TMI Blog2020 (2) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the creditor, because same can only be proved by the creditor himself which in this case both Assessing Officer and Ld. CIT(A) have failed to do so and has simply gone by the fact that the income returned is less. The other material fact of availability of fund has not been inquired into, when Director of the assessee company was duly responding and complying with the notices and therefore, merely on such presumption, the addition cannot be made, because in so far as assessee is concerned it has not only established the identity and genuineness of the transaction but also the creditworthiness by providing the entire bank statement and the source wherefrom the amount have been received. It is not a case of any information or material coming on record that the share application money has been received through any accommodation entry or by an entry provider or by any conduit manner. Therefore, such an addition of ₹ 1.50 crore cannot be sustained and same is directed to be deleted - Appeal of the assessee is allowed. - I.T.A. No.4500/DEL/2016 (Assessment Year 2011-12) - - - Dated:- 27-1-2020 - SHRI G.S. PANNU, VICE PRESIDENT AND AMIT SHUKLA, JUDICIAL MEMBER Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee submitted that he gave following payments as advance for the purchase of land: 1. ₹ 45,00,000/- vide cheque no.036356, ₹ 7,00,000 Ch. No.036357 and vide ch. No.036360 ₹ 7,00,000/- Dated 20.10.2010 2. ₹ 16,00,000/- vide cheque no.489201 dated 21.10.2010 3. ₹ 50,00,000/- by cash on 31.1.2011 4. ₹ 25,00,000/- by cash on 9.2.2011 5. ₹ 15,00,000/- by cash on 14.2.2011 3. However, the ld. Assessing Officer accepted the cheque amount but regarding cash payments, he held that assessee could not prove the source of the same and even the information called u/s.133(6) from various parties could not be received in time, were returned back, therefore, he added the entire cash payment of ₹ 90 lacs. 4. Before the Ld. CIT (A), the assessee preferred an appeal on the addition of ₹ 90 lac in respect of advance paid in cash for the purchase of land. It was submitted that the Assessing Officer has wrongly observed that the assessee company has deposited cash amount of ₹ 90 lacs within 15 days between 31.01.2011 to 14.02.2011 stating that amount was lying in the house and deposited in different dates, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney and Smt. Renu Agarwal has made payment of ₹ 15 lac as repayment of loan. The source of ₹ 1.5 crore given by Shri Arun Agarwal was not found to be satisfactory by the Assessing Officer, because according to the Assessing Officer his annual income as per the ITR was only ₹ 6,80,382/-. 6. The assessee before the ld. CIT (A) had submitted confirmation of Shri Arun Agarwal along with copy of his PAN, bank statement and also the source of deposit, etc. It was submitted that remand report was without any corroborative evidence and without any adverse information and all the payments were routed through banking channels. Ld. CIT (A) after detailed discussion held that assessee could not prove the creditworthiness of Shri Arun Agarwal and made enhancement of ₹ 60 lac after observing and holding as under:- 4.3.7 So, in view of the above facts discussed and in view of the remand report the amount of ₹ 1.5 crore treated as unexplained cash credit u/s 68 of the IT Act. The AO has made addition of ₹ 90 lacs of cash payment amount as income from other sources Since the source of the investment deposited in the bank account by Sh. Arun Agarwal has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the subject matter of appeal before the Ld. CIT(A) is addition of ₹ 90 lac made under the head income from other sources . But Ld. CIT (A) had now taken the new source of income which is not permissible. In support, she relied upon the following judgments:- 1. Gurinder Mohan Singh Nindrajog vs. CIT, (2012) 348 ITR 170 (Del) 2. CIT vs. Rai Bahadur hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC) 3. CIT vs. Union Tyres, (1999) 240 ITR 556 (Del.) 8. On merits, she submitted that the assessee has filed all the necessary documents to prove the identity and creditworthiness of Shri Arun Agarwal, the Director of the Company and the genuineness of the transaction was duly established. Further, here the Director himself has accepted the transaction and given all the documentary evidences. Merely, the lender was shown less return of income that does not lead to any adverse inference when he has availability of funds, disclosed in the balance-sheet. In support, he relied upon the judgment of Hon ble Delhi High Court in the case of CIT vs. Vrindavan Farms (P) Ltd., ITA 71/2015, ITA 72/2015, ITA 84/2015 dated 12.08.2015 and PCIT vs. M/s. Goodview Trading Pvt. Ltd. dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, the addition of ₹ 1.5 crore made u/s.68 on account of share application money received from the Director of the assessee company, Shri Arun Agarwal. The addition was made on the back ground that while examining the bank statement and the source of withdrawal of ₹ 90 lac, it was found that sum of ₹ 1.5 crore have been deposited in the bank account of the assessee which was received by two Directors of the assessee company, namely Smt. Renu Agarwal who has repaid her loan back at ₹ 15 lac and Shri Arun Agarwal who has given amount of ₹ 1.50 lac as share application money. Before the Assessing Officer, the assessee was confronted with this fact and in response, assessee had filed the details of share application money received from various persons including the Director was filed not only during the assessment proceedings as well as before the Ld. CIT(A). The assessee has filed the confirmation from the Director, copy of his PAN and income tax return and bank statement from where he has given the payment to the assessee company. Further, notice u/s.133(6) was issued to Shri Arun Agarwal, in response to which he has submitted the copy of account of as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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