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TMI Blog2025 (3) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... the opening cash balance ought not to be added as deemed income. It be so held now and addition sustained be deleted. 2. The ld. CIT(A) [NFAC] further also grievously erred both in law arid on facts in confirming the addition of Rs. 20,90,000/- ignoring the submission that considering the overall availability of cash, the deposits in bank accounts was fully and satisfactorily explained. Since the source of such deposit is explained, the addition made and sustained is not justified. It be so held now and addition of Rs. 20,90,000/-be deleted. 3. The ld CIT(A) [NFAC] also grievously erred both in la wand on facts in confirming the addition of Rs. 36,10,000/- on irreleval grounds and ignoring the fact that merely on account of alleged reply of the purchasers and without inquiry with the person through whom cars were sold and also ignoring the documentary evidence of sale note furnished is wholly unjustified. It be so held and the additions made of Rs. 36,10,000/- be directed to be deleted now. 4. The ld CIT(A) [NFAC] further grievously erred both in la wand on facts in confirming addition of Rs. 1,10,00,000/- received from Late Prabhatsinhji Thakor as contribution for joint vent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of various sources of the cash deposits made by the assessee in his bank account, during the demonetization period and one of the sources of deposit claimed by the assessee was out of opening cash balance of Rs. 88,64,304/-. The Assessing Officer, however, after analyzing the history of returns filed by the assessee was of the view that the authenticity of the opening cash balance of Rs. 88,64,304/- declared by the assessee was not authenticated. The Assessing Officer analysed the returns of income filed by the assessee from A.Y. 2011-12 onwards and observed that the assessee was only earning salary income and declaring meagre return of income in the vicinity of Rs. 1.5 lakhs to Rs. 2.5 lakhs for previous assessment years and therefore, the assessee was not able to demonstrate that he had substantial income to justify opening cash balance of Rs. 88,64,304/- declared by him, for the impugned assessment year. The Assessing Officer was of the view that the assessee has not submitted any documentary evidence to demonstrate that he had other sources of income, other than salary income to justify the huge opening cash balance of Rs. 88,64,304/- declared by him. Accordingly, the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no allegation that the assessee earned any income, other than salary income, outside the books of accounts. As far as opening balance is concerned, the Counsel for the assessee submitted that the cash flow statement was prepared by the assessee based only on the withdrawals made by the assessee from his bank accounts in the prior years. The assessee had submitted cash book from 01.04.2012 to 31.03.2017 which had been prepared only on the basis of entries of cash withdrawals and deposits from assessee's bank accounts. Therefore, once it is accepted by the Assessing Officer that the assessee had only one source of income i.e. salary income, addition under Section 69A of the Act is not permissible. Further, it was submitted that the Assessing Officer has not pointed out to any entry in the cash book as being incorrect or unexpalined. Even as on 01.04.2015, the opening cash balance was Rs. 75,75,779/- and no infirmity was pointed out with respect to this figure submitted by the assessee. The Counsel for the assessee submitted that the entire cash book and opening cash balance were only based on the withdrawals and deposits made by the assessee in his bank account and once there are wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,04,10,000/- and the balance withdrawal of Rs. 20,90,00/- remained explained by the assessee and therefore, the claim of the assessee to that extent cannot be considered. Accordingly, an amount of Rs. 20,90,000/- was added as income of the assessee under Section 69A of the Act. 11. Before us, the Counsel for the assessee submitted that Assessing Officer erred in making addition of Rs. 20,90,000/- since no infirmity has been found in the total availability of cash as per cash flow statement submitted by the assessee. Further, the Assessing Officer has not pointed out to any specific item not matching with the earlier withdrawals and cash on hand as opening balance. Since there is no specific allegation that the assessee had utilized the cash withdrawals elsewhere, in our view, there is no reason for the Assessing Officer to make addition of Rs. 20,90,000/- under Section 69A of the Act. 12. On going through the facts of the instant case, we observe that no specific observations were made by the Assessing Officer while making the addition that the assessee had utilized the cash withdrawals elsewhere and further, the Assessing Officer has not pointed out as to why the cash withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete mismatch between assessee's facts and details of purchase obtained from Mr. Darshan Lakhani. Accordingly, a sum of Rs. 24,10,000/- was added as unexplained income of the assessee. 17. In appeal, Ld. CIT(A) confirmed the additions with the following observations: "6. Ground no 4 is against the addition of Rs. 12,00,000 in respect of amount received from sale of Renault Fluence and Santro treating the same as unaccounted income. Ground no 5 is against the addition of Rs. 24,10,000 received in cash by the appellant from Sale of Mercedez Benz. The appellant submitted sale letter/delivery notes. The assessing officer issued notices u/s 133(6) to buyers of above cars. Buyers of Fluence arid Santro did not respond to notice. The buyer of Mercedes stated that alleged payment "of Rs. 24,10,000/- by way of cash is extremely wrong. I have purchased Mercedise car for Rs. 50.00 lacs (approximately) by obtaining loan from Kotak Mahindra Prime Ltd and said payment has been made by cheque only". The appellant claimed that the sale of Mercedes was through M/s. Kamadhenu motors. However he could not produce confirmation letter and bank statement, of Kamadhenu motors showing cash payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partly allowed. Ground No. 4: Ld. CIT(A) erred in confirming addition of Rs. 1,10,00,000/- received from Late Prabhatsinhji Thakor as contribution for joint venture under Section 68 of the Act. 22. The brief facts of this ground are that during the course of assessment proceedings, the Assessing Officer observed that assessee had shown cash receipts of Rs. 1.10 crores from Shri Prabhatsinghji Thakor against Development joint venture MOU for land situated at Moti Bhura, Ahmedabad. The assessee also filed copy of joint venture MOU for Moti Bhura Land Development dated 15.10.2016 signed between the assessee and Pratapsingh Ataji Thakor for a sum of Rs. 2,20,00,000/-. On perusal of the MOU, the Assessing Officer observed that the terms of the MOU does not mention any fact regarding cash receipts of Rs. 1,10,00,000/- from Shri Pratapsingh Ataji Thakor as claimed by the assessee. Since the assessee had introduced cash receipt of Rs. 1,10,00,000/- on 31.10.2016, in his cash book, the assessee was asked to prove the genuineness of such cash receipt. Further, on verification, the Assessing Officer observed that Shri Pratapsingh Thakor had not filed any return of income and the creditworth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were found to be non-existent, and the onus to establish the identity of the investor companies, was not discharged by the assessee. The appellant stated that the cash payment is received from a business partner or investor as per MoU. In above decision, the Supreme Court reiterates that even if the amount is received through banking channels, the recipient has to prove creditworthiness of investor. In the instant case cash was received from a non-filer. Respectfully following the guidance of Supreme Court, it is hereby held that as long as the creditworthiness of a payer or creditor stands disproved the burden of proof of the appellant is not discharged. Hence the addition u/s 69A is sustained and ground no 6 is dismissed." 24. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) confirming the addition made in the hands of the assessee. 25. On going through the facts of the instant case and in light of the arguments put forth by the Counsel for the assessee, we observe that the Joint Development deal with Shri Prabhatsingh Attaji Thakore did not materialize and the land development in terms of the MOU never took place. Further, we were also in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id company was also not proved by the assessee. Accordingly, in light of the above facts, the Assessing Officer was of the view that a sum of Rs. 49,99,900/- was liable to be treated as unexplained income in the hands of the assessee. 28. In appeal, Ld. CIT(A) confirmed the addition in the hands of the assessee with the following observations: "8. Grounds 7, 8 and 9 are against the addition of Rs:49,99,900 as unexplained income. The appellant had sold 4,99,990 shares of Balsam Enterprise Pvt. Ltd to Fincruise Credit Services Pvt Ltd. It was very unusual that share transaction was conducted in cash. The sale was off market and the appellant was director of the purchasing company. So the assessing officer asked for cash book of the company as proof of cash transactions. The appellant claimed that there was corresponding entry of payment in the audited books of purchaser company. However there is no mention of cash payment. As per hank statement the appellant had received Rs. 1,50,00,000 from Fincruise Credit Services Pvt Ltd through banking channels on 16.12.2016 - the share sale was on 25.10.2016. On an earlier occasion the assessee had issued D.Ds of Rs. 1,00,00,000/- in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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