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TMI Blog2018 (11) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... cided as under. 4. On ground No.1, Revenue challenged the deletion of addition of Rs. 3 lakhs on account of capital contributed by the assessee. 4.1. The Ld. CIT(A) noted that the assessee claimed to have opening balance of Rs. 3 lakh in capital account which according to assessee represented her accumulated savings out of her agricultural income in the past. The AO observed that she had no bank account and there was no independent evidence of holding Rs. 3 lakh by her. Assessee gave a copy of land-holding but no evidence regarding agriculture or sale of agricultural produce by her was furnished. The assessee had also not shown agricultural income in her computation of income. In view of this, the AO held that the closing balance of Rs. 3 lakh shown in her capital account furnished with the return of income for A.Y. 2008-2009 was only a calculated plan to generate the funds and treated the same as her income from undisclosed sources. 4.2. It was submitted by the assessee that she has 24 bighas of land in which various agricultural crops were grown. According to her, she had also dairy income in the past and furnished certificate from the Gram Pradhan in support of her contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained in law. The matter requires reconsideration. We, accordingly, set aside the impugned order and restore this issue to the file of Ld. CIT(A) with a direction to re-decide this issue strictly on the basis of merits and evidence available on record. The Ld. CIT(A) shall give reasonable and sufficient opportunity of being heard to the assessee and the A.O. Ground No.1 of appeal of Revenue is allowed for statistical purposes. 6. On ground No.2, Revenue challenged the Order of Ld. CIT(A) in setting aside the issue of cash payment under section 40A(3) of the I.T. Act, 1961. 6.1. It is noted in the impugned order that A.O. on enquiry with India Glycol Ltd., noted that the assessee had made payments for purchases of Rs. 53,06,324/ in cash in violation of provision of section 40A(3) of the I.T. Act of the I.T. Act. The assessee submitted that she had made cash payment normally below Rs. 20,000/ at a time and that payments exceeding Rs. 20,000/- had been made only on bank holidays. The AO was not satisfied with explanation of assessee and made addition of Rs. 53,06,324/ under section 40A(3) of the I.T. Act. The assessee submitted before Ld. CIT(A) that the transactions were genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the identity and capacity. The AO was however, not satisfied with the explanation of assessee and treated the amount paid as license fee out of the alleged loans as unexplained expenditure. 10.2. The assessee submitted before Ld. CIT(A) that the creditors had made payments to the Government as tender money and such tender money was subsequently transferred to the credit of assessee on their request The Ld. CIT(A), therefore, noted that burden upon assessee to explain cash credit have been duly discharged. If the AO was not satisfied, he could have summon these persons and give a finding that they did not have the capacity to deposit the tender money in question. The Ld. CIT(A), accordingly, deleted the addition. 11. After considering the rival submissions, we are of the view that the matter requires reconsideration at the level of the Ld. CIT(A). The A.O. noted that assessee has furnished affidavits of seven persons for a sum of Rs. 14,71,600/- who have deposited the money with the Excise Department. The assessee explained that since they could not get the tender approved of liquor shop, therefore, on their request, the tender amount was transferred to the account of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of account or bank accounts. The Ld. CIT(A) accepted the explanation of assessee based on confirmation letters and accordingly, deleted the addition. 13. After considering the rival submissions, we are of the view that the Ld. CIT(A) was not justified in deleting the addition. The assessee claimed to have received unsecured loans from several persons and in support of her claim, assessee filed copy of khasra khataunies of land holdings by the lenders, their PAN and copy of the confirmation. But, no evidence have been produced to prove the genuineness of the loan in the matter. The Ld. CIT(A) noted that the A.O. could have asked the assessee to produce these persons after preliminary enquiry, if the evidences found not to be reliable. Since A.O. failed to make preliminary enquiry, therefore, addition were deleted. The Ld. CIT(A) failed to note that burden is upon assessee to prove that she has received genuine credits in the matter. In this case, initial burden upon assessee have not been discharged to prove the identity of the creditors, their capacity to give loan to assessee and genuineness of the transaction in the matter. The assessee in the paper book has filed list at pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on made by A.O. on account of unexplained cash credit on account of purchases of Rs. 35,444/-, application fee of Rs. 11,000/- and cost of furniture and cash in hand of Rs. 84,786/-. 14.1. The Ld. CIT(A) noted that source of these payments/ cash was explained from opening balance of the capital account as well as loans as discussed above. The A.O. following the logic in other grounds, treated these payments as unexplained and assessed the sum as the assessee's income from undisclosed sources. The Ld. CIT(A) noted that since the amount of Rs. 3 lakhs shown by assessee as opening balance of her capital and loans and advance aggregating to Rs. 27,70,700/- was treated as unexplained by the A.O. separately, therefore, these additions should not have been made separately. These additions are deleted. 15. After considering the rival submissions, we are of the view that the matter requires reconsideration at the level of the Ld. CIT(A). A.O. noted that assessee claimed adjustment of demand drafts of loaners and unsecured loans on which A.O. made additions, therefore, these additions were also made against the assessee. The Ld. CIT(A) deleted the additions because of the favourable view t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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