped merely on the basis of the aforesaid unsubstantiated claim of Shri Zafar Ali, Stamp vendor. We, say so, for the reason that as observed by the CIT(Appeals) there could be multiple reasons as to why Shri Zafar Ali (supra) would have declined of having sold the stamp papers in question. Apart from that, we concur with the CIT(Appeals) that the failure on the part of the stamp vendor to properly maintain his records could not have on such standalone basis justified drawing of adverse inferences as regards the genuineness of the transactions under consideration which the assessee had duly substantiated on the basis of supporting documentary evidence. Also, we are persuaded to subscribe to the view taken by the CIT(Appeals) that now when both the parties to the respective "agreements to sell" had confirmed the transactions, then, due weightage was required to be given to their respective statements and the same could not have been brushed aside merely on the basis of the unsubstantiated claim of the st....
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....however, he had recorded the statements of only 2 parties who had in their respective statements confirmed the transactions in question. It is further the claim of the ld. A.R that the assessee was never intimated by the A.O about the fact that the notices issued to some of the parties were returned unserved. Be that as it may, in our considered view though the assessee had duly substantiated the authenticity of the transactions of having received advances from 18 parties (supra), but the A.O had failed to dislodge the same by placing on record any such material which would irrefutably disprove the authenticity of the said claim. Also, we are unable to persuade ourselves to subscribe to the view taken by the A.O that the authenticity of the transaction was to be summarily rejected on the basis of the unsubstantiated claim of Shri Zafar Ali, Stamp vendor. We, thus, in the totality of facts involved in the present case before us finding no infirmity in the view taken by the CIT(Appeals) who in our considered view had rightly vacated the addition of Rs. 128.50 lac made by the A.O u/s. 68 of the Act uphold his order to the said extent. (B). Advance received from M/s. Tirthayatra Inv....
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....der to substantiate the authenticity of the aforesaid transaction the assessee had filed with the A.O confirmations of the aforesaid company, viz. M/s. Tirthayatra Investment & Properties Ltd. Raipur, Page 186 of APB. Also, the assessee in order to dispel all doubts had filed before the A.O an 'affidavit' of Shri Mukesh Singhania, Director of M/s. Tirthayatra Investment & Properties Ltd., Raipur, wherein the latter had deposed of having advanced an amount aggregating to Rs. 2.50 crore for purchase of land at Dumur Talab, Phase No. 35, RIC, Raipur, Ward No. 14, Ishwarichand Shukl Ward, Tah. & Dist. Raipur (C.G.), Kh. No. 373/1, area 18500 Sq. ft, which thereafter on the cancellation of the deal was refunded in tranches through banking channel. Copy of the account of the aforesaid party for the immediately succeeding year i.e. period relevant to A.Y 2015-16 reveals that the total outstanding balance of Rs. 2.10 crore (supra) was repaid by the assessee through banking channel by 30.03.2015., Page 411 of APB. We further find that the assessee had also filed before the A.O a copy of the bank statement which revealed the receipt of entire amount of advance from the aforementioned....