TMI Blog2017 (4) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 21-4-2017 - Shri Bhagchand, Accountant Member Assessee by: Shri P.C. Parwal CA Revenue by : Smt. Poonam Rai, DCIT-. DR ORDER Per Bhagchand, AM The assessee has filed an appeal against the order of the ld. CIT(A), Alwar dated 30-11-2016 for the assessment year 2009-10 raising therein following ground:- 1. The ld. CIT(A) has erred on facts and in law in confirming the addition of ₹ 5,76,200/- of the Act. 2.1 Apropos solitary ground of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- 7.3 I have gone through the assessment order as well as submissions made by the appellant. Following facts have emerged. 1. The appellant is a farmer and his source of income is agriculture. 2. That during the year under consideration the appellant has received an amount of ₹ 25,00,000/- in his saving bank account maintained at Savings Bank A/c No. 30526003761 of SBI Kotkasim. The amount was found credited in his bank accounts on 16- 10-2008. 3. During the assessment proceedings, the assessee had claimed that the cash deposit was out of cash proceeds received from his Brotherin- law Shri Harpal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note the above facts, which distinguish those three cases (supra) from the case before us, but it is also relevant to note that the following observations made by this Court in the above three cases: There cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade of or channel of investment in the share capital of a company must be firmly excoriated by the revenue. Equally, where the preponderance of evidence indicates absence of culpability and complexity of the assessed it should not be harassed by the revenues insistence that it should prove the negative. In the case of a public issue, the company concerned cannot be expected to know every detail pertaining to the identity as well as financial worth of each of its subscribers. The company must, however, maintain and make available to the AO for his perusal, all the information contained in the statutory share application documents. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while making the tightrope of Sections 68 69 of the I.T. Act. The burden of proof can seldom be discharged to the hilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished to the Assessing Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no addition can be made in the hands of the company under section 68 and the remedy open to the revenue is to go after the share applicants in accordance with law .. Thus the High Court has laid down following parameters to be discharged by the assessee on the applicability of Section 68 of the Act on share application money/ cash credits; The assessee has to prima facie prove; 1. The identity of the creditor/ subscriber. 2. The genuineness of the transactions namely, whether it has been transmitted through banking or other indisputable channels. 3. The creditworthiness or financial strength of the creditor / subscriber. 4. If relevant details are furnished to the Department it would constitute acceptable proof or acceptable explanation by the assessed. 5. The Department would not be justified in drawing an adverse inference only because the creditor/ subscriber fails or neglects to respond to its notices. 6. The onus would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant for financial year ending on 31-03-2009, an amount of ₹ 8,75,000/- is shown as cash in hand. Therefore, in my considered view, the amount of ₹ 5,76,200/- retained by him is taxable in the hand of Shri Anuj Kumar, the appellant as benefit/ commission income. In view of the above mentioned facts/ discussion, in my considered view although the amount of ₹ 25 lakhs is explained and hence not justified in addition under section 68 of the Act but the amount of ₹ 5,76,200/- is assessable in his hand as commission /benefit income. Therefore, the addition is sustained for an amount of ₹ 5,76,200/-. Accordingly, the appellant s ground of appeal on this issue is partly allowed. 2.2 During the course of hearing, the ld. AR of the assessee prayed for deletion of addition of ₹ 5,76,200/- sustained by the ld. CIT(A) for which the ld. AR of the assessee filed the written submission and the same has been taken into consideration. Facts:- 1. The assessee has no source of income except that he is doing agriculture on 14 bhigas of the land owned by his father at village Matalwas, tehsil Kotkasim, Alwar. Hitherto he neither had a PAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been utilised out of the withdrawals made from the bank account for the purchase of land in the name of Smt. Rajnesh Devi, wife of Shri Harpal Singh. The Ld. CIT(A) therefore inferred that the balance amount of ₹ 5,76,200/- is kept by the appellant which can reasonably be attributed as being retained by him as the commission / benefit for facilitating the purchase of land as well as for giving the facility to Shri Harpal Singh to use his bank account for parking the cash. He further held that even in the Balance Sheet for the FY ending on 31.03.2009 an amount of ₹ 8,75,000/- is shown as cash in hand. He therefore, made an addition of ₹ 5,76,200/- on account of alleged benefit / commission income retained by the assessee. Submission: 1. From the facts stated above it can be noted that the Ld. CIT(A) has accepted the source of deposit of ₹ 25 lakhs in the bank account of the assessee on 16.10.2008 being the amount received from his brother-in-law, Shri Harpal Singh out of the sale proceeds of the agricultural lands. Accordingly, the addition made by the AO is rightly deleted by the Ld. CIT(A). 2. The Ld. CIT(A) also accepted the that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 5,76,200/- for the reason that out of the amount of ₹ 25 lacs so deposited only an amount of ₹ 19,23,800/- has been utilized for purchase of land in the name of Smt. Rajnesh Devi, wife of Shri Harpal Singh. Therefore, the balance amount of ₹ 5,76,200/- retained by the assessee is his benefit/ commission income for the services given by the assessee for using his bank account and facilitating the purchase of land. This view taken by the ld. CIT(A) in my considered view is neither factually correct nor legally tenable. This is for the reason that from the bank account and the document placed on record from which a cash flow statement is prepared and available at page 19 of the assessee's paper book in which it is mentioned that the amount the of ₹ 25 lacs has been withdrawn by the assessee from his bank account out of which ₹ 19,42,880/- is utilized for purchase of land in the name of Smt. Rajnesh Devi and on expenses of registry. Further an amount of ₹ 5 lakh is advanced to Smt. Bharti Devi and Satish Devi for purchase of land. Thus, an amount of ₹ 24,42,800/- has been utilized. There is no material to hold that any part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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