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2024 (6) TMI 730
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....e of addition of Rs. 90,75,000/- invoking provision of section 56(2)(vii) and or 28(iv) of the Act. (3) That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A), Delhi, was not justified in confirming disallowance of addition of Rs. 50,25,000/- towards cash deposited in bank under section 69 treating the same as unexplained deposit. (4) That on the facts and in the circumstances of the case of the assessee the ld. CIT(A), Delhi, was not justified in confirming disallowance of addition of Rs. 15,50,000/- towards cash received by assessee treating the same on unexplained cash." 2. The background facts leading to present appeal are such that the assessee-individual filed her return for AY 2012-13 on 31.07.2012 declaring a total income of Rs. 8,06,570/- which was duly assessed. Subsequently, the AO re-opened assessment through notice dated 29.09.2019 u/s 148. In response to this notice, the assessee re-filed return repeating the same income of Rs. 8,06,570/-. Then, the AO issued notices u/s 143(2)/142(1). Ultimately, the AO completed assessment u/s 147 r.w.s. 143(3) vide order dated 30.11.2019 after making certain additions. Aggrieved, ....
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....: "Regarding Land Purchase: For the purchase of land, from the bank account of the assessee, cheques amounting to Rs. 64,45,029/- were issued. None of the cheques issued by the assessee was encashed. Therefore, the assessee did not pay any consideration for purchase of land. As per legal parlance, the term consideration in contract law refers to something of value given to someone in return for goods, services or some other promise. In the case of the assessee, the assessee has not paid any consideration for purchase of land, against which the assessee has received joint holding in land along with Shri Anchit Goyal, the market value of which stood at Rs. 1,81,50,000/-. Therefore, the assessee has received immovable property amounting to Rs. 90,75,000/- without consideration. The assessee has contended that Rs. 3,75,000/- has been paid by her father in law. The assessee claimed that in such circumstances, the purchase cannot be said without consideration. The contention of the assessee has been considered. It is true that some consideration has been paid by Shri Prahlad Goyal, however, as per the provisions of the Act, the immovable prope....
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....ther or not the stated development of plots are made or not, appellant has received the land as there is a registered sale-deed. When the appellant did not pay anything for receiving the land, which is shown in stock in trade, then there is a benefit accrued to appellant without payment and therefore, the AO considered the receipt of land without payment as a benefit u/s 28(iv) and brought to tax as income from business. 6.3.3 What the appellant has provided in the appeal proceedings, of writ filed and correspondence with the Bhopal Development Authority does not take away from the fact that the appellant got the land and as submitted by appellant, it is without payment. Outcome of litigation does not determine the ownership. Thus, the receipt of benefit is clear. As the said land is supposed to be part of the appellant's business, the AO treated the same as benefit accrued liable to be taxed as income from business as per the section 28(iv). This action of the AO, is upheld." 7. Before us, Ld. AR for assessee made a very forceful submission to contest that neither section 56(2)(vii)(b) nor section 28(iv) was applicable to the facts of case. Ld. AR submitted that the AO....
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.... Goyal to Hon'ble High Court of Madhya Pradesh against BDA, copy at Page No. 32-39 of paper-book. Thus, from these clinching evidences, it is clearly evident that the impugned property was not clean and free from encumbrance though it was so stated by sellers in registered-deed. Ld. AR made an assertion standing at the Bar that the BDA has not developed the Scheme even till now. Thus, in these circumstances, the assessee and Shri Anchit Goyal made payment through post-dated cheques and those cheques are also not cleared till now. Ld. AR submitted that ultimately depending upon development of scheme by BDA or outcome of the Writ Petition by Hon'ble High Court, the assessee shall be either making payment as agreed to the sellers or otherwise the deal itself would be cancelled. Therefore, it is not a case of purchase 'without consideration' in terms of section 56(2)(vii)(b) nor there is any benefit to assessee in terms of section 28(iv). Ld. AR submitted that the revenue authorities have branded the transaction done by assessee as 'without consideration' merely because the cheques given by assessee were post-dated and not cleared but the authorities have ignored the underlying facts a....
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....ts and documents, firstly it is clear that the assessee has not only agreed consideration with the sellers but also paid the same through cheques and secondly there is a merit in assessee's submission that part of the cheques given to the sellers have not been cleared for payment because of the litigation or uncertainty attached with the property. Hence, the assessee is very much correct in claiming that it cannot be said to be a case of purchase 'without consideration'. The assessee's claim gets further strength from the assertion by Ld. AR that in the event the decision of High Court or BDA does not materialize in favour of assessee, there would be cancellation of deal only and still if the assessee keeps the deal, the assessee would necessarily release the amounts of postdated cheques to the sellers. Therefore, in the situation, the purchase is made for consideration and the unpaid amount is only a 'liability' of assessee. Hence, without any lengthy deliberation, it can be easily concluded that the purchase done by assessee cannot be said to be 'without consideration'. Accordingly, it is neither a case of section 56(2)(vii)(b) nor of section 28(iv) as perceived by the lower-auth....
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..... The withdrawals are from the deposits into the bank account and therefore, are not unexplained. If the deposits are not explained or sources not brought to tax, the AO has not discussed the same. Further, under what section of the IT Act, is withdrawal of cash from bank account taxable, is also not mentioned by the AO." However, the CIT(A) upheld addition of Rs. 50,25,000/- qua cash-deposits by passing following order: "7.3.1 The AO's main argument is that the cash withdrawn from one bank account cannot be considered as the source of cash deposit into another account in view of the lag between the dates, i.e. cash withdrawn is not immediately deposited into another account. On the other hand, the appellant only relied on its cash book, stating that books have not been rejected. 7.3.2 In this case, the appellant has relied on cash book, but has not produced the same to the appellate authority. No explanation of the cash deposits is also given. The AO has rejected the cash book as the basis. There is no merit in appellant's argument that if a cash book is there, the same is to be accepted. As the Apex Court observed in case of Devas Multimedia P. Ltd. vs. Antri....
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....ted money, the burden of proof is on him to show he is not the owner. The Hon'ble Court laid down as under :- "6..... There is a contention was raised that the provision in section 110 where a person was found in possession of anything, the onus of proving that he was not the owner was on the person who affirmed that he was not the owner, was incorrect and inapplicable to taxation proceedings. This contention was rejected. The Bombay High Court held that what was meant by saying that the Evidence Act did not apply to the proceedings under the Act was that the rigour of the rules of evidence contained in the Evidence Act, was not applicable but that did not mean that the taxing authorities were desirous of invoking the principles of the Act in proceedings before them, they were prevented from doing so. Secondly, all that section 110 does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a get of circumstances that satisfy its condition." 7.3.5 Thus, the court affirmed that as per the evidence act, a person in possession of anything has the onus of proving he is not the owner and that this is a common law jurisprude....
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....deleted. So far as quantum is concerned, he submitted that total cash-withdrawals made by assessee were Rs. 80,80,125/- as against which cash-deposits were Rs. 50,25,000/- only, therefore the withdrawals are more than enough for making deposits. (iv) He submitted that the AO has not rejected assessee's cash-book nor found any discrepancy therein. (v) He submitted that the AO was prompted to make addition by making a wrong comparison of cash-withdrawals/deposits with turnover/ gross-profit of assessee whereas the fact is that cash-withdrawn from one bank was re-deposited in another bank or same bank. When it so, how the figures of cash-withdrawals/deposits will have any commensuration with turnover/gross-profit? (vi) He submitted that the AO has gone to the height that he made additions for cash-withdrawals as well as cash-deposits. During first appeal, the CIT(A) has though deleted addition qua cash-withdrawals and while doing so, in Para No. 5.3.2 of his order re-produced above, categorically noted "The withdrawals are from the deposits into the bank account and therefore, are not unexplained". But despite this, the CIT(A) has not deleted the addition of....
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....f money. It is nowhere a case of AO that the assessee has utilized money for any other purpose. Even the time-gap in withdrawals and re-deposits is a few days only. Then, the AO has made comparison of turnover/profit of assessee with the quantum of withdrawals/deposits but that comparison is also wrong when the assessee claims that the moneys withdrawn were re-deposited. It is nobody's case that the business turnover was deposited. We also agree with Ld. AR that there are numerous decisions wherein the cash-withdrawals from bank have been accepted as source for re-deposit in bank and additions have been deleted. Taking into account all these aspects, we are of the considered view that the addition made by AO and upheld by CIT(A) is not correct. Consequently, we delete the same. This ground is also allowed. Ground No. 4: 17. In this ground, the assessee claims that the CIT(A) was not justified in confirming the addition of Rs. 15,50,000/- made by AO towards cash-receipts by assessee treating the same as unexplained. 18. During assessment-proceeding, the AO found that the assessee has shown cash-receipts of (i) Rs. 9,00,000 for land sold in Barkhedi + Rs. 4,00,000 for land s....
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....h-book filed at Page 66-68 of Paper-Book. In so far another receipt of Rs. 4,00,000/- for land at Pura Chindwara is concerned, Ld. AR carried to Page 18 of Paper-Book where the detailed "P&L A/c of land at Pura Chindwara" is filed showing receipts/receivable of Rs. 36,54,000/- from Shri Tarik to whom the assessee sold land. The sum of Rs. 36,54,000/- includes the impugned receipt of Rs. 4,00,000/- in cash on 18.10.2011 and remaining portion was received through cheques or remained outstanding. The assessee has incurred cost of land at Rs. 24,84,174/-, thus leaving a net profit of Rs. 11,69,826/-. Next Ld. AR carried us to Page 73-76 of Paper- Book where the agreement entered by assessee with the purchaser Shri Tarik duly witnessed by two witnesses is filed which contains the details of the payment of Rs. 4,00,000/- made by Shri Tarik to assessee. This receipt is also recorded by assessee in the cash-book filed at Page 66-68 of Paper- Book. By showing these documents, Ld. AR contended, that the assessee has received the sum of Rs. 9,00,000/- from Kavita Indra and Rs. 4,00,000/- from Shri Tarik for the lands at Barkhedi and Pura Chindwara respectively. Ld. AR submitted that the asses....
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....ents were on plain paper and not registered but when the substantial profit arising therefrom is assessed by AO without any questioning, the impugned cash-receipts forming part of sale-proceeds giving rise to the very same profit cannot be treated as ingenuine. In any case, when the impugned receipts are part of the sale-proceeds, it amounts to double taxation of the transactions when the AO has assessed profits arising therefrom and at the same time added cash-receipts separately. This, in our considered view, is not justified. Being so, we delete the additions of Rs. 9,00,000 + 4,00,000 made by AO. (ii) Receipt of Rs. 70,000/- on account of agreement for Godamaru: Ld. AR drew our attention to Page 77 of Paper-Book where the assessee has filed a Ledger A/c of Shri Gorelal Newari according to which the assessee received a cash-advance of Rs. 70,000/- from Shri Gorelal Newari on 06.03.2012 against land but the same was refunded back on 10.03.2012 due to cancellation of deal. Ld. AR referred Page 85-87 where a letter dated 18.11.2019 filed by assessee to AO during assessment-proceeding is placed. In para 3(ii)(c), the assessee categorically informed to AO the same facts of adva....
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....रà¥à¤¦ ऊपर लिखी हà¥à¤ˆ इमारत तारीख क तादाद रजिसà¥à¤Ÿà¥à¤°à¥€ है अगर हो जी) दाखल आमदार के चाह शà¥à¤¦à¤¾ दसà¥à¤¤à¤¸à¥à¤µà¤¤- A 1,81,50 1675007 UNDRED PEES 500 उप पंजीयक जमा 18 17 JUN 2011 1888888 मधà¥à¤¯ पà¥à¤°à¤¦à¥‡à¤¶ MADHYA PRADESH कà¥à¤°à¥‡à¤¤à¤¾ विकà¥à¤°à¤¯ मूलà¥à¤¯ 3 2 - E 527332 1. शà¥à¤°à¥€à¤®à¤¤à¥€ जà¥à¤¯à¥‹à¤¤à¤¿ गोयल वयसà¥à¤• पतà¥à¤¨à¥€ शà¥à¤°à¥€ अशोक गोयल PAN. ABBPG 3493P à¤à¤µà¤‚ 2. शà¥....
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.... नं. 000298 दिनांक 24.03.2012 दà¥à¤µà¤¾à¤°à¤¾ चैक नं. 000299 दिनांक 24.03.2012 बैंक बैंक ऑफ इणà¥à¤¡à¤¿à¤¯à¤¾, पà¥à¤°à¥‹à¤«à¥‡à¤¸à¤°à¥à¤¸ कालोनी, à¤à¥‹à¤ªà¤¾à¤² (उपरोकà¥à¤¤ चैकà¥à¤¸ की राशि शà¥à¤°à¥€ जà¥à¤žà¤¾à¤¨à¤¸à¤¿à¤‚ह को देय) दà¥à¤µà¤¾à¤°à¤¾ चैक नं. 273202 दिनांक 24.07.2010 दà¥à¤µà¤¾à¤°à¤¾ चैक नं. 298259 दिनांक 24.03.2012 बैंक सेनà¥à¤Ÿà¥à¤°à¤² बैंक ऑफ इणà¥à¤¡à¤¿à¤¯à¤¾, इमामीगेट, à¤à¥‹à¤....
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....िनांक 24.03.2012 बैंक बैंक ऑफ इणà¥à¤¡à¤¿à¤¯à¤¾, पà¥à¤°à¥‹à¤«à¥‡à¤¸à¤°à¥à¤¸ कालोनी, à¤à¥‹à¤ªà¤¾à¤² (उपरोकà¥à¤¤ चैकà¥à¤¸ की राशि रामनारायण बी को देय) दà¥à¤µà¤¾à¤°à¤¾ चैक नं. 298255 दिनांक 24.03.2012 बैंक सेनà¥à¤Ÿà¥à¤°à¤² बैंक ऑफ इणà¥à¤¡à¤¿à¤¯à¤¾, इमामीगेट, à¤à¥‹à¤ªà¤¾à¤² दà¥à¤µà¤¾à¤°à¤¾ चैक नं. 000302 दिनांक 24.03.2012 बैंक बैंक ऑफ इणà¥à¤¡à¤¿à¤¯à¤¾, पà¥à¤°à....