TMI Blog2012 (10) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... ipts because these amounts represents amount received from various applicants for applying of plots/flats and current income of assessee. (B) Addition of ₹ 4,98,775/- credited on 3.12.2005 being cheque received from Shri Jogi Ram is also illegal a s the amount was received in lieu of Cheque of ₹ 2.00 Lakhs issued on 24.8.2005 and on account of HP Shimla, flat applied through appellant on 6..12.2005. (C) Addition of ₹ 19,310/- being cheques of ₹ 810/- and ₹ 18,500/- credited on 22.3.2006 is also illegal as the amount was received on account of refund received from Housing Board, Haryana. 3. Ground No. 1 regarding issue of notice u/s 148 was not pressed before us, therefore the same is dismissed as not pressed. 4. Ground No. 2 Brief facts of the case are that the assessee had filed return declaring income of ₹ 99,500/- from tuition on 29.3.2007 which was processed on 30.3.2007. Later on information was received from CIT(CIB), Chandigarh that the assessee has deposited certain cash deposit in his bank account. It was also noticed that the assessee has derived income of ₹ 8800/- as interest from his bank account in Bank of Barod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to J.C.I.T., Kurukshetra Range, Kurukshetra. Simultaneously an application was moved before the AO to get the assessment proceedings pending till disposal of the application u/s 144A. Before the J.C.I.T. the assessee filed various submissions which were forwarded to the AO and the AO accordingly submitted the details vide letter No. 1360 dated 6.10.2009 which has been reproduced by the AO at para 2.5. After considering this report the J.C.I.T. Kurukshetra range, Kurukshetra issued the directions u/s 144A which read as under:- In this connection, . the counsel of the assessee Sh. Permit Goel. Advocate moved an application u/s 144 A in the case of the above referred assessee for the A.Y. 2006-07 on 01.09.2009. and subsequent reply submitted on 24.09.2009 which were already filed by the assessee as well as forwarded by the undersigned to your office. Your report submitted vide No. 1360 dated 6.10.2009 has been considered. Further, the assessee's counsel as per his reply dated. 9.10.2009 has surrendered peak credit and other unexplained investment of ₹ 2l,90,527/- subject to no penal action. The assessee's offer of surrender of the following incomes subject to no pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d flats by others and income from providing these services has already been declared in the return of income. Since no credible evidence was produced by the assessee for receiving cash from this which has been deposited in the bank for issuing drafts. The AO held that the flats/plots have been applied in the name of the family members or in the name of benami persons. Since no evidence was filed regarding income earned for rendering services to other plot applicants and no such persons were produced despite specific request, the AO held that it can not be accepted that the assessee had rendered any services for applying the plots/flats. According to the AO in the absence of any evidence for deposit in cash and also in view of the directions u/s 144A an addition of ₹ 21,90,527/- was made. 6 On appeal before the ld. CIT(A), similar submissions were reiterated. It was further contended that there was no column in Saral Tax Return Form and hence the professional income could not be shown in the return but the complete details were filed on 22.6.2009 wherein it was clarified that income from tuition was ₹ 63,050/- and income from service charges was ₹ 36,450/-. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce Shri Jogi Ram for verification but he had failed to produce the person. It was further noted that in case of Shri Jogi Ram a sum of ₹ 4,98,592/- was credited in the bank account on 2.12.2005 and on the other hand, next day the cheque for ₹ 4,98,775/- was issued in the name of assessee. There was no indication for the source of ₹ 4,98,592/-. Regarding cheque of 18,500/- the assessee had claimed that the amount was received from Haryana Housing Board on account of refund of cash deposits in Stte Bank of India, Kurukshetra being unsuccessful draw but no evidence was filed. The comments of the AO were provided to the assessee for further comments. The assessee in his comments reiterated the submissions made earlier. 7 The ld. CIT(A) after examining the issue in detail, allowed the relief in respect of money received from Shri Gurdial Singh because there was clear evidence in the form of bank statement that Shri Gurdial Singh had withdrawn a sum of ₹ 2,50,000/- from his bank account. He also allowed a relief of ₹ 30,000/- on account of set off of the current income. The assessee has claimed a set off of ₹ 60,000/-. According to the AO inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the surrounding circumstances to find out the reality of such recitals. Thus it is clear that wherever a particular state does not seen to be real then the party alleging that state of affairs has to be prove the same. 11 Again in case of CIT V. Smt. P.K.Noorjehan (supra) the Hon'ble Supreme Court has held as under: In the corresponding clause of the Bill which was introduced in Parliament while inserting section 69 in the Income-tax Act, 1961 the word shall had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word may . This clearly indicates that the intention of Parliament in enacting section 69 was to confer a discretion on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the Income-tax Officer is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory . The question whether the source of the investment should be treated as income or not under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om HUDA and other Government departments on the basis of information provided by the assessee. It is settled position of law that for any cash credit, three ingredients have to be proved i.e. (i) identity of the party, (ii) genuineness of the transaction and (iii) capacity of such party to give such money. In case before us even the first ingredient i.e. identity of the party has not been proved because the assessee has not furnished the names and addresses of such persons before the AO or the ld. CIT(A) or even before us. We do not understand how the Department can verify the source in the hands of the stranger by writing to the HUDA only on the basis of name even such Government authorities may not be able to provide any information. We further find that the ld. CIT(A) has recorded the detailed finding from para 1.17 to 1.21 which is reproduced hereunder: 1.17 The issue is considered. The facts in brief are that the Assessing Officer received information from CIT(CIB) regarding substantial deposits made in the bank account of the appellant. The AO further noted that interest of ₹ 8800/- credited in his bank account was not declared in the Return of income already filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment is, therefore, not correct/ tenable. 1.18 Now coming to the merits of the submissions made by the appellant, it is noted that the same were considered by the AO in his order and in his comments filed during appeal proceedings. The plea of the appellant that credit of current income has not been given whereas credit thereof as reduced by the house hold expenses should have been given, particularly when the AO accepted house hold expenses at ₹ 30000 + 30000 by wife Anita vide reply dated 29.06.09. 1.19 The plea of the appellant is considered. The relevant assessment records is referred. The counsel of the appellant in his letter filed on 29.06.2009 before the AO during assessment proceedings, submitted as under:- ₹ 60000/- Approximately were spent on house hold expenses by me and my wife jointly including expenses of two minor local primary school going children and we are leaving in out old house. No separate details of house hold expenses are maintained. 1.20 Since no addition was made on account of low house hold withdrawals, the appellant claimed that the AO accepted his claim of household expenses of ₹ 60,000/- and hence is requested to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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