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2019 (10) TMI 701 - ITAT DELHIAddition u/s 68 - unexplained cash credit - HELD THAT:- We find that it is not in dispute that all the three loan creditors had sold three piece of land jointly held before advancing loan to the assessee company. Further, from the confirmation of account of Sh. Rajinder Singh, Sh. Raj Pal and Sh. Ramesh Yadav in the books of M/s EMM VEE Infrastructures (India) Pvt. Ltd. It is observed that opening balance of advance given by Sh. Rajinder Singh was ₹ 65,00,000/-, Sh. Raj Pal was ₹ 71,00,000/- and Sh. Ramesh Yadav was ₹ 50,00,000/-. Thus, in our considered opinion, creditworthiness of such a loan creditor cannot be doubted. In fact, in the instance case, actual creditworthiness of three loan creditors, namely, Sh. Rajinder Singh, Sh. Raj Pal and Sh. Ramesh Yadav was not impeached by the revenue by bringing on record any relevant material but addition was made by doubting the source of ₹ 18,00,000/- in the case of Sh. Rajinder Singh, ₹ 23,00,000/- in the case of Sh. Raj Pal and ₹ 13,00,000/- in the case of Sh. Ramesh Yadav. It is observed that no material has been brought on record to show that ₹ 18,00,000/-, ₹ 23,00,000/- and ₹ 13,00,000/- has flown from the exchequer of the assessee and was routed back by way of loan from Sh. Rajinder Singh, Sh. Raj Pal and Sh. Ramesh Yadav. It is an established position of law that u/s 68 of the Act in respect of loan creditor, the assessee is required to establish his source and not the source of the source. Therefore, the addition made of ₹ 18,00,000/- received from Sh. Rajnder Singh, ₹ 23,00,000/- received from Sh. Raj Pal and ₹ 13,00,000/- received from Sh. Ramesh Yadav by doubting their source cannot be sustained. - Decided in favour of assessee Addition on account of closing stock - AO was not satisfied with the explanation of the assessee and observing that the assessee has not explained the basis of allocation of opening WIP between cost and closing WIP, therefore, WIP transferred to cost is disallowed and added to income of the assessee CIT(A) reducing the addition made by the AO on account of closing stock - HELD THAT:- Both the parties before us could not point out any error in the order of the CIT(A), therefore, the grounds of appeal of the assessee as well as revenue are dismissed. Disallowance of cost on development of land claimed - addition made for the reason that from the sale and purchase document, it is not borne out that such expenditure was incurred on land and that no supporting bills and vouchers were produced by the assessee - HELD THAT:- CIT(A) deleted the addition on the ground that the said expenditure has been incurred by the assessee towards development cost of land at Rajpura in the immediately preceding assessment year 2011-12 and was accepted in the assessment year 2011- 12, in an assessment made by the AO u/s 143(3) of the Act. The DR merely relied on the order of the Assessing Officer. He could not bring any material on record to controvert the above findings of the CIT(A). No reason to interfere with the order of the CIT(A) which is confirmed and the ground of the revenue is dismissed.
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