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TMI Blog2025 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ns from whom it was received as contravention of RBI Rules without any legal framework and he had also failed to go through the Return of DMC filed with IT department. The instructions given by CBDT for scrutinising deposit during demonetised period will show that the appellant had complied the instructions given as is there is no violation of CBDT instructions. The Assessing Officer and CIT NFAC had failed to take into consideration the above while passing the order Ground no:2 a) The CIT(A) NFAC erred both in law and in facts in confirming additions of Rs. 48,117,383/-(Being properties purchased in earlier years brought into books by crediting capital account) u/s69 as unexplained investments and taxed u/s 115BEE b) He failed to into consider the rep dt. 03/12/2019 given by appellant showing how the personal property is purchased were brought into books to understand the fact that the personal properties purchased in 2006, 2008, 2009, 2010 and 2012 out of debits to Capital Account brought into business books by CREDITING Capital Account to give a better view of financial affairs, taking only one part of the ENTRY in the book and treated as UNEXPLAINED INVESTMENTS which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115BBE of the Act. Apart from that the AO has made an addition of Rs. 84,000/- under the head 'rental income' and also the difference in turnover as per the service tax return and as per the income-tax return to the tune of Rs. 2,14,36,263/- under the head 'business income'. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A). 4. Before the Ld.CIT(A), the assessee submitted that fees collected from students during the demonetization period in SBNs was not prohibited up to the date of 30.12.2016 (appointed date) and hence, the additions made by the AO is not justified. In support of the claim of the assessee, he relied on the decision of Vizag Bench of ITAT in ITA No.76/Viz/2021 & CO No.42/Viz/2024 and prayed for deleting the addition. However, the Ld.CIT(A) on perusal of the submissions made by the assessee was not convinced and confirmed the addition of Rs. 24 lakhs by passing an order dated 31.07.2024 by holding as under:- "7.1 Grounds of appeal number 1: Vide ground number 1, the appellant has assailed the addition of Rs. 24,00,000/- made by AO as unexplained cash deposits. The appellant has claimed that the source of these deposits were exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income in the capacity of Individual and has declared the properties purchased earlier for first time in the return of income under consideration. In the absence of any documentary evidence, the action of the AO in treating the amount of Rs. 48,17,383/- as unexplained investment u/s 69 r.w.s 115BBE of the Act is justified. Therefore, the addition of Rs. 48,17,383/- made by the AO u/s r.w.s.115BBE of the Act for AY 2017-18 treating it as unexplained investment is confirmed. Accordingly, the ground no.2 of the appeal is dismissed." Aggrieved, assessee is in appeal before us. 5. The Ld.AR for the assessee submitted that the assessee has maintained proper books of accounts which were duly audited u/s. 44AB of the Act and the assessee has furnished the entire cash book explaining the sources of cash deposits during both assessment and first appellate proceedings. Before us, the Ld.AR submitted a paper-book having 885 pages consisting of cash book for the entire financial year 2016-17, receipts collected from students including the SBNs, cash balance as on 08.11.2016, statement of fixed assets as on 31.03.2016 as well as 31.03.2017 along with the details of written down value, proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired from 2006 to 2012 are given below:- Details Document No. year Date of Purchase Amount in Rs. Plot No. 24, Shree Balaji Nagar 11222/2006 20.09.2006 3,43,490/- Plot No. 27, Associate Avenue 12131/2006 10.10.2006 1,42,245/- Plot No. 17, Associate Avenue 12132/2006 10.10.2006 1,38,720/- Plot No. 302, Naveen Nagar II 12917/2006 31.10.2006 1,04,880/- No.135, Narasamangalam 7325/2008 27.05.2008 1,23,260/- Flat @ Kilkattalai Village 2160/2009 16.06.2009 5,27,212/- House ICL Home Phase part 2 3308/2010 29.03.2010 21,94,900/- Flat F 3rd floor Azeez Nagar II Street 3470/2012 08.11.2012 12,42,676/- Total 48,17,383/- The registered documents for the above said properties are given in pages 396 to 550 of assessee's paper-book. Since the assets have already been purchased in the earlier assessment years out of the explained source of income and by debiting to the capital account during the respective earlier assessment years, the addition made in the impugned assessment year amounts to double taxation and hence, prayed for deleting the same. 6. Per contra, the Ld.DR submitted that the assessee has accepted the SBNs after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w relied upon by the ld. DR, and we find that, in the said case, the Tribunal after considering the decision of Hon'ble Apex Court in the case of Apex Laboratories (P) Ltd vs DCIT (135 Taxmann.com 236), held that, one arm of the law cannot be utilized to defeat the other arm of law and doing so would be opposed to public policy and bring the law into ridicule. In our considered view, the case law relied upon by the ld. DR is not applicable to the facts of the present case for the simple reason that, the Tribunal has not considered the facts of cash deposits in light of explanation offered by the assessee with regard to source for cash deposits. However, it went on the legal issue of validity of legal tender of specified bank notes after 08.11.2016. The said issue has been considered by the coordinate bench in the case of M/s. Purani Hospitals Suppliers Pvt Ltd vs DCIT (Supra) and held that, there is no prohibition in accepting specified bank notes from 08.11.2016 up to 31.12.2016, in light of specified bank notes (Cessation of Liability) Act, 2017. Therefore, we prefer to follow the decision of Coordinate bench, which is more appropriate in light of facts of the present case and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2013 (Page No.803 of 811 of paper book) showing that these assets have been purchased by debiting the same to the capital account in the respective assessment year along with the borrowings from the banks/financial institutions. We find that the assessee has borrowed from banks / financial institutions to purchase/acquire these assets as detailed below: Asst.Year Name of the Bank Amount 2006-07 PNB Housing Finance 13,00,000/- 2010-11 TNSC Bank Noombal - 3308/2010 21,94,900/- 2013-14 Dhanam Agency 11,50,000/- Total 46,44,900/- 7.2 We find that the assessee has duly submitted the particulars pertaining to the loans obtained for the purpose of acquiring the assets in question and has substantiated the sources of funds utilized for such acquisitions during the relevant assessment years, in addition to the income declared in those respective years. Furthermore, it is observed that the immovable properties in question, acquired during the period from Year 2006 to 2012, are supported by registered sale deeds executed in favour of the assessee. In light of the foregoing, it is our considered view that the ld. CIT (A) has erred in upholding the additions in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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