TaxTMI 
TaxTMI 
2026 (8) TMI 561
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....ng a total income of Rs. 32,35,315/-. The case has been selected for scrutiny under CASS for verification of large investment in property as compared to the total income and also large cash deposits in savings bank accounts. During the assessment proceedings, in response to the notices issued by the AO, the assessee submitted the details as and when called for. The assessee furnished computation of income, bank statements, purchase deed and Form 26AS before the AO. The assessee further stated that he is a qualified MBBS doctor and providing parttime consultancy to patients. Further, the assessee stated that to purchase the immovable property, i.e., survey No.56/2B, measuring 5.25 acres in Virudhunagar for a consideration of Rs. 4 crores during the year has obtained loan from following three parties to the extent of Rs. 4.13 crores. (i) SPS Vaikunth Reality Private Limited Rs. 3.1 crores. (ii) NOAH Infrastructure Rs. 60 lakhs (iii) Senthilmathi Rs. 43 lakhs. 3. Further, the assessee stated that in respect of cash deposits made to the tune of Rs. 11 lakhs and Rs. 28.5 lakhs in the saving bank accounts held with Indian Bank and City Union Bank, respective....
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....explained the source of the same as rental receipts from property at Tambaram, other sources of income including the part time professional receipts and interest income as admitted in the return of income filed for the AY 2022-23. Further, the assessee submitted that the receipt of amount of Rs. 3.1 crores from M/s.SPS Vaikunth, the amount was given to the company for purchase of immovable property as advance on 31.03.2021 of Rs. 2.38 crores and on 09.11.2021 of Rs. 72 lakhs. However, the transactions could not materialize because the said amount of Rs. 3.10 crores, which was paid as advance was refunded in the impugned assessment year and the same has been utilized for purchase of immovable property. In respect of other two loans, the assessee filed the confirmation from the parties. In respect of cash deposits in the savings bank account, the assessee submitted that the source for the same as detailed below:- Opening balance of cash as on 01.04.2021 Rs.10,25,400 Part time professional receipts Rs. 9,75,000 Interest income received in cash Rs. 9,47,300 Rental receipts received in cash Rs.11,49,000 Out of the above source of cash, a sum of Rs. 39,50,000/-....
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..... Similarly in the case of interest receipts also the appellant had not furnished any documentary proof in support of his claim. Hence, the amount of the extent of Rs. 9,75,000/- and confirmed the addition of Rs. 29,75,000/- u/s 69A of the Act as the source of which remain unexplained and unsubstantiated. I have no reason to interfere with the decision of the learned Assessing officer and hence the addition of Rs. 39,50,000/- is upheld. Ground No. 2 is herewith Dismissed." 8. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us. In support of the grounds of appeal filed by the assessee, the ld.AR for the assessee submitted the following written submissions :- "The source of funds received for purchase of said property are as under- 1. On 02.12.2021 RTGS received from SPS Vaikunth Realty Pvt Ltd through City Union Bank Rs. 1,00,00,000/- This Entire amount was transferred to TVH Infrastructure on 02.12.2021 itself towards part payment of sale consideration paid to them. 2. On 03.12.2021 RTGS received from SPS Vaikunth Realty Pvt Ltd through City Union Bank Rs. 1,00,00,000/- This Entire amount was transferred to TVH Infrastructure ....
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....he loan party and genuineness of transactions; the addition made under section 68 was liable to be deleted.-Vide Vidya Education Investments (P) Ltd. v. Dy. CIT 2021 TaxPub (DT) 2542 (Del- Trib). 4. Assessee by furnishing loan confirmation duly signed by assessee and the lender, ledger account of assessee in the books of lender, copy of bank account statement of assessee with Canara Bank recording the receipt of loan, loan confirmation of FY 2007- 08 in which said loan was repaid, discharged onus under section 68 to prove identity of and capacity of creditor to advance money; and genuineness of loan transaction. There was enough material before assessing officer to make further inquiry/verification in the matter, but assessing officer had not done even elementary/ preliminary inquiry to verify genuineness of the transaction. Therefore, addition made by assessing officer based on surmises and conjectures could not be sustained.-Vide Khetan Twist Net (P) Ltd. v. ITO 2020 TaxPub (DT) 4943 (Mum-Trib): (2021) 85 ITR (Trib) 47 (Mum- Trib). 5. Assessee had proved identity, genuineness and creditworthiness of the unsecured loans taken by it from creditors through cheque a....
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....operty purchased for Rs. 4,00,00,000/- was already furnished as above. The details of property purchased was supported by source of investment in property and confirmation of all the parties including creditors through whom property purchase amount was invested, hence the entire source of investment of property was fully explained already. Therefore there is no reason to make any addition on this account. The Appellant hereby humbly requests to the Appellate authority to consider the case sympathetically and delete the entire estimated addition made on this account. The Appellant has already furnished complete account details, confirmation of accounts, Income tax account statements and Acknowledgement of Creditors, Bank account statement of creditors. Hence the addition made may kindly be deleted entirely. The Appellant has submitted during the course of Assessment proceedings furnished copy of bank account statement which contains details of Loan receipts etc. Moreover the Appellant has submitted confirmation letter, Income Tax Assessment details and relevant details towards receipt of loan for purchase of property. But Unfortunately the Assessing Officer has not consider....
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....rtunately, the Assessing Officer has made arbitrary and imaginary addition to the tune of Rs. 39,50,000/- being the Entire cash deposit made in Indian Bank and City Union Bank during the Financial Year 2021-22. With reference to the cash deposit made by the Appellant, the Appellant during the Assessment proceedings has submitted the source of funds for cash deposits made in the Bank as follows: The Appellant is a Doctor holding MBBS Degree and pursuing for MD Course during FY 2021-22. Since the Appellant is staying in Semi Urban area people in the nearby area used to come for consultation casually. For the consultation the visitors used to make cash payment for the service rendered by the Appellant. The entire receipts received from this part time work was duly admitted in the return of income submitted for FY 2021-22 totalling to Rs. 9,75,000/- which was deposited in the Bank account of the Appellant from time to time on lumpsum basis. The Appellant has also given small loans to the flower merchants on daily basis in his area. For the said loans the appellant has received interest from small debtors in cash only. The total Interest received amounted to Rs. 9,46,650/- was ....
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....vailable for the Financial Year 2021-22, a round sum of Rs. 39,50,000/- was deposited in the bank account on various dates during the said financial year. Therefore the appellant prays before the authorities to delete the entire demand made and accordingly to give full relief in demand raised. Therefore, on the above grounds and on additional grounds that may kindly be permitted to be added at the time of hearing, Appellant prays before your kind honour to delete the entire addition and cancel the demand raised and render justice. 9. During the hearing, the ld.AR also filed a paper book consisting of 95 pages containing sale agreement and sale deed of the immovable property purchased, extract of bank statement of the assessee, loan confirmation issued by Empee Distilleries and SJN Distilleries Limited dated 27.12.2023, declaration of winners of Falcon Evening Lottery, Nagaland, claim of lottery along with the prize tickets, ITR of SPS Vaikunth along with the ledger account of the assessee and bank statement to show the transaction, ITR, confirmation, bank statement of NOAH Infrastructure and also the ITR filed of Senthilmathi, confirmation and the financials. F....
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....m M/s.SPS Vaikunth Realty Private Limited, M/s.NOAH Infrastructure and the assessee's family members. It is also not in dispute that the payments towards purchase of the property were made through regular banking channels. The assessee furnished before the lower authorities the purchase deed, bank statements, confirmations from the concerned parties, copies of their returns of income, ledger accounts and a detailed fund-flow statement correlating the receipt of funds with the payments made to the seller. The AO had also issued notices u/s. 133(6) of the Act to the principal parties. In response thereto, M/s.NOAH Infrastructure furnished its balance sheet, audit report and return of income and confirmed that it had advanced an interest-free loan to the assessee. M/s SPS Vaikunth Realty Private Limited also responded to the notice and explained that the amount represented refund of advances earlier received from the assessee in connection with a proposed property transaction that did not ultimately materialise. The company also furnished its ledger account, return of income and bank statement. The third creditor, Smt.Senthilmathi, furnished confirmation of the transaction. 14. The....
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.... upon the assessee stood discharged. Thereafter, if the AO entertained any doubt regarding the financial capacity of the parties or the genuineness of the transactions, it was incumbent upon him to undertake further enquiries and bring on record cogent material to dislodge the evidence furnished by the assessee. However, neither the assessment order nor the order of the ld.CIT(A) refers to any independent enquiry demonstrating that the money received by the assessee belonged to the assessee himself or that it was introduced through the concerned parties by way of accommodation entries. No defect has been specifically pointed out in the bank statements, confirmations or ledger accounts furnished by the assessee. No material has been brought on record to establish that the documents furnished by the parties in response to notices u/s. 133(6) were false or fabricated. 17. The ld.CIT(A) relied upon the decision of the Hon'ble Supreme Court in the case of NRA Iron and Steel Private Limited and observed that the assessee had failed to establish the identity, creditworthiness and genuineness of the transactions. However, the ld.CIT(A) has not examined the evidence pertaining to each cr....
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....ts 9,75,000 Interest income received in cash 9,47,300 Rental receipts received in cash 11,49,000 Total Cash Available 40,96,700 Against the above cash availability, the assessee deposited a sum of Rs. 39,50,000/- into the bank accounts during the relevant previous year. 22. It is an undisputed fact that the assessee is a qualified medical practitioner carrying on part-time consultancy and has disclosed professional receipts of Rs. 9,75,000/- in the return of income. Likewise, the assessee has also offered rental income and interest income to tax. The computation of income placed before the authorities indicates that these receipts have been duly reflected in the return of income. Merely because such receipts were initially received in cash and subsequently deposited into the bank, the same cannot automatically assume the character of unexplained money. Once the income has been disclosed and subjected to tax, redeposit of the same cash into the bank account cannot again be brought to tax u/s. 69A of the Act in the absence of any contrary evidence. 23. The ld.CIT(A) rejected the explanation mainly on the ground that confirmations from the tenants and bor....