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Mukesh V. Prajapati Versus ITO, Ward 6 (1) , Ahmedabad

2015 (10) TMI 1606 - ITAT AHMEDABAD

Addition of unexplained cash credits - Held that:- We observe that once the land record proves this creditor’s land to be fertile, presumption rather goes in favour of the creditor that he is sowing crops and deriving agricultural income. The land record rather specifies the nature of the crop grown as well. Merely because he is a farmer not having enough documentary evidence of having sold the produce is no ground to dispute the aforesaid land revenue document. The other presumptions of collate .....

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below have not done any homework or to inquire about sources of income in case of other family member; if any. Therefore, we hold that the impugned presumptions drawn in the course of assessment and affirmed in the lower appellate proceedings are without any supportive material. We accordingly hold that the assessee’s maternal uncle a farmer had sufficient means to advancing cash loan of ₹ 2 lacs in cash since not having a bank account. There is no material on record apart from these pres .....

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ndicated the assessing authority proceeded mere assumptions and presumptions. It also raises similar reasons against these four creditors as well. In these circumstances, we observe that AO’s reasons in all four cases are identical to those raised in case of Shri Govindbhai decided hereinabove. We draw support therefrom. And accept assessee’s arguments herein as well and ignore technical reason of personal nonappearance of these four creditors. The assessee’s explanation regarding balance cash c .....

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ses from order of CIT(A)-XII, Ahmedabad dated 12.1.2007 passed in case no. CIT(A)- XII/Wd.6(1)/103/05-06 upholding addition of unexplained cash credits amounting to ₹ 10,14,135/- made in the course of a regular assessment framed under section 143(3) of the Income Tax Act in short the Act . 2. A perusal of the case file reveals that the assessee has filed the instant appeal after delay of four days. He filed a condonation petition dated 17.5.2007. The Revenue is fair enough not to dispute c .....

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vabhai and family, Prajapati Keshabhai Chhaganbhai and family and Prajapati Kannubhai Natthabhai and family; all of Taluk-Dholaka District-Ahmedabad having given him loans of ₹ 2 lacs each in first two cases, 2.5 lacs each in third and fourth party and ₹ 1.5 lac in case of the last name. The assessee stated all of them to be his relatives. The Assessing Officer summoned all of them. The case file reveals that only Prajapati Govindbhai Shankarbhai appeared, proved identity and confirm .....

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ills of sale of agricultural produce were also forthcoming. The Assessing Officer assumed that this creditor was maintaining a large family. And he did not have any capacity to lend this money in question amounting to ₹ 2 lacs to the assessee. This made the Assessing Officer to doubt genuineness/creditworthiness of the assessee s claim resulting in section 68 being invoked for making the impugned addition. 4. It is evident from the assessment order dated 28.3.2005 that the other four credi .....

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5. The assessee preferred an appeal. The CIT(A) has confirmed the Assessing Officer s action. This leaves the assessee aggrieved. 6. We have heard both sides. Case file perused. The assessee has filed a paper book containing land records, confirmations of the aforesaid five creditors. The Revenue strongly supports the CIT(A) order in favour of the impugned addition. The cash credits in question read ₹ 10,64,135/-. The assessee has tendered explanation of ₹ 10,50,000/-. Therefore, the .....

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assumption that he is already having a large family to maintain, his land is already pledged as collateral security and no bills of sale of agricultural produce are forthcoming. We differ with this approach. We observe that once the land record proves this creditor s land to be fertile, presumption rather goes in favour of the creditor that he is sowing crops and deriving agricultural income. The land record rather specifies the nature of the crop grown as well. Merely because he is a farmer not .....

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fficient agricultural income. The third objection of large family being maintained on the same agricultural income is also without any basis. The authorities below have not done any homework or to inquire about sources of income in case of other family member; if any. Therefore, we hold that the impugned presumptions drawn in the course of assessment and affirmed in the lower appellate proceedings are without any supportive material. We accordingly hold that the assessee s maternal uncle a farme .....

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