2023 (5) TMI 827

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....e case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs.1,25,01,969/- made by the Ld. AO on account of alleged unexplained cash deposits. Your appellant, therefore, prays that the aforesaid addition of Rs.1,25,01,969/- be deleted." Grounds of Revenue (ITA No.3293/M/2022) "1) Whether on the facts and in circumstances of case and in the law the Ld. CIT (A) erred in deleting the unsecured loans. 2) Whether on the facts and in circumstances of case and in the law the Ld. CIT(A) erred in deleting the unsecured loans specially so when the AO clearly mentioned in the Remand report that the identity genuineness and creditworthiness were not established by the Ld. CIT(A) erred in entirely deleting the unsecured loans in so far as not restricting the loans of 9 related parties in view of the fact that in Remand proceedings the AO stated that many of the lenders have not furnished the Return of Income and have immediate cash deposit immediately preceding the loan transaction. 3) Whether on the facts and in circumstances of case and in the law the Ld. CIT(A) erred in deleting the unsecured loans and not restricting the same to the lend....

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....8 of the Act being the credit made in the books of account in the name of advance booking on failure of the assessee to file the necessary details and explanation for depositing of such amount in the books of account and thereby framed the assessment. 5. The assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has partly allowed the appeal filed by the assessee. Feeling aggrieved with the impugned orders passed by the Ld. CIT(A) the assessee and the Revenue have come up before the Tribunal by way of filing present cross appeals. 6. The assessee has not preferred to put in appearance to contest the present cross appeals despite the fact that notices issued were through Registered Post with Acknowledge Due (RPAD) at the given address but not received back served/unserved. Since a period of 30 days has already elapsed assessee is presumed to have been served but not preferred to come present. So the Bench has decided to dispose of these cross appeals on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue. 7. We have heard the Ld. D.R. for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorit....

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....available with the assessee to be redeposited/utilized at a later date. h) In case the amount was received in Cash against booking of flat/shop there should have been an execution of an agreement for sale of flat/shop but no such agreement was filed by the Appellant either before AO or the undersigned. Reliance is placed on judgment of Hon'ble P&H High Court reported in 179 taxmann.141. i) In view of the above facts the addition made by the AO of Rs.1,25,01,969/- u/s 68 in respect of Cash deposits is sustainable and is hereby upheld and confirmed. Ground of Appeal No. 3 is dismissed." 8. When the assessee has not given the detail viz. name, address and PAN of the person from whom the cash in question was received along with confirmation neither before the AO nor before the Ld. CIT(A) nor the assessee has come up before the Tribunal to furnish any such detail, the identity and creditworthiness of the depositor has not been proved nor the genuineness of the transaction is proved as required under section 68 of the Act, we find no illegality or perversity in the impugned findings returned by the Ld. CIT(A). So ground No.1 raised by the assessee in its appeal i....

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....he transactions are made in cash and no other source of income of the lender has been proved, thus failed to prove the genuineness of the transaction. 12. In case of Shalla Vardekar who stated to have lent an amount of Rs.16,24,825/- to the assessee has also failed to prove any source of income. The AO noticed from the bank statement that an amount of Rs.4,00,000/- was paid to the assessee on 22.08.2012 and there was a corresponding cash deposit of Rs.4,00,000/- in financial year 2011-12 and opening balance for the year under consideration was merely Rs.4,36,898/-. So ultimately the AO drawn the conclusion that since the assessee has failed to bring on record any documentary evidence to support the creditworthiness of the lenders which is evident from the bank statement which does not reflect all the loans and lenders have not been filing any regular income tax return nor it is case of the assessee that the lenders are into the business of money lending, the genuineness of the transactions and creditworthiness of the lenders remained unproved on the file. 13. Undisputedly, the assessee has availed of the unsecured loan of Rs.1,97,62,025/- (however, the AO has wrongly written ....

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....on 68 of the Act. Merely because of the fact that transaction is through banking channel does not absolve the assessee to prove the creditworthiness of the lenders. Financials of any of the creditors have not been brought on record. 17. We are of the further considered view that when such transactions are surrounded by unexplainable facts and suspicious circumstances the onus is on the assessee to explain and to dispel all the suspicious circumstances which the assessee has miserably failed to prove. 18. No doubt income of the lending entities is not the requirement of the law or they should have sufficient balance in their account to lend the loan. But we are of the considered view that when transactions themselves are surrounded by unexplainable and suspicious circumstances, income of the lending parties and their business profile do become a requirement to be explained by the assessee. 19. Moreover, no income or meager income of the lender itself speaks volume of the creditworthiness of the lenders which is the requirement of section 68 to prove. So in these circumstances, we are of the considered view that when the assessee has failed to discharge the onus by proving g....

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....ceived in Cash/cheque. As per note No. 4 attached to Balance Sheet under the head 'Trade Payable' it is clear that 122 persons and Employees/ Members of Coop. Credit Societies advanced a sum of Rs. 2,97,59,530/- towards Advance booking of flats/shops in the Low Cost Housing project of Appellant. The list showing name and amount received as Advance towards booking of flats is mentioned in Note No. 4 under 'Trade Payable and is listed in Balance Sheet. Out of these an amount of Rs.1,01,21,400/- was received in Cash from a group of 122 persons. As discussed earlier the AO has added this cash amount of Rs.1,01,21,400/- deposited by Appellant in his bank account u/s 68 of Act from these Advances received on booking of flats. AO has again made an estimated addition @25% of these Advances received of Rs.2,97,59,530/- totaling of Rs.74,39,883/-. The above facts clearly show that the AO has made double addition from the Advances received for booking of Flats/shops as under: • Addition of Rs.1,25,01,969/- u/s 68 on account of cash received as Advance for booking of flats/shops and deposited in its bank account u/s 68 of Act. • Estimated....