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2016 (12) TMI 749 - AT - Income TaxAddition made under section 68 - Held that:- In case the entirety of the facts are taken into consideration, then though the assessee claims that it had to incur expenditure of ₹ 49,20,000/- on account of compensation due to the farmers but the Assessing Officer and the CIT(A) had allowed compensation only to the extent of ₹ 19,50,000/- i.e. claim of ₹ 20 lakhs on account of amount received from M/s. Nirmal Seeds and ₹ 50,000/-disallowed by the Assessing Officer and the CIT(A) which was to be paid to one Shri Ishwar Manik Mali. In case the assessee has been held to have paid compensation only to the extent of ₹ 19,50,000/-, then the onus was upon the assessee to prove the source of said payment to the extent of ₹ 19,50,000/-only. The assessee admittedly, had received ₹ 20 lakhs from M/s. Nirmal Seeds which has been accepted by the Assessing Officer and hence, the compensation amount is sourced from the said loan and no further addition is to be made on this account in the hands of assessee. Coming to the second part of the order of CIT(A), who had perused the bank statements and also scanned and reproduced the same as part of the appellate order. On perusal of the same, the assessee was found to have deposited ₹ 5 lakhs each on 05.01.2005 totaling ₹ 15 lakhs in respect of said amount received from three persons. Though before the Assessing Officer in the original assessment proceedings, the assessee only produced 7/12 extract of the said persons but could not produced the same, hence addition was made to the extent of ₹ 15 lakhs. However, before the CIT(A) during the course of remand proceedings, all the three persons were produced, who admitted to have advanced sum of ₹ 5 lakhs each to the assessee. The entire transaction was through banking channel. In such circumstances, where the identity of the persons have been proved and even the creditworthiness has been established by filing relevant 7/12 extract, agricultural land holding and the produce, then the genuineness of transactions stands established and there is no merit in the addition made under section 68 of the Act and the same is deleted. Accordingly, the grounds of appeal raised by the assessee are allowed.
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