TaxTMI 
TaxTMI 
2022 (11) TMI 1197
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....) was justified in deleting the addition of Rs.2,82,00,000/- being on account of sundry creditors despite the fact that has brought the facts that Shri Kishorbhai Laxmanbhai is nothing but firm's unaccounted money routed in the form of sundry creditors which failed on test. 3.On the basis of the facts and circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer." 2. Brief facts of the case are that assessee engaged in business of real estate, filed its return of income for the assessment year under consideration, i.e. 2015-16 declaring income of Rs.8,50,200/. The case was selected for scrutiny. During the assessment, the Assessing Officer on going through the balance-sheet and audit report noted that assessee was having three projects, namely, Sarthee Industrial Park, Sarthee Height and Sarthee Township. The assessee has shown advanced booking under the current liability of Rs.4.56 crores, which includes advance of Rs. 4.05 crore in Sarthee Industrial Park, Rs.24,65,000/- crores in Sarthee Height and Rs.27,22,000/- crores in Sarthee Township. The assessee also shown sundry creditor of Rs.2.82 crores in the balance-sheet of Sa....
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....und. The Assessing Officer further recorded while final show cause notice dated 20.10.2017 the assessee was asked to produce following persons on 26.12.2017 and to file their confirmations with copy of income tax return and bank statements; 1 Kishorbhai Laxmanbhai Creditor 2 Shri Haribhai Kakad, Advance booking 3 Piyushbhai Ashokbhai Kakadia, -Do- 4 Mansukhbhai Padsala, -Do- 5 Rajesh Virabhai -Do- 6 Parulben D Gabani -Do- 4. The Assessing Officer recorded that neither such persons were produced nor any confirmation of creditors or their documents were furnished. On the basis of his observation, the Assessing Officer made addition of Rs.2.82 crores on account of sundry creditor and balance of boking advance of Rs.4.05 crores against all three concerned of assessees. 5. Aggrieved by the additions, the assessee filed appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee filed detailed written submission. The submission of assessee are duly recorded by Ld. CIT(A) in para-6 of his order. On the addition of advance booking of Rs.4.05 crores as unexplained cash credit submitted that all the advances were received in ear....
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....deed, however, he has changed his given addresses and could not able to file his relevant details. The summon under section 131 was not served due to change of addresses and assessee explained that the said plot was purchased in assessment year 2012-13 and not in the year under appeal as recorded by the Assessing Officer in the assessment order. Despite the fact shown same was shown as opening outstanding balance, Assessing Officer made addition under section 68 of the Act. Section 68 is not applicable as no amount is credited in the books of assessee in assessment year 2015-16. Section 68 cannot be applied for the opening balance of earlier year. The assessee relied on similar case law as cited in its first addition (supra). On the observation of Assessing Officer, that sellers had already received the amount as recorded in sale deed, the assessee explained that cheque mentioned at Sr.No.24 to 42 of the sale deed were not represented by the said parties in their bank for encashed. Therefore, the same amount cannot be added under section 68. To support such contention, the assessee furnished copy of bank statement to demonstrate that the cheques were not cleared. 7. On the obser....
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....y were asked by Assessing Officer to call if required later. 10. The Ld. CIT(A) after considering the submission of assessee that Assessing Officer made additions of two amounts under section 68, (i) opening balance of advances for booking and (ii) another sundry creditor. The assessee challenged the additions on legal ground, the assessee claimed that opening balance of advances and creditor cannot be added under section 68. On merit, the assessee claimed that advances for booking and creditor added are genuine and cannot be added under section 68. On legal ground, assessee pointed out that both the additions are made on opening balance carried forward for assessment year 2014- 15. The Ld. CIT(A) examined the audited and financial statements of assessment years 2014-15 and 2015-16 respectively, wherein balance-sheet shows that both the amounts are closing balance for assessment year 2014-15. In ITR-5 for assessment years 2014-15 and 2015-16, which was downloaded from ITD system in closing balance for assessment year 2014-15 is shown at Rs.9.26 crores which includes the booking advance of Rs.4.56 and creditors of Rs.2.82 crores respectively. Further the creditor of Rs.2.82 crore....
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....he orders of lower authorities carefully. The ld. CIT-DR for the Revenue submits that before Assessing Officer the assessee has not filed any confirmation of creditors, copy of ITRs of so-called advances given, were furnished. The address furnished by assessee about the sundry creditor as well as parties who made advance was incomplete and advances were received itself why the plots were given even after two years. The plotting process is not a time consuming process and assessee was required to make a marking of plots and to execute the sale deeds in the name of buyer. Such fact prima facie shows that it was assessees own un-accounted money. The assessee completely failed to identity of the person and to establish from whom the advances were taken, neither the creditors nor the genuineness of such transaction was proved. The assessee failed to produce such parties after issuing show cause notice before the Assessing Officer on the addition of sundry creditor. The Ld. CIT-DR for the Revenue submits that no confirmation, copy of balance-sheet and return of income of creditor in its balance-sheet is filed. 13. On the second addition of sundry creditor, the ld CIT-DR for the revenu....
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....law:- Geeri fashion (P.) Ltd. IDTO (191 ITD 155) CIT vs. Jagatkumar Satishbhai Patel [225 Taxman 190 (Mag.)] PCIT vs. Matruprasad C. Pandey (377 ITR 363 (Guj) CIT vs. Bhogilal Ramjibhai Atara (222 Taxman 313 (Guj) Balaji InfoTech Services vs. ITO ITA No.5066/Mum/2010 dated 28.12.2011 Jashojit Mukherjee vs ACIT, Circle-50, Kolkata (2018) 93 taxmann.com 366 (Kolkata-Trib. /170 ITD 701 (Kol-Trib.) 04.05.2018 16. We have considered the rival submission of both the parties and have gone through the orders of lower authorities. We have also deliberated on various case laws relied by the ld AR for the assessee. We find that Assessing Officer made addition of Rs.7.38 crores under section 68 (Rs. 4.05 Crore of advances and Rs. 2.82 crore of sundry creditor), which was carried forwarded from earlier years, by taking view that neither such persons who made advances were produced nor any confirmation of creditors or their documents were furnished. 17. As recorded above before Ld. CIT(A), the assessee filed detailed written submission, which we have already noted above and are not repeated again for the sake of brevity. On the submissi....
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.... matter. We are conscious of the fact that there is no ground of appeal raised by the revenue for making/ sustaining addition under section 41(1), yet we may observe that the assessing officer has not brought any evidence to show that it was a cessation or remission of trading liability. 18. The combination of this bench in Geeri Fashion Vs ITO (supra) by following the decision of Bombay High Court in Ivon Singh ACIT (2020) taxmann.com 499 / 422 ITR 128 and Ahmedabad bench of Tribunal in DCIT Vs Brijwasi Developers (ITA No. 1659-60/Ahd/2012 held that where share premium was received in earlier years, same cannot be taxed in the current year. The Hon'ble Jurisdictional High Court in CIT Vs Jagat Kumar Satish Bhai Patel (supra) while considering the question of law " whether on the facts and circumstances of the case, the Hon'ble Tribunal was justified in reversing the order of CIT (A) in deleting the addition of Rs. 10,09,000/- on account of unexplained cash credit under Section 68 of the Act considering major amount of cash credit as opening balance even though no return was filed in earlier year and books of account were not maintained by the assessee" held that once the ad....