TMI Blog2020 (12) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... may not apply in the case of the assessee. Onus upon assessee to explain the source of the cash deposit in the bank account is duly discharged and, as such, there was no justification to make or sustain even part addition against the assessee. In view of the above discussion, we set aside the orders of the authorities below and delete the entire addition. AO is also directed to grant benefit of section 54F to the assessee on account of deletion of this addition as per law. - Decided in favour of assessee. - I.T.A No.3249/Del/2016 - - - Dated:- 2-12-2020 - Shri Bhavnesh Saini, Judicial Member And Shri Anil Chaturvedi, Accountant Member For the Assessee : Shri R.S. Singhvi, CA, Shri Satyajeet Goel, CA For the Revenue : Ms. Parul Singh, Sr. DR ORDER PER BHAVNESH SAINI, J.M. This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-10, New Delhi dated 31.03.2016 for AY 2011-12 on the following grounds : - 1. (i) That on the facts and circumstances of the case, the CIT(A) was not justified in confirming addition of ₹ 1,73,27,000/- as unexplained deposit in the bank account with Standard Chartered Bank, New Friends Colon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3.3 In respect of bank account no. xxxxxx6844 with M/s Standard Chartered Bank, New Friends Colony in the name of assessee, there was cash deposits of ₹ 2,82,87,000/- and other deposits of ₹ 1,63,87,867/-, AO asked the assessee to explain source of the cash deposits. The assessee filed submissions explaining the source of the same. It was explained by the assessee that cash deposits were made from the sale consideration of property no. A-205, New Friends Colony, New Delhi which was sold in the FY 2009-10. It was further explained by assessee that capital gain tax was paid by assessee in AY 2010-11 in respect of this transaction. Considering the reply of assessee, AO asked to furnish complete name, address, PAN and assessment particulars of the buyer of the property, along with confirmation of the buyer and also asked to furnish complete address of the broker through whom the deal was finalized. However, assessee failed to explain the same, the AO, therefore, held that source of the above cash deposits of ₹ 2,82,87,000/- remained unexplained, which was treated as income of assessee from undisclosed sources and added to the income of the assessee. 3.4 It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the above additions. 5. The assessee challenged the above additions before Ld. CIT(A) and detailed submissions of the assessee were filed. The assessee also filed an application under Rule 46A of IT Rules for admission of the additional evidences. The same were forwarded by the Ld. CIT(A) to the AO for filing the remand report. The AO submitted the remand report dated 20.10.2014 which is reproduced in the appellate order in which the AO has briefly stated that Counsel for assessee was requested to produce all the four persons namely Mohd. Laiq Ahmed, Shri Ishrafil, Shri Parveen Goyal Shri Rakesh who have purchased painting from assessee for recording their statements and was also asked that all the four persons will bring them the copy of the ITR, audited copy of the Profit Loss Account and balance sheet. In response to this Shri Nikhil Bansal, CA of Shri Mohd. Laiq Ahmed and Shri Ishrafil appeared and filed power of attorney and copy of ITR of AY 2011-12 under appeal, copy of the bank accounts statement, affidavit and PAN Card. He has submitted that as the parties are travelling, they are not able to appear in person. For Shri Parveen Goyal Shri Rakesh, Shri Nitin Bans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing undisputed facts: i. There is no dispute that these deposits are relating to sale proceeds of paintings. ii. Fact of ownership of paintings which were sold to the four parties is not in dispute as same is corroborated from order u/s 132(5) dated 13/10/1993, placed in the paper book at page 33-39. iii. The fact of sale of these paintings is supported from confirmation of the parties, their affidavits and also corroborated from bank statements and permanent account number of purchasers. iv. All the four parties are regular income tax assessees and duly furnished confirmation in support of purchase of paintings. Further, in response to notice u/s 133(6) of the Income Tax Act, 1961 during remand proceedings, Chartered Accountant of the parties also appeared and confirmed the fact of purchase of paintings as per details given in the confirmation and affidavit. v. The source of sale consideration is not in dispute as same is corroborated from bank statements of the parties and Assessing Officer has not made any adverse comments. vi. Further, authenticity of the bank account was duly verified from respective bank. 7. The assessee further ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is verifiable from documentary evidence provided by the appellant during the course of appellate proceedings. Assessee has provided a copy of order u/s 132(5) of the IT Act, 1961 dated 16.06.1993 subsequent to search operation conducted at the residence of the assessee on 17.11.1993, which clearly established that several paintings of renowned artists were seized by the department. The above order also establish the fact that on 16.06.1993 paintings and works of arts were valued by Sh. Anish Farooqi, Director, National Modern Art, New Delhi and in all 75 paintings and 9 pieces of works of arts were valued at ₹ 25,89,000/-. Further from the above order, the names of painters also established which include paintings made by Sh. Ramachandran, Sh. Laxman Pai, Sh. Satish Gujral, Sh. K. Khosa, Sh. Manjeet Bawa and Tanjore paintings made by unknown artists, glass paintings and paintings of other miscellaneous artists. Further perusal of above order u/s 132(5) indicates that an addition of ₹ 22,09,000/- was made in the hands of the assessee as unexplained investment in paintings and works of art. These facts and circumstances of the case establish the fact that the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, Mr. Parveen Goyal and Mr. Rakesh, but in spite of opportunity provided to the assessee, copies of Income Tax Returns (to demonstrate tax status capacity) were not filed by the assessee in respect of Mr. Parveen Goyal and Mr. Rakesh. Considering this fact, I disallow the claim of the Ld. AR of the assessee that Mr. Parveen Goyal has purchased paintings from the assessee of ₹ 1,52,80,000/- and Mr. Rakesh purchased paintings worth ₹ 36,95,000/- from the assessee. 4.6.13 However, Ld. AR has filed copies of ITR for AY 2011-12 in respect of Mohd. Laiq Ahmed (Existing a/c no. 290691381240911) and Mr. Ishrafil (Existing a/c no. 234186311140711), the claim of the AR is accepted. Further, Ld. AR has also filed the confirmation, affidavit and bank details in respect of the above named two persons. Perusal of bank details of these persons clearly indicates substantial deposit and withdrawals which further justify their capacity to purchase the paintings in question details of which have also been furnished. Resultantly out of the total addition of ₹ 2,82,87,000/-, appellant gets relief in respect of purchase of paintings by Mohd. Laiq Ahmed of ₹ 76,35,000/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified from the assessment records of both the persons instead of confirming the addition for not filing the copy of the ITR. The non-filing of copy of ITR is no ground to disbelieve the explanation of the assessee. He has relied upon the judgment of the Supreme Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. 159 ITR 78 in which it was held as under: In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the Income tax asessees. Their index number was in the file of the Revenue. The Revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the four parties and AO did not bring any evidence on record to controvert the availability of the paintings with the assessee which have been sold by assessee to the above four parties in assessment year under appeal. The Ld. CIT(A) accepted the similar evidences for accepting sale of paintings to Mohd. Laiq Ahmed and Shri Ishrafil but in respect of Shri Parveen Goyal and Shri Rakesh the claim is not accepted because copy of their ITR is not filed. The Ld. CIT(A) in his findings has directed the AO to pass on necessary information to the concerned AOs of the above four persons who have confirmed that they have purchased paintings from the assessee. Thus, the Ld. CIT(A) accepted that four parties have confirmed purchase of paintings from the assessee. When Ld. CIT(A) called for the remand report from the AO at appellate stage and also directed to pass on information of sale of paintings to the concerned AO, Ld. CIT(A) could have directed the AO or the concerned AOs of the purchaser to verify the copy of the ITR in the cases of two purchasers Shri Parveen Goyal and Shri Rakesh but no steps have been taken in this regard despite both are existing assessees of the Income tax Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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