TMI Blog2014 (4) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... with the order of the CIT(A) – Decided against Revenue. Addition made on account of income from other sources – Held that:- The addition was made solely on the reason that the assessee has failed to establish that he was earning agricultural income by furnishing proper details and evidence - the assessee has shown the land as an asset and even though the confirmation letter mentions about payment of annual lease rental, but, there is no other evidence to show that Sri K. Subhash Chandra Bose was carrying on agricultural operation on the said land - the household card of Sri K. Subhash Chandra Bose mentions his annual income at Rs. 18,000 - it raises serious doubt as to how a person having annual income of Rs. 18,000/- can pay lease rental of Rs. 75,000/- to the assessee - The assessee has not at all proved with sufficient evidence that agricultural operation was being carried on the said land or it was generating income from agriculture – thus, there is no infirmity in the order of the CIT(A) in sustaining the addition as income from other sources – Decided against Assessee. Addition on account of gift received from Father-in-law – Held that:- Sri M. Krishnama Naidu has menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns residing outside India – thus, in their case strict proof of evidence is required with regard to creditworthiness and genuineness of the loan - it is required to be verified from their bank accounts whether they had source to advance the amount to the assessee - the CIT(A)'s finding with regard to the amount of Rs. 5 lakhs from Smt. Santoshamma is accepted but so far as loan of Rs. 4,17,670/- and Rs. 2,01,890/- from Sri Sudhakar and Sri Ananda Kumar are concerned, the matter is remitted back to the AO for verification – Decided partly in favour of Revenue. - ITA No.238,239,519,663,664/H/11, C.O. No.21,22/H/11 - - - Dated:- 13-11-2013 - Chandra Poojari And Saktijit Dey, JJ. For the Appellant : Shri P V Rao For the Respondent : Shri S Rama Rao ORDER:- PER : Saktijit Dey All these appeals are pertaining to one Assessee. Appeals in ITA Nos. 238 and 239/Hyd/2011 filed by Revenue are directed against separate orders of CIT(A)-VII for the assessment years 2002-03 2005-06. The assessee filed COs for the said two assessment years in support of the orders of CIT(A). Appeal in ITA No. 519/H/11 filed by the Revenue is directed against the order of CIT(A)-VII, Hyder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d wrongly made the addition of Rs. 5 lakhs even though these aspects of loan taking was very much disclosed at the time of filing the original return of income. He, therefore, contended that the AO had not appreciated the facts on record and made the additions, which is not proper. The AR of the assessee relied on the following decisions in support of the case of the assessee: 1. Vijaybhai N. Chandrani Vs. ACIT, 231 CTR 474 (Guj.) 2. LMJ International Ltd. Vs. DCIT, 119 TTJ 214 (Kol.) 3. Royal Marwar Tobacco Products Ltd. Vs. DCIT, 29 SOT 53 4. Anilkumar Bhatia Vs. ACIT, ITA No. 2660 to 2665/Del/09 5. KGR Exports Vs. JCIT, Central Circle, ITA No. 494/V/2007, dtd. 11/09/2008 7. After considering the submissions and the decisions relied upon by the assessee, the CIT(A) observed that the issues with regard to the addition made by the AO are not newly disclosed in response to the notice u/s 153C of the Act issued by the AO and since the assessee had already disclosed all the above credits and loans while filing the original return of income and since there is no seized material contrary to the assessee's disclosure made in the original return of income, no addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has simply relied upon the information submitted by the assessee in the original return filed by him prior to the date of search for making additions in question. In our view, in proceeding u/s 153C of the Act, no assessment can be made unless there is seized material belonging to the assessee. As is very much evident from the computation submitted along with the return of income filed by the assessee prior to the search, a copy of which is at page 14 of the paper book, information relating to both the loan taken from SBI as well as from others was disclosed to the department by the assessee. It is also evident that there is no material before the AO either as a result of search or enquiry made by him subsequently, to come to the conclusion that the amount of Rs. 3,00,000/- and Rs. 5,00,000/- are unexplained income of the assessee. The decision of the Hon'ble jurisdictional High Court in case of Gopal Lal Bhadruka (supra) is clearly distinguishable on facts as in that case there was admission made by the individual partners with regard to the undisclosed income and that besides the Hon'ble High Court never held that assessment can be made u/s 153A/153C without any material What th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce any evidence as to the land holdings and sale proceeds of agricultural produce, though sufficient opportunity was given to the assessee, AO made the addition of the said amount treating it as income from other sources. Before the CIT(A) it was the submission of the learned AR of the assessee that the assessee had given his land on lease and he receives lease rental of Rs. 75,000/- per annum and therefore the disclosure made by the assessee should have been accepted by the AO. The CIT(A) confirmed the addition made by the AO on the ground that the assessee failed to establish that he is earning so much from agricultural operations. 18. Still aggrieved the assessee is in appeal before us. 19. The learned AR reiterating the contentions raised before the lower authorities submitted that the assessee was the owner of agricultural land in question and has shown it in the balance sheet as on 31/03/2006 and the said land was given on lease for annual lease rent of Rs. 75,000/-. In this context, the learned AR invited our attention to the confirmation letter from one Sri K. Subhash Chandra Bose at page 15 of the paper book confirming the lease rental of Rs. 75,000/-. 20. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solidly support for having given a gift of Rs. 4,00,000/- to the assessee. 24. Aggrieved, the assessee is in appeal before us. 25. We have heard the submissions of the parties and perused the orders of the revenue authorities as well as other materials on record. It is the contention of the Ld. AR before us that the assessee has received the gift from his father-in-law and in this context he has referred to the confirmation from Sri M. Krishnamma Naidu, at page 17 of the paper book. On perusal of the said confirmation letter it is seen that Sri M. Krishnama Naidu has mentioned that he is owner of 2.97 acres of land and earning agricultural income of Rs. 80,000/- to Rs. 1 lakh per year. However, there is no other evidence produced by the assessee to establish that his father-in-law did actually earn agricultural income to the extent mentioned in the conformation letter. It is also fact that the gift has been made in cash and the donor Shri Krishnamma Naidu is not an income-tax assessee.. Since there is no evidence produced by the assessee either to prove the capacity of the donor or the fact of earning agricultural income by him, the addition on that account, in our view is jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,27,000/- on sale of car, but, he did not adduce any evidence towards the sale of car on loss. Therefore, the AO declined the same to be set off and added the same to the income of the assessee. On appeal, the CIT(A) confirmed the addition made by the AO by holding that as no concrete explanation or evidences were filed by the assessee in support of the loss claimed, therefore, the loss claimed is without valid reasons and necessary proofs, hence cannot be allowed. 33. The learned AR submitted before us that the assessee had sustained short term loss on sale of car, which has been claimed in the return of income filed for the impugned assessment year. The learned AR referring to the purchase invoice of car, a copy of which is at page 84 of the paper book, submitted that the car was purchased on 06/05/2003 for a consideration of Rs. 3,65,070/- and sold on 19/07/2007 for Rs. 2,35,000/-, hence, there is a loss of Rs. 1,27,000/-, which should have been allowed by the AO. The learned AR further submitted that the assessee had never claimed any depreciation on the said car. 34. The learned DR, on the other hand, submitted that since the assessee has been estimating the income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be remitted back to the AO for verification. 40. We have heard both the parties and perused the orders of the revenue authorities as well as other materials on record. Considering the submissions of the assessee and perusing the details of purchase of land made by the assessee, which has been furnished at page 81 of the paper book, we are inclined to remit the matter back to the file of the AO for deciding the issue afresh after verifying the claim of the assessee as well as other material and evidences that may be produced before him. The AO shall afford reasonable opportunity of hearing to the assessee. This ground is allowed for statistical purposes. 41. In the result, this appeal of the assessee is allowed for statistical purposes. ITA NO. 519/H/11 by the Revenue 42. The ground raised by the revenue in this appeal is against the action of the CIT(A) in deleting the addition made by the AO on account of unexplained cash credits of Rs. 11,19,560/-. 43. The AO noted that during the year the assessee had shown loan receipt of Rs. 5,00,000/-, Rs, 4,17,670/- and Rs. 2,01,890/- from Smt. Santoshamma, Sri Sudhakar, NRI and Sri Ananda Kumar, NRI respectively. Since the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have deleted the addition. He, therefore, submitted that the entire issue requires to be verified by the AO, hence, requested for remitting the matter to the AO. 47. The learned AR, on the other hand, submitted that out of the total amount of Rs. 11,19,560/- an amount of Rs. 5 lakhs is not actually a loan but gift given by Smt. Santhoshamma, who worked as Head Nurse and the amount was remitted through banking channel, hence, there cannot be any doubt with regard to the gift given by Smt. Santhoshamma. It was also submitted that Smt. Santhoshamma has also confirmed of having made the gift to the assessee out of her retirement benefits. To this effect, the learned AR referred to the confirmation letter of Smt. Santoshamma at page 82 of the paper book. So far as the loans of Rs. 4,17,670/- and Rs. 2,01,890/- from Sri Sudhakar and Sri Ananda Kumar are concerned, the learned AR submitted that both of them are closely related and non-resident Indians. It was submitted that the amount advanced by them have come through banking channel and reflected in the bank account of the assessee. The learned AR submitted that the AO has not independently considered each credit and has made the add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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