ACIT, Jaipur V. SHRI VIVEK GUPTA, Jaipur

ITA 120/JPR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91844 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY MALLICK
• Assessee Lawyers: MANISH AGARWAL CA DHK
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Source of fund; Onus to prove
• Section: 143(3); 131; 68; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE:SHRI T.R. MEENA,AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 120/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ACIT CIRCLE- 5 JAIPUR CUKE VS. SHRI VIVEK GUPTA 30, KAMAL GATTA COLONY OPP. NIWAS GARDEN, JANTA MARKET, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABOPG 3690 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALLICK, ADDL. CIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/03/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08 /04/2016 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 14-11-2011 FOR THE ASSESS MENT YEAR 2008-09 WHEREIN THE SOLITARY GROUND OF THE REVENUE IS AS U NDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE ADDITION OF RS. 1,06,15,290/- MADE BY THE AO U/S 69 OF THE I.T. ACT, 1961 WITHOUT APPR ECIATING THE FACT THAT THE ASSESSEE FAILED TO PROVE THE GENU INENESS OF HIS CLAIM OF HAVING RECEIVED CASH ADVANCES OF RS. 3 5.00 LACS EACH FROM THREE AGRICULTURISTS. ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 20-09-2008 DECLARING TOTAL INCOME OF RS. 5,45,470/- ELECTRONICALLY. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY. HOWEVER, THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AT A TOTAL INCOME OF RS. 1,14,32,689/- BY MAKING VARIOUS ADDIT IONS / DISALLOWANCES AND BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT BY THE AO. 2.2 NOW THE APPEAL OF THE REVENUE IS THAT THE LD. C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,06,15,299/- MADE BY THE AO WITHOUT APPRECIATING THE FACTS AND THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF HIS CLAIM OF HAVING RECEIVED ADVANCES OF RS. 35. 00 LACS EACH FROM THREE AGRICULTURISTS. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS PURCHASED A LAND AMO UNTING TO RS. 1.50 CRORES DURING THE YEAR UNDER CONSIDERATION IN TERMS OF THE REGISTERED DEED 30-05-2007 AND AS PER AIR INFORMATION AVAILABLE WIT H THE DEPARTMENT AND HE NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS AGAINST THIS LAND IN FOLLOWING MANNER. S.N. DATE OF PAYMENT AMOUNT MODE OF PAYMENT 1. 24-05-2007 25.00 LACS THROUGH DD 2. 24-05-2007 25.00 LACS THROUGH DD 3. 24-05-2007 25.00 LACS THROUGH DD 4. NOT MENTIONED 75.00 LACS THROUGH CASH ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 3 THE AO FURTHER OBSERVED THAT IT IS CLEAR FROM THE A BOVE DETAILS THAT THE ASSESSEE HAS MADE CASH PAYMENTS OF RS. 75.00 LACS F OR THE PURCHASE OF LAND BESIDES THE PAYMENTS OF RS. 31,15,290/- MADE I N CASH FOR REGISTRATION CHARGES FOR THE WHICH THE AO ASKED THE ASSESSEE EXP LAIN THE SOURCE OF PAYMENTS MADE FOR PURCHASE OF SUBJECT PROPERTY. THE LD. AR OF THE ASSESSEE SUBMITTED VIDE HIS LETTER THAT THE PAYMENT OF RS. 75.00 LACS MADE THROUGH DD WAS THE LOAN TAKEN FROM HIS FATHER SHRI RAM PRAKASH GUPTA WHO HAD TAKEN THE LOAN FOR THE SAME AMOUNT FROM ICI CI BANK AND NECESSARY DOCUMENTS AS TO CONFIRMATION OF LOAN FROM THE ICICI BANK BY THE FATHER OF THE ASSESSEE ARE SUBMITTED. AS REGARD S THE PAYMENTS MADE IN CASH, IT IS CONTENDED THAT THE ASSESSEE HAS TAKEN A DVANCE OF RS. 35.00 LACS EACH FROM THREE AGRICULTURISTS NAMELY SHRI PANNA LA L SHARMA (NOW DECEASED) S/O SHRI UDARAM, SHRI GULAB CHAND SHARMA S/O SHRI UDARAM AND MOOL CHAND SHARMA S/O SHRI UDARAM WHO ARE THE R ESIDENTS OF VILLAGE SARANGPUR, TEHSIL SANGANER, DISTT. JAIPUR. THE ASSESSEE HAS FURTHER STATED THAT HE HAS RECEIVED THE PAYMENTS IN CASH IN DIFFERENT DAYS DURING THE PERIOD FROM 2005 TO 2007 FROM THE ABOVE NAMED A GRICULTURISTS AGAINST THE PROPOSED SALE OF THE LAND PURCHASED BY THE ASSE SSEE AND THE ASSESSEE FILED THE BANK STATEMENTS ALONGWITH THEIR CONFIRMAT IONS IN SUPPORT OF THE ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 4 AVAILABILITY OF CASH IN THE HANDS OF THE AGRICULTUR ISTS. THE REPLY OF THE ASSESSEE WAS CONSIDERED BY THE AO TO THE EXTENT OF THE PAYMENTS MADE THROUGH DD OUT OF THE LOAN TAKEN FROM HIS FATHER WA S FOUND SATISFACTORY AS THE SAME WAS GIVEN BY HIS FATHER SHRI RAM PRAKAS H GUPTA OUT OF THE LOAN TAKEN FROM ICICI BANK. AS REGARDS THE REPLY O F THE ASSESSEE ON THE SOURCE OF CASH PAYMENT OF RS. 1,06,15,290/- WAS NOT FOUND CONVINCING AND SATISFACTORY BY THE AO AS THE ASSESSEE HAD FAIL ED TO SUBSTANTIATE HIS CLAIM BY SUBMITTING PROPER EVIDENCES. THE AO OBSERV ED THAT THE ASSESSEE HAD PURCHASED THE PROPERTY IN MAY 2007 AND IT IS UN BELIEVABLE BY HIM THAT THE ASSESSEE HAS TAKEN ADVANCE BOOKING AGAINST THE SAID PROPERTY MUCH BEFORE THAT AND THE AO FURTHER OBSERVED THAT R EGISTRATION FORMALITIES OF THE LAND TOOK PLACE MUCH AFTER THE ADVANCE RECEI VED BY THE ASSESSEE . HENCE THE AO CONSIDERED THAT ASSESSEE HAS FAILED TO FURNISH THE PROPER EVIDENCES AND THE ASSESSEE HAS MADE A STORY TO EXPL AIN THE PAYMENT MADE IN CASH OUT OF HIS UNDISCLOSED INCOME. IN VIEW OF T HE ABOVE FACTS, THE AO OBSERVED THAT IT IS CLEARLY ESTABLISHED THAT SOURCE OF CASH PAYMENT OF RS. 75,00,000/- IS MADE TO THE SELLER AND RS. 31,15,290 /- TOWARDS REGISTRATION CHARGES IS REMAINED UNEXPLAINED, THEREFORE, THE AO ADDED A SUM OF RS. 1,06,15,290/- TO THE INCOME OF THE ASSESSEE U/S 69 OF THE ACT. ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 5 2.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION OF RS. 1,06,15,209/ - BY OBSERVING AS UNDER:- 5.1 I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT . THE AO AS PER AIR INFORMATION AVAILABLE WITH THE DEPARTMEN T DIRECTED THE ASSESSEE TO EXPLAIN THE SOURCES OF INVESTMENT IN TH E PURCHASE OF LAND FOR RS 1.5 CRORES. BESIDES ABOVE, THE ASSESSEE HAD ALSO PAID CASH OF RS 31,15,290/- FOR REGISTRATION OF SALE AGREEMENT. IN RESPONSE, THE ASSESSEE EXPLAINED THAT HE HAD OBTAINED LOAN OF RS 75,00,000/- FROM HIS FATHER SH. RAM PRAKASH GUPTA. IN SUPPORT, THE ASSES SEE ALSO FILED COPY OF LOAN SANCTION LETTER FROM ICICI BANK FOR SANCTIO N OF LOAN OF RS 75,00,000/- TO SH. RAM PRAKASH GUPTA, WHO IN TURN A DVANCED THE SAME TO THE ASSESSEE. THE AO WAS SATISFIED WITH THE EXPL ANATION RENDERED BY THE ASSESSEE AND CREDIT OF RS 75,00,000/- WAS ACCEP TED AS GENUINE. HOWEVER AS REGARDS ADVANCES OF RS 1.05 CRORES RECEI VED FROM SH. PANT LAL SHARMA, SH. GULAB CHAND SHARMA AND SH. MOOL CHA ND SHARMA, THE AO IGNORED THE ALLEGED CONFIRMATIONS FILED BY THE ASSE SSEE WHICH INTER-ALIA ALSO CONTAINED THEIR COMPLETE ADDRESSES AND PANS OF THESE PERSONS. THE ASSESSEE ALSO FILED COPY OF AGREEMENT TO SALE HOWEVER THE AO HELD THAT THE EVIDENCES FILED BY THE ASSESSEE WE RE BASICALLY IN THE NATURE OF AN AFTERTHOUGHT. THE AO HELD THAT THE REP LY OF THE ASSESSEE WAS NOT CONVINCING AS HE HAD PURCHASED THE PROPERTY IN MAY, 2007 AND IT WAS UNBELIEVABLE THAT HE COULD HAVE TAKEN ADVANC E BOOKING AGAINST THE SAID PROPERTY MUCH BEFORE ITS ALLEGED PURCHASE. ON CAREFUL CONSIDERATION OF FACTS IN ENTIRETY, I AM INCLINED T O ACCEPT THE ARGUMENTS OF THE APPELLANT. THE COUNSEL OF APPELLANT HAS FURN ISHED CONFIRMATIONS FROM THE ALLEGED BUYERS. IN THE CASE OF LATE SH. PA NNA LAL SHARMA, HIS PAN WAS STATED TO BE BNBPS2468F. THE CONFIRMATION W AS SIGNED BY HIS LEGAL HEIR, SH. OM PRAKASH SHARMA. IN THE CONFI RMATION, IT WAS STATED THAT SH. PANNA LAL SHARMA HAD SOLD HIS AGRIC ULTURAL LAND TO VARIOUS BUILDERS AND HE HAD RECEIVED CHEQUES OF RS 1,29,88,800/- ON SALE OF LAND. THE BANK STATEMENT OF SH. PANNA LAL S HARMA WITH CENTRAL BANK OF INDIA, SARANGPURA WAS ALSO FILED AND HE HAD BALANCE OF RS 1,11,78,833/- AS ON 19.04.2005. HE MADE CASH WITHDR AWAL OF RS 9,00,000/- ON 19.04.2005, CASH WITHDRAWAL OF RS.20, 00,000/- ON 20.04.2005, CASH WITHDRAWAL OF RS 3,00,000/- ON 21. 05.2005, CASH ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 6 WITHDRAWAL OF RS.40,00,000/- ON 02.06.2005, CASH WI THDRAWAL OF RS 8,00,000/- ON CASH WITHDRAWAL OF RS 5.00.000/- ON 21.07.2005, CASH WITHDRAWAL OF RS 6,00,000/- ON 16.08.2005, CASH WIT HDRAWAL OF RS 4,00,000/- ON 16.09.2005 AND CASH WITHDRAWAL OF RS 9,00,000/- ON 21.09.2005. THE CASH WITHDRAWALS OF SH. PANNA LAL S HARMA TO THE EXTENT OF RS 1,04,00,000/- WERE SUFFICIENT TO EXPLA IN THE CASH ADVANCES OF RS 35,00,000/- TO THE APPELLANT . IN THE CASE OF SH. GULAB CHAND SHARMA, HIS PAN WAS STATED TO BE BNBPS2469E. HE HAD SIGNED THE CONFIRMATION WHEREIN IT WAS STATED THAT HE HAD SOLD HIS AGRICULTURAL LAND TO VARIOUS BUILDERS AND RECEIVED CHEQUES OF RS 1,29,88,800/- ON SALE OF LAND. THE BANK STATEMENT OF SH. GULAB CHAND SHARMA WITH CENTRAL BANK OF INDIA, SARANGPURA WAS ALSO FILED AN D IT SHOWED CASH WITHDRAWAL OF RS 9,90,000/- ON 02.04.2005, CASH WIT HDRAWAL OF RS. 9,00, 000/- ON 19.04.2005, CASH WITHDRAWAL OF RS 20 ,00,000/- ON 20.04.2005, CASH WITHDRAWAL OF RS 1,00,000/- ON 18. 05.2005, CASH WITHDRAWAL OF RS 4,00,000/- ON CASH WITHDRAWAL OF RS 1,00,000/- ON 04.07.2005, CASH WITHDRAWAL OF RS.5,00, 000/- ON 05 .07.2005, CASH WITHDRAWAL OF RS 5,00,000/- ON 15.07.2005, CASH WIT HDRAWAL OF RS 4,00,000/- ON 18.07.2005 AND CASH WITHDRAWAL OF RS 3,00,000/- ON 26.07.2005. THE CASH WITHDRAWALS OF SH. GULAB CHAN D SHARMA TO THE EXTENT OF RS 66,90,000/- WERE SUFFICIENT TO EXPLAIN THE CASH ADVANCES OF RS 35,00,000/- TO THE APPELLANT . IN THE CASE OF SH. MOOL CHAND SHARMA, HIS PAN WAS STATED TO BE BNBPS2467L. HE HAD SIGNED THE CONFIRMATION WHEREIN IT WAS STATED THAT HE HAD SOLD HIS AGRICULTURAL LAND TO VARIOUS BUILDERS AND RECEIVED CHEQUES OF RS 1,29,80,800/- ON SALE OF LAND. THE BANK STATEMENT OF SH. MOOL CHAND SHARMA WITH CENTRAL BANK OF INDIA, SARANGPURA WAS ALSO FILED AN D IT SHOWED CASH WITHDRAWALS OF RS 3,00,000/- ON 08.04.2005, CASH WI THDRAWAL OF RS 9,00,000/- ON 19.04.2005, CASH WITHDRAWAL OF RS 20, 00,000/- ON 20.04.2005, CASH WITHDRAWAL OF RS 1,35,000/- ON CA SH WITHDRAWAL OF RS 74,000/- ON 14.05.2005, CASH WITHDRAWAL OF RS 9, 50,000/- ON 09.06.2005, CASH WITHDRAWAL OF RS 1,50,000/- ON 22. 06.2005 AND CASH WITHDRAWAL OF RS 7,00,000/- ON 25.06.2005. THE CASH WITHDRAWALS OF SH. MOOL CHAND SHARMA TO THE EXTENT OF RS 52,09,000 /- WERE SUFFICIENT TO EXPLAIN THE CASH ADVANCES OF RS 35,00,000/- TO T HE APPELLANT. I DO AGREE WITH THE ARGUMENTS OF THE APPELLANT THAT IF AO HAD ANY DOUBT REGARDING THE GENUINENESS THESE CASH ADVANCES, SHE COULD HAVE ISSUED SUMMONS TO THE CONCERNED BUYERS WHO HAD GIVEN THE C ASH ADVANCES. NO MATERIAL WAS BROUGHT ON THE RECORD TO REJECT THE CO NFIRMATIONS AND ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 7 AGREEMENT TO SALE DATED 11.01.2007. I HAVE ALSO PER USED THE AGREEMENT TO SALE DATED 11.01.2007 AND NOTHING ABNORMAL IS NO TICED. THE STAMP PAPERS WERE PURCHASED ON 07.12.2006. THE AGREEMENT WAS DULY NOTARIZED BY THE NOTARY PUBLIC. THE AGREEMENT WAS S IGNED BY THE BUYERS AND THE ASSESSEE. IT WAS ALSO WITNESSED BY TWO WITN ESSES. IT WAS ALSO SIGNED BY THE ADVOCATE I.E. SH. R.S. SHARMA. IN THE PRESENT CASE, THE BUYERS HAD ALSO EXPLAINED THE SOURCES OF CASH IN HA ND BY SUBMITTING THEIR BANK STATEMENTS. UNDER THESE FACTS, THE AO HA D NO LEGAL SANCTITY OR ADVERSE MATERIAL IN HER POSSESSION TO MAKE THE I MPUGNED ADDITION. IT WAS HELD IN THE CASE OF CIT VS BRIJ PAL SHARMA (333 ITR 229) T HAT WHEN THE ASSESSEE REQUESTED FOR SUMMONS TO PARTY TO PROVE VERACITY OF HIS CLAIM, THE AO COULD NOT HAVE MADE THE DISALLOWA NCE WITHOUT EXAMINATION. IT WAS OPEN TO THE AO TO EXERCISE AUTH ORITY VESTED IN HIM UNDER SECTION 131 OF THE ACT, SO AS TO SUMMON PERSO NNEL FROM THE FIRM IN ORDER TO DETERMINE THE VERACITY OF THE MATERIAL RELIED UPON BY THE ASSESSEE. HAVING NOT TAKEN THE PROCEDURAL REQUIREME NT, IT WAS NOT OPEN TO THE ASSESSING OFFICER TO REJECT THE MATERIAL PRO DUCED BY THE ASSESSEE. IN THE PRESENT CASE, SINCE THE ALLEGED BUYERS HAD C ONFIRMED THE TRANSACTIONS AND SOURCE OF THE SOURCE STOOD EXPLAIN ED, IN SUCH CIRCUMSTANCES THE OBSERVATION OF THE AO AS TO WHY T HE APPELLANT HAD ENTERED INTO ADVANCE SALE OF LAND PRIOR TO PURCHASE OF LAND DID NOT REQUIRE COGNIZANCE. IT WAS ALSO THE PREVAILING MARK ET PRACTICE AND APPELLANT WAS NO EXCEPTION TO IT. THERE IS NO EVIDE NCE OR MATERIAL TO EVEN SUGGEST, AS POINTED OUT ON BEHALF OF THE ASSES SEE, THAT THE CASH DIRECTLY OR INDIRECTLY EMANATED FROM THE ASSESSEE S O THAT IT COULD BE SAID THAT THE ASSESSEES OWN MONIES WERE BROUGHT BA CK IN THE GUISE OF ALLEGED ADVANCES. THE BURDEN TO PROVE THAT APPARENT WAS NOT REAL LAY ON THE SHOULDER OF THE REVENUE. THE AO HAD NOT BROU GHT ANY MATERIAL ON RECORD TO FALSIFY THE CLAIM OF THE ASSESSEE EXCE PT STATING THAT IT WAS IN THE NATURE OF AN AFTERTHOUGHT. ON THE OTHER HAND , THE ASSESSEE HAD PROVED THE SOURCES OF SOURCES OF THE CREDITORS BY P RODUCING CONFIRMATION AND AGREEMENT TO SALE. IT IS WELL SETT LED LAW THAT WHILE CONSTRUING AN INSTRUMENT, THE SURROUNDING CIRCUMSTA NCES TO FIND OUT ITS TRUE NATURE AND THE REALITY OF THE RECITALS MADE IN THE DOCUMENTS MUST ALWAYS BE CONSIDERED BUT IT DOES NOT M E AN THAT LEGAL RELATION RESULTING FROM SUCH TRANSACTION COULD BE IGNORED. THE APPELLANT HAD ESTABLISHED TRUTH OF THE RECITAL MADE IN THE AGREEMENT TO SALE BY PRODUCING BANK STATEMENTS OF THE CREDITORS, FULLY EXPLAINING THE S OURCE OF SOURCE OF THE CREDITORS BEFORE THE AO. IN THE CASE OF CIT VS SURE SH KUMAR KAKAR ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 8 (324 ITR 231), THE MOTHER OF THE ASSESSEE HAD GIVEN GIFT OF RS 24. 77 LAKHS TO HER SON IN CASH. THE ASSESSEE HAD FILED HE R CONFIRMATION AND ALSO HER BANK ACCOUNT, YET THE AO TREATED IT AS UNE XPLAINED. IT WAS HELD BY HONOURABLE DELHI HIGH COURT THAT THE CONCLUSIONS OF THE ASSESSING OFFICER AND CIT (APPEALS) WITH REGARD TO THE GENUIN ENESS OF THE TRANSACTIONS WERE MERELY CONJECTURAL AND BASED ON S URMISES AND ASSUMPTIONS. SUCH CONJECTURES AND ASSUMPTIONS COULD NOT TAKE THE PLACE OF PROOF, ONCE THE ASSESSEE HAD DISCHARGED TH E PRIMARY BURDEN WHICH HAD BEEN CAST UPON HIM. THE TRIBUNAL HELD THA T WHEN THE IDENTITY AND THE CAPACITY WERE PROVED BEYOND DOUBT AND THE S OURCE OF THE GIFTS WAS THE MOTHER, THERE WAS NO QUESTION OF MAKING THE ADDITION UNDER SECTION 68 OF THE ACT. IT WAS HELD THAT THE FINDING S RECORDED BY THE TRIBUNAL DID NOT SUFFER FROM ANY PERVERSITY. IN THE CASE OF TAM TAM PEDDA GURUVA REDDY VS JCIT (291 ITR 44), THE ASSESSEE, A CONTRACTOR, EXECUTED NUMEROUS CONTRACTS AND SOME OF THEM WERE E XECUTED IN OUT OF THE WAY AT PLACES WHERE BANKING FACILITIES WERE POO R. FOR THE ASSESSMENT YEAR 1992-93, THE ASSESSING AUTHORITY AD DED A SUM OF RS. 2,87,000 ON ACCOUNT OF LOAN ADVANCED BY ONE SH RAJA REDDY TO THE ASSESSEE. THE TRIBUNAL SUSTAINED THIS ADDITION HOLD ING THAT SH RAJA REDDY WAS A RELATIVE OF THE ASSESSEE, THAT HE COULD NOT HAVE SAVED OR ADVANCED SUCH A HUGE SUM OF RS 2,87,000 TO THE ASSE SSEE AND THAT THERE WAS NO PROOF OF THE SOURCE OF THE LOAN. IT WAS HELD BY HONBLE KARNATAKA HIGH COURT THAT THAT THE AFFIDAVIT FILED BY SH RAJA REDDY SHOWED THAT HE HAD INCOME FROM AGRICULTURE AND FROM BUSINESS AND THAT HE HAD TWO FIXED DEPOSITS WHICH HAD MATURED DU RING THE SAID PERIOD. THEREFORE, THE SOURCE OF INCOME HAD BEEN CL EARLY SPELT OUT IN HIS AFFIDAVIT AND THIS CREDIT COULD NOT BE TREATED AS UNEXPLAINED CREDIT IN TERMS OF SECTION 68. IN THE PRESENT CASE, THE CR EDITORS HAVE ALSO SATISFACTORILY EXPLAINED THEIR SOURCES OF INCOME AN D CASH WITHDRAWALS ARE ALSO SUBSTANTIATED BY THEIR BANK STATEMENTS. I THEREFORE DIRECT THE AO TO DELETE THE ADDITION OF RS 1,06,15,290/- MADE BY HER. THIS GROUND OF APPEAL IS ALLOWED. 2.4 NOW THE REVENUE IS BEFORE US WHEREIN THE LD. DR RELIED ON THE ORDER OF THE AO CONTENDING THAT THE AO HAS RIGHTLY MADE ADDITION OF RS. 1,06,15,290/- IN ASSESSEE'S HANDS. ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 9 2.5 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE RELIED ON HIS FOLLOWING WRITTEN SUBMISSION. , THE LD. AO MADE AN ADDITION U/S 69 OF THE INCOM E TAX ACT, 1961 BY TREATING AN AMOUNT OF RS. 1,06,15,290/- AS UNEXPLAINED INVESTME NT IN PURCHASE OF AN IMMOVABLE PROPERTY SITUATED AT AGRA ROAD, JAIPUR FOR A TOTAL CONSIDERA TION OF RS. 1,50,00,000/- AND REGISTRATION CHARGES OF RS. 31,15,290/-WITHOUT PROPERLY APPRECIA TING THE EXPLANATION OF ASSESSEE REGARDING SOURCE OF PAYMENT OF CONSIDERATION AND WITHOUT APPR ECIATING FOLLOWING CRUCIAL FACTS ESTABLISHING THE SOURCE OF FUNDS IN THE HANDS OF AS SESSEE WHICH IS DEPICTED AS UNDER: 1. THAT, THE AMOUNT OF RS. 1,06,15,290/- (PAID IN C ASH) WAS PAID OUT OF AMOUNTS RECEIVED FROM FOLLOWING THREE PERSONS:- S.NO. NAME OF PERSON AMOUNT 1. SH. PANNA LAL SHARMA (NOW DECEASED) 35,00,000.00 2. SH. GULAB CHAND SHARMA 35,00,000.00 3. SH. MOOL CHAND SHARMA 35,00,000.00 TOTAL 1,05,00,000.00 2. THAT, THESE ADVANCES WERE GIVEN IN ACCORDANCE WI TH AN AGREEMENT BETWEEN ASSESSEE AND THE ABOVEMENTIONED PERSONS. IT HAS BEEN STATED IN THIS AGREEMENT THAT, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO PURCHASE WITH THE OWNE R OF THE SUBJECT PROPERTY AND WAS IN NEED OF MONEY TO PAY THE SALE CONSIDERATION. TO CATER TO THIS NEED, THE ABOVEMENTIONED THREE PERSONS AGREED TO SUPPLY AN AMOUNT OF RS. 1.05 CROR ES AND IN RETURN, ASSESSEE AGREED TO HAND OVER 2/3 RD (UNDIVIDED) PART OF THE SUBJECT LAND. A COPY OF TH IS AGREEMENT WAS ALSO SUBMITTED BEFORE THE LD. AO. 3. THAT, THE ABOVE MENTIONED PERSONS HAVE ADMITTED ADVANCING THE SAID AMOUNTS TO ASSESSEE IN THEIR CONFIRMATIONS FILED BEFORE THE LD . AO WHICH CONTAINED THEIR COMPLETE NAMES, ADDRESSES AND RESPECTIVE PANS. THUS, COMPLETE EVIDE NCES STOOD SUBMITTED BEFORE LD. AO SO AS TO ESTABLISH THE SOURCE OF FUNDS INVESTED IN PUR CHASE OF THE SUBJECT PROPERTY. NOT ONLY THIS, BUT THE ASSESSEE HAS BEEN ABLE TO ESTABLISH THE SOU RCE OF SOURCE BY SUBMITTING THEIR BANK STATEMENTS WERE THEY HAVE SUFFICIENT WITHDRAWALS IN CASH. THUS, THERE REMAINED NO GROUND FOR AO TO MAKE ADDITION U/S 69. IT IS SUBMITTED THAT ALL THESE CRUCIAL FACTS WERE B RUSHED ASIDE BY THE LD. AO AND WENT ON TO HOLD THE AMOUNT OF RS. 1,06,15,290/- PAID BY ASSESSEE FOR PURCHASE OF SUBJECT PROPERTY AS UNEXPLAINED INVESTMENT U/S 69. NEVERTHELESS, DUR ING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A), ALL THESE FACTS ALONG WITH RELEV ANT EVIDENCES (ALREADY SUBMITTED BEFORE LD. AO) WERE SUBMITTED WHO AFTER PERUSING THEM CAREFULL Y PASSED A VERY REASONED ORDER, ACKNOWLEDGING THEREIN ALL THE ABOVE-MENTIONED FACTS AND THEREBY DELETED THE ADDITION MADE BY LD. AO. A BARE PERUSAL OF THE ABOVE OBSERVATIONS OF LD. CIT (A) AS CONTAINED IN PARA 5.1 AT PAGES 15-18, WOULD CLEARLY SHOW THAT THE ORDER OF L D. CIT(A) IS VERY WELL REASONED ORDER, PASSED AFTER DUE EXAMINATION OF ACTUAL FACTS AND CI RCUMSTANCES OF THE CASE AND AFTER PAYING DUE REGARD TO THE CASE LAWS SQUARELY APPLICABLE IN THE FACTS OF THE CASE AND THUS, LEAVES NO SCOPE FOR INTERFERENCE ON ANY GROUNDS. ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 10 THEREFORE, IN LIGHT OF THE ABOVE IT IS PRAYED THAT THE OBSERVATIONS OF THE LD. CIT(A) MAY PLEASE BE UPHELD AND THE APPEAL OF THE DEPARTME NT MAY PLEASE BE DISMISSED. HOWEVER, WITHOUT PREJUDICE TO THE ABOVE PRAYER AND ON MERITS OF THE CASE, FOLLOWING SUBMISSION IS MADE AS UNDER: AS HAS ALREADY BEEN MENTIONED ABOVE THAT, DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE HAS PURCHASED AN IMMOVABLE PROPERTY SITUAT ED AT AGRA ROAD, JAIPUR FOR A TOTAL CONSIDERATION OF RS. 1,50,00,000/- AND AGREEMENT WA S DULY REGISTERED WITH SUB-REGISTRAR, JAIPUR VIDE REGISTRATION DEED DATED 30.05.2007 . TH E PAYMENT OF PURCHASES CONSIDERATION WAS MADE BY THE ASSESSEE IN THE FOLLOWING MANNER:- S.NO. AMOUNT MODE OF PAYMENT TYPE OF PAYMENT 1. 25,00,000.00 THROUGH DD PURCHASES CONSIDERATION 2. 25,00,000.00 THROUGH DD PURCHASES CONSIDERATION 3. 25,00,000.00 THROUGH DD PURCHASES CONSIDERATION 4. 75,00,000.00 THROUGH CASH PURCHASES CONSIDERATION 5. 31,15,290.00 THROUGH CASH REGISTRATION CHARGES AS REGARDS TO THE SOURCE OF PAYMENT IT WAS SUBMITTE D THAT THE ASSESSEE HAS OBTAINED LOAN OF RS. 75 LACS FROM HIS FATHER WHO HAS TAKEN L OAN OF SAME AMOUNT FROM ICICI BANK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE HAD SUBMITTED CONFIRMATION OF LOAN TAKEN ALONGWITH THE SOURCE IN THE HANDS IN THE SHAP E OF COPY OF LOAN SANCTION LETTER FROM ICICI BANK WITH REGARD TO LOAN TAKEN BY SHRI RAM PRAKASH GUPTA (ASSESSEES FATHER) ALONGWITH RELEVANT PAPERS TO FORTIFY THE FACT THAT THE MONEY AS RECEIVED FROM THE BANK AS LOAN GIVEN TO THE ASSESSEE WHICH WAS ACCEPTED AS GENUINE CREDIT B Y LD. AO. AS REGARDS TO THE PAYMENT MADE IN CASH OF RS. 1,06, 15,290/- [RS. 75,00,000/- TOWARDS SALE CONSIDERATION AND RS. 31,15,290/- TOWA RDS REGISTRATION CHARGES] IT WAS CONTENDED THAT THE ASSESSEE HAS TAKEN ADVANCE IN CA SH OF RS. 1.05 CRORES FROM THREE PERSONS NAMELY SHRI PANNA LAL SHARMA (NOW DECEASED) S/O UDA RAM, SHRI GULAB CHAND SHARMA S/O SHRI UDARAM AND MOOL CHAND SHARMA S/O SHRI UDARAM W HO ALL ARE RESIDENT OF VILLAGE SARANGPURA TEHSIL SANGANER, DISTT. JAIPUR AND ARE A GRICULTURISTS, AGAINST THE ONWARD SALE OF THE PROPERTY PURCHASED (UNDER REFERENCE) BY THE ASS ESSEE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS RECEIVED ADVANCES IN CASH ON DIFFE RENT DATES DURING THE PERIOD FROM 2005 TO 2007 FROM THESE PERSONS AGAINST THE PROPOSED SALE O F LAND PURCHASE BY THE ASSESSEE. THE NECESSARY COPY OF CONFIRMATIONS WERE SUBMITTED CONT AINING THEIR COMPLETE NAME, ADDRESSES AND PAN NOS. IT IS FURTHER SUBMITTED THAT ALL THE T HREE PERSONS ARE ASSESSED TO INCOME TAX AND HAVING SUFFICIENT SOURCE IN THEIR HANDS IN THE SHAP E OF DRAWINGS FROM THEIR BANK ACCOUNTS OUT OF THE SALE PROCEEDS OF THE LANDS OWNED BY THEM IN PREVIOUS YEARS, COPY OF THE SAME WERE ALSO SUBMITTED BEFORE LD. AO . THE LD. AO WITHOUT PROPERLY CONSIDERING THE SUBMISS ION MADE AND WITHOUT APPRECIATING THE EVIDENCES ADDUCED IN SUPPORT OF CL AIM OF THE ASSESSEE HAS HELD THAT ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM BY SUBMITTING PROPER AND NECESSARY EVIDENCE AND IT IS A STORY MADE BY THE ASSESSEE JUST TO EXPLAIN THE PAYM ENT MADE IN CASH OUT OF HIS UNDISCLOSED INCOME.[PAGE 6, PARA 2 OF ASSESSMENT ORDER] HE FUR THER OBSERVED THAT THE REPLY OF THE ASSESSEE IS AN AFTERTHOUGHT AND TREATED THE PAYMENT OF RS. 75.00 LACS TO THE SELLER AND RS. 31,15,290/- TOWARDS REGISTRATION CHARGES AS UNEXPLA INED AND MADE THE ADDITION OF RS. 1,06,15,290/- TO THE TOTAL INCOME OF THE ASSESSEE U /S 69 OF THE INCOME TAX ACT, 1961. WHILE OBSERVING SO THE LD. AO HAS FULLY IGNORED THE EVIDENCES FILED IN SHAPE OF CONFIRMATIONS, CONTAINING NECESSARY DETAILS OF THES E PERSONS, COPIES OF BANK STATEMENT IN ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 11 SUPPORT OF SOURCES OF FUNDS IN THEIR HANDS, IF THE LD. AO HAD ANY DOUBT REGARDING GENUINENESS OF RECEIPTS OF ADVANCE FROM THESE PERSONS HE SHOULD HAVE ISSUED THE SUMMON U/S 131 TO THESE PERSONS TO KNOW ACTUAL STATE OF TRANSACTIONS AS ALL THE NECESSARY DETAILS WERE AVAILABLE WITH THE LD. AO. BUT THE LD. AO WITHOUT RESORTING THE LE GAL COURSE AVAILABLE, HAS HELD THAT REPLY OF THE ASSESSEE IS AN AFTERTHOUGHT ON MERE ASSUMPT IONS AND PRESUMPTIONS. THE LD. AO HAS FURTHER DOUBTED SOURCES OF PAYMENT B Y GIVING THE FINDING THAT THE ASSESSEE PURCHASED PROPERTY IN MAY, 2007 AND IT IS UNBELIEVABLE THAT THE ASSESSEE HAS TAKEN ADVANCE BOOKING AGAINST THE SAID PROPERTY MUCH BEFO RE THAT. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE HAS MADE HUGE INVESTMENT IN PURCHASE O F IMMOVABLE PROPERTY WITH AN INTENTION OF ITS FURTHER SELL TO VARIOUS PARTIES AFTER HAVING GOOD PROFIT ON INVESTMENT. FOR THIS PURPOSE HE ARRANGED FUNDS FROM PROSPECTIVE BUYERS WHO INTEREST ED IN THE SAID PROPERTY AND LOAN TAKEN FROM HIS FATHER WHO HAD TAKEN LOAN FROM BANK OF SAM E AMOUNT AFTER HAVING VARIOUS BANK FORMALITIES. FURTHER ADVANCE FROM EACH PERSON WAS R ECEIVED RS. 35.00 LACS IN A PERIOD OF 2 YEARS WHICH IS NOT SUCH A LONG DURATION AS IN PROPE RTY DEALINGS ADVANCES ARE RECEIVED IN INSTALLMENTS OVER A PERIOD OF TIME. THUS OBSERVATIO N OF LD. AO IS BASELESS AND SAME DESERVES TO BE IGNORED AND EXCLUDED. IN SUPPORT OF THE DEALI NG A COPY OF AGREEMENT BETWEEN THE ASSESSEE AND THE PERSONS WHO MADE THE ADVANCE WERE ALSO SUBMITTED . THE ASSESSEE HAS PROVED THE CREDITS BY SUBMITTING THE COMPLETE NAME, ADDRES S, ASSESSMENT PARTICULARS, CONFIRMATION AND COPY OF BANK STATEMENTS OF THE PERSONS WHO MADE THE ADVANCES AND NO ADVERSE MATERIAL WAS BROUGHT ON RECORD BY CONDUCTING INDEPENDENT ENQ UIRIES TO HOLD THAT THE DETAILS FURNISHED BY THE ASSESSEE ARE NOT CORRECT OR THE TRANSACTION WAS NOT GENUINE. MERELY BY STATING THAT IT IS AN AFTERTHOUGHT, IS NOT SUFFICIENT TO PROVE A GENUI NE TRANSACTION AS SHAM TRANSACTION. IT IS FURTHER SUBMITTED THAT LD. AO HAS HELD THAT I NVESTMENT MADE BY THE ASSESSEE OUT OF HIS UNDISCLOSED INCOME BUT HE HAS IGNORED THE FA CT THAT INCOME EARNED BY THE ASSESSEE FROM BUSINESS ARE DULY RECORDED IN BOOKS OF ACCOUNTS AND OFFERED FOR TAXATION AND THE SAME IS SUBJECT TO SCRUTINY ASSESSMENT YEAR AFTER YEAR. THE LD. AO HAS NOT BROUGHT ON RECORD ANY MATERIAL OR EVIDENCE TO JUSTIFY THE ALLEGED UNDISCL OSED SOURCE OUT OF WHICH ALLEGED INVESTMENT IN PROPERTY WAS MADE BY THE ASSESSEE. THUS, THE ADD ITION MADE BY THE LD. AO HAS RIGHTLY BEEN DELETED. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CAS E, IT IS SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON HIM TO PROVE THE SOURCES OF INVESTMENT MADE IN THE PROPERTY WITH ALL THE LEGITIMATE EVIDENCE AND MATER IAL AVAILABLE ON RECORD THUS THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY LD. AO. TH EREFORE, IT IS HUMBLY PRAYED THAT THE ORDER OF LD. CIT(A) MAY PLEASE BE UPHELD AND THE APPEAL O F REVENUE BE DISMISSED. TO THIS EFFECT, THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAW S. (I) 125 ITD 141 PRIYADARSHINI EDUCATIONAL ACADEMY V . ASSTT. CIT (VISAKHAPATNAM) (II) 187 TAXMAN 338 ARAVALI TRADING CO. VS. ITO (RA J.). (III) 322 ITR 394 CIT VS. TANIA INVESTMENTS PVT. LT D. (BOM.) (IV) 267 CTR 396 CIT VS. JAI KUMAR BAKLIWAL (RAJ.) (V) 361 ITR 10 CIT VS. GANGESHWARI METAL PVT. LTD. (DEL.) (VI) 357 ITR 146 CIT VS. FAIR FINVEST LTD. (DELHI) (VII) 159 ITR 78 (SC) COMMISSIONER OF INCOME-TAX V. ORISSA CORPORATION P. LTD. (VIII) CIT VS. HEERALA CHAGAN LAL 257 ITR 281 (RAJ. ) ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 12 (IX) BALBIR SING TOMAR (DR.) V/S ACIT (RAJ. HC) 20 TW 546 (X) SHEON NARAIN MOHARILAL VS ACIT 24 TW 318 (ITAT , JAIPUR) (XI) SIDEWAY INVESTMENT PVT. LTD. V/S DCIT 24 TW 14 6 (ITAT, JAIPUR) (XII) PRADEEP KUMAR HIMMATRAMKA VS ITO 27 TW 393 (I TAT, JAIPUR) (XIII) 128 TTJ 708 SHANTI KUMAR CHORDIA VS. ASSTT. CIT (JP A) (XIV) CIT VS. KISHORI LAL CONSTRUCTION LTD. [2010] 5 TAXMANN.COM 60 (DELHI) 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE ORDER OF T HE LD. CIT(A) THAT THE ASSESSEE HAS SUFFICIENT FUNDS IN CASH FOR MAKING PA YMENTS TOWARDS THE BALANCE PURCHASE CONSIDERATION AS WELL AS AMOUNT OF REGISTRATION CHARGES OF SUBJECTED LAND SITUATED AT AGRA ROAD, JAIPUR. AL L SUCH NECESSARY EVIDENCES WERE AVAILABLE BEFORE THE AO WHO HAS NOT PROPERLY APPRECIATED THEM ON MERITS AND THE LD. CIT(A) AFTER TAKING INTO CONSIDERATION ALL THE ASPECT AND THE DETAILS AVAILABLE ON RECORD OF THE C ASE DELETED THE ADDITION OF RS. 1,06,15,290/- MADE BY THE AO. CONSIDERING TH E DECISIONS CITED BY THE ASSESSEE AS WELL AS ORDER OF THE LD. CIT(A) AND ALSO LOOKING TO THE FACTS THAT THE ASSESSEE HAS BEEN ABLE TO SUBSTANTIA TE THE SOURCE IN HIS HANDS BY WAY OF CONFIRMATIONS AND BANK STATEMENT AND OTHE R DETAILS OF THE AGRICULTURISTS WHO HAD MADE THE ADVANCES TO THE ASS ESSEE, WE FIND THAT THE ORDER OF THE LD. CIT(A) TO THIS EFFECT IS REASO NED ONE AND WE FIND NO ITA NO.120//JP/2012 THE ACIT, CIRCLE- 5, JAIPUR VS. SHRI VIVEK GUPTA, J AIPUR . 13 INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS THE SOLITARY GROUND RAISED BY THE REVENUE IN ITS APPEAL IS DISMISSED. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/04/2 016. SD/- SD/- (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ( TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 /04/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT THE ACIT, CIRCLE- 5, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI VIVEK GUPTA, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 3. VK;DJ VK;QDR@ CIT 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.120/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR