Sh. Rajneesh Thakur, Ludhiana V. ACIT, C-VII, Ludhiana

ITA 1565/CHANDI/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9686 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-09-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRIATULJAYASWAL
• Assessee Lawyers: SHRISUDHIRSEHGAL
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources
• Section: 143(3); 69A; 13; 68; 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH (VIRTUAL COURT) , ! ' # , $ % BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1565/CHD/2018 / ASSESSMENT YEAR : 2011-12 SHRI RAJNEESH THAKUR SCO-545, COLLEGE ROAD, LUDHIANA THE ACIT CIRCLE-VII, LUDHIANA ./PAN NO:AAJPT3443P /APPELLANT /RESPONDENT /ASSESSEE BY: SHRISUDHIRSEHGAL, ADVOCATE ! / REVENUE BY : SHRIATULJAYASWAL, SR. DR ' # /DATE OF HEARING : 07/10/2020 $%&' /DATE OF PRONOUNCEMENT:. 23.12.2020 $ /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THE ABOVE APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA [(IN S HORT REFERRED TO AS CIT(A)] DATED 01/09/2018, RELATING TO ASSESSMENT YEAR 2011-12 , PASSED U/S 250(6)OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. GROUND NO. 1& 2, IT WAS POINTED OUT BY THE LD.COUNSE L FOR THE ASSESSEE, RELATED TO THE SAME ISSUE OF ADDITION MADE UNDER 69A OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK AMOUNTING TO RS. 16,49, 000/-,AND THE GROUNDS ARE AS UNDER: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION OF RS. 16,49,000/- IN RESPECT OF CASH DEPOSITED WITH IDBI BANK AND TREATE D THE SAME AS UNDISCLOSED INCOME U/S 69-A. 2. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE BO NAFIDE EXPLANATION FOR DEPOSIT OF CASH AND VARIOUS OTHER FACTS AS REPRODUCED BY HE R IN THE ORDER. 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 2 3. BRIEF FACTS RELATING TO THE ISSUEARE THAT DURING ASS ESSMENT PROCEEDINGS THEASSESSEE WAS ASKED TO FILE THE COMPLETE DETAILS OF THE BANK ACCOUNTS MAINTAINED BY HIM.THE ASSESSEE DULY RESPONDED, BUT THE ASSESSING OFFIC ER (AO) NOTICED THAT THE ASSESSEEHAD NOT FILED DETAILS OF HIS SAVINGS ACCOUNT MAINTAINED WITH IDBI BANK . SINCE THE ASSESSING OFFICER WAS IN POSSESSION OF INFORMATION OF ASSESSEE'S BANK ACCOUNT MAINTAINED WITH IDBI, WHEREIN THE ASSESSEE HAD DEPOSITED CASH RS. 16,49,000/- IN DECEMBER 2010, HE SPECIFICALLY ASKED THE ASSESSEE TO EXPLAIN THIS DEPOSIT . THE ASSESSEE EXPLAINED THE REASON FOR NOT FILING DETAILS OF THE SAID B ANK ACCOUNT STATING THAT HE WAS BUSY IN THE ONGOING CANCER TREATMENT OF HIS FATHER AND THE P ERSON ENGAGED IN HIS OFFICE SKIPPED TO FURNISH THE SAME. FURTHER THE ASSESSE E ALSOEXPLAINED THE SOURCE OF CASH DEPOSIT OF RS. 16,49,000/- AS BEING LOAN WHICH WAS TAKEN BY THE ASSESSEE IN HIS PERSONAL CAPACITY FROM ONE SH. BALKRISHAN DEPOSITED IN THE BANK ACCOUNT , SUBSEQUENTLY WITHDRAWN IN CASH ON DIFFERENT DATES (27.03.2010 TO 07.05 .2010) AND REDEPOSITED ON 20.12.2010 AND 21.12.2010 IN CASH RS. 8,50,000 AND RS. 7,99,000/- RESPECTIVELY.IT WAS ALSO POINTED OUT THAT THE CASH SO DEPOSITED WAS UTILIZED T O REPAY THE LOAN OF SHRI BALKISHAN BY RTGS. THE REPLY OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER FOR THE REASON THAT THE BANK ACCOUNT WAS NOT DISCLOSED BY THE ASSESSEE U NTIL CONFRONTED BY THE REVENUE AND THAT THE FACTS ON RECORD DID NOT CORROBOR ATE HIS EXPLANATION SINCE THE CASH IN HAND REFLECTED IN THE BALANCE SHEET FILED BY HIM FOR THE YEAR ENDING MARCH 2010 WAS TOO MEAGER ,RS.6,75,307/- TO JUSTIFY THE C ASH WITHDRAWN OF RS. 16,50,000/- REMAINING WITH THE ASSESSEE FOR REDEPOSIT IN THE SUCCE EDING IMPUGNED YEAR. THE RELEVANT FINDINGS OF THE AO ARE AT PARA 2.7 OF HIS ORDER .ACCORDINGLY ADDITION OF RS. 16,49,000/- WAS MADE TO THE TOTAL INCOME OF THE ASSES SEE BY RESORTING TO THE PROVISIONS OF SECTION 69A OF THE ACT HOLDING THAT THE DEPOSIT OF CA SH AMOUNTING TO RS. 16,49,000/- IN IDBI SAVINGS ACCOUNT OF THE ASSESSEE WAS ON ACCOUNT O F UNDISCLOSED INCOME OF THE ASSESSEE.THE SAME WAS UPHELD IN APPEAL BY THE LD. CIT(A ) HOLDING AT PARA 4.4 OF HIS ORDER AS UNDER: 4.4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE. AFTER G OING THROUGH THE FACTS OF THE CASE AND EXPLANATION OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AS WELL AS IN ASSESSMENT PROCEEDINGS, I AM NOT INCLINED TO AGREE WITH THE CONTENTION OF THE ASSESSEE. FIRSTLY THE ASSESSE E HAD COMPLETELY FAILED TO DISCLOSE HIS SAVING BANK ACCOUNT MAINTAINED WITH ID BI, TO THE DEPARTMENT, WHEN HE WAS SPECIFICALLY ASKED TO FILE HIS COMPLETE BANK STATEMENTS BY THE ASSESSING 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 3 OFFICER. THE ASSESSING OFFICER WAS ALREADY IN POSSE SSION OF THE INFORMATION RECEIVED THROUGH AIR, THAT THE ASSESSEE HAD GOT DEPOSITED CA SH OF RS.16,50,000/- IN DECEMBER 2010. WHEN THE ASSESSEE WAS SPECIFICALLY A SKED FOR NONDISCLOSURE OF THIS BANK ACCOUNT, THEN THE ASSESSEE PLEADED THAT, DUE TO ONGOING CANCER TREATMENT OF HIS FATHER THE STAFF OF THE ASSESSEE W AS DEALING WITH THE MATTER WHO FORGOT TO MENTION AND DISCLOSE THIS BANK ACCOUNT TO THE DEPARTMENT. THIS PLEA OF THE ASSESSEE COULD NOT BE RELIED UPON , AS THE ASSE SSEE IS AN OLD ASSESSEE AND HIS ACCOUNTS HAVE BEEN AUDITED BY A COMPETENT CHARTERED ACCOUNTANT AND WAS HAVING A TEAM OF ASSISTANTS WHO WERE DEALING THE MA TTER AS PER HIS CLAIM IN HIS ABSENCE. SECONDLY THE EXPLANATION OF THE ASSESSEE WITH REGAR D TO DEPOSIT OF THIS CASH AMOUNTING TO RS. 16,50,000/- IN DECEMBER 2010 , IN IDBI BANK ACCOUNT IS ALSO NOT TENABLE. THE ASSESSEE HAS CLAIMED ,THAT THE ASSESSE E HAD RECEIVED RS. 1,650,000 TO RS. 16,50,000/- IN THE MONTH OF MARCH ,ASS A LOA N FROM SHRIBALKISHAN .WHICH WAS GOT DEPOSITED ON 12/03/2010. IN THIS REGARD THE ASSESSEE HAS FILED CONFIRMATION FROM SHR IBALKISHAN. I FIND MYSELF IN AGREEMENT WITH THE VIEW OF THE ASSESSING OFFICER, WHEREIN THE ASSESSING OFFICER HA S NOT DOUBTED ABOUT THE SOURCE OF CASH DEPOSIT IN THE MONTH OF MARCH 2010 AS THE A SSESSEE HAS RECEIVED RS.16,50,000/- FROM SHRI BALKISHAN THROUGH CHEQUE W HICH WAS GOT DEPOSITED BY HIM IN THE BANK ACCOUNT MAINTAINED WITH IDBI BANK. HOWEVER THEREAFTER THE ASSESSEE'S SUBMISSION WITH REGARD TO THE CLAIM, THA T THE SAME AMOUNT WAS WITHDRAWN BY THE ASSESSEE AND WHICH WAS LATER ON DE POSITED BACK ON 20/12/2010IS NOT ACCEPTABLE. AS RIGHTLY MENTIONED B Y THE ASSESSING OFFICER THE CASH IN HANDAVAILABLEWITH THE ASSESSEE AS ON 31 MAR CH 2010 DOES NOT CONFIRM THE CLAIM OFASSESSEE, THAT THE ASSESSEE WAS HAVING SUFFICIENT CASH IN HAND WHICH WAS LATER ON GOT DEPOSITED IN THE IDBI BANK ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER HASMENTIONEDTHAT THE ASSESSEE HAD WITHDRAWN RS. 16 LAKH BY 29 MARCH 2010 FROM THISIDBI BANK ACCOUNT. THEREFORE TH E ASSESSEE'S CLAIM OF GETTING DEPOSITED THE SAME AMOUNT OF RS. 16,50,000/- ON 20T H AND 21ST DECEMBER 2010 ,IS NOT SATISFACTORY. THEASSESSING OFFICER HAS VERY RIG HTLY MENTIONED THAT THE AS AGAINST THE CLAIM OF THEASSESSEE THAT THE AMOUNT OF RS. 16,49,000/- PERTAINS TO THE AMOUNT WITHDRAWN INMARCH 2010, HOWEVER VERY IMPORTA NTLY THIS AMOUNT REMAINED WITH THE ASSESSEE,OUT OF BOOKS, IS NOT TEN ABLE AS THE SAME HAS NOT BEEN ENTERED BY THE ASSESSEE INHIS REGULAR BOOKS OF ACCO UNTS AT ANY POINT OF TIME. THE ASSESSING OFFICER HAS VERYRIGHTLYMENTIONED, THAT TH E ASSESSEE IN ITS BALANCE SHEET FOR THE FINANCIAL YEARENDING ON 31 MARCH 2010 HAD S HOWN CASH IN HAND OF RS. 6,75,307/- ONLY ANDTHEREFORE THE ASSESSEES CLAIM FO R GETTING THE SAME CASH WITHDRAWAL DEPOSITED INTHE BANK ON 20TH AND 21ST DE CEMBER 2000 , IS NOT BELIEVABLE. THIS EXPLANATION OFTHE ASSESSEE ALSO DE FIES THE HUMAN PROBABILITY AS DISCUSSED BY THE ASSESSINGOFFICER IN THE CASE OF CI T V/S DURGA PRASAD MORE 82 ITR 540 AND IN THE CASE OF SUMATI DAYAL 214 ITR 801 WHE RE HONOURABLE SUPREME COURT HAS DECIDED,THAT THE TAXING AUTHORITIES ARE E NTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUTTHE REALITY AN D THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMANABILITIES. HERE IN THIS CASE THE ASSESSEE HAS COMPLETELY FAILED TO EXPLAIN ITS CONDUCTAND THE EXPLANATION OF THE ASSESSEE IS BEYOND HUMAN PROBABILITY AS THE CORPORATEAND SURROU NDING CIRCUMSTANCES DOES NOT EXPLAIN THE ASSESSEE IS CONTENTION WITHREGARD T O EXPLANATION OF CASH DEPOSIT AMOUNTING TO RS. 1,649,000/- IN LDBI BANK. ACCORDIN GLY IT IS HELD THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSIT AM OUNTING TO RS. 1,649,000/- THEREFORE THE ADDITION MADE BY THE ASSESSING OFFICE R ON THIS ACCOUNT IS ORDERED TO BE CONFIRMED. WITH THE RESULT THIS GROUND OF APPEAL IS DISMISSED. 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 4 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE LOWER AUTHORITIES THAT THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT STOOD DULY EXPLAINED AS BEING THE AMOUNT OF LOAN RECEIVED FROM ON E SHRI BALK RISHAN IN THE IMMEDIATELY PRECEDING YEAR THROUGH CHEQUE, WHICH WAS SUB SEQUENTLY WITHDRAWN IN CASH ON VARIOUS DATES IN THE LAST WEEK OF THE PRECEDING Y EAR I.E. F.Y. 2009-10 WHICH CASH WAS RE DEPOSITED IN THE BANK ACCOUNT IN THE IMPUGNED YEAR IN NOVEMBER/DECEMBER 2010.LD.COUNSEL FOR THE ASSESSEE CO NTENDED THAT THE SAID EXPLANATION WAS SUBSTANTIATED WITH THE FOLLOWING SUPPORTI NG DOCUMENTS : S. NO. NATURE OF DOCUMENT RELEVANCE OF DOCUMENT PAGE NO. OF PAPER BOOK 1. COPY OF BANK STATEMENT OF IDBI BANK EVIDENCING THE AMOUNT CREDITED IN THE BANK ACCOUNT BY WAY OF LOAN, BY WAY OF CHEQUE FROM SH. BALKRISHAN WHO CONFIRMED THE SAME. THE AMOUNT OF CASH WITHDRAWN BY THE APPELLANT ON VARIOUS DATES THE SUBSEQUENT DEPOSIT OF THE WITHDRAWN CASH BY THE APPELLANT. 1 OF PAPER BOOK ENTRY DATED 12.03.2010 ENTRIES DATED 27.03.2010, 29.03.2010 A 01.05.2010 ENTRIES DATED 20.12.2010 A 21.12.2010 2. CONFIRMED COPY OF ACCOUNT OF SH. BALKRISHAN FOR THE AY 2010-11 EVIDENCES ABOUT THE FACT THAT THE SAID PARTY HAS GIVEN LOAN TO THE APPELLANT 2 OF PAPER BOOK 3. CONFIRMED COPY OF LEDGER ACCOUNT OF BALKRISHAN FOR THE AY 2011-12 EVIDENCING THE FACT THAT THE SAID AMOUNT OF LOAN WAS RETURNED BACK TO THE PARTY AND THE SAME WAS MADE THROUGH BANKING CHANNEL. 3 OF PAPER BOOK 5.1 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE FACT THAT THE ASSESSEE HAD TAKEN LOAN FOR SHR IBALKRISHAN TO THE TUNE OF 16,50,000/- AND SUBSEQUENTLY WITHDRAWN CASH FROM THE BANK AGGREGATING THE SAME AMOUNT HAS NOT B EEN DOUBTED.FURTHER NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE AMOUNT SO WITHDRAWN HAD BEEN UTILIZED ELSEWHERE BY THE ASSESSEE.THEREFORE,LD. COU NSEL FOR THE ASSESSEE PLEADED THAT THE SOURCE OF THE CASH DEPOSIT STOOD SUITABLY EXPLAINED AS BEING FROM THE CASH WITHDRAWN OUT OF THE LOAN TAKEN FROM SHRI BALKRISHAN .LD. C OUNSEL FOR THE ASSESSEETHEREAFTERCONTEND THAT THE BASIS FOR UPHOLDING T HE ADDITION WAS NOT IN ACCORDANCE WITH THE FACT OF THE CASE. DRAWING OURATTENTI ON TO THE FINDING OF THE LD. 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 5 CIT(A),LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD. CIT (A) HAD UPHELD THE ADDITION FOR THE REASON THAT: A)THE ASSESSEE HAD FAILED TO DISCLOSE THE SAVING BANK A CCOUNT MAINTAINED WITH IDBI TO THE DEPARTMENT WHEN ASKED TO FILE HIS COMPLETE BANK STATEMENTS BY THE AO. B) THAT THE CASH IN HAND AVAILABLE WITHTHE ASSESSEE AS ON 3 1/03/2010 AS REFLECTED IN HIS BOOKS OF ACCOUNTS WAS TOO SMALL AND BELIED THE EXPLANATION OF THE ASSESSEE THAT THE CASH WITHDRAWN FROM THE IDBI ACCOUNT IN THE MONTH OF MARCH 2010,WAS RETAINED BY HIM A ND LATER ON REDEPOSITED. C)THAT THE EXPLANATION OF THE ASSESSEE DEFIED ALL HUMAN P ROBABILITY. 5.2 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT IT HAD BE EN EXPLAINED TO THE AUTHORITIES BELOWTHATTHE IDBI BANK ACCOUNT DETAIL HAD NOT BEEN SUBMITTED DURING ASSESSMENT PROCEEDINGS SINCE IT WAS NOT RELATED TO THE BUSINESS OF THE ASSESSEE BUT WAS HIS PERSONAL SAVING ACCOUNT AND EVEN OTHERWISE IT HAD SUBS EQUENTLY BEEN SUBMITTED DURING ASSESSMENT PROCEEDINGS AND THEREFORE NON SUBMISSI ON AT THE FIRST INSTANCE CAUSED NO PREJUDICE TO THE DEPARTMENT. HE FURTHER POINTE D OUT THAT THE CASH BALANCE REFLECTED IN THE BOOKS OF ASSESSEE RELATED TO THAT IN HIS BUSINESS OPERATIONS CARRIED OUT AND THEREFORE HAD NOTHING TO DO WITH THE CASH WITHDRAWALS MAD E FROM HIS PERSONAL SAVING ACCOUNT. HE FURTHER CONTENDED THAT IT IS A SETTLE D LEGAL POSITION THAT NO ADDITION IS TENABLE IF CASH DEPOSIT IS MADE OUT OF CASH WITHDRAW N BY THE APPELLANT AND RELIANCE IN THIS REGARD WAS PLACED ON THE FOLLOWING JUDGMENT. ITO VS. ASHOK KUMAR JAIN IN ITA NO.180/CHD/2013, A.Y 2008-09, ORDER DT. 03/11/2015 THE ACIT VS. JOGINDE RPAUL IN ITA NO. 734/CHD/2014, A.Y. 2010-11,ORDERDT. 12/01/2015 SHRI RAVINDER SINGH NEGI VS. DCIT IN ITA NO. 811 & 812/CHD/2014, A.Y. 2009- 10 & 2010-11, ORDER 08/11/2016 5.3 LD. COUNSEL FOR THE ASSESSEE THEREFORE PLEADED THAT THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT OF RS. 16,49,000 T HEREFORE BE DELETED. 6. LD DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF T HE LD. CIT 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 6 7. WE HAVE HEARD THE CONTENTION OF BOTHTHE PARTIES AND CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUMENT S REFERRED TO BEFORE US.THE ISSUE TO BE ADJUDICATED IN THE PRESENT GROUND IS WHETHER THE CASH FOUND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IN IDBI OF RS. 16,49,00 00/- WAS FROM EXPLAINED SOURCES. THE EXPLANATION OF THE ASSESSEE SUPPORTED WITH DOCUMENTAR YEVIDENCES IS TO THE EFFECT THAT IT WAS THE LOAN TAKEN FROM ONE SHRI BALKRISHAN SOOD BY WAY OF CHEQUE WHICH WAS DEPOSITED IN THIS BANK ACCOUNT AND SUBSEQUENTLY WITHDRAWN I N CASH IN THE PRECEDING YEAR, WHICH CASH WAS REDEPOSITED IN THE BANK ACCOUNT IN THE IMPUGNED YEAR. THE CHRONOLOGY OF THE AFORESAID EVENTS AS BROUGHT OUT FROM T HE COPY OF BANK STATEMENT PLACED BEFORE US AT P.B 1 IS AS UNDER: VALUE DATE CHQ. NO. WITHDRAWAL DEPOSIT BALANCE NARR ATION 21-12-2010 022613 8,00,000 DR 4387.00 CR RTGS/IBKL H10355003251/BAL KRISHAN 21-12-2010 7,99,000 CR 8,04,387 CR LUDHIANA : CAS H RECEIPT 20-12-2010 22612 8,50,000 DR 5,387 CR RTGS/IBKLH10 355001936/BAL KRISHAN 20-12-2010 8,50,000 CR 8,55,387 CR LUDHIANA : CAS H RECEIPT 30-09-2010 387 CR 5,387 CR 27010400000467 10: INT PD:01-04- 2010 TO 30-09-2020 07-05-2010 22607 45,000 DR 5,000 CR LUDHIANA : CAS H RECEIPT 01-05-2010 22605 50,000 DR 50,000 CR LUDHIANA : CA SH RECEIPT 29-03-2010 22604 5,00,000 DR 1,00,000 CR LUDHIANA : CASH RECEIPT 29-03-2010 22603 3,00,000 DR 6,00,000 CR LUDHIANA : CASH RECEIPT 27-03-2010 22502 8,00,000 DR 9,00,000 CR LUDHIANA : CASH RECEIPT 12-03-2010 50,000 CR 17,00, 000 CR A/C OPENING BY CASH DEPOSIT 12-03-2010 16,50,000 CR 16,50,000 CR INITIAL AMOU NT DEPOSIT 8. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THERE FORE IS THAT SOURCE OF CASH DEPOSIT IN IDBI BANK IN THE IMPUGNED YEARIN TWO TRANCHES O N 20/21-12-2010 OF RS.8,50,000/- AND RS.7,99,000/-RESPECTIVELY, IS THE L OAN TAKEN FROM SH B.K SOOD BY CHEQUE DEPOSITED IN THE BANK ACCOUNT ON 12-03-2010 WHICH W AS WITHDRAWN IN CASH UPTO RS.16,00,000/- ON 27/29-03-2010 AND RS.50,000/ - ON 01-05-2010 .IT HAS BEEN ALSO 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 7 POINTED OUT FROM THE BANK STATEMENT THAT THE CASH DEPOSITE D WAS UTILIZED THE SAME DAY TO REPAY THE LOAN OF SH B.K SOOD THROUGH RTGS THUS LENDING CREDIBILITY TO THE EXPLANATION OF THE ASSESSEE THAT THE LOAN TAKEN FROM SH.B K SOOD WAS WITHDRAWN IN CASH , AND LATER REDEPOSITED TO REPAY THE SAME. 9. WE FIND MERIT IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. THE FACT OF THE ASSESSEE HAVING RECEIVED A LOAN OFRS. 16,50,000 FROM S HRI BALKRISHAN SOOD BY WAY OF CHEQUE WHICH STOOD DEPOSITED IN THIS IDBI ACCOUNT AND WHIC H AMOUNT WAS SUBSEQUENTLY WITHDRAWN IN CASH IN THE PRECEDING F.Y. ,ARE NOT DISPUTED BY THE REVENUE. THUS THERE IS NO DISPUTE ABOUT THE FACT THAT THE LOAN TAKEN BY THE ASSESSEE WAS AVAILABLE WITH HIM IN CASH ON 29-03-2010.THE SAME AM OUNT OF CASH WITHDRAWN IS FOUND TO BE DEPOSITED IN DECEMBER 2010,I.E AFTER NINE MONTHS, AND ON THE SAME DAY ITSELF TRANSFERRED BY RTGS TO SHRI SOOD AS REPAYMENT O F LOAN, WHICH FACT HAS BEEN CONFIRMED BY HIM ,COPY OF THE CONFIRMATION BEING THERE B EFORE US AT P.B 3 AND THE SAME HAS NOT BEEN DISPUTED BY THE REVENUE ALSO.THE REVE NUE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THE USAGE OF THE CASH WITHDRA WN FOR ANY OTHERPURPOSES. THEREFORE CONSIDERING THAT EXACTLY THE SAME AMOUNT OF LO AN TAKEN ,WITHDRAWN IN CASH STOOD REDEPOSITED IN CASH FOR IMMEDIATE REPAYMENT OF THE LOAN BY RTGS, ALL WITHIN A REASONABLY SHORT SPAN OF NINE MONTHS AND NO OTHER USAGE OF THE CASH WITHDRAWN BEING BROUGHT TO LIGHT,WE AGREE WITH THE LD.COUNSEL FOR THE ASSESSEE AND HOLD THAT THE PREPONDERANCE OF PROBABILITY IN THE PRESENT CASE IS THAT IT IS THE AMOUNT OF LOAN TAKEN FROM SHRI SOOD, WHICH WAS DEPOSITED IN CASH IN THE IMPUGN ED YEAR . 10. THE CONTENTION OF THE REVENUE FOR TREATING THE CASH DE POSITED AS UNEXPLAINED,WE FIND, MERITS NO CONSIDERATION AT ALL.MEREL Y BECAUSE THE ASSESSEEDID NOT SUBMIT THE COPY OF THE BANK ACCOUNT AT THE FIRST INSTANC E DURING THE ASSESSMENTPROCEEDINGS CANNOT BE THE BASIS OR REASON FOR TREATING THE CASH DEPOSITED AS UNEXPLAINED ,WHEN THE FACT OF THE MATTER IS THAT THE BA NK ACCOUNT WAS SUBSEQUENTLY FILED BY THE ASSESSEE BEFORE THE AO WHO HAD DULY EXAMI NED THE SAME AND MADE ALL NECESSARY ENQUIRY AND INVESTIGATION VIS A VIS THE SAME. MOREOVER THE REASONING OF THE LD. CIT(A) THAT THE CASH BALANCE SHOWN BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS AS ON MARCH 2010 BEING RS 6,75,307/- DID NOT JUSTIFY THE CAS H WITHDRAWAL OF RS.16,50,000/- IN MARCH 2010 BEING AVAILABLE FOR REDEPOSIT,AS EXPLAINE D BY THE ASSESSEE,DESERVES TO BE 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 8 REJECTED SINCE ,WE FIND ,THAT IT IS BASED ON INCORRECT APPRECIATION OF FACTS.AS RIGHTLY POINTED OUT BY THE LD. COUNSEL OF THE ASSESSEE THE CASH BALANCE REFERRED TO BY THE REVENUE RELATES TO THAT REFLECTED IN THE BOOKS OF ACCO UNTS OFTHE BUSINESS OF THE ASSESSEE, WHILE THE IDBI BANK ACCOUNT HAS CONSISTENTLY BEE N PLEADED AS THAT RELATING TO HIS PERSONAL SAVING ACCOUNT HAVING NOTHING TO DO WITH THE B USINESS OF THE ASSESSEE. THIS ,WE FIND ,IS SUBSTANTIATED BY THE FINANCIAL STATEMENTS OF THE ASSESSEE FOR THE IMPUGNED YEAR REFLECTING CASH BALANCE OF RS.6,75,307/-PLACED BEFORE US AT P.B 21-28,WHICH WE HAVE NOTED REFLECT HIS PROFITS FROM PROPRIETORSHIP CO NCERN AND ASSETS AND LIABILITIES THEREOF .THE REVENUE HAS NOT BEEN ABLE TO DEMONSTRATE O THERWISE AND CONTROVERT THE CONTENTION OF THE ASSESSEE.THEREFORE THE IDBI ACCOUNT BEI NG HIS PERSONAL ACCOUNT,THERE WAS NO REASON AT ALL FOR THE CASH WITHDRAWN IN THE PRECEDING YEAR FROM THE SAME BEING REFLECTED IN THE BOOKS OF THE BUSINESS OF THE ASSESSEE AND HOLDING THE ASSESSES EXPLANATION UNSATISFACTORY FORTHIS REASON BY THE REVENUEIS THEREFORE UNFOUNDED.MOREOVER ,AS HELD ABOVE BY US, THE FACTS AND C IRCUMSTANCES IN THE PRESENT CASE SHOW THAT THE PREPONDERANCE OF THE PROBABILITY WAS THAT THE CASH WITHDRAWN IN THE PRECEDING YEAR STOOD RE DEPOSITED IN THE BANK ACCO UNT OF THE ASSESSEE AS EXPLAINED BY THE ASSESSEE,THE ARGUMENT OF THE REVENUE OF THE PREPONDERANCE OF PROBABILITY GOING AGAINST THE ASSESSEE ALSO DOES NOT ST AND. 11. IN VIEW OF THE ABOVE WE HOLD THAT THE CASH DEPOSITED INTHE BANK ACCOUNT OF THE ASSESSEE IN IDBI OF RS. 16,49,000 STANDS EXPLAINED AND THE ADDITION MADE THEREFORE BY TREATING THE SAME AS UNEXPLAINED UNDER SECTION 69 OF THE ACT IS DIRECTED TO BE DELETED. GROUNDNO. 1& 2 OF THE APPEAL ARE ALLOWED. 12. GROUND NO. 3 READS AS UNDER: 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION OF RS. 61 LACS RECEIVED DURING THE YEAR BY INVOKING THE PROVISION S OF SECTION 68 AND TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURC ES. 13. IN THE ABOVE GROUND THE ASSESSEE HAS CHALLENGED THE A DDITION OF RS. 61,00,000/- MADE UNDER SECTION 68 OF THE ACT BY TREATING THE AMOUNT OF ADVANCE TAKEN FROM M/S JAMNA DAS NIKKAMAL JAIN AND SARAF PVT. LTD. AND SHRI CHAND RAKANT JAIN AS ASSESSES OWN INCOME FROM UNDISCLOSED SOURCES. 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 9 14. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FILE THE DETAILS OF THE BUSINESS ADVANCES RECEIVED BY THE ASSESSEE DURING THE ASSESSMENT YEAR. THE ASSESSING OFFI CER NOTICED THAT THE AMOUNT OF ADVANCE OF. RS.61,00,000, WHICH WERE SHOWN TO BE GIVEN B Y M/S JAMNA DASS NIKKAMAL JAIN SARAF PVT. LTD. AND SH. CHANDERKANT JAIN, AMOUNTING TO RS.50 LAKHS AND RS.11 LAKHS RESPECTIVELY., HAD NOT BEEN EXPLAINED BY THE ASSESSEE A S HE FAILED TO FILE CONFIRMATION RELATING TO THESE PARTIES. AS THE CASES OF THE ABOVE TW O PARTIES WERE PENDING FOR SCRUTINY U/S 143 (3) OF THE ACT WITH THE SAME ASSESSING OFFICER, THEREFORE WHEN THE AO ENQUIRED FROM THESE PARTIES IN THE COURSE OF THEIR ASSES SMENT PROCEEDINGS , THE SAID PARTIES REPLIED THAT THE AMOUNT WAS NO MORE RECEIVABLE FROM THE ASSESSEE. THE REPLIES FORM PART OF THE ASSESSMENT ORDER AS ANNEXURE-A AND B. T HE ASSESSING OFFICER THEREFORE HELD THAT THE AMOUNT OF RS. 61 LACS WAS UNDISCLOSED INC OME OF THE ASSESSEE AND ADDITION WAS MADE BY RESORTING TO THE PROVISIONS OF SE CTION 68 OF THE ACT. THE LD. CIT(A) UPHELD THE ADDITION HOLDING AT PARA 5.7 & 5.8 OF HER ORD ER AS UNDER: 5.7 I HAVE GONE THROUGH THE ASSESSMENT ORDER WHERE IN AS PER ANNEXURE-A AND B, THE AO HAS ANNEXED CONFIRMATION FROM M/S JAMN A DASS NIKKAMAL JAIN SARAF AND CHANDER KANT JAIN. BOTH OF THEM HAVE CONF IRMED THAT THE AMOUNT OF RS. 61 LAKH, AS CLAIMED BY THE ASSESSEE AS PENDING ADVANCE WITH THE ASSESSEE, HAS BEEN RECEIVED BY THEM, WAY BACK IN FINANCIAL YE AR 2010-2011, ON 24/11/20110. BOTH OF M/S JAMNA DASS NIKKAMAL JAIN S ARAF AND CHANDER KANT JAIN , HAVE CONFIRMED THAT THIS AMOUNT, IS NO LONGER PEN DING WITH THE ASSESSEE AS THE SAME HAVE BEEN RECEIVED BACK BY THEM IN FINANCIAL Y EAR 2010- 2011 MEANING THEREBY THAT IN THIS FINANCIAL YEAR NO SUCH LIABILI TY WAS PENDING WITH THE ASSESSEE AS CLAIMED BY HIM. THE RELEVANT PART OF THE CONFIRM ATION FILED BY THE ABOVE PARTIES ARE BEING REPRODUCED IN ABOVE PARAGRAPHS. A CCORDINGLY IT IS UNDOUBTEDLY CLEAR THAT THE ASSESSEE HAS COMPLETELY FAILED RATHE R HAS BEEN MISLEADING THE DEPARTMENT BY CLAIMING THAT ADVANCE WERE STILL PEND ING WITH HIM, WHEREAS AS EVIDENT FROM THE FACTS AS DISCUSSED ABOVE THE SAME HAD ALREADY BEEN GIVEN BACK TO THE RESPECTIVE PERSONS BY THE ASSESSEE IN T HIS FINANCIAL YEAR ITSELF. ACCORDINGLY I AM IN AGREEMENT WITH THE CONTENTION O F THE ASSESSING OFFICER WHEREIN HE HAS TREATED THIS AMOUNT OF RS. 61 LAKH A S UNEXPLAINED AND ADDED BACK TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT 1961 AS THE ASSESSEE HAS NOT EXPLAINED IT AT ALL DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5.8 I HAVE ALSO CAREFULLY CONSIDERED THE ASSESSEE'S WRITTEN SUBMISSION FILED THROUGH HIS COUNSEL AT THE TIME OF APPELLATE PROCEE DINGS, WHEREIN IT HAS BEEN REITERATED THAT THE AMOUNT WAS STILL PENDING AND SI NCE THE AMOUNT PERTAIN TO OLD ADVANCES, NO ADDITION UNDER SECTION 68 CAN BE MADE. THE ASSESSEE ALSO REITERATED, THAT IN THE SCRUTINY ASSESSMENT OF ASSE SSEE FOR THE ASSESSMENT YEAR 2008-2009 WAS COMPLETED U/S 143(3 , WHEREIN THE IMP UGNED ADVANCES RECEIVED 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 10 HAVE BEEN ACCEPTED BY THE DEPARTMENT, THEREFORE ON ACCOUNT OF THESE OLD ADVANCES, NO ADDITION CAN BE MADE IN THIS YEAR. IN SUPPORT OF HIS CONTENTION THE ASSESSEE HAS RELIED UPON FEW JUDICIAL PRONOUNCEMENT S ALSO. I HAVE GONE THROUGH THE DETAILED FACTS OF THE CASE LAWS, RELIED UPON BY THE ASSESSEE AND THE FACTS OF THE CASE. HOWEVER IN VIEW OF THE EXPLICIT STATEMENT FILED BY THE ABOVE PARTIES DURING THE COURSE OF THEIR RESPECTIVE ASSESSMENT PR OCEEDINGS WHICH HAVE BEEN REPRODUCED IN ABOVE PARAS AND THE SAME IS PART OF T HE ASSESSMENT ORDER AS ANNEXURE A AND ANNEXURE -B. IT IS UNDOUBTEDLY CLEAR ; THAT THE SAID ADVANCES HAVE ALREADY BEEN RETURNED TO THE SAID PARTIES, DUR ING THIS FINANCIAL YEAR ITSELF, THEREFORE THE ASSESSEE'S CLAIM WITH REGARD TO THESE ADVANCES RECEIVED FROM EARLIER YEARS IS NOT TENABLE. IN VIEW OF THE ABOVE GLARING FACTS IT IS HELD, THAT THE ASSESSEE HAS NOT COME FORWARD WITH THE SATISFACTORY EXPLANATION WITH REGARD TO THESE ADVANCES AND ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED TRADE ADVANCES RECEIVED FROM M/S JAMNA DASS NIKKAMAL JAIN SARAF AND CHANDER KANT JAIN, IS TREAT ED AS UNEXPLAINED AND ADDITION ON THIS ACCOUNT BY LEARNED AO IS HEREBY CON FIRMED. ACCORDINGLY THESE GROUND OF APPEAL ARE DISMISSED. 15. BEFORE US, THE CONTENTION RAISED BY THE LD. COUNSEL O F THE ASSESSEE WERE TO THE EFFECT THAT THE IMPUGNED ADDITION PERTAINED TO OUTSTANDING ADVANCES RECEIVED IN EARLIER YEARS FROM THE TWO PARTIES AND APPEARING IN THE BALANCE SHEET OF THE ASSESSEE RIGHT FROM F.Y. 2007-08 ONWARDS WHEN THE SAID ADVANCES W ERE RECEIVED AS UNDER: JAMNA DA SNIKKAMAL JAIN SARAF - RS. 50,00,000/- CHANDRAKANT JAIN - RS. 11,00,000/- 15.1 LD. COUNSEL OF THE ASSESSEECONTENDED THAT SINCE TH E IMPUGNED AMOUNT WAS RECEIVED IN EARLIER YEARS IT COULD NOT BE TREATED AS UNEXPLAINED CREDIT OF THE IMPUGNED YEAR FOR THE PURPOSE OF MAKING ADDITION UNDER SECTION 68 OF THE ACT. 15.2 OUR ATTENTION WAS DRAWN TO THE PROVISIONS OF SECTI ON 68 IN THIS REGARD AND RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISIONS IN SU PPORT OF THE CONTENTION THAT UNDER SECTION 68OF THE ACT ADDITION CAN BE MADE ONLY IN R ESPECT OF ADVANCES RECEIVED IN THE YEAR ITSELF AND NOT THAT RECEIVED IN EAR LIER YEARS. DY. CIT V. AMOD PETROCHEM (P.)LTD. [2008] 307 ITR 2 65 (GUJ.) CIT V. USHA STUD AGRICULTURAL FARMS LTD. [2008] 301 ITR 384/[2009] 183 TAXMAN 277 (DELHI) CIT VS. PRAMESHWAR BOHRA, 301 ITR 404, RAJASTHAN HIGH C OURT MAHABIR PRASAD PREM CHAND JAIN V. ITO [1988] 40 TAXMAN 35 (MAG.)(DELHI) NUCHEM LTD. V. DY. CIT [2004] 87 TTJ 166 (DELHI - TR IB.) 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 11 SHRI VARDHMAN OVERSEAS LTD.'S CASE [2008] 24 SOT 393 (DELHI) ACIT VS. SMT. N. SASIKALA 92 TTJ 1196 (CHENNAI) (TRIB .) IT WAS ALSO POINTED OUT THAT FOR THE A.Y. 2008-09 (RE LEVANT TO F.Y. IN WHICH THE ADVANCE WAS RECEIVED) THE SAID ADVANCE HAD BEEN ASSESS ED UNDER SECTION 143(3) OF THE ACT AND NO ADVERSE VIEW WAS TAKEN AGAINST THE ASSESS EE. IN THIS REGARD OUR ATTENTION WAS DRAWN TO THE FINANCIAL STATEMENTS / AUDITED BALANCE SHEET OF THE ASSESSEE FOR F.Y. 2007-08,2008-09, 2009-10 AND 2010- 2011 PLACED AT PB NO. 4 TO 39 RELEVANT PAGES BEING 7,15,24, AND 35, REFLECTING THE IM PUGNED ADVANCE IN ALL THESE YEARS. COPY OF THE ASSESSMENT ORDER FOR A.Y. 2008-09 WAS ALSO FILED BEFORE US TO SHOW THAT NO ADVERSE VIEW WAS TAKEN WITH RESPECT TO THE SAID ADVANCES IN ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT. LD. COUNSEL OF THE ASSESSEE THEREFORE CONTENDED THAT THE SAID AMOUNT CANNOT BE TREATED AS UNEXPLA INED BECAUSE NO AMOUNT HAD BEEN RECEIVED IN THE YEAR UNDER CONSIDERATION AND HAD BEEN ACCEPTED IN SCRUTINY ASSESSMENT FOR THE YEAR IN WHICH RECEIVED. THEREAFTER LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THE REVENUE HAD TREATED THE SAME AS UNEXPLAINED FOR THE REASON THAT THE SAID TWO PARTIES HAD STATED THAT THE AMOUNT ADVANCED HAD BEEN RECEIVED BACK DURING THE IMPUGNE D YEAR AND THERE WAS NO BALANCE OUTSTANDING, WHILE THE ASSESSEE ON THE OTHER HAND HAD REFLECTED THE OUTSTANDING BALANCES. LD. COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE REASONS FOR THE AFORESAID CONTRADICTION STOOD DULY EXPLAINED BY THE LET TERS SUBMITTED BY THE IMPUGNED PARTIES IN COURSE OF ENQUIRY CONDUCTED FROM THEM,DULY S UBSTANTIATED WITH EVIDENCES. REFERRING TO THE LETTER FILED BY THEM PLACED AT PAPER BOOK PAGE NO 40-45 D. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE SAID PARTIES HAD EXPLAI NED THAT THE AMOUNT OF RS.61,00,000/- STOOD OUTSTANDING IN THEIR NAMES SINCE THEY HAD ADVANCED RS. 50,00,000/- EACH TO THE ASSESSEE WHICH INCLUDED 39,00,000 IN CASH AND T HE BALANCE BY WAY OF CHEQUE TO THE ASSESSEE, FOR ACQUIRING A PROPERTY ON THEI R BEHALF WHICH INTURN HAD BEEN ADVANCED BY THE ASSESSEE TO A THIRD PARTY FOR THE SAID PURPOSES IN F.Y. 2007-08 ITSELF BUT SUBSEQUENTLY DUE TO SOME DISPUTE THE TRANSACTION WAS SHELVED AND THE THIRD PARTY HAD REFUNDED THE ENTIRE RS. 1 CRORE DIRECTLY TO THE SAID TWO PARTIES. FOR WHICH REASON THE SAID TWO PARTIES HAD STATED THAT NO AMOUNT WAS OUTSTANDING ON ACCOUNT OF THE SAME.THAT 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 12 THE ASSESSEE HAD NOT MADE RELEVANT ACCOUNTING ENTRIES IN HI S BOOKS OF ACCOUNT WITH RESPECT TO THE SAME REFUND AND THEREFORE ALSO THE AMOUNT STOOD REFLECTED AS OUTSTANDING IN ITS BOOKS. LD. COUNSEL OF THE ASSESSEED REW OUR ATTENTION TO THE LETTER SUBMITTED BYTHE SAID PARTIES TO THE AO EXPLAINING THE TRANSACTION ,PLACED AT P.B 46-48 AS UNDER ,ALONGWITH DOCUMENTS TO SUBSTANTIATE THIS EXPL ANATION. TO THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-VII LUDHIANA SUB: ASSESSMENT PROCEEDINGS IN THE CASE OF M/S JAMN A DASS NIKKA MAI JAIN SARAF (P) LTD. 455, THE MALL, LUDHIANA..ASSESSM ENT YEAR 2011-12. SIR, REFERENCE DISCUSSION ON THE LAST HEARING. DURING THE ASSESSMENT PROCEEDINGS, YOUR HONOUR HAVE OBS ERVED THAT SH. RAJNEESH THAKUR HAD RECEIVED A SUM OF RS. 50.00 LACS AS ADVANCE FROM THE ASSESSEE COMPANY AND AS PER THE DETAILS GIVEN B Y THE ASSESSEE COMPANY IN RESPECT OF LOANS AND ADVANCES, THERE IS NO SUCH ADVANCE. YOUR HONOUR HAVE FURTHER DESIRED THE ASSESSEE TO EXPLAI N AS TO WHY THIS ADVANCE BE NOT TREATED AS UNEXPLAINED INVESTMENT U/S 69: IN REPLY, IT IS RESPECTFULLY SUBMITTED THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF GO LD AND DIAMOND JEWELLERY AND IS ALSO A DEALER IN REAL ESTATE . ON 14.04.2007, THE ASSESSEE COMPANY AND ONE OF ITS DIRECTORS VIZ. SH. CHAND E KANT JAIN HAD ENTERED INTO A MEMORANDUM OF UNDERSTANDING (COPY ENCLOSED) WITH SH. RAJNEESH THAKUR S'/O SH. RAM PAL THAKUR S/O SH. MUNSHI R AM RESIDENT OF 545, COLLEGE ROAD, LUDHIANA FOR PURCHASE OF IMMOVEABLE PR OPERTY AT PLOT NO. 1-H, BEARING MUNICIPAL NO. B-XX-4049, MEASURING 995 S Q. YDS.AT KARTAR SINGH SARABHA NAGAR, LUDHIANA AND HAD ADVANCED A SUM OF R& 50 .00 LACS EACH TO SH. RAJNEESH THAKUR AS EARNEST MONEY. SH. RAJNEESH T HAKUR, ON THE OTHER HAND HAD ENTERED INTO AN AGREEMENT OF SALE DATED 26. 02.2007 (COPY ENCLOSED) WITH SH. JEET AMOL SINGH SON OF SH. KULDI P SINGH RESIDENT OF 69-K, SARABHA NAGAR, LUDHIANA (3/4 M SHARE) AND DALJIT KAUR W/O SH. JEET AMOL SINGH GILL (1/4 LH SHARE) FOR THE PURCHASE OF THIS PROPERTY AS THESE WERE THE OWNERS OF THIS PROPERTY. HE HAD ALREADY PAID RS. 1 CRORES TO THE OWNERS AS EARNEST MONEY FOR PURCHASE OF THIS PROPERTY. THE MAT TER OF EXECUTION OF SALE DEED WAS LINGER ON AND DEVELOPED SOME DISPUTE BE TWEEN SH. RAJNEESH THAKUR AND THE OWNERS OF THE PROPERTY. AS A RESU LT, BOTH THE 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 13 PARTIES FILED LEGAL SUITS AGAINST ONE ANOTHER AND AS SU CH THE PROPERTY COULD NOT BE PURCHASED EITHER BY THE ASSESSEE COMPANY OR BY S H. CHANDER KANT JAIN. TO RECOVER THE AMOUNT OF RS. 1 CRORE FROM SH. RA JNEESH THAKUR, BOTH SH. RAJNEESH THAKUR AND THE ASSESSEE COMPANY ENTERED AN ASSI GNMENT TO GET THE AMOUNT OF RS. 1 CRORE FROM SH. JEET AMOL SINGH A ND HIS WIFE SMT. DALJIT GILL. IT WAS IN THE FINANCIAL YEAR 2010-11, THE OWNERS OF THE PROPERTY RETURNED THE MONEY BY WAY OF TWO BANK TRANSFERS OF RS. 75.00 LACS AND RS. 25.00 LACS. THE BANK TRANSFER OF RS. 75.00 LACS ON 24. 11.2010 WAS OUT OF ACCOUNT NO. 4450000100002633 IN PNB, SUNDER-NAGAR, LUDH IANA IN THE NAME OF SH. JEET AMOL SINGH AND THE OTHER BANK TRANSFER O F RS. 25.00 LACS ON 24.11.2010 WAS OUT OF ACCOUNT NO. 4450000100002642 IN SAME BANK IN THE NAME 3F DALJIT KAUR GILL W/O JEET AMOL SINGH. BUT F ACT OF THE MATTER, AS STATED ABOVE, ONLY RS. 50.00 LACS WAS ADVANCED BY THE ASSESSEE COMPANY AND THE BALANCE RS. 50.00 LACS WAS ADVANCED BY SH. CHA NDER KANT JAIN. ON RECEIPT OF THE ENTIRE AMOUNT OF RS. 1.00 CRORE, THE A SSESSEE COMPANY RETURNED RS. 50.00 LACS TO SH. CHANDER KANT JAIN. WITH REGARD TO ABOVE, THE FOLLOWING DOCUMENTS ARE ENCLO SED FOR YOUR HONOR'S KIND PERUSAL:-- A) COPY OF ACCOUNT OF SH. RAJNEESH THAKUR IN THE BOOKS OF M/S JAMNA DAS NIKKAMAL JAIN SARAF P. LTD. AND SH. CHANDERKANT JAIN FROM A:Y: 2008-09 TO THE ASSESSMENT YEAR UNDER CONSIDE RATION, B) COPY OF BANK ACCOUNT NO. 0765008700032141 IN PNB, BH ARAT NAGAR CHOWK, LUDHIANA IN THE NAME OF M/S JAMNA DASS NIKKA MAL JAIN SARAF P. LTD. (THE ASSESSEE COMPANY) SHOWING THE CR EDITS OF BANK TRANSFERS RECEIVED FROM THE OWNERS OF PROPERTY AS MENTIONED ABOVE AND ALSO PAYMENT OF RS. 50 LACS TO SH. CHANDERKANT JAIN. C) COPY OF BANK ACCOUNT NO. 4450000100002633 IN PNB, SU NDER NAGAR, LUDHIANA IN THE NAME OF SH. JEET AMOL SINGH SHOWIN G THE BANK TRANSFER OF RS. 75 LACS, D) COPY OF BANK ACCOUNT NO. 4450000100002642 IN PNB, SU NDER NAGAR, LUDHIANA IN THE NAME OF DALJIT GILL W/O JEET AMO L SINGH SHOWING THE BANK TRANSFER OF RS. 25 LACS E) COPY OF BANK ACCOUNT NO. 0765000106695711 IN PNB, BH ARAT NAGAR CHOWK, LUDHIANA IN THE NAME OF SH. CHANDERKANT JAIN SHOWING THE RECEIPT OF RS. 50 LACS FROM THE ASSESSEE CO MPANY. F) COPY OF 'ASSIGNMENT' FROM SH. RAJNEESH THAKUR FOR R ECEIPT OF RS. 1 CRORE AS EARNEST MONEY FROM THE ASSESSEE COMPANY AND SH. CHANDERKANT JAIN. THIS 'ASSIGNMENT WAS GIVEN ON THE BACK SIDE OF AGREEMENT OF SALE DATED 26.02.2007 (COPY ENCLOSED) ENT ERED INTO BY SH. RAJNEESH THAKUR WITH SH. JEET AMOL SINGH SON OF SH. K ULDIP 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 14 SINGH RESIDENT OF 69-K, SARABHA NAGAR, LUDHIANA (3/4 TH SHARE) AND DALJITKAUR W/O SH. JEET AMOL SINGH SINGH(1/4* SHARE) FOR THE PURCHASE OF THIS PROPERTY. G)COPY OF CONFIRMATION GIVEN BY SH. RAJNEESH THAKUR ON 16. 11.2010 FOR RECEIPT OF RS. 50 LACS FROM SH. CHANDERKANT JAIN, WHICH WAS ALSO FILED DURING THE ASSESSMENT PROCEEDINGS, OF SH. CHANDERKA NT JAIN FOR ASSESSMENT YEAR 2008-09. H)COPIES OF SOME OF THE DOCUMENTS RELATING TO LEGAL P ROCEEDINGS BETWEEN SH. RAJNEESH THAKUR AND THE OWNERS OF THE PROPERTY. IN VIEW OF THE ABOVE, THERE IS NO SUCH ADVANCE WHICH HAS NOT BEEN DISCLOSED/ACCOUNTED FOR BY THE ASSESSEE COMPANY. AS SU CH, THE PROVISIONS OF SEC. 69 ARE NOT ATTRACTED AT ALL UNDER SUCH CIRCUM STANCES. HOPE YOUR HONOUR WILL FIND THE POSITION EXPLAINED WITH R ESPECT TO THE QUERY RAISED AND SHALL PROCEED TO FINALIZE THE ASSES SMENT ACCORDINGLY. THANKING YOU, YOURS FAITHFULLY, FOR JAMNADASS NIKKA MAI JAIN SARAFP.LTD. SD/- (DIRECTOR) ENCL: AS ABOVE DATED 20.02.2012 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE CONTRADI CTION BETWEEN THE STATEMENT OF THE SAID TWO PARTIES OF NO AMOUNT OUTSTANDI NG WITH THE ASSESSEE AND THE ASSESSEE ON THE OTHER HAND REFLECTING OUTSTANDING AMOUNT, S TOOD DULY EXPLAINED AND THEREFORE ALSO THE REASONING OF THE LD. CIT(A) THAT SINC E THE IMPUGNED PARTIES HAD STATED THAT NO AMOUNT WAS OUTSTANDING AND THEREFORE THE CRE DIT BALANCE REMAINED UNEXPLAINED WAS LIABLETO BE REJECTED. LD. COUNSEL FOR THE ASSESSEE THEREFORE PLEADED THAT THE ADDITION MADE OF RS. 61,00,000/- UNDER SECTION 6 8 OF THE ACT BE DELETED. 16. LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE LD. CIT(A). 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 15 17. WE HAVE HEARD THE CONTENTION OF BOTH THE PARTIES AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUM ENTS REFERRED TO BEFORE US. THE ADDITION IN DISPUTE BEFORE US, IS THAT PERTAINING TO A DVANCES RECEIVED FROM THE FOLLOWING TWO PARTIES, UNDER SECTION 68 OF THE ACT, HOLDING THEM TO BE UNEXPLAINED. M/S JAMNA DAS NIKKAMALJAINSARAF - RS. 50,00,000/- SH. CHANDRAKANTJAIN - RS. 11,00,000/- THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THESE A DVANCES WERE RECEIVED IN EARLIER YEAR I.EF.Y. 2007-08 AND DULY DEM ONSTRATED THE SAID FACT ALSO FROM THE COPIES OF ITS AUDITED BALANCE SHEET PERTAINING TO F.Y.07-08 ONWARDS TILL THE IMPUGNED YEAR WHICH WERE FILED BEFORE US. FURTHER THE A DVANCES WERE ACCEPTED IN SCRUTINY PROCEEDINGS CONDUCTED FOR THE YEAR IN WHICH THEY WERE RECEIVED I.E. F.Y. 2007- 08 PERTAINING TO A.Y. 2008-09. NOW THESE FACTS HAVE NO T BEEN CONTROVERTED BY THE REVENUE BEFORE US. IN FACT WE FIND THAT THE LD. CIT(A) HA S ALSO NOTED THE FACT THAT THE IMPUGNED PARTIES HAD ALSO CONFIRMED THE FACT OF MAKING THESE ADVANCES TO THE ASSESSEE IN F.Y. 2007-08. CONSIDERING THE SAID FACT, T HERE IS NO CAUSE AT ALL FOR MAKING ADDITION OF THE SAME AS UNEXPLAINED CREDIT OF THE IMPUG NED YEAR UNDER SECTION 68 OF THE ACT SINCE THE SAID SECTION DEEMS UNEXPLAINED CREDIT S RELATING TO THE IMPUGNED YEAR ONLY AS INCOMES AS INTERPRETED IN VARIOUS DECISIONS OF HONBLE HIGH COURTS POINTED OUT BY LD.COUNSEL FOR THE ASSESSEE BEFORE US WHICH THE REVE NUE HAS BEEN UNABLE TO DISTINGUISH.FOR THIS REASON ALONE THE ADDITION MADE UNDER SECTION 68 OF THE SAID ADVANCES OF RS. 61,00000 IS LIABLE TO BE DELETED. FURTHER WE DO NOT FIND ANY MERIT INTHE FINDINGS OF THE LD. CIT(A) THAT THERE WAS CONTRADICTION IN THE STATEMENT OF THE SAID PARTIES WHO HAD MADE THE IMPUGNED ADVANCES, WHEN THEY HAD STATED BEFORE THE AO THAT NO AMOUNT WAS OUTSTANDING IN THE IMPUGNED YEAR WHILE THE ASSESSEE CONTINUED REFLECTIN G THE SAID ADVANCES AS OUTSTANDING.WE FIND THE DISCREPANCY DULY EXPLAINED BY T HE SAID TWO PARTIES THEMSELVES VIDE LETTERS SUBMITTED BY THEM DURING THEIR ASSESSME NT PROCEEDINGS FILED BEFORE US AT P.B 46-48 & 82-85 ALONGWITH ALL EVIDENCES PLACED AT P .B 49-81. THE PARTIES HAD EXPLAINED THAT THE AMOUNT ADVANCED TO THE ASSESSEE HAD BE EN FOR THE PURPOSE OF PURCHASING AN IMMOVEABLE PROPERTY FROM ONE SHRI JEET A MOL SINGH AND HIS WIFE DALJIT 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 16 KAUR, WITH WHOM THE ASSESSEE HAD ENTERED INTO AN AGREEMENT OF SALE,BUT SINCE THERE AROSE SOME DISPUTE AND THE SALE DEED COULD NOT BE EXEC UTED, THE OWNERS OF THE PROPERTY RETURNED THE AMOUNT ADVANCED TO THEM OF RS. 1 CRORE DIRECTLY TO ONE OF THE PARTY WHO HAD ADVANCED MONEY TO THE ASSESSEE, I.E M/S JAMNA DAS NIKKA MAL JAIN SARRAF (P) LTD. ,WHO IN TURN RETURNED THE AMOUNT ADVANCE D BY THE OTHER PARTY I.E SH CHANDER KANT JAIN. EVIDENCES TO SUBSTANTIATE THE AFORESAID EXPLANATION WERE ALSO FILED AS UNDER: COPY OF ACCOUNT OF THE ASSESSEE, SH. RAJNEESH THAKU R IN THE BOOKS OF M/S JAMNA DASS NIKKAMAL JAIN SARAF P. LTD. AND SH. CHAN DERKANT JAIN FROM A:Y: 2008-09 TO THE ASSESSMENT YEAR UNDER CONSIDERA TION, REFLECTING THE AMOUNT ADVANCED IN A.Y 2008-09. O COPY OF 'ASSIGNMENT' FROM THE ASSESSEE, SH. RAJNEES H THAKUR ,FOR RECEIPT OF RS. 1 CRORE AS EARNEST MONEY FROM M/S JAMNA DASS NIKKAMAL JAIN SARAF P. LTD AND SH. CHANDERKANT JAIN. THIS 'ASSIGNMENT W AS GIVEN ON THE BACK SIDE OF AGREEMENT OF SALE DATED 26.02.2007 (CO PY ENCLOSED) ENTERED INTO BY SH. RAJNEESH THAKUR WITH SH. JEET A MOL SINGH SON OF SH. KULDIP SINGH RESIDENT OF 69-K, SARABHA NAGAR, LUDHI ANA (3/4 TH SHARE) AND DALJIT KAUR W/O SH. JEET AMOL SINGH (1/4* SHARE) FO R THE PURCHASE OF THIS PROPERTY. O COPY OF CONFIRMATION GIVEN BY THE ASSESSEE, SH. RA JNEESH THAKUR, ON 16.11.2010 FOR RECEIPT OF RS. 50 LACS FROM SH. CHAN DERKANT JAIN, WHICH WAS ALSO FILED DURING THE ASSESSMENT PROCEEDINGS, OF SH . CHANDERKANT JAIN FOR ASSESSMENT YEAR 2008-09. O COPIES OF SOME OF THE DOCUMENTS RELATING TO LEGAL P ROCEEDINGS BETWEEN SH. RAJNEESH THAKUR AND THE OWNERS OF THE PROPERTY COPY OF BANK ACCOUNT NO. 4450000100002633 IN PNB, S UNDER NAGAR, LUDHIANA IN THE NAME OF SH. JEET AMOL SINGH SHOWING THE BANK TRANSFER OF RS. 75 LACS, COPY OF BANK ACCOUNT NO. 4450000100002642 IN PNB, S UNDER NAGAR, LUDHIANA IN THE NAME OF DALJIT GILL W/O JEET AMOL S INGH SHOWING THE BANK TRANSFER OF RS. 25 LACS COPY OF BANK ACCOUNT IN THE NAME OF M/S JAMNA DASS NIKKAMAL JAIN SARAF P. LTD. SHOWING THE CREDITS OF BANK TRANSFERS RECEIVED FROM THE OWNERS OF PROPERTY AS MENTIONED ABOVE AND ALSO PAYM ENT OF RS. 50 LACS TO SH. CHANDERKANT JAIN. COPY OF BANK ACCOUNT NO. 0765000106695711 IN PNB, B HARAT NAGAR CHOWK, LUDHIANA IN THE NAME OF SH. CHANDERKANT JAIN SHOWING THE RECEIPT OF RS. 50 LACS FROM M/S JAMNA DASS NIKKAMAL JAIN SARAF P. LTD. 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 17 THUS IT HAD BEEN STATED THAT THE AMOUNT HAD NOT BEEN REFUNDE D BY THE ASSESSEE BUT BY THE THIRD PARTY, SHRI JEET AMOL SINGH A ND HIS WIFE DALJIT KAUR, EXPLAINING THEREFORE THE DISCREPANCY OF NO ADVANCE REMAINING IN THEI R BOOKS WHILE THE SAME OUTSTANDING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. NO INFIRMITY HAS BEEN POINTED OUT BYTHE REVENUE IN THE SAME. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THEREF ORE SINCE THE IMPUGNED ADVANCES DO NOT PERTAIN TO THE IMPUGNED YEAR BUT TO EAR LIER YEAR AND THE ASSESSEE HAVING DULY EXPLAINED WHY THE SAME WAS SHOWN AS OUTSTANDING IN HIS BOOKS DESPITE THE ADVANCES HAVING BEEN STATED BY THE SAID PARTIES TO HAVE BEEN REFUNDED TO THEM, WE SEE NO REASON FOR MAKING ANY ADDITION OF THE SAID ADVANCES UNDER SECTION 68 OF THE ACT AND DIRECT THE SAME TO BE DELETED. 18. GROUND NUMBER 3 OF THE APPEAL IS ALLOWED. 19. GROUND NO. 4 IT WAS STATED BY THE LD.COUNSEL FOR THE ASSESSEE RELATED TO THE LD.CIT(A) NOT HAVING CONSIDERED THE DETAILED SUBMISSIONS OF THE ASSESSEE.THE SAID GROUND WAS NOT PRESSED BEFORE US AND IS THEREFORE DISMI SSED. 20. IN EFFECT THE APPEAL OF THE ASSESSEE ISPARTLY ALLO WED. ORDER PRONOUNCED ON 23.12.2020. . SD/- SD/- ! ' # (DIVA SINGH) (ANNAPURNA GUPTA) /JUDICIAL MEMBER $ % /ACCOUNTANT MEMBER /DATED: AG/RKK % ( ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' * / CIT 4. ' * ( )/ THE CIT(A) 5. +, , , -./,0 / DR, ITAT, CHANDIGARH 6. ,/ 1# / GUARD FILE 1565-CHD/2018- RAJNEESH THAKUR, LUDHIANA 18