2023 (3) TMI 767

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....leave to add, amend or alter all or any of the grounds of appeal on or before the date of hearing." 3. None appeared on behalf of the assessee however, the Bench decided to proceed the matter on merit based on the materials available on record, concerning the issue in question. 4. The brief facts of the case are that assessee is an individual and filed its return of income on 31.03.2010 declaring total income of Rs. 1,49,090/-. The assessment u/s 143(3) of the Act was completed vide order dated 24.11.2014 at the total income of Rs. 1,93,327/-, but after the ld. CIT-II, Jaipur has passed order u/s 263 of the Income Tax Act on 23.01.2013 treating the assessment order dated 24.11.2011 has erroneous in so for as it is prejudicial to the interest of the Revenue and directed to recomputed the total income of the assessee after verify the source of cash deposited of Rs. 20,29,000/- in saving bank account of the assessee, therefore ld. AO has made assessment u/s 263/143(3) vide order dated 26.12.2014 at Rs. 16,93,330/- by addition of Rs. 15,00,000/-. 4. The ld. AO observed that the contention of the AR of the assessee that instead of personally produce to Shri Sunda Ram Swami an affida....

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....ineness of the transactions. Thus, I am of the confirmed view that the appellant has failed to prove the genuineness of cash credits appearing into the bank account to the tune of Rs. 15,00,000/-. 6.5 In the instant case, the appellant has failed to discharge the onus of proving the creditworthiness of the parties and genuineness of the transactions. Under the circumstances, the Department need not prove such amount as forming part of income and the same would by default become income of the appellant u/s. 68/69 of the Act, as the case may be. 1. Sudhir Kumar Sharma (HUF) Vs. CIT [2014] 224 Taxman 128 (P & H HC) 2. Arun Kumar J Muchhala Vs. CIT [2017] 339 ITR 256 (Bom. HC): In the above mentioned cases, it is held by the Hon'ble High Courts that, burden of proof u/s. 68 of the Act would always lie on the appellant and if the appellant failed to explain the source of cash deposits made in the bank account to the satisfaction of the AO, then such amount would become income of the appellant without any further action from the appellant. 6.6 Thus, in view of the aforementioned factual matrix and settled position of law, I am of the considered opinion that the appella....

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....ase of land. The burden lying upon the assessee u/s 68 of the Act, is to explain the source of the credit found in his books of accounts not the source of the source. If the assessee is enforced to explain the source of funds of the purchasers, it shall amount to enforce the assessee to explain the source of the source. Additional burden was on department to show that lender did not have means to make advance payment for purchase of land, the advance payment made by them actually emanated from coffers of the assessee so as to enable it to be treated as undisclosed income of assesee. In the absence of such findings, addition could not made in the income of assessee under section 68 of the act. 3.3 As held by Hon'ble jurisdictional high court in Labh chand Bohra vs ITO 219 CTR 571, so far as capacity of the lender is concerned, in our view on the face of the judgment of the hon'ble supreme Court in Daulat Ram's case and other judgments, capacity of the lender to advance money to the assessee was not a matter which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. 3.4 Therefore the claim o....

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....tual advance from Shree Sunda Ram Swami through cash no accommodation entry was taken from Shree Sunda Ram Swami. In the books of accounts of the assessee, no irregularity has been pointed out by the AO. Therefore, the entries recorded in the books of account of the assessee is evidence under the Evidence Act and should be accepted, the burden to prove that the amount attributable to the assessee represents its concealed income would be on the department. This burden cannot be discharged merely on suspicion, surmises and conjectures. The Judicial view has been that there cannot be a presumption against assessee due to circumstances that Shree Sunda Ram personally not attended before A.O. In light of above discussions, in our view, the crux of the issue at hand is that whether the principle of natural justice stand violated in the instant case. In other words, where the A.O. doesn't want to accept the explanation of the assessee and the documentation furnished regarding the genuineness of the transaction. In support of this contention, assessee relied upon the decision of Hon'ble Apex Court in the case of CIT, Orissa Vs. Orissa Corporation P. LTD (1986) 159 ITR 78 It is t....