TMI Blog2017 (3) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... a petition on 07.01.2017 before this tribunal alongwith details of 483 customers pertaining to the advances received of ₹ 2.52crores. It submits therein that it has obtained PAN numbers of 182 customers involving advances amount of ₹ 1.02 crores. Total 75 customers are stated to be the cases therein amount is refunded due to cancellation plot registration. This is followed by 21 members whose sale deeds have been executed on 31.03.2016 leaving behind balance amount of advances received from 205 customers involving ₹ 96,60,823/-. Learned Departmental Representative objects to this petition. He strongly submits that the same is in the nature of additional evidence wherein an Assessing Officer has to be granted opportunity to rebut the facts sought to be brought on record. We appreciate learned Departmental Representative’s concerned. The fact also remains that all these developments in this petition are post facto institution of the instant appeal as filed in the year 2012. We therefore take these additional documents on record and remit the issue back to the Assessing Officer for conducting necessary verification as per law. We further deem it appropriate to confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 11.24crores. 3. We come to relevant facts. The assessee company develops real estate projects. The impugned assessment year is stated to be the year of its incorporation. It commenced its Nalsarovar city project in relevant previous year. The assessee credited a gross amount of ₹ 12,11,39,401/- as advances from 2129 customers. It further returned a sum of ₹ 87,13,650/- therefrom to the said parties. The balance left thus came to be ₹ 11,24,25,551/-. The Assessing Officer sought all necessary details in the course of scrutiny. The assessee in response filed copy of agreements pertaining to its members/customers with names, addresses, telephone numbers, plot specifications, advances receipts particular, application forms with photographs, modes of payment, relevant period of payments, type of plot and brochure scheme. The Assessing Officer framed a regular assessment on 03.12.2010 invoking Section 68 of the Act thereby treating the above sum of ₹ 11.24crores as unexplained cash credits u/s.68 of the Act after inter alia observing that the assessee had not filed PAN details and confirmations of the said parties in order to prove identity, genuineness and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a With PAN 3A 656951 b Without PAN 3B 4937850 Total 1+2+3 5503801 112425551 Taking into account all the evidences on record the taxability of these advances is discussed in the preceding para. (A) Advances received from persons in whose favour sale deed has been executed. It is seen that the appellant has executed sale deeds in favour of 175 persons from whom advances in the A.Y.2008-09 of ₹ 2,19,55,992/- was received. The transfer of residential plots by way of sale deed was made after 31/3/2007 but before 22/2/2012. The amount of advances received from these persons works out to ₹ 2,19,55,992/-. In my considered view the advances to the extent of ₹ 2,19,55,992/- cannot be taxed u/s.68 of the I.T. Act in the A.Y.2008-09, since the income representing these advances has been declared /booked as sale in the subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt time to collect PANs from these persons. Apparently the appellant has not made use of ample time available to it to collect this information. It is an established proposition of law that to discharge onus of section 68, the appellant has to establish identity, genuineness of. transaction and creditworthiness of the creditors appearing in its books of accounts. The appellant had furnished only the copy of application form in respect of these creditors. The appellant has not even furnished any independent evidence to prove the identity of these creditors. There is absolutely nothing on record to prove the genuineness of transaction and creditworthiness of the creditor. This way the appellant has failed to discharge the onus cast upon it by the provisions of sec.68 of the I.T.Act in respect of these credits. In this regard the appellant has placed reliance on various case laws. However, these case laws cannot be applied in case of the appellant. These case laws were decided on entirely different facts. It is further observed that many of these case laws were decided in respect of share application money which is not relevant for the instant case. Since the appellant has failed to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,56,951 + 22,14,301) against advances in respect of which the appellant has furnished PANs or advances in respect of bookings were cancelled and the advances received refunded to the customers The appellant is left with another sum of ₹ 26,32,549/- (55,03,801 - 28,71,252) against which the appellant has not furnished PA Numbers. The advances are still with the appellant. It is submitted by the appellant that either the booking amounts are pending to be refunded or the customer had booked other residential plot in other scheme of the appellant. In respect of these advances the appellant has furnished copies of application form which does not conclusively established even the identity of the creditor. In view of these facts I hold that the appellant could not furnish documentary evidences to prove identity, genuineness of transaction and creditworthiness of the creditor in respect of advances of ₹ 26,32,549/-. Since the appellant has failed to discharge its onus in respect of these advances, accordingly, addition to the extent of ₹ 26,32,549/- made by the A.O. is confirmed. 3.5 As a result, the appellant widget a relief of ₹ 8,45,91,627/- (2,19,55,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have nowhere been disputed. Nor the Assessing Officer conducted detailed inquiries by issuing them necessary notices under the provisions of the Act on test check basis. We repeat that we are dealing with an issue of unexplained cash credits un/s.68 of the Act wherein an assessee suppose to discharge its primary onus of proving source along with identity, genuineness and creditworthiness thereof. We thus conclude in Revenue s appeal that the assessee has discharged its onus successfully in course of remand and lower appellate proceedings. We accordingly do not see any reason to accept the Revenue s two substantive grounds seeking to revive the Assessing Officer s addition amount therein. Its appeal ITA No.1722/Ahd/2012 thus fails. 7. We now come to assessee s substantive ground seeking to delete the remaining addition amount of ₹ 2,78,33,924/- as confirmed in the lower appellate proceedings. We find that it has filed a petition on 07.01.2017 before this tribunal alongwith details of 483 customers pertaining to the advances received of ₹ 2.52crores. It submits therein that it has obtained PAN numbers of 182 customers involving advances amount of ₹ 1.02 crores. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afresh adjudication as per law after affording adequate opportunity of hearing to the assessee. This substantive ground is accepted for statistical purposes. 10. The assessee s next two substantive grounds plead that both the lower authorities have erred in making additions of ₹ 2,45,412/- pertaining to amounts received as booking cancellation and the latter sum of ₹ 1,01,000/- as pre-operative cheque return charges; treating the same as business income thereby rejecting assessee s identical plea that the same deserved to be taken as pre-operative income reducing work-in-progress. Learned Authorized Representative strongly argues that the assessee ought to have been allowed to treat the above incomes as work-in-progress instead of business income. He however fails to dispute that there exists a direct first degree nexus between assessee s business of real estate development and these two incomes wherein it has firstly charged for plot booking cancellations and also derived latter income in lieu of cheque cancellation charges from its customers. We thus find no reason to interfere in the CIT(A) s order confirming Assessing Officer s action on both counts. These two a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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