TMI Blog2017 (6) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act on account of unexplained cash credit made in S.B. Account of the assessee with Corporation Bank, Ahmedabad. ii. The learned CIT(A) has failed to consider the reasons and legal position as discussed by the AO vide para-4, 4.1 to 4.5 of assessment order dated 30/12/2010 on the basis of which addition of ₹ 37,50,000/- was made by the AO u/s.68 of the IT Act. iii. The learned CIT(A) has passed the appellate order on the basis of submission of the assessee filed during the course of appellate proceedings. Before considering the submission, no opportunity has been given to the AO of being heard. Since the same is against principles of natural justice, the appellate order is not acceptable. 3. The relevant facts as culled out from the materials on record are as under:- The assessee has deposited cash in his Bank Account with Corporation Bank on following dates as mentioned in Para 4 of the Assessment Order: Sr. No. Date Amount Rs. 1. 31.01.2008 5,00,000/- 2. 02.02.2008 5,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated 18/12/2010 and 23/12/2010 showing that the said slips contained signature of the assessee. iv. Shri Rajgopal is assessed in Chennai and it has been informed by the I.T.O. that he is the employee of The Indian Overseas Bank and his return details show that he has no capacity to pay such a huge amount and therefore the fact that amount was received from T.V. Rajgopal towards advance of sale of Plot is incorrect. The assessee was required to reply to show cause by 28/12/2010. As mentioned in Para 4.3 of the assessment order the assessee explained and replied to the show cause as under: a) The fact that Shri T. V. Rajgopal is assessed at Chennai, that he is employee of Indian Overseas Bank, that his returns show that he has no capacity to pay such huge amount of ₹ 37.50 Lakhs, that the Bank slip has been made by the assessee are correct but the facts have not been properly appreciated because the assessee has never stated that the plots have been sold to Shri T.V. Rajgopal. What he stated is that Shri T.V. Rajgopal has agreed to sell the plots to local buyers at Chennai. The amount received on behalf of assessee by Shri T.V. Rajgopal was sent by him and the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from undisclosed sources in cash, and accordingly the total amount of cash deposit has been treated as unexplained cash credit within the meaning of Section 68 and accordingly treated as income of the assessee. Therefore, an addition of ₹ 37,50,000/- as income from undisclosed sources was added to the income of the assessee. 4. Against the said order assessee preferred first statutory appeal before the learned CIT(A) who decided the matter in favour of the assessee and held as under: I have carefully considered the submission made by the assessee, material placed in Paper Book filed and have also gone through the findings given by the assessing officer in respect of addition of cash deposit of ₹ 37.50 lakh made during the period from 31/01/2008 to 17/03/2008. The assessee has explained the source of cash deposit as advance received in respect of sale of plots at Chennai belonging to him and his wife. In support of it he furnished confirmation of T.V. Rajgopal who acted as intermediary. The explanation of the assessee has been rejected by the assessing officer as per his findings narrated in Para 4.4 of the assessment order pointing out that the names and ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the discretion whether the investment should be treated as income or not has to be exercised by the A.O., keeping in view the facts and circumstance of a particular case. The apex Court in the case of P. MOHANKALA mentioned in the submission has held that the opinion of the A.O. for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record and the opinion of A.O. is required to be formed objectively with reference to the materials available in record. In the case of ROSHAN D. HATTI . The addition was deleted for the reason that the impossibility of earning such a large amount within a few months was a circumstance which should have been considered. In the case of BHARAT ENGG. AND CONSTRUCTION the explanation given by the assessee was found to false but the case credit was not held to be income because Tribunal was of e view that the assessee could not have earned such a huge amount as profit very soon after the start of business and the Supreme Court inferred that it was reasonable to assume that those cash credit entries were capital receipts alth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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