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TMI Blog2017 (4) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, the assessee had claimed that the cash deposit was out of cash proceeds received from his Brotherin- law Shri Harpal Singh who in turn had received the amount on account of sale of 2 agricultural plots. 4. That Shri Harpal Singh has admitted through affidavits and statement that he had given the cash of Rs. 25 lakhs to Shri Anuj Kumar for making purchase of agricultural land in the name of his wife Smt. Rajnesh Devi. 5. That Shri Harpal is assessable to income tax at Ward- 2(1), Gurgaon and his PAN is ASTPP 5543 J 6. That the AO has not accepted the claim of the assessee and accordingly added the cash deposit of Rs. 25,00,000/- in the income of Shri Anuj Kumar under section 68 of the Act, citing reasons of identity of the creditors, creditworthiness and genuineness of transaction. 7. That the present appeal is against the addition of Rs. 25,00,000/- under section 68 of the Act. 7.3.2 I have considered the above mentioned facts of the case, I have particularly taken into accounts the facts that with regard to source of cash deposits amounting to Rs. 25 lakhs in the saving bank account of Shri Anuj Kumar, it was admitted by Shri Harpal Singh, Brother-in-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 68 & 69 of the I.T. Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the AO harbours doubts of the legitimacy of any subscription he is empowered, nay duty bound to carryout through investigations. But if the AO fails to unearth any wrong or illegal dealings, he cannot obdurately adhere to his suspicions and teat the subscribed capital as the undisclosed income of the company. We may also note that a reference was made by this Court to several authorities including at least seven judgment of this Court on the question of applicability of Section 68 to share application monies, and the position was pithily summed up as follows at pages 282 of 299 ITR: ''In this analysis, a distillation of the precedents yields the following propositions of law in the context of Section 68 of the I.T. Act. The assessee has to prima facie prove (1) the identity of the creditor/ subscriber; (2) the genuineness of the transaction, namely whether it has been transmitted through banking or indisputable channels; (3) the creditworthiness or financial strength of the creditor / subscriber, (4) if the relevant details o the address or PAN identity of the creditor / subsc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or neglects to respond to its notices. 6. The onus would not stand discharge if the creditor/ subscriber denies or repudiates the transaction set up by the assessed nor should the AO take such repudiation at face value and construe it, without more, against the assessed. 7. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/ subscriber the genuineness of the transaction and the veracity of the repudiation.'' Thus, going by the parameters set by above mentioned judgements, in this particular case the source of the cash deposits has been proved and the creditor has accepted by way of affidavit also that he has given the amount. He has also given the source of such generation of cash amounts. He has also provided PAN details. Therefore, it is my considered view that the source of cash deposits amounting to Rs. 25 lakhs in the bank account of the appellant is reasonably explained in the hand of the appellant. However, even if the source of the cash deposit is reasonably explained the question remains as to what is the nature of such cash receipts. It has been claimed by the appellant that the money is received in his accounts for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had a PAN nor was filing any return of income. 2. The AO on the basis of the information that in the bank account of the assessee maintained with SBI, Kotkasim, there is a cash deposit of Rs. 25 lakhs on 16.10.2008, issued notice u/s 148 to the assessee. In response to this notice, it was explained that his brother-in-law, Shri Harpal Singh, sold 2 agricultural lands at village Moonpur, tehsil Kotkasim, on 16.10.2008 (PB 7-14) for Rs. 25,87,200/- out of which he gave Rs. 25 lakhs to the assessee for purchase of agricultural land in the name of his wife, Smt. Rajnesh Devi, in tehsil Kotkasim and this amount was deposited by the assessee in his bank opened on that day itself. The affidavit of Shri Harpal Singh in this connection was filed (PB 6). It was further explained that the amount so deposited was withdrawn between 06.12.2008 to 18.12.2008 for purchase of agricultural land in the name of Smt. Rajnesh Devi in support of which the copy of the receipt of payment against the sale agreements / registered sale deeds were filed (PB 20- 40). These facts are also mentioned at page 6 of the assessment order. 3. The Ld. AO however held that assessee failed to establish that the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt between 06.12.2008 to 18.12.2008. To explain the utilisation of such withdrawal, the assessee filed a cash statement (PB 19) linking the withdrawals from the bank account with the amount advanced to various persons for purchase of land on account of Shri Harpal Singh. This is supported by the receipt of advance given to these 4 persons and also the sale deeds executed by 3 persons in the name of Smt. Rajesh Devi, wife of Shri Harpal Singh (PB 20-40). The Ld. CIT(A) after considering the same accepted the utilisation of the amount of Rs. 19,23,800/- (correct amount is Rs. 19,42,880/-) where the sale deed has been executed but without any basis failed to consider the amount of Rs. 5 lakhs advanced on 18.12.2008 to Smt. Bharti Devi and Satish Devi (PB 22) against the agreement for purchase of agricultural land. The Ld. CIT(A) further wrongly held that as per the Balance Sheet for FY ending on 31.03.2009 Rs. 8,75,000/- is shown as cash in hand, whereas assessee has not prepared / filed such balance sheet. Infact, the amount of Rs. 8,75,000/- is the total of the cash statement (PB 19). Thus, the utilisation of Rs. 25 lakhs withdrawn from the bank account for the purpose of purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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