TMI Blog2004 (8) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted that he deposited the amount out of sale proceeds of agricultural land for Rs. 1,50,000 at Village Bhairupa on 26th Aug., 1997. Photocopy of the sale deed was furnished before the AO. The creditor also stated that he received pension from State Government and also earned agricultural income. The creditor produced a copy of saving account with State Bank of Patiala in which he deposited Rs. 80,000 from 3rd Feb., 1998 to 14th Feb., 1998. The creditor purchased the draft from his saving fund account and the AO after discussing the explanation of the creditor has rejected such explanation on the ground that there was a time gap of about 5 months in the sale of agricultural land and depositing the amount in the bank. The AO has further observed that as per sale deed the amount was received earlier but the AO has failed to prove that the deposits of Rs. 80,000 were not made out of the sale proceeds of Rs. 1,50,000. The creditworthiness of the creditor was proved by the assessee and the AO made the addition of Rs. 80,000 out of the deposit of Rs. 97,000 without any basis. The AO has partly accepted the credit. It was pleaded that since the assessee has discharged the onus of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural land at village Laundewala for Rs. 3,00,000 on 20th Jan., 1997. Photocopy of the sale deed was furnished before the AO that Shri Baldev Singh deposited Rs. 40,000 through payee's account pay order dt. 23rd June, 1997, purchased from Punjab Sind Bank, Extension Counter, Muktsar, on 23rd June, 1997, and deposited the same with the company. According to the AO the amount could be given to the son at the time of complete partition of the family only. The AO has further doubted the contention of the assessee because the land was sold in January, 1997, and the pay order was purchased in June, 1997. The AO failed to prove that the amount of sale proceeds was utilised by the depositors somewhere else. The AO failed to appreciate the fact that the only business of the company is to accept deposits from the public and the interest was duly credited to the accounts of the creditors. The assessee proved the identity, capacity and source of the creditors. 5. The learned CIT(A) while considering and accepting the plea of the assessee has concluded to delete such addition with respect to both the creditors as per para 3.2 of the order as under: "I have given careful considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1998-99. Thus, the AO failed to provide an opportunity to the assessee to clarify the factual position. Moreover, the interest was credited to the account of the creditor. The assessee proved the identity, capacity and source of credit. 7. The learned CIT(A) while considering and accepting the plea of the assessee has concluded to delete this addition also as per para 4.2 of the order as under: "I have given careful consideration to the views expressed by both the sides and hold that there is weightage in the arguments advanced by the learned counsel of the appellant. Shri Rajinder Singh was produced before the AO and his statement was also recorded. He has confirmed the deposit of Rs. 49,000 through pay order dt. 11th June, 1997. He explained that he along with his brother and sister-in-law own 430 kanals of agricultural land at village Ghudiana and the amount of Rs. 49,000 was deposited out of Theka of agricultural land. The AO, on the other hand, rejected the contention of the assessee because of the entry in the Jamabandi of the creditor that he mortgaged 16 kanals of agricultural land. The finding of the AO that the creditor mortgaged 104 kanals of agricultural land is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gift of Rs. 30,000 and the savings of agricultural income for making deposit of Rs. 49,900 with the appellant. The appellant also produced Shri Jagjit Singh, father of the creditor before the AO and his statement was recorded. Shri Jagjit Singh also confirmed the fact of making gift to his daughter. The assessee also filed the Jamabandi of Shri Jagjit Singh. Therefore, the identity of the creditor, source of credit and genuineness of the transaction have been proved beyond any doubt. Therefore, the addition made by the AO is not justified and stands deleted." 10. Against the deletion of all the additions aggregating to Rs. 2,79,218, the Department is in appeal and the main thrust of argument of the learned Departmental Representative is that in some cases it was a time gap between the source of receipt of the amount and the payment of the assessee and in one case, there was occasion for gifting the amount of Rs. 30,000 was birth of son and amounts should not have been given to the other party when it belongs to the son on whose birth the same was given by the father of the creditor and in one of the cases portion of the land was not mortgaged to the bank for obtaining credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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