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2019 (9) TMI 344

..... . The mere receipt of the amounts by account payee cheque does not mean that the credit is genuine. The assessee has to establish the identity of the creditor, the capacity of the creditor to advance the amount in question and prove the genuineness of the transaction. Assessee has failed to produce any of these details, leading him to observe that the assessee has not produced any details and supporting evidence of ledger account, supporting entries of the respective balance sheet of the parties, etc. In the absence of any clinching evidence, it cannot be said that the assessee has discharged the onus under section 68 of the Act. - Decided against revenue Addition of un-explained cash deposits - CIT(A) rejected this explanation put forth by .....

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..... as under:- 2.1 The assessee, an individual, filed his return of income for Assessment Year 2009-10 on 22.02.2010 declaring Nil Income. The Assessing Officer (AO) noticed that in the return of income, the assessee had shown Long Term Capital Gains (LTCG) of ₹ 2,56,343/- which was entirely claimed as exempt under section 10(37) of the Income Tax Act, 1961 (in short the Act ) in view of the compulsory acquisition of land by the National Highways Authority of India (NHAI). The case was selected for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Act vide order dated 29.12.2011, wherein the assessee s income was determined at ₹ 52,62,338/- in view of the following additions to the retur .....

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..... ut of the original addition of ₹ 13,70,330/-made as unproved creditors under the facts and in the circumstances of the appellant's case:- [a] Sri Hanumanthappa ₹ 3,00,000/- [b] Sri R S Rakesh, S/o the appellant ₹ 1,00,000/- 3. The learned CIT[A] is not justified in sustaining the addition of ₹ 35,20,000/- considered as unexplained cash deposits made by the appellant under the facts and in the circumstances of the appellant's case. 4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-A, 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 5 .....

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..... d that an amount of ₹ 8,00,000/- was received from Shri. Hanumanthappa by account payee cheque No.10859 of Canara Bank which was encashed on 28.03.2009. The said amount was received as advance towards sale of site and since the intended purchaser backed out from the deal, the said amount was to be returned to him; out of which a sum of ₹ 4,00,000/- was repaid on 29.03.2009 and a sum of ₹ 1,00,000/- was repaid on 30.03.2009 by cash. The balance of ₹ 3,00,000/- payable was genuine and the identity of the party was established. 6.1.3 With regard to the amount of ₹ 1,00,000/- payable to Shri. R. S. Rakesh, S/o the assessee, the learned AR submitted that the said amount was received by way of an account payee cheque .....

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..... we find no reason to interfere with or deviate from the findings rendered by the CIT(A) and consequently dismiss ground No.2 raised by the assessee. 7. Ground No.3 - Cash Deposits - ₹ 35,20,000/- 7.1 In this ground (supra), the assessee contends that the CIT(A) is not justified in sustaining the addition of ₹ 35.20 lakhs made by the assessee. In this regard, the learned AR for the assessee submitted that the AO noticed that there were cash deposits in the assessee s bank account in the year under consideration. On being queried in this regard, the AR of the assessee agreed for an addition of ₹ 32,50,000/- in respect of the aggregate of cash deposits made. Subsequently, before the CIT(A), the assessee retracted the aforesa .....

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..... (Ker). 7.3 In rejoinder, the learned AR for the assessee submitted that mere consent alone cannot confer jurisdiction to assessee. According to the learned AR, the decision of the Hon ble Kerala High Court in the case of Jayasree Chit Funds & Services (P) Ltd., (supra), turns on its own facts and the same does not apply to the case on hand. It is further submitted that the decision of the Hon ble Apex Court in B. Kishore Kumar (supra), relied on by the learned DR, is also not applicable to the facts of the case on hand as it was rendered in the context of admission in a sworn statement given by the assessee in the course of search conducted under section 132 of the Act. The learned AR argued that the aggregate cash deposits can never be .....

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..... tentions of the assessee that the addition in respect of cash deposits made in the assessee s bank account in the year under consideration should be based on peak credit method. The assessee has furnished the working of peak credit before us showing the peak credit of ₹ 10,70,000/-; but this has not been examined by the authorities below. We, therefore, are of the view that the matter be restored to the file of the AO with a direction to verify the computation of peak credit filed and thereafter to restrict the addition in respect of unexplained cash deposits in the assessee s bank account to the peak credit. We hold and direct accordingly. 8. In the result, the assessee s appeal for Assessment Year 2009-10 is partly allowed. Order pr .....

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