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TMI Blog2019 (10) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the same is unsecured loan as nothing was purchased from them. As per order sheet entry dated 04.03.2015 was required by the Assessing Officer to give confirmation of creditors alongwith bills for which payment was due. Further, again on 13.03.2015, assessee was asked to produce the three parties before him, the assessee failed to produce the creditors. The assessee submitted that they were unsecured depositor and wrongly mentioned in balance sheet under the head sundry creditors. The Assessing Officer observed that explanation of the assessee was not acceptable as this was not reflected in the Tax Audit Report. The assessee accepted this fact only when assessee was required to furnish bills of goods supplied by them. Therefore, the Assessing Officer concluded from the confirmations, bank statement and purchase/sale deed that all the bank account maintained are in joint name of Sh. Vijay Pal Yadav with Union Bank of India, who is the director in the assessee company. All cheques of loaners for the amount of loan received by the company for Rs. 18,00,000/-, Rs. 23,00,000/- and Rs. 13,00,000/- is only signed by director himself and cheques does not contain any signature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) observed that on the issue of admission of additional evidence under Rule 46A, he was of the considered view that under the facts and circumstances and in the interest of justice, the additional evidence being affidavit needs to be admitted, more so, also because the AO has examined the additional evidence on merits and has offered his comments on merits also. The appellant has also filed reply to remand report vide his letter dated 17.02.2016. It has been stated that Sh. Rajinder Singh was down with cancer and still under treatment, therefore, could not attend. The appellant furnished the confirmation of Sh. Rajinder Singh, copy of his PAN card, copy of ITR acknowledgment of assessment year 2012-13 showing gross income of Rs. 5,18,780/-, computation of income of assessment year 2012-13 and bank statement of Sh. Rajinder Singh. The appellant has claimed that the source of this loan by the creditor is out of the sale proceeds of properties. Copies of sale deeds were also filed. However, on examining the bank statement of Sh. Rajinder Singh and Sh. Vijay Pal Yadav, the CIT(A) found that the immediate preceding credit of Rs. 20,00,000/- on 24.03.2012 is through some clearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.03.2012 through clearing is vide instrument no. 345026. The source of Rs. 15,00,000/- is not explained either by the appellant or by Sh. Ramesh Yadav. The CIT(A) observed that it was important to point out that the sale proceeds of properties which were credited in the same bank earlier already stood consumed/exhausted prior to receipt of immediate preceding credit of Rs. 15,00,000/- on 24.03.2012. Therefore, the claim that the source in the bank account of Sh. Ramesh Yadav is out of sale proceeds of properties remains unsubstantiated. Under these facts, although the identity of the loan creditor is not in doubt, however, creditworthiness stands unproved. The appellant has not successfully discharged his full onus in respect of this credit and therefore, he held that the AO were justified in making addition of Rs. 13,00,000/- u/s 68 of the Act for unsecured loan in the name of Sh. Ramesh Yadav. 10. The CIT(A) observed that in the case of Raj Pal, the loan amount of Rs. 23,00,000/- all the facts and circumstances are similar in the above two cases. The additional evidence being affidavit stands admitted for the reason already given above. The only difference in this case is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on 22.03.2012 EMM VEE Infrastructures (India) Pvt. Ltd. returned Rs. 20,00,000/- vide DD No. 345031 dated 22.03.2012 to the assessee. He pointed out from the bank statement of Union Bank of India of Sh. Rajinder Singh and Sh. Vijay Pal Yadav that there was a credit of Rs. 20,00,000/- on 24.03.2012 and on 26.03.2012 Sh. Rajinder Singh vide RTGS from the same bank account with Union Bank of India in the name of Sh. Rajinder Singh and Sh. Vijay Pal Yadav advance a loan of Rs. 18,00,000/- to the assessee. 12. Similarly, in the case of Mr. Raj Pal Singh, the assessee has filed copy of ledger account in the books of EMM VEE Infrastructures (India) Pvt. Ltd. which is placed at page no. 190 of the paper book and pointed out there from that assessee has advanced Rs. 21,00,000/- to the said M/s EMM VEE Infrastructures (India) Pvt. Ltd. on 06.01.2012 vide cheque no. 650813 dated 06.01.2012 drawn on UBI Main Branch, Meerut. He has also placed copy of bank statement of Sh. Raj Pal Singh and Sh. Vijay Pal Yadav at page no. 180 of the paper book wherein on 06.01.2012 there is debit of Rs. 21,00,000/- vide cheque no. 650813 in the name of M/s EMM VEE Infrastructures (India) Pvt. Ltd. He the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitting the above documents as additional evidences called for remand report from the AO. After considering the remand report and submissions of the assessee, the CIT(A) confirmed the action of the AO in respect of all the three loan creditors. 17. The AR of the assessee submitted at bar that all the three loan creditors in questions are brothers of Director of the assessee company, namely, Sh. Vijay Pal Yadav. All of them are assessed to tax and have been allotted PAN by the department. Thus, their identities are not in dispute. 18. Further, the loans in question were advanced through banking channel and were also confirmed by the said creditors by way of their affidavits. Thus, the genuineness of the transactions are also not in dispute. 19. The lower authorities made the addition only because they doubted the creditworthiness of the said loan creditors. All the three creditors had three piece of land jointly owned by them which were sold vide registered deed dated 24.12.2011 for Rs. 35,98,500/-, deed dated 24.12.2011 for Rs. 40,81,500 and registered deed dated 24.12.2011 for Rs. 35,05,500/- and the respective share of sale consideration was credited in the bank account mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor, the assessee is required to establish his source and not the source of the source. Therefore, the addition made of Rs. 18,00,000/- received from Sh. Rajnder Singh, Rs. 23,00,000/- received from Sh. Raj Pal and Rs. 13,00,000/- received from Sh. Ramesh Yadav by doubting their source cannot be sustained. We, therefore, set aside the orders of the lower authorities and delete the addition of Rs. 18,00,000/-, Rs. 23,00,000/- and Rs. 13,00,000/- all aggregating to Rs. 54,00,000/- and allow the ground of appeal of the assessee. 21. In ground no. 2 of the appeal of the assessee and in ground no. 1 of the appeal of the revenue, the grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs. 9,34,394/- on account of closing stock and the grievance of the revenue is that the CIT(A) was not justified in reducing the addition made by the AO on account of closing stock from Rs. 66,00,000/- to Rs. 9,34,394/-. 22. Since, the facts and issues involved are similar, the ground of appeal of the assessee and that of the revenue are adjudicated together as under. 23. The brief facts of the case are that the Assessing Officer asked the assessee to justify decrease of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, he added Rs. 46,54,068/- to the income of the assessee. 29. On appeal, before the CIT(A), the assessee submitted that the development cost of Rs. 46,54,068/- was incurred prior to the assessment year 2012-13 and therefore, no addition can be made in the year under appeal. 30. The CIT(A) observed that he has examined the issue from the trading and profit and loss account of the current year as well as the preceding year submitted by the assessee that these expenses are attributable to the assessment year 2011-12 towards cost of plots at Rajpura and thereby the cost of such plots as on 01.04.2011 was shown to Rs. 77,85,600/- including development cost of Rs. 46,54,068/- incurred in assessment year 2011-12. Therefore, he held that this expenses was not incurred in assessment year 2011-12 and was already included in the opening cost of Rajpura plots. He also observed that for assessment year 2011-12, the assessment has been completed u/s 143(3) of the Act wherein no adverse view was taken for such land development cost and therefore, there was no reason for any addition or disallowance of Rs. 46,54,068/- in respect of such land development cost which has been incurred in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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