TMI Blog2022 (4) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... ource of money in the hands of the respective hands. We are unable to convince ourselves with the contention of the assessee. It is for the reason that the assessee on one hand claims to have invested in the impugned properties bearing survey No. 125 and 124 out of the money received from the 3 parties and in the event of non-furnishing the necessary details on the other hand AR changed his stand by submitting that the impugned loan can be treated as the utilization against the gift received by the assessee. Thus in our view, the assessee failed to discharge the onus and therefore we confirmed the addition to the extent of ₹ 19 lacs. Regarding the investment in the property taluka Dhanduk bearing survey number 143 we note that it was the onus upon the assessee to justify the source of money in pursuance to the provisions of section 69A - we find that, the assessee failed to do so. Rather the assessee has changed his stand by contending that the investment the properties can be assumed out of the gift which is not acceptable in the absence of necessary evidences. Accordingly we do not find any reason to interfere in the finding of the authorities below and therefore conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other purpose. In the absence of relevant information, we are inclined to assume that such amount has been utilized by the assessee for making the investment in the properties which were subject to the addition under the provisions of section 69. Hence the ground of appeal of the assessee is allowed. - ITA No. 3153/AHD/2014 - - - Dated:- 30-3-2022 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Tushar Hemani, Sr. Advocate with Shri Parimalsinh B. Parmar, A.R For the Revenue : Shri Mukesh Jain, Sr.D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-VIII, Ahmedabad, dated 18/09/2014 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2011-12. 2. The assessee has raised the following grounds of appeal: 1. The Id. CIT (A), has erred in law and on the facts by confirming the action AO of making addition u/s 68 of the Act on account of unexpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hearing of the appeal. 3. The 1st issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for ₹ 33,07,640/- out of the total addition of ₹ 53,57,640/- made by the AO instead of deleting the same in entirety. 4. The facts in brief are that the assessee in the present case is an individual and declared income from agricultural activity. The assessee in the year under consideration has received certain amount of loan of ₹ 53,57,640/- from different parties through banking channel. The party wise and amount wise details of the loan is available on page 3 in the order of the AO. The assessee during the assessment proceedings in support of such loan has filed the copy of the PAN. 4.1 However, the AO was not satisfied with the details furnished by the assessee in support of such loan received by him. As per the AO, it was the onus of the assessee to furnish the confirmation, bank details, source of income of the loan parties. But the assessee failed to do so. Accordingly, the AO treated the entire amount of loan of ₹ 53,57,640/- as discussed above as unexplained cash credit under section 68 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,00,000/- - 4. Other Parties ₹ 15,42,640/- - ₹ 15,42,640/- - ₹ 15,42,640/- 5. Total ₹ 53,57,640/- - ₹ 53,57,640/- ₹ 20,50,000/- ₹ 33,07,640/- 6.1 The learned CIT-A accepted the explanation of assessee with respect to the loan amount of ₹ 2 Lacs received from Shri Mithulesh Kumar P Patel that such party has provided the fund to the assessee out of maturity of fixed deposit. 6.2 The learned CIT-A on perusal of bank statement of loan parties namely Shri Parshottambhai Mohanbhai Patel and Shri Kalpeshkumar Parshottambhai Patel found that the assessee has received loan of ₹ 4.85 lacs and 31.3 lacs only on different dates. However only an amount of ₹ 3 lacs and 15.5 Lacs from the respective parties found to be sourced from maturity of fixed deposit maintained with bank. Thus the ld. CIT-A held that the remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Loan Parties Amount of loan Addition confirmed 1. Parshottambhai Mohanbhai Patel ₹ 4,85,000/- ₹ 1,85,000/- 2. Kalpeshkumar Parshottambhai Patel ₹ 31,30,000/- ₹ 15,80,000/- 3. Others ₹ 15,42,640/- ₹ 15,42,640/- 4. Total ₹ 51,57,640/- ₹ 33,07,640/- 10.1 With respect to the loan taken by the assessee for ₹ 15,42,640/- from the parties namely, Jayeshkumar Patel (₹ 6,82640/-), Ashwin M Patel (₹ 5 lacs) and friends and relative (₹ 3.6 lacs), we note that there was no detail furnished by the assessee in support of such parties. These details include evidences to prove the identity, creditworthiness of the parties and the genuineness of the transactions. The assessee has furnished the identity of the parties only which is not sufficient enough to discha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of section 251(2) of the Act. Secondly, the assessee has discharged the onus by furnishing the necessary details in support of genuineness of such loan. Furthermore, the assessee was not under the obligation to explain the source of source in the hands of the lenders. 10.6 As regards the 1st contention of the learned AR of the assessee that there was the enhancement of addition made by the learned CIT-A, we disagree with the contention of the learned AR. It is for the reason that the assessee himself has submitted that he has received the loan of ₹ 4.85 lacs from the party namely Shri Parshottambhai Mohanbhai Patel. The relevant submission of the assessee before the learned CIT-A reads as under: The appellant has received unsecured loan from Patel Parshottambhai Mohanbhai of ₹ 485000/- ₹ 300000/- received by account payee cheque no.52780 drawn in the Salal Nagrik Sahkari Bank Ltd. Saving Bank A/c No.02648 and remaining amount of ₹ 185000/- received by account payee cheque no.52780 drawn in Bank of India, saving a/c no.240010100002174. 10.7 Thus, from the above submissions, there remains no ambiguity that the learned CIT- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties for the amount of ₹ 15,42,640/- is hereby confirmed. Hence the ground of appeal of the assessee is partly allowed. 11. The 2nd issue raised by the assessee in ground Nos. 2 to 5 is common and interconnected. Therefore, we have clubbed all of them together for the purpose of adjudication for the sake of brevity and convenience. The interconnected issue raised by the assessee is that the learned CIT-A erred in confirming the addition made by the AO for ₹ 79,33,788/- on account of investments made in different properties. 12. The assessee in the year under consideration has purchased certain pieces of agricultural lands bearing different survey numbers. Out of such pieces of lands, 3 agricultural lands, which are in dispute, detailed as under: S. Nos. Survey number Amount of investments 1. 125 at Ta. Prantji ₹ 48,24,400/- 2. 124 at Ta. Prantji ₹ 2,11,90,400/- 3. 143 at Ta. Dhanduka ₹ 9,17,900/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 393198 1/3/2011 6,24,400/- 12.2 The assessee in support of the impugned transaction as discussed above has furnished the confirmation from the parties along with their PAN numbers and party wise/ date wise payment to vendor along with cheque details. Accordingly the assessee, contended that the impugned transactions were carried out through the banking channel and therefore the genuineness of the same cannot be doubted. The assessee, also submitted that the sum of ₹ 2 lacs was directly deposited from his bank account. 12.3 However, the AO during the assessment proceedings found that the assessee failed to furnish the necessary details about the availability of funds in the hands of the parties who have made payments on behalf of the assessee to vender. Likewise, the assessee has not furnished any information whether the loan parties have filed the income tax return. Accordingly, the AO doubted on the creditworthiness of the parties. Thus the AO treated the impugned amount of loan entries shown by the assessee as unexplained cash credit under section 68 of the Act except the sum of ₹ 2 lacs and added the remaining amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other parties (other than ₹ 1.4 by brother and ₹ 47,98,912/- from his own bank) failed to furnish the necessary details about the availability of funds in the hands of the parties who has made payment on behalf of the assessee to vendor. Likewise, the assessee has not furnished any information whether the loan parties have filed the income tax return. Accordingly, the AO doubted on the creditworthiness of the parties. Thus the AO treated the impugned amount of loan entries for ₹ 23,91,488/- shown by the assessee as unexplained cash credit under section 68 of the Act and added the same to the total income of the assessee. Property at Ta Dhanduka survey no. 143 12.7 The AO during the assessment proceedings observed on the basis of AIR information that the assessee has purchased a property at Dhanduka at 8.75 lacs and incurred stamp duty charges at ₹ 42,900/- aggregating to ₹ 9,17,900/-. However, the assessee has not disclosed the same in his income tax return. Likewise, the assessee has not disclosed the source of money used for making the impugned investments in the property. Accordingly the AO treated the investment as unexplained in pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any documentary evidence the explanation of the appellant that the cheque number has been mentioned in the sale deed and the payment has been made through banking channel cannot be accepted. It cannot be considered as sufficient evidence to discharge the onus cast on the appellant. The appellant has therefore, not been able to explain the source of investment of ₹ 4 lakh which is claimed to have been made in the name of this person. In view of these facts,I am of the considered view that the addition made by the AO in respect of this investment under section 69 was justified. The same is accordingly upheld. ii. The appellant has claimed that payment of ₹ 10 lakh has been made by Shri Praknit Bhavsar, the details of which are mentioned at serial No. 3 4 of the above table. It is noted that the appellant has given some information from the above person. The person has a PAN and is a non-resident Indian. The money has been given by cheque from bank account and copy of the same has been submitted. An examination of the bank account of this person show that the amount has been received by him through clearing from some other bank account and subsequently the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven to the appellant for purchase of properly are not clear. The addition under section 69 in this respect is therefore, upheld. v. The appellant has claimed that another payment of ₹ 6 lakh was made by one Mr Aroon Mafatlal Patani, as per the details mentioned at serial No. 8 9 of the above table, to Jayanti Distributors Private Limited. It is noted that the appellant has given some confirmation from this person. It holds a permanent account number. The payment has been made through banking channel. The appellant has also given a copy of telephone bill in support of proving the identity of the person. If has also given a copy of the bank account from which the cheques have been issued. It is noted that in the bank account, i.e. Bank of India, the cheque: have been issued against the available credit balance in the account. An examination of the bank account shows that there was some balance in the bank account of the person from which the cheques have been issued. However the sources of the funds in the the bank account are not given. If is also noted that though the depositor has a PAN number, if is not filing the return of income as no details regarding filing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus. The addition made by the AO in this/ respect is therefore, upheld. The appellant has also claimed that the payment of ₹ 3.5 lakh has been made by one Mr Deepak Ganpatlal Sharrna, as per the details mentioned at serial number five of the above table. The appellant has given confirmation from the above person, if is also given a copy of the PAN and driving licence of the person. The payments have been issued through cheque drawn on a bank account in ICO bank. The sources of funds and nature thereof has been discussed in detail in preceding pages in para (vi), wherein the issue of funds given by him for purchase of another property has been discussed. After examining various details it has been held by me that the sources of funds given by this person are doubtful and cannot be considered as explained. In view of these facts, I am of the considered opinion, that the appellant not discharged its onus of proving the source of payment from that person. The addition made by the AO is therefore, upheld. The appellant has also claimed that payment of ₹ 1041488/- has been made by one Devabhai Patel, as per the details at serial No.6 of the above table. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to the investments made for survey numbers 125 and 124 submitted that the AO has made the addition under the provisions of section 68 of the Act by observing that the assessee failed to explain the source of money in the hands of the party who has made the payment on behalf of the assessee for making the investments. However, the learned CIT-A has confirmed the addition under the provisions of section 69 of the Act considering the impugned investments as unexplained. As such, the learned CIT-A has changed the stand for confirming the addition by treating the same as unexplained investment under the provisions of section 69 of the Act. As per the learned AR, the change in the stand of the learned CIT-A is enhancement of income but the same has been done without giving any opportunity of being heard to the assessee as mandated under the provisions of section 251(2) of the Act. Accordingly, the addition sustained by the learned CIT-A under different provisions of the Act without providing the opportunity of being heard to the assessee is unsustainable. 17. The learned AR on merit with respect to the investments made for survey numbers 125 and 124 submitted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal 28,17,900/- 18. On the other hand, the learned DR vehemently supported the order of the authorities below. 19. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates to the source of investment made by the assessee in the properties as discussed above. 19.1 The assessee in the year under consideration has made the investments in the properties bearing survey No. 125 and 124 out of borrowed fund from different individual. Admittedly, the AO made the addition with respect to the investment made by the assessee out of borrowed fund in the property bearing survey No. 125 and 124 under the provisions of section 68 of the Act. The AO was of the view that the assessee failed to justify the source of fund from the unsecured loan parties. However, the learned CIT-A has treated the impugned investments as unexplained in pursuance to the provisions of section 69 of the Act. Indeed, the learned CIT-A has change the stand for confirming the addition made by the AO which is nothing but enhancement of income. Therefore, it appears that it was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23,91,488), we note that the assessee has furnished the necessary details such as confirmation, PAN, license, bank statement of the lender, the cheque number as appearing in the conveyance deed and confirmation, light bill, banks statements etc. about the parties from whom the assessee has taken the unsecured loan. These details are placed in the paper book. The details of such parties stand as under: S. No. Name of persons Amount of loan (Rs.) Invested in survey no Relevant page of paper book 1. Prakrut Bhavsar 10,00,000/- 125 76 to 79 2. Maunik Ishwarbhai Bhavsar 15,00,000/- 125 80 to 83 3. Aroon Mafatla Opatani 6,00,000/- 125 84 to 89 4. Deepak Ganpatlal Sharma 6,24,400/- 125 90 to 95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above discussion and case law we hereby held that the assessee has discharged his onus casts for explanation of investment to the extent of ₹ 51,58,888/- in property bearing survey numbers 125 and 124. Hence the addition of ₹ 51,58,888/- cannot be sustained. 19.6 Before parting, it is important to note that the assessee has claimed to have made investments in the properties bearing survey numbers 125 and 124 out of the money received from three other parties as detailed below: 1. Sanjaybhai Jadeja ₹ 4,00,000/- 2. Dipali Bhadres Modi ₹ 5,00,000/- 3. Dilipbhai Zala ₹ 10,00,000/- 19.7 However, at the time of hearing the learned AR has changed his stand by contending that there was a gift of ₹ 2,04,20,000/- which was accepted as genuine. As per the learned AR only a sum of ₹ 1.40 crores was utilized towards the investments in the impugned properties. Therefore the balance amount of ₹ 64,20,000/- should be treated as against the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a note of production chart report of Sabarkantha district was of the view that the assessee was in a position to produce the crop of ₹ 1 lacs per hectare aggregating to ₹ 3 Lacs. Thus, the AO treated the balance amount of ₹ 4 Lacs as income from other sources. 22. Aggrieved assessee preferred an appeal to the learned CIT-A. 23. The assessee before the learned CIT-A contended that the agricultural land available with him is 6.67 hectare but inadvertently failed to bring to the notice of the AO during the assessment proceedings. Accordingly, the assessee before the learned CIT-A filed the additional evidences in support of his claim. As such it was the contention of the assessee that even the rate as adopted by the AO for the production of agriculture crop is taken then also the agricultural income of the assessee stands at ₹ 6,67,000/- only. 24. However, the learned CIT-A confirmed the order of the AO by observing as under: After carefully examining all the evidences produced by the AO it is noted that the appellant had not furnished the details of land which he is now seeking to produce in the appellate proceeding. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if any addition is sustained under the provisions of section 68 of the Act, then the same should be treated as used for the investments under section 69 of the Act if any confirmed. 29. The learned AR before us submitted that if any addition is sustained under the provisions of section 68 of the Act, then there cannot be any addition to the extent of such amount invested in the unexplained properties in the manner provided under section 69 of the Act, otherwise, it would lead to the double addition. As such, the learned AR before us prayed to grant the benefit of telescoping if any. 30. On the other hand, the learned DR opposed to give the benefit of telescoping on the reasoning that the assessee failed to establish the nexus between the amount of unexplained cash credit viz a viz the investment made in the unexplained properties. 31. We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that there cannot be double addition under the provisions of Act for the same item of income. In other words, if any addition has made under the provisions of section 68 of the Act then its application cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
