2021 (1) TMI 945 - AT - Income Tax

Addition u/s 68 - unexplained loan received - HELD THAT:- In order to prove the identity, genuineness and creditworthiness of the cash creditor Rimsha Maheswhari, assessee had been provided sufficient opportunity. Inspite of that assessee has only provided copy of confirmation letter and copy of bank account which too is not legible. There is no evidence to show the Permanent Account Number, identity details, details of bank account, Income Tax Return and salary certificate. The copy of bank statement shows that assessee is receiving salary of ₹ 21,666/- per month but assessee has been unsuccessful to provide the details of other credit entries. In this situation we are of the considered view that the assessee has failed to discharge its onus to prove the identity and creditworthiness of the cash creditor. In these given facts and circumstances of the case we find no reason to interfere in the finding of Ld. CIT(A) confirming the addition for unexplained loan received from Rimsha Maheshwari.

Additional income surrendered in the statement given u/s 132(4) - HELD THAT:- Impugned addition made by the Ld. A.O was purely based on the statement given u/s 132(4) of the Act and there was no reference to any incriminating material found during the course of search which could support the impugned addition, we thus delete the addition of ₹ 25,00,000/- for Assessment Year 2013-14 and ₹ 3,00,00,000/- for Assessment Year 2014-15 and set aside the finding of both the lower authorities and accordingly allow Ground No.3 raised in assessee’s appeal.

Undisclosed investment u/s 69B of the Act based on the Departmental Valuation Officer Report - HELD THAT:- Assessee has maintained regular books of accounts which are not found to be incomplete or unreliable and also have not been rejected by the Ld. A.O and secondly Valuation was done of the incomplete project which has been valued not on the basis of local price but on the basis of Delhi rates which are universally accepted on higher side. Therefore since no defects were pointed out in the books of accounts regularly maintained by the assessee and are duly audited and no incriminating material was found in the search to show that unaccounted investment in the building project has been made, addition made purely on the basis of Departmental Valuation Report, we find no reason to interfere in the finding of Ld. CIT(A) who was rightly deleted the addition for the alleged undisclosed investment u/s 69B.

Claim of set off income against the additions made u/s 69B - HELD THAT:- Assessee is entitled to claim deduction of any expenses which has been deemed to be its income u/s 69B. Accordingly the AO is directed to provide deduction of the addition made u/s 69B towards unexplained expenditure incurred by the assessee.

Addition of undisclosed investment in purchase of land - HELD THAT:- Addition was made on the basis of cash deposits in the bank account of seller who do not response to the summons of the department nor ever appeared before the Ld. A.O so as to explain the cash deposits in her account. Under these circumstances we find no justification in the observation of the Ld. A.O that the cash deposit of ₹ 10,00,000/- in the account of seller on 10.8.2010 is in connection with the land sold vide Registry deed in favour of the assessee on 24.02.2010 was paid by the assessee. In these given facts the deposit of cash in the account of the seller cannot be connected with the assessee without any material on record to suggest such transaction. Therefore Ld. CIT(A) has rightly appreciated the facts and deleted the addition.

Unexplained investment u/s 69 - HELD THAT:- Addition was the price of ₹ 1 crore per acre stated by the seller which was subsequently revised/rectified in the remand proceedings by the seller stating at ₹ 1 crore per hectare and the same if applied to the transaction under consideration and the same will arrive at 2.59 crores which is less than the actual purchase consideration paid by assessee at ₹ 2.91 crores (approx.) and thus do not call for any addition for unexplained investment in the purchase of 2.59 ha of land at Village Bagli by the assessee. Since there is no inconsistency in the finding of Ld. CIT(A) we uphold the same and dismiss Revenue’s Ground No.1 for Assessment Year 2012-13.

Unexplained investment in purchase of land at village Bagli - HELD THAT:- In the unsigned draft agreements is the basis and Ld. A.O had applied the higher rate mentioned in the seized unsigned two draft agreements i.e. 1.12 crores per acre and completely ignored the rate of ₹ 20,00,000/ - per acre mentioned in the other two draft agreements. Ld. A.O has also ignored the actual registered sale deed showing the purchase of land in question at a price in between ₹ 40,00,000/ - and ₹ 45,00,000/-per hectare. Ld. A.O has failed to bring on record any other documentary evidence to support the fair market value of 1.12 crores adopted by him. In these facts and circumstances of the case we find no justification in the action of the Ld. A.O in making the addition for undisclosed investment merely on the basis of unsigned draft agreements which also have not been given equal weightage and the Ld. A.O. has merely picked those documents showing higher purchase consideration which ID our view is not justified. Thus the Ld. CIT(Al has rightly deleted the addition.

Addition on account of disallowance u/s 40(A) - HELD THAT:- Genuineness of the payment were not doubted and there is no iota of evidence to show that the assessee wanted to evade any tax liability and more so the transactions have been carried out before the Registering authority of State Government and impugned cash payments are part of the consideration appearing in the registered deed. We thus respectfully following the judicial precedents referred herein above find no inconsistency in the finding of Ld. CIT(A) deleting the disallowance u/s 40A(3) of the Act for the alleged cash payment u/s 40A(3) of the Act and the same is upheld.

Addition u/s 68 of the Act for unexplained unsecured loan received from Non Resident Indian Shri Rajesh sadhwani - HELD THAT:- From perusal of the finding of Ld.CIT(A), various documentary evidences filed by the assessee to support the identity, genuineness and creditworthiness of Shri Rajesh Sadhwani which are in itself sufficient enough to satisfy that the alleged amount of ₹ 2,45,OO,OOO/- should not have been treated as unexplained cash credit and further in view of the decision of this Tribunal relied by Ld. CIT(A) in the case of Umesh Electricals Vis ACIT 2011 (2) TMI 1584 - ITAT AGRA] and Aseem Singh V/s ACIT [2011 (9) TMI 1209 - ITAT INDORE] we are satisfied with the finding of Ld. CIT(A) and of the considered view that since the assessee has furnished all the required details to prove the identity of the lender, genuineness of the transaction and creditworthiness of the lender i.e. Shri Rajesh Sadhwani there is no justification at the end of the Ld. A.O in making the addition for unexplained cash credit u/s 68.