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2026 (4) TMI 177
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....sed to established principles of jurisprudence and in violation of principles of natural justice. 2. The Ld.CIT(A) is not justified in passing the impugned appellate order without considering or alluding to the elaborate submissions made by the appellant. 3. The Ld.CIT(A) erred in confirming the addition of Rs. 2 crore made by the AO solely based on the retracted statement of the appellant without showing any corroborative evidence for the cash loan of Rs. 2 crore alleged to have been advanced by the appellant to Mr. Vasudev during the relevant previous year. 4. The Ld.CIT(A) erred in holding that the appellant's retraction was not supported by any documentary evidence whereas the appellant sought to correct his statement by submitting that sum of Rs. 2 crores (coded as 200 in seized paper) was actually referring to the amount expected from Mr. Vasudev towards repayment of loan and in support thereof the details of repayment in cheque were submitted by producing the ledger account of Mr. Vasudev in his books. 5. The Ld.CIT(A) erred in holding that the seized paper constitutes incriminating material as it contains unaccounted cash transactions....
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....ng to cash loan of Rs 2 Cr. given by the assessee to one Mr. Vasudev were mentioned at page 1 of the seized material marked as 'A/TGMRR/01. During the search, statement u/s. 132(4) was recorded of the assessee on 10th and 11th Sept. 2018 wherein he was asked to explain the contents of that paper. The assessee explained that he wanted to purchase land of six acres from Mr. Vasudev for a total consideration of Rs. 7.8 crores and assessee wanted to adjust his earlier cash loan given of Rs. 2 crores during June 2016 and further an amount of Rs. 1 crore which was given through cheque. The assessee paid Rs. 50 lakhs through cheque and further 50 lakhs were yet to be paid. Accordingly, assessee has paid Rs. 2 crores in cash and Rs. 50 lakhs in cheque. The balance amount of Rs. 4.80 crores was outstanding from the assessee which was to be paid later at the time of registration. 7. Therefore, the assessee was asked to explain the source of cash loan of Rs. 2 crores given to Mr. Vasudev. The assessee submitted that cash loan of Rs. 2 crores was given to Mr. Vasudev during June 2016 and source of such cash loan was unaccounted income which assessee has generated through his various busines....
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....oks of the assessee in the accounts of Mr. Vasudev. Therefore, there was an error on the part of the assessee in explaining the point during the 132(4) statements. (7) The ld. AO has made an addition in violation of CBDT Instruction No.20/2015 dated 29.12.2015 wherein in para four it was stated that assessee must be given a proper opportunity of hearing and opportunity to explain. The assessee has explained that it is not a cash loan given to Mr. Vasudev, but the amount received by cheque from Mr. Vasudev. (8) The assessee did not retract his original statement as he was under a belief that by producing Mr. Vasudev the situation may be explained to the AO that there is no cash loan given by the assessee to Mr. Vasudev, but it was a cheque transaction in earlier years with Mr. Vasudev and therefore the statement was not retracted. (9) Mr. Vasudev, when summoned by the AO u/s.131,1 has categorically stated that he has not received any cash loan from the assessee. (10) The provisions of section 69A do not apply. (11) The money which was lent to Mr. Vasudev in FY 2015-16 was in cheque from the Bank account of the assessee, therefore the sour....
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....ch has been repaid by that gentleman through various cheques of Catholic Syrian Bank. Therefore, it was submitted that the assessee was confused and failed to explain the transaction in the right perspective at the time of search. c) merely because assessee has made a statement u/s. 132(4), no addition could have been made. d) when the AO summoned Mr. Vasudev, he denied having received any such cash loan. Accordingly addition made by the ld. AO is merely based on statement made u/s. 132(4) of the Act. e) The statement was not retracted by the assessee for the only reason that he was under belief that he will explain this issue during the course of assessment proceedings where the facts will naturally come out based on the books of account of the assessee as well as the statement of Mr. Vasudev that no such transaction of giving loan in cash by the assessee to Mr. Vasudev really exists. f) He further submitted that the ld. CIT(A) has confirmed the addition also on the same facts because the assessee has made a statement u/s. 132(4) of the Act. He submits that merely because a declaration is made u/s. 132(4) of the Act, which is not corroborated by....
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.... wanted to adjust earlier loan given in cash of Rs. 2 crores to Mr Vasudev, which was paid in cash during June 2016 and an amount of Rs. 1 crore which was given through cheques wherein Rs. 50 Lacs were already paid before couple of months and a sum of Rs. 50 lakhs were yet to be paid. Therefore according to him, till date he has already paid Rs. 2 crores in cash and Rs. 50 lakhs by cheque. The balance amount of Rs. 4.80 crores was due for him to pay later at the time of registration of the land. On examination of the documents and after obtaining the legal opinion, it came to the notice of the assessee that the land is having some dispute. Since the documents were not legal, the assessee dropped the idea to purchase the same land. 18. Further in answer to question No. 17 the assessee was asked a specific query that why he had advanced cash loan to Mr Vasudev. The assessee explained that Mr Vasudev was his partner in the Park Square project. Assessee is into the finance business in the name and style of N V Finance Limited. Therefore initially, assessee advanced cash loan at 12% interest in 2016. Initially Mr Vasudev has paid the interest for 2 - 3 months. However after demonetis....
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....e also explained that how the above amount of Rs 2 crores paid by the assessee in cash to Mr Vasudev would have been recovered by purchase of land. 21. Further interesting question No. 24 was asked to the assessee that in the seized material marked as A/TGMRR/01 the assessee has entered into lot of cash transactions which are not entered in the books of account, but assessee was provided many opportunities before the recovery of those sheets, and why assessee should not be prosecuted. The assessee replied that he was under impression that income tax department will not be able to catch, which was caught by the assessee. He further confirms that these transactions are not entered in his books of accounts. 22. In the end in answer to question No. 52 of the statement the total amount of Rs. 50,516,597/- was disclosed by the assessee where many such transactions are of cash loan and cash payment wherein also for assessment year 2017-18 a sum of Rs. 2 crores being the cash loan to Mr Vasudev towards the purchase of the property was also mentioned. 23. From the whole statement it is evident that assessee is engaged in the transactions of giving cash loan to various parties, whic....
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....s the amounts receivable from him that were already accounted forming part of the amounts receivable." 26. At page No. 44 of the paper book assessee submitted the Ledger account of Mr Vasudev for the financial year 2016 - 17 wherein there is an opening debit balance in that particular account as on 1 April 2016 of Rs. 1,90,79,450. Subsequently in June-August, 2016 assessee received the above sum back by cheque on four occasions of the same amount. Thus the outstanding debit in the account of Mr Vasudev was cleared and the outstanding balance as on 1 August 2016 was Rs. Nil. Further the transaction of giving cash loan is stated in June 2016 by assessee in his statement, has nothing do with the above transaction because cheques loans were already substantially repaid by Mr. Vasudev by Cheque prior to that date. Thus the above explanation is rightly rejected by the ld. Lower authorities. 27. There is no other averments made by the assessee. Thus a statement which was given on 10 September 2018 remained uncontroverted by the assessee till 4 February 2021. On 4 February 2021 also the assessee stated that the statement so given is erroneous and for the reason that that the amount s....