TMI Blog2020 (2) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of refund. However, there is a basic precondition that the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Before making any enhancement to the income of the assessee determined by AO, the learned CIT(A) should have granted the assessee an opportunity of showing that the order of the learned CIT(A) making an addition u/s 68 of the Income Tax Act should not be enhanced. On careful reading of the order of the CIT(A) we do not find that any such notice has been issued by CIT(A) proposal enhancement of the income of the assessee. In view of this the enhancement made by the learned CIT(A) of the addition is not sustainable in law on the principles of natural justice not followed by him. Therefore we direct the learned assessing officer to restricted the addition to the extent u/s 68 of the Act and assessee is granted relief to that extent. Accordingly ground number 2 of the appeal of the assessee is allowed. Addition of gifts of loans - assessee has also failed to show the genuineness of the transaction of receipt of the sale of land for the reason that there is no sale taken place of any agricultural land by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his onus by producing the buyers who have advanced the money to the assessee against the purchase of his agricultural land as insisted by the Ld. Income Tax Officer. That during personal deposition of the buyers Mr. Jai Ram Nagar and Mr. Shri Chand, they have confirmed that they have paid the advance to the assessee against the purchase of his agricultural land and also explained the sources of their income. That Mr. Jai Ram Nagar has also shown his withdrawal from his bank account justifying the payment made to the assessee which was totally ignored by the Ld. Income Tax Officer on the pretext that the date of withdrawal by Mr. Jai Ram Nagar and date of deposit by the assessee does not match, whereas at no time during his personal deposition Mr. Jai Ram Nagar has stated he has paid the amount to the assessee immediately after withdrawal from his bank account to the assessee. 3. That the assessee has discharged his onus by producing the parties with whom he has entered into agreement for sale of his agricultural land and from whom he has received the advance and deposited the same in his bank account. That by producing the buyers and confirmation from them that they have p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in presuming that the assessee has intentionally not made the personal deposition of his real brother Mr. Brahma Nand Sharma and his real sister-in-law Mrs. Bhagwati. That it was explained that Mr. Brahma Nand Sharma, brother of the assessee was expired on 24.04.2009 and the copy of gift deed , affidavit of legal heir, identity proof of legal heir and the donor and sources of gift given to the assessee. That it was explained to the Ld. Income Tax Officer that the real sister in law of the assessee, Mrs. Jagwati Sharma wife of Mr. Likhiram Sharma, brother of the assessee was expired on 27.11.2011 and due to tradition in the family , elder lady Mrs. Bhagwati cannot be produced for personal deposition and requested to depute the official staff to record the statement, if necessary. That the Ld. Income Tax Officer has not taken any steps to record the statement of legal heir of late Mr. Brahmna Nand Sharma and Mrs. Bhagwati for the reasons better known to him and wrongly presumed that these persons have capacity of payment of gift of ₹ 25,000/- each, totally ignoring the age of the donors , their relationship with the assessee and occasion of such gift. That Ld. Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indirapuram, Ghaziabad. The assessee was asked to explain the source of the cash deposit. Assessee tried to explain the cash deposit stating that on 19/04/2008, ₹ 1 lakh is the sum received against sale of agricultural land. Cash deposit of ₹ 1 lakh on 30/04/2008 is also an advance against the sale of agricultural land. Cash deposit of ₹ 3 lakhs on 30/4/2008 is also advanced against sale of agricultural land. Cash deposit of ₹ 5 lakhs on 5/5/2008 is also advanced against sale of agricultural land. All these advances were received from Shri Jairam Nagar. For the sum of ₹ 24,50,000/ deposited on 17/06/2008 assessee explained that ₹ 10 lakhs is out of cash withdrawn from bank on 02/06/2008 and further sum is received as advanced against sale of agricultural land, cash gift received from various persons. Other cash deposits were stated to be deposited out of the cash withdrawal made on earlier dates. The learned Assessing Officer asked the assessee to produce all those persons from whom advance against sale of agricultural land was received as well as the persons who have gifted sums to assessee. The learned Assessing Officer also recorded statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised at any point of time. He therefore submitted that same should be admitted. 8. The learned Departmental Representative vehemently objected the raising of the additional ground and submitted that such ground cannot be raised that it is neither a jurisdictional ground nor a ground which goes to the root of the matter. It is merely a challenge to the Assessing Officer s action of taxing the amount deposited in the bank account in cash under Section 68 of the Income Tax Act. 9. We have carefully considered the rival contention and find that assessee can raise any additional ground of appeal which is technical in nature. As the additional ground raised by the assessee goes to the root of the matter that whether any addition can be made under section 68 of the Act in case of the assessee was not maintaining the books of accounts when the money is deposited in his bank account. In view of the decision of the Hon ble Supreme Court in National Thermal Power Co Ltd (supra), we admit the additional ground raised by the assessee. 10. As the additional ground raised by the assessee is required to be adjudicated first, as it goes to the root of the assessment made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount cannot be added to the income of the assessee. It was further stated that even otherwise the enhancement made by the ld CIT(A) is illegal as neither there is a notice u/s 251(2) of the Act and nor any opportunity was given. 13. The ld Departmental Representative vehemently supported the order of the lower authorities. 14. We have carefully considered the rival contentions and also perused the orders of the lower authorities. Admittedly, assessee has deposited cash of ₹ 2450000/ in the bank account of the assessee in cash. Source of the cash as explained by the stating that he has received ₹ 1,000,000/- from Mr Jayaram Nagar as advance against the sale of land, out of which the learned assessing officer has accepted the genuineness to the extent of ₹ 300,000/- and made the addition of ₹ 700,000/- as unexplained cash credit. The learned CIT(A) enhance to ₹ 1,000,000/- thereby making an enhancement to the income of the assessee of ₹ 300,000/-. Further, the assessee also explained that ₹ 1,000,000/- have been received from Mr Sri Chand, out of which the learned Assessing Officer accepted the genuineness and creditworthines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k account of the assessee cannot be considered as an amount deposited in the books of accounts of the assessee and hence, the addition made u/s 68 of the income tax act stands vitiated and therefore it should be deleted. The first judicial precedent in this controversy is the decision of the honourable Bombay High Court in 141 ITR 67, wherein it has been held that that when monies are deposited in bank account, relationship that is constituted between the bank and the customer is of creditor and not the trustee and beneficiary. Therefore, it is not as if the bank passbook is maintained by the bank as an agent of the customer, nor can it be said that the passbook is maintained by the bank under the instructions of the customers. In view of this, the bank passbook supplied by the bank to the assessee cannot be regarded as a books maintained by the assessee under instructions. Accordingly, it was held that cash credit for the previous year shown in the assessee‟s bank passbook issued to him by the bank, but not shown in the cashbook maintained by him for that year, does not fall within the ambit of section 68 of the income tax act. The facts in that case are that assessee did ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no requirement that the books of account should be maintained by the assessee himself. In view of this, we do not find any infirmity in the order of the learned CIT A, in confirming an addition of INR 512000/ on account of unexplained bank deposits under section 68 of the income tax act. Accordingly, the additional ground raised by the assessee for assessment year 2004 05 is also dismissed. 16. In view of above facts and respectfully following the decision of the coordinate bench we hold that the cash deposited by the assessee in his bank account is also covered under section 68 of the income tax act. Thus the additional ground raised by the assessee is dismissed. 17. Coming to the merits of the case the learned Commissioner of income tax appeal has decided the above issue holding as under:- 4. During appeal proceedings the counsel of the appellant attended and made following written submission:- Brief Facts The appellant has voluntarily filed his return of income declaring income of ₹ 90,200/- on 13.10.2009 The assessment has been framed by the Ld. Income Tax Officer, Ward 1(3), Ghaziabad after adding a sum of ₹ 19,97,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961, without considering the facts of the case explained and submitted to him. The Ld. Income Tax Officer has erred in presuming that the persons who have advanced the money to the assessee as per the agreement to sale entered with assessee does not have sources to pay the amount. The Ld. Income Tax Officer has accepted the agreement of sale entered by the assessee with the prospective buyers in one hand and assessee has discharged his onus by producing the buyers who have advanced the money to the assessee against the purchase of his agricultural land as insisted by the Ld. Income Tax Officer. That during personal deposition of the buyers Mr. Jai Ram Nagar and Mr. Shri Chand , they have confirmed that they hdve paid the advance to the assessee against the purchase of his agricultural land and also explained the sources of from which such amount have been paid to the assessee. That Mr. Jai Ram Nagar has also shown his withdrawal from his bank account justifying the payment made to the assessee which was totally ignored by the Ld. Income Tax Officer on the pretext that the date of withdrawal by Mr. Jai Ram Nagar and date of deposit by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the assessee and specially when the assessee is specifically asking for the same in writing. That no copy of Statement recorded of the persons was confronted to the assessee nor was any copy of the same provided to the assessee. That during the year under consideration assessee has also received from his close relatives on his 25th marriage anniversary. That in support of which assessee has filed Affidavit, Gift Deed and confirmation of the said relatives. That assessee has also produced the Donors for personal deposition who have confirmed that the amount was paid to the assessee- and also explained their sources from which the amount was paid. That Late Mr. Brahma Nand Sharina, brother of the assessee and Mrs. Bhagwati was not produced before the assessing officer due to the fact that Mr. Brahma Nand Sharma was expired on 24.04.2009 and Mrs. Bhagwati due to family tradition but requested the Ld. Income Tax Officer to depute some person to record her statement, whether she has given the amount or not to the assessee, which was also ignored by the Ld. Assessing Officer. That the Ld. Income Tax Officer has erred in presuming that the donors who are aged about 55 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther of the assessee, whose wife was expired on 27.11.2011 was also present for his personal deposition. That the Ld. Income Tax Officer has erred in not providing the opportunity to the assessee to explain and justify his case after recording the statement of the donors, whereas after every deposition, assessee has specifically requested to the Ld. Income Tax Officer to appraise him and also to provide the details and opportunity if any contrary observed during the personal deposition. In this manner principal of natural justice was violated by not providing opportunity to the assessee to justify if any adverse observation has been formed against the assessee and specially when the assessee is specifically asking for the same in writing. That no copy of Statement recorded of the donors was confronted to the assessee nor was any copy of the same provided to the assessee. That during the course of assessment proceedings and even in his first submission, assessee has submitted and disclosed that he has earned Saving Bank Interest of ₹ 10,627/- and Auto Sweep Interest of ₹ 2,821/- but not included in his taxable income on the presumption that the same is not taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II) ITCL 111 (All-HC) : (2005) 147 Taxman 18 (All) 18. Smt. Shanti Devi v. ITO (2004) 90 TTJ (Agra-Trib) 651 19. A. Rajendran Ors. V. Asstt CIT (2006) 12 (I) ITCL 365 (Mad-HC): (2006) 204 CTR (Mad) 9 20. CIT v. Laid Transport Corporation (2009) 28 (I) ITCL 423 (P HHC) : (2009) 180 Taxman 185 (P H) 21. Asstt. CIT v. Rajasthan Asbestos Cement Co. (2009) 23 DTR (JpTrib) 430 22. Dy. CIT v. SmtArchana Devi (2004) 84 TTJ (Jod-Trib) 467 23. ITO v. Laxman Das Makhija (2009) 26 (II) ITCL 517 (Agra-Trib) : (2009) 313 ITR 123 (Agra-Trib): (2009) 116 ITD 47 (Agra-Trib) 24. S. Hastimal v. CIT (1963) 49 ITR 273 (Mad) 25. JaikishanDadlani v. ITO (2005) 4 SOT 138 (Mum-Trib) 26. Prop. Dhawala Service Station v. CIT (1993) 113 Taxation 11 (JpTrib). 27. ITO v. Suresh Kalmadi (1988) 73 CTR (Trib) 80 (PuneTrib)(TM) 28. Jagadish Oil Mills v. ITO (1995) 52 TTJ (Ind-Trib) 102 29. CIT v. Shri Ram NarainGoel (1997) 224 ITR 180 (P H) 30. Asstt. CIT v. Mahavir Metals Alloys (2002) 75 TTJ (Asr-Trib) 256. 31. KanhaialalJangid v. Asstt. CIT (2008) 217 CTR (Raj) 354 32. CIT v. Laul Transport Corporation (200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Jaipur). 18. CIT Poona v. Bhai Chand H. Gandhi (1983) 141 ITR 67 (Bom.) 5. Matter was remanded to the assessing officer vide this office letter dated 08.05.2013. In response, the Assessing Officer sent remand report vide his letter dated 04.06.2013 as under: In his submissions made before your goodself, the assessee mainly agitated the additions of R$. 19,97,650/- on account of unexplained cash credits under section 68 of I.T.Act, 1961 vide order u/s 143(3) of I.T.Act, 1961 dated 27.12.2011. At Page No. 5 in first para of his submission filed on 8th May, 2013 before your honour, the assessee mis-pleaded the fact that the A.O did not supply him copy of statement recorded on oath till date. This contention of the assessep is not acceptable at all. The statement of all the parties were recorded in the presence of assessee as well as his Counsel Sh. Sandeep Bhatnagar which is also evidenced from their signatures on the statements. It is a fact that the assessee applied for supply of copies of statement vide his letter dated 11.01.2012 but no required fee challan was furnished alongwith the application. He was required, to furnish the same which was never produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which also no date etc. could be given by him on the pretext that he is not remembered the date. It is worth to mention here that as per para-2 of the so called agreement, it is mentioned that if the second party do not fulfil strictly the terms of this agreement otherwise the First Party shall forfeit the full earnest money received under this agreement and the second party shall have no objection to it. One most important aspect of this socalled agreement is that the land under sale of so called agreement is only 890/- Sq. Meter for which the agreement is written for ₹ 1,24,60,000/- which by no stretch of imagination is the rates of agriculture land at the nearby location. The rates of above agriculture land at the time/date of agreement was approximately only ₹ 15,00,000/- per bigha. The land under consideration is less than 1 (One) bigha. All these facts prove that this is a cooked-up story to justify the cash deposits only. Since Shri Jai Ram Nagar could not prove his creditworthiness and genuine-ness of transaction nor he is .assessed to tax with the Deptt. therefore, the A.O rightly rejected the claim of advance and rightly hold the cash credit as un-explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to safe-guard the assessee from the consequences of income-tax, It is also worth to mention here that in his reply dated 24.11.2011 submitted during the course of assessment proceedings at para no. 7, the assessee himself admitted not to have any family function during the year under consideration. Therefore, the above assersion of the assessee further strengthen the fact that no family function i.e. 25th Marriage Anniversary was solemnized by the assessee and the so called gifts shown were actually unexplained cash credits of the assessee which were rightly disallowed and added to the income of the assessee under section 68 of I.T.Act, 1961. During the remand proceedings also the assessee was given an opportunity vide letter dated 27.05.2013 to prove his case and to furnish the following details I All sort of authentic and documentary evidences to prove legal rights in 890 Sq. meters Land and as stated to be negotiated as per agreement dated 17.06.2008 and latest copy of Khasra and Khatauni relating to land as owned by four brothers including you. What was total area of land belonged to family with reference to Bighas. II. Furnish authentic reason as to why t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been provided to the appellant against of which he submitted rejoinder as under: 1. That the Remand Report submitted by the Ld. Income Tax Officer is against the fact of the case of the assessee and just trying to divert the attention of the facts and the mistake committed during the Assessment Proceedings. 2. That the Ld. Income Tax Officer has made the allegation in para 1. that the assessee is mis-pleaded the fact that the A.O. did not supply him copy of statement on oath till date of the persons which were used against the assessee. That the Ld. Income Tax Officer has also stated that the statements were recorded in the presence of assessee as well as his counsel which is evidenced from the signatures on the statements. It was also stated that the assessee has applied for the statement vide letter dated 11.01.2012 but no required fee challan was furnished along with the application. He was required to furnish the same which was never produced. Allegations levied by the Ld. Income Tax Officer is totally against the fact of the case and baseless. In fact Statement(s) of the persons were recorded by the Ld. Income Tax Officer during the assessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vert. In any case, if the person(s) have accepted the transaction with the assessee and the Ld. Income Tax Officer has not satisfied with the creditworthiness of the person, then the assessing officer of those persons can verify the same but no adverse opinion could be made against the assessee. The Ld. Assessing officer has also erred in presuming that there is difference in the statement given by the person(s) and the fact of the case of the assessee, ignoring the fact that the statement was recorded of the illiterate villagers who have narrated the truth to the assessing officer but not remembered the date of payment of amount to the assessee. Even the agreement entered by the assessee was not doubt by the Ld. Income Tax Officer during the assessment proceedings but now in remand report, the Ld. Assessing officer is raising the fresh issues which was not gathered and determined by the assessing officer at the time of assessment proceedings. The Ld. Income Tax Officer has also raised the objection that the assessee has mentioned in his reply that No function was held during the year. Even today, assessee is stating the same facts, that No function was conducted for his 25t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings, that the amount was not paid to the assessee or the persons does not have enough sources to pay such amount to the assessee. 9. That at No instance the Ld. Income Tax Officer has pointed out any defect in the return filed by the assessee nor found any sources of income from which assessee has generated cash which can be treated as unexplained. That the Ld. Income Tax Officer has also erred in not providing any opportunity nor any show cause notice has been issued by him before making the assessment, hence principal of natural justice has been overlooked by the Ld. Income Tax Officer. 10. That even providing the statements recorded during the assessment proceedings at this stage after the directions given by the Ld. CTT(A) does not cover up the illegality committed during the assessment proceedings to use the statements recorded and used against the assessee for making additions without providing any opportunity to him to revert. 11. That the assessee again relied on the judicial pronouncement cited in earlier submission in which it was decided that the Principles of Natural justice are violated if an adverse order is made on an assessee on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. The Ld. Income Tax Officer has ignored all the judicial pronouncement relied by the assessee in his submission before your good self by just stating that the facts are different in this case, clearly reflecting his negative attitude to penalize the assessee without analyzing the case laws relied by the assessee. Keeping in view the above facts this is to request you to cancel the arbitrary / illegal ssessment made by the Ld. Income Tax Officer, Ward 1(3), Ghaziabad, which is bad in law, against the principles of natural justice and as well as against the facts of the case and is liable to be quashed on legal and also on merits provide the justice to the assessee and oblige. 7. Having considered facts of the case, submission of the appellant, remand report and rejoinder to the remand report, the appeal is decided as under: 7.1 The main issue in this case relates to genuineness of source of deposit in the bank A/c of the appellant. The main contention of the appellant is that statements recorded by the Assessing Officer were not provided to him and providing such statement at appellate stage does not cover up the illegality committed during assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be filed. This opportunity has not been availed by the appellant. 7.2 In the light of the detailed discussion in the assessment order and remand report and fact that the appellant has not produced required details during remand proceedings it is beyond doubt that the assessee has failed to prove genuineness of the transaction as well as creditworthiness of the creditors. The judicial decisions cited by the appellant do not help his case as the primary onus u/s 68 is on assessee which has not been discharged satisfactorily. The gifts or loans have not proved satisfactorily. Same is the case with receipts against sale of land which was not proved to be sold till date. 7.3 The relevant law and case laws in the matter are discussed below before analyzing the facts of the case further: (i) Where any sum is found credited in the book of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, th,e sum so credited may be charged to income-tax as the income of the assessee of that previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors to advance money; and 3. Genuineness of transaction. As to the issue of genuineness of transaction, it was further held in the above decision that the transaction is not genuine, simply because some, out of many, of the transactions are by cheque. Conversely, it is not open for the Assessing officer to add token amount merely for the purpose of making the returned income into a round figure. Where certain sum of money claimed by the assessee to have been borrowed from certain persons, it is for the assessee to prove, by cogent and proper evidence, that they are the genuine borrowings for the reason that the facts are exclusively within the assessee's knowledge. (ix) In CIT vs. Bhan Sons (2005) 273 ITR 206 (P LI), it was found that the credits were received by account payee cheques and the creditors were income tax asscssccs. But the contention of the Assessing Officer was that the assessee did not respond to the requirements of the production of creditors before him for verification. The first appellate authority and the High Court felt that it was possible for the Assessing Officer to have accepted the same or make further enquiries with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered by applying the test of human probabilities Now we shall proceed to examine the validity of those grounds that appealed to the learned judges. It is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real. In a case of the present kind a party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide-open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. Now, coming to the question of onus, the law does not prescribe any quantitative test to find out whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer observed that short-term capital gains were not genuine in as much as the assessee had purchased 45000 shares of Ankur International Ltd. at varying rates from ₹ 2.06 to Rs, 3.1 per share and sold them within a short span of six-seven months at the rate varying from ₹ 47.75 paisa to ₹ 55. Even though the two respective transactions for purchase and sale of shares were routed through two different brokers, yet the Assessing Officer did not believe the astronomical rise in share price of a company from ₹ 3 to ₹ 55 in a short-term. The assessee lost its case before the Tribunal. Confirming the order of the Tribunal, the Punjab and Haryana High Court held that the burden of proving that income is subject to tax is on the revenue but, on the facts, to show that the transaction is genuine, burden is primarily on the assessee. As per the Court, the Assessing Officer is to apply the test of human probabilities for deciding genuineness or otherwise of a particular transaction. Mere leading of the evidence that the transaction was genuine, cannot be conclusive. Any such evidence is required to be assessed by the Assessing Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department cannot, however, act unreasonably. 7.4 In back drop of the above legal position as laid down by various courts the issue is decided in the instant case as below: It is seen that The Assessing Officers has recorded statements of the persons from whom the assessee has claimed to have received the advances against alleged purchase of land. He has analysed the discrepancies in the statements as well as the financial position of each person from whom the said advances were claimed to have been received. During appeal the appellant had claimed that he had not been provided the copies of statements. During remand proceedings such statements were provided. The assessing officer raised certain material queries to the assessee during remand proceedings. The queries raised by AO are relevant to the issue at hand as discussed supra. This opportunity has not been availed by the appellant. The assessee has merely harped on the contention that the statements were not provided to him during assessment proceedings and providing the same now cannot undo the wrong. This claim of appellant is not tenable. The statements have been provided to appellant. The conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 10 Lacs to assessee without having explainable sources and keeping this money with assessee for long time defy any prudence and disprove the genuineness of claim as Shri Jairam lacked the creditworthiness. However, the AO has made addition of ₹ 7 Lacs only taking a lenient view. In facts and circumstances of the case, I find that not only the creditworthiness but the genuineness of the transaction is not proved. Having given a finding that the transaction is not genuine particularly in view of the fact that the agreement to sale on a plane piece of paper is not reliable, the question of creditworthiness was less relevant. In remand proceedings the appellant has not responded to relevant queries by the AO. Therefore- the lenient view adopted by AO is not justified. The whole of the amount purported to have been received as advance against sale of land is held to be not proved and therefore the addition is enhanced to ₹ 10 Lacs. (iv) Shri Chand: He is shown to have advanced ₹ 10 Lac to assessee for purchase of land from assessee. In the statement recorded neither did he remember the names of witnesses nor did he disclose the sources of the deposit. The agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue that arises that assessee has deposited INR 24.50 Lacs in his bank account where the assessing officer has made the addition out of that a sum of INR 1,975,000/- under section 68 of the Income Tax Act which has been enhanced by the learned CIT(A) of ₹ 24.50 Lacs. According to section 251(2) the learned Commissioner of Income Tax(A) is empowered to enhance in assessment order penalty or reduced the amount of refund. However, there is a basic precondition that the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Therefore it is apparent that before making any enhancement to the income of the assessee determined by the learned Assessing Officer, the learned CIT(A) should have granted the assessee an opportunity of showing that the order of the learned CIT(A) making an addition u/s 68 of the Income Tax Act should not be enhanced. On careful reading of the order of the learned CIT(A) we do not find that any such notice has been issued by the learned CIT(A) proposal enhancement of the income of the assessee. In view of this the enhancement made by the learned CIT(A) of the addition from ₹ 1,975,000/- to ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
