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2016 (9) TMI 919 - ITAT AHMEDABAD

2016 (9) TMI 919 - ITAT AHMEDABAD - TMI - Unexplained cash credits - addition u/s 68 - Held that:- It has come on record that four out of these six persons had agricultural land ownership in their names since they placed on record their 7/12 and 8A certificates to name a few. The Assessing Officer took note of the fact that two persons could not prove their land title. The assessee proved in the course of lower appellate proceedings that these two farmers were joint owners of the land. There is .....

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t is that there were some DRT proceedings wherein the assessee was in urgent need of money. We notice that all the relevant evidence forms part of the case file. Revenue fails to rebut any of the CIT(A)’s findings with the help thereof. We find no reason to interfere in well reasoned lower appellate findings. This first substantive ground fails accordingly. - Learned Departmental Representative takes us to Assessing Officer’s findings wherein Shri Amit Patel was found to have deposited the s .....

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atel as land advances received back. This also explains source of source in assessee’s case. We further notice that the assessee in the instant case has already filed all income tax statements/returns along with their bank account. Both these persons are related to the assessee (supra). The Revenue does not controvert all these findings in the course of hearing before us. We conclude in these facts that the assessee has been able to prove identity, genuineness and creditworthiness of its eight p .....

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dings under section 143(3) of the Income Tax Act, 1961; in short the Act . 2. The Revenue s first substantive ground assails correctness of the lower appellate order deleting section 68 addition of unexplained cash credits made by the Assessing Officer in his order dated 29-12- 2010. 3. We come to relevant facts first. The assessee-an individual derives interest, commission and agricultural incomes. He filed return on 25-03-2009 declaring income of ₹ 1,20,900/- along with agricultural inco .....

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way of banking channel. All these payments stood recorded in his books of accounts maintained in the said assessment year. These six persons filed their confirmations supporting assessee s case. The Assessing Officer treated the same to be lacking genuineness/creditworthiness. We notice that the CIT(A) elaborately discusses Assessing Officer s findings and assessee s submissions as under:- 5.6 DECISION :- I have carefully considered the observation of the AO in the assessment order as well as t .....

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ons u/s.68 of the Act. In short, on the basis of evidences submitted by the Id. AR, can it be held that the explanations with regards to the identity and creditworthiness of the persons whom the appellant claimed to have received the money was established ? It is undisputed fact that the appellant had advanced aggregate amount of ₹ 39 lacs to the above named six farmers from his explained sources of income in the F.Y. 2006-07. Secondly the AO did not dispute the fact that said advances wer .....

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the new deal with DRT for the purchase of property at Itrava village. There is a palpable reason for the appellant to ask for instant payment. I have carefully considered the reasons given by the AO for making addition of 39.00 lakhs u/s. 68 of the Act. In brief, the AO justified the additions because; i. there was no agreement/satakhata made with theses 6 parties for purchase of land. ii. some of the parties whom the advances were given, their names are not appearing in the copy of the abstrac .....

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cheques/ cash towards the deal and up on cancellation of the deal they have repaid the said advance to the appellant in cash during the year under reference. ii. Copies of the bank pass books of those six farmers in support of the above facts showing advance received by them during financial year 2006-07 by cheque and cash withdrawal made by them for repayment made to the appellant during the year under reference. iii. Certificate issued by Village Talati-cum-mantri towards the identity of the .....

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her property to DRT (Debt recovery Tribunal) and had the farmers made repayment through cheque then the delay in the process of clearance of cheque would have resulted in cancellation of the new deal of the appellant with DRT for purchase of another property at Itrava village. vi. The relevant abstract of the appellant's written submissions dated 29-12-2010, filed before the AO justifying the source of cash deposited by the appellant in bank account i.e. out of the repayment received from si .....

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explanation about the nature and source of such sum, or ii) the explanation offered by him is, in the opinion of the Assessing Officer, not satisfactory. In this case the AO held, after giving due consideration to the submission, that the explanations given by the appellant was not satisfactory due to-the fact that the appellant failed to prove the genuineness and creditworthiness of those parties whom the appellant received the money. In my considered view the Appellant has given all relevant c .....

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s remain undisputed that the appellant had advanced those 6 parties for purchase of land from it's known source of income. When the advances were returned by them, why should the appellant pump his money for the same purpose. It is on record that the appellant did not buy the land from them even after lapse of 4 years indicates that the refund of money takes the colour of genuineness. It is also relevant to mention here that when properties are purchased through DRT auction one has to make p .....

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nd of appeal is allowed. 4. Both parties strongly argue in support of their respective stands. Relevant facts narrated in the preceding paragraphs are not repeated for the sake of brevity. This is admittedly not a case where identity of the six payers hereinabove is in dispute. The Revenue s sole argument quotes Assessing Officer s findings hereinabove in seeking to revive the impugned addition. It has come on record that four out of these six persons had agricultural land ownership in their nam .....

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that these six vendors have returned their advances to the assessee in the impugned assessment year. Ld. CIT(A) further records a finding a fact that the assessee successfully linked the payment in question in case of each party. The extra-ordinary circumstance forming primary reason of cash payment is that there were some DRT proceedings wherein the assessee was in urgent need of money. We notice that all the relevant evidence forms part of the case file. Revenue fails to rebut any of the CIT( .....

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ention of the appellant as well as observation of the AO in the assessment order. The fact remains that during the course of assessment proceedings, the appellant had furnished confirmations from the depositors along with their addresses, copies of bank accounts, ROI, etc. It is also fact that Amit Patel is the son and Bachhubhai C Patel is the brother of the Appellant. Both of them were gained from share disinvestment with M/s. Desai Cold Storage Pvt. Ltd. From the bank statements of these part .....

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n the basis of proper enquiry. The enquiry envisaged in the sec. 68 is an enquiry which is reasonable and just. In the instant case the identity of the loaner is not doubted. The amount has been routed through the banking channel and at the source of the fund has been explained. The appellant had filed evidence in support of the said transaction. As mentioned above, satisfaction must be derived from relevant factors on the basis of proper enquiry. There are plethora of judgements which have laid .....

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