Vivekanda Shiksha Samiti, Palwas Road, Sikar V. DCIT, Central Circle-2, Jaipur, Jaipur

ITA 203/JPR/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5988 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 22-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL DHAKA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Income from undisclosed sources; Search and seizure; Source of fund; Corroborative evidences
• Section: 69; 132; 143(3); 142(1); 69B; 143(2); 13; 153C

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 203/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2017-18 Vivekanand Shiksha Samiti, Palwas Road, Near Prince School, Sikar cuke Vs. DCIT, Central Circle-02, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABAV 9003 C vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 260/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2016-17 Gargi Global Academy Sansthan, Sikar cuke Vs. DCIT, Central Circle-02, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABAG 8409 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P. C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Sh. Anil Dhaka (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 14/05/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 05/07/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These two appeals filed by assessee are arising out of the order of the Commissioner of Income Tax (Appeals)-4, Jaipur dated 28/12/2023 & 2 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT 08/01/2024 [here in after ld. CIT(A) ] for assessment years 2016-17 & 2017-18 which in turn arise from the order dated 05.12.2019 & 04.1.22019 passed under section 143(3) r.w.s 153C of the Income Tax Act, by DCIT, Central Circle-2, Jaipur. As both the appeal of two different assessee argued together, having similar set of facts and grounds are disposed off by this consolidated order. 2. At the outset of hearing the ld. AR of the assessee submitted that the matter in ITA No. 203/JP/2024 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount disputed. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 203/JP/2024 is taken as a lead case. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 203/JP/2024 on the following grounds; “1 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 1,77,67,000/- u/s 69 of the Act on account of alleged unexplained investment in purchase of plot by not accepting the explanation of assessee that source of such investment is out of undisclosed income offered for tax by its trustees Sh. Joginder Sunda and Sh. Piyush Sunda accepted by Hon'ble Interim Board of 3 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Settlement vide order dt. 29.05.2023 by making various incorrect, irrelevant and unwarranted observations. 2 The Ld. CIT(A) has erred on facts and in law in confirming that taxing of alleged unexplained investment u/s 69 @ 60% instead of taxing the same @30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is not applicable to AY 2017-18. 3 The appellant craves to alter, amend and modify any ground of appeal. Necessary cost be awarded to the assessee. 4. Necessary cost be awarded to the assessee.” 3. Succinctly, the fact as culled out from the records is that a search and seizure action u/s 132 of the Income Tax Act, 1961 and/or survey action u/s 133A of the Act was carried out by the Income Tax Department on the members of Prince Group Sikar on 10.03.2018 of which the Assessee is one of the members. The jurisdiction over the case was assigned to Central Circle-2, Jaipur by the Pr. Commissioner of Income Tax, Jaipur-III, Jaipur by means of an order u/s 127 of the Act circulated vide Pr. CIT- III/ITO(Hqrs)/JPR/2019-20/1386 dated 04-09-2019. Based on the books of accounts or documents found and seized during the search belonged to a person other than the person in the case of whom the search u/s 132 of the Act was carried out, notice(s) under section(s) 153C of the Act dated 06- 09-2019 was issued and served upon the Assessee, requiring the assessee to file a true and correct return of income as prescribed under 4 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Rule 12 of the Income Tax Rules, 1962 within 15 days of the service of the said notice. In response to the said notice(s), a return declaring an income of Rs. 1,51,250/- was filed by the Assessee on 13-10-2019. However, In the return of income filed in response to notice u/s 153C of the Act no undisclosed income pertaining to the relevant year has been declared by the Assessee. 3.1 The Assessee is a charitable society constituted with the main object of educational activities. The proceedings of assessment of income were commenced by issue of notice u/s 143(2) of the Act on 21-10-2019. Later notice u/s 142(1) dated 21-10-2019 was also issued to the assessee and information and details pertaining to the case relevant to assessment of its income were called by means of a questionnaire. Later queries were raised vide notices under section 142(1) and/or Order Sheet Entries wherever deemed fit. The information furnished by the Assessee's Counsel was examined and placed on record by the ld. AO. 3.2 As a consequences to the search & seizure action u/s 132(1) of the I.T. Act, 1961 was carried out at premises of Shri Jogendra Singh, Shri Plyush Sunda & Smt. Urmila, situated at Opp. Prince School, Palwas Road, 5 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Sikar, wherein a registered sale deeds / documents / loose papers was found and seized as page no. 1 to 7, exhibit-13, Annexure-AS. A sale deed dated 30.06.2016 executed between Smt. Mohini Devi w/o Shri Manglaram Raibari, Vill. Dula Ki Dhani at present Vill. Palwas, Tehsil- Dhod, Sikar (seller) and Vivekanand Shiksha Samiti through its president Shri Gopal Singh S/o Shri Jaisaram Sunda, Vill. Shyampura, Tehsil Dhod, Sikar (Purchaser) for sale of land admeasuring 2.40 hectares situated at Khasra No. 1061 rakba 0.35 hectare and Khasra No. 1065 rkaba 2.05 hectare at Village Kanwarpura, Tehsil- Dhod, Sikar. The sale consideration in this registered sale deed has been reported at Rs. 15,00,000/-. But as per the evidences gather during the course of search at the office premises of Prince Public School Society and Princess Academy Society image of mobile data of Shri Jogendra Singh were taken and seized. The image data contains, a page containing land data wherein at the top of the page area of land is mentioned as 2.40 hectare which is equal to 21.35 kachchi bigha. Rate of land per kachchi bigha is mentioned at Rs. 9 lakh thus total sale consideration of the land mentioned at Rs. 1,92,17,000/-. Out of total sale consideration, a sum of Rs. 10,00,000/- is reduced by writing as hold. Out of the remaining sum of Rs 1,82,17,000/-, an amount of Rs. 80,00,000/- and 87,67,000 considered as paid leaving balance of Rs. 14,50,000/- as 6 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT paid by cheque. This page bears signatures of Shri Jogendra Singh at the end with date as 30.06.2016. The ld. AO also noted the assessee purchased the land referred in that seized paper by sale deed dated 30.06.2016 and the amount of Rs. 14,50,000/- mentioned is found in that sale deed. In view of these facts the ld. AO noted that as against the consideration of Rs. 1,92,17,000/- the consideration recorded in the sale deed is found to be Rs. 14,50,000/- only. Therefore, ld. AO issued a detailed show cause notice on 07.11.2019 requesting the assessee to furnish evidence of payment of difference amount of Rs. 1,77,67,000/-. In case of failure, it was proposed to make the addition as an undisclosed investment. 3.3 In compliance of the same the assessee furnished a written submission on 01.11.2019 wherein the assessee society admitted that difference amount of Rs. 1,77,67,000/- was paid in the purchase deal of the aforesaid property. However, the society claimed that difference amount was paid by Shri Jogendra Singh Sunda and Shri Piyush Sunda out of their undisclosed income of Rs. 1,00,00,000/- and Rs. 77,67,000/- respectively FY 2016-17 which Shri Jogendra Singh Sunda and Shri Piyush Sunda have offered as additional income before the Hon'ble Settlement 7 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Commission, New Delhi. The assessee also furnished the affidavit of Shri Jogendra Singh Sunda in this respect. 3.4 The reply submitted by the assessee was duly considered by the ld. AO but he has not accepted that explanation of the assessee on the following reasons; (i) The land has been purchased by the society in its name and same is asset of the society. Hence the investment made thereon has to be considered in the hand of society itself. (ii) The society is not a prop. concern of any individual but an association of a person which exist and works to achieve certain objectives of public utility and does not have any profit earning motive. (iii) In view of the above facts question arises why a Individual will invest his unaccounted money in a property of society when he cannot gain or earn from the same for his own benefit and property become a public property. (iv) Shri Jogendra Singh Sunda and Shri Piyush Sunda have filed an application before the Hon'ble Settlement Commission, New Delhi wherein he was compelled to disclosed his unaccounted income earned from school fee of his prop. concern M/s Prince Defence Academy and M/s Prince Career Pinoneer. As these persons were having excess fund on account of undisclosed receipts so they offered the same as utilization of undisclosed income as investment in aforesaid property which is only a adjustment to avoid addition in hands of society. 3.5 Based on this observation the ld. AO further noted that why an Individual will invest his unaccounted money in a property of society when he cannot gain or earn from the same for his own benefit and property 8 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT become a public property. Thus, with this observation the ld. AO held that the amount shown in sale deed is unexplained investment of the society itself and claiming the same as undisclosed income of Shri Jogendra Singh Sunda and Shri Piyush Sunda are nothing but an eye wash. Hence, ld. AO considered that amount of Rs. 1,77,67,000/- considered as unexplained investment of the society which is added back to the income of the society u/s. 69 of the Act. 4. Feeling dissatisfied from the finding so recorded in the order of the assessing officer, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- It is submitted by the appellant that the assessee is a charitable society with the main object of carrying out educational activities. A search and seizure action u/s 132 was carried out on the members of Prince Group, Sikar on 10/03/2018 of which assessee is one of the entity. In response to notice u/s 153C, the appellant filed its return of income declaring total income of Rs. 1,51,250. The Id. AO observed that page 1 to 7 of Annexure-AS Exhibit-18 i.e. sale deed found from the residence of Joginder Singh Sunda provide details of purchase of land by the assessee. According to the sale deed, land measuring 2.40 hectare situated at Vill. Kanwarpura, Dhod, Sikar was purchased by M/s Vivekanand Shiksha Samiti for total sale consideration Rs. 15,00,000/- (Rs.50,000/- paid in cash and Rs. 14,50,000/- paid by cheque). 9 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Further an image of mobile data of Shri Jogindar Singh Sunda was also found. From the said image AO observed that it is dated 30.06.2016 which is also the date of sale deed. The area of land mentioned on it is same as mentioned in the sale deed. As per the image the total consideration is Rs. 1,92,17,000/- out of which amount paid by cheque is Rs. 14,50,000/- which is same as mentioned in the sale deed. Accordingly AO concluded that the actual sales consideration is Rs.1,92,17,000/- whereas the consideration recorded in the sale deed is Rs. 14,50,000/- and thus the difference of Rs. 1,77,67,000/- is paid in cash. He further rejected the explanation of the assessee that the difference amount is paid by Shri Jogendra Singh Sunda and Shri Piyush Sunda out of their additional income for FY 16-17 offered for tax before the Hon'ble Settlement Commission, New Delhi by holding that the property purchased is an asset of the society and payment made over and above the amount shown in sale deed is an unexplained investment of the society itself and claiming the same as undisclosed income of Shri Jogendra Singh Sunda is nothing but an eye wash. Accordingly he made addition of Rs.1,77,67,000/- u/s 69 of the Income Tax Act, 1961 The Ld. AR of the appellant explained that Jogendra Singh Sunda and Piyush Singh Sunda are trustees of the society. The assessee society has no source of income except nominal membership fees received in the year under consideration. In search also no evidence was found that assessee society has any source of income. Further the appellant society had also not started its activities except receipt of membership fees. As against this, Shri Jogendra Singh Sunda, at Para 14(h) of his Settlement Petition, have submitted that differential consideration of Rs.1,77,67,000/- (1,92,17000 - 14,50000 ) has been paid by him and his brother Shri Piyush Sunda out of their additional income of FY 16-17 (PB 46). Further at Para 13 of the Settlement Petition filed by Shri Piyush Sunda same facts have been disclosed before the Hon'ble Settlement Commission. The same is also verifiable from the Cash Flow Statements filed by them before the Hon'ble Settlement Commission. The affidavit of Shri Jogendra Singh is also filed to AO wherein he has accepted that the amount of Rs. 1,77,67,000/- was pałd by him and his brother Shri Piyush Singh Sunda from CIT(A)-4, Jaipur their undisclosed income and the society has nothing to do with this payment. Thus he pleaded that when investment of Rs 1,77,67,000/- has been made by Shri Joginder Singh Sunda and Piyush Sunda out of their undisclosed income, no addition can be made in the hands of the assessee. The LD. AR further filed the order of the Hon'ble Interim Board of settlement dated 29/05/2023 wherein this issue is discussed at page 19 at para 9.6.1 & 9.6.2. The Hon'ble Board after considering all the documents, explanation and submissions accepted the income disclosed in the petition and made some further addition on account of unrecorded receipt as per the discussion made at page 50 to 52 of the order. Thereafter at page 55 para 52 it held that in respect of other issues discussed in the preceding para of the order, after considering the contention of the applicant and the department during the hearings and the various written submissions/reports submitted in this regard, no further addition is called for on other issue. Thus he pleaded that the Hon'ble Board has accepted that source of 10 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT the investment of the land purchased by the assessee is undisclosed income offered/determined by the Hon'ble Board in case of Joginder Singh and Piyush Sunda. Accordingly he pleaded for deletion of the addition. It is further seen that the Hon'ble Interim Board of Settlement has decided this case vide order dated 29/05/2023. The submissions of parties regarding the issue of investment in land was discussed at page 19 at para 9.6.1 & 9.6.2. The Hon'ble Board after considering all the documents, explanation and submissions has at page 55 para 52 held that no further addition is called for on other issue. However the same is w.r.t. the applicants before the Hon'ble IBS and it is undisputed fact that the appellant was not an applicant before the Hon'ble IBS and thus the order of the Hon'ble IBS is not for the appellant. When the appellant was not an applicant in those proceedings the question of getting order on the issue of addition which has been done in the hands of the appellant does not arise. The Id. AR argued that source of unaccounted cash payment w.r.t. the immovable property purchased by the society is now explained as the same is out of taxed income as the same is sourced from and is the application of the undisclosed cash income of Sh. Joginder Singh and Sh. Piyush Sunda which now stands taxed as per the order of Hon'ble IBS The implication of the same is that payment of unaccounted cash for the land purchased by the appellant is made by Sh. Joginder Singh and Sh. Piyush Sunda on behalf of the appellant society. This order of the honorable Interim Board of Settlement was passed after the date of passing of the assessment order and as such the matter was not settled till then. Submission of the applicants as inter-alia noted by the Hon'ble IBS in the order that "If the office bearers of the society have paid the amount out of their own sources and not claimed the same from the society, it cannot be construed to be undisclosed investment of the society and if it is claimed by the office bearer, it will be only a liability of the society to pay them". In this regard, the learned AO is directed to pass on the information to the jurisdictional officers with respect to examination and applicability of sections 271D/271E of the Act as there is admission by the two individuals w.r.t. the cash loan or loan not through banking channel and the same is in connection with purchase/transfer of immovable property. The addition has been done to the income in the hands of the appellant and the onus is on the appellant to explain the source of the payment done with respect to the unexplained investment. It is evident that the property purchased is an asset of the society and onus to explain the payment made over and above the amount shown in sale deed is unexplained investment of the society itself. The argument given in the submissions that "Thus when investment of Rs. 1.77.67.000/- has been made by ShriJoginder Singh Sunda and Piyushsunda out of their undisclosed income, no addition can be made in the hands of the 11 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT assessee" implying thereby that the investment has been done by the two individuals is therefore rejected. At the same time it is observed that in none of the submissions of the appellant the appellant has made any categorical statement on its own behalf that the payment of unaccounted cash for the land was made by the two individuals on its behalf. The plausible argument of the appellant can be that payment of unaccounted cash for the land purchased by the appellant society is made by Sh. Joginder Singh and Sh. Piyush Sunda on behalf of the appellant society. The appellant has made indirect submissions by referring to the documents of the proceedings of the honorable IBS which are in respect to the application filed by the other tax payers. The two individuals has no right on such asset and nowhere such right has been recorded neither in the purchase nor in any other agreement and it is only after the search action it was discovered that the unaccounted cash payment has been involved in the transaction. It is stated by the Id. AO in the assessment order that "Shri Jogendra Singh Sunda and Shri Piyush Sunda have filed an application before the Hon'ble Settlement Commission, New Delhi wherein he was compelled to disclosed his unaccounted income earned from school fee of his prop. concern M/s Prince Defence Academy and M/s Prince Career Pinoneer. As these persons were having excess fund on account of undisclosed receipts so they offered the same as utilization of undisclosed income as investment in aforesaid property which is only a adjustment to avoid addition in hands of society". The appellant has not filed any direct submission on this finding of the assessment order. No documentary or corroborative evidences have been filed to show the money flow from the two individuals and the same cannot be presumed. The onus is on the appellant to explain the source along with supportings. The Id. AO has relied upon following circumstancial factors and evidences in support of the conclusion of the assessment which have not been rebutted/responded by the appellant:- "(ii) The society is not a prop, concern of any individual but an association of a person which exist and works to achieve certain objectives of public utility and does not have any profit earning motive. (iii) In view of the above facts question arises why a Individual will moest his unaccounted money in a property of society when he cannot gain or earn from the same for his own benefit and property became a public property. (iv) Shri Jogendra Singh Sunda and Shri Piyush Sunda hurve filed an application before the Hon'ble Settlement Commission, New Delhi wherein he was compelled to disclosed his unaccounted income carned from school fee of his prop. concern M/s Prince Defence Academy and M/s Prince Career Pinoncer. As these persens were having excess fund on account of undisclosed receipts so they offered the same as utilization of undisclosed income as investment in aforesaid property which is enly a adjustment to avoid addition in hands of society." The settlement proceedings relied upon by the appellant are in connection with the taxability and the settlement of income of other tax payers whereas the question with respect to the addition done in the assessment order in the case of 12 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT the appellant is regarding the source of the unexplained investment done by the appellant. The explanations of the appellant would have remained the same irrespective of whether the other taxpayers filed settlement applications or not and similarly irrespective of the orders of the honorable IBS. The statements (if recorded) of the two individuals or the office bearers of the appellant society recorded during the search action have not been produced to show that if the same claim was made during the course of search and seizure action that the investment in the land was made in such manner. In the personal cash flow statements of the two individuals filed by the appellant (stated to have been filed in the Settlement proceedings), the opening cash balance as on 01-04-2016 (Α.Υ. 2017-18) in the hands of Sh. Piyush Sunda is stated to be 42,52,000 and similarly opening cash balance as on 01-04-2016 (Α.Υ. 2017-18) in the hands of Sh. Jogendra Singh is stated to be Rs. 2,62,15,510. However there is no evidence in record in this regard that cash from earlier years was being accumulated and not spent. Further, nowhere a categorical statement has been made by the appellant that the payment of unaccounted cash on its behalf was done by the two individuals and no corroborative cash flow documents have been filed and the appellant has merely relied upon the documents filed by other taxpayers in their own proceedings. It is not the self or own claim of the appellant that the source of unexplained investment is the unaccounted cash paid by the two individuals on the behalf of the society appellant but merely because the two individuals have stated this fact in their applications and there is no additional tax liability to such individuals on making of such statement and as such the parties are also related parties amongst themselves and no documents or corroborative evidence has been filed regarding the actual cash flow regarding the property from the two individuals to the seller. There cannot be reverse onus on the Id. AO as it is settled law that where the assessee has failed to prove satisfactorily the source and nature of a credit entry in his books, and it is held that the relevant amount is the income of the assesse, it is not necessary for the department to locate its exact source CIT v. M.Ganapathi Mudaliar [1964] 53 ITR 623 (SC) / A Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC) and similar legal principle is applicable to the present facts of the case pertaining to source of unexplained investment. Since the income owned up by the two individuals in the settlement proceedings are on account of receipt of fees by them and not on account of impugned cash payment in land and rather the impugned cash payment for the land is not leading to any tax liability for the two individuals and is rather leading to the claim of relief from the tax liability by the appellant and the parties are related parties having vested interests; in such a scenario the onus is even greater on the appellant to show what has been claimed with stronger evidences. Further, even in the order of the honorable IBS there is no direction or finding that the addition in the hands of the appellant is liable to be deleted or the source 13 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT stands explained. Further the appellant has not filed any document to show how and whether the order of the honorable IBS has been given legal effect between the two individuals and the appellant society. In the case of Parmesh Chand Yadav v. Income-tax Officer [2023] 146 taxmann.com 514 (Rajasthan) it is held by the Hon'ble Rajasthan High Court that "15. We find considerable force in the submission of leaned counsel for revenue that bank transactions alone are not sufficient to verify the trade in Crypto currency rather, the assessee ought to have submitted before the authority the relevant ledger statement evidencing that he had entered into trade of Crypto currency in the manner as has been asserted by him by way of the information stated by him.". In view of the detailed discussion, the appellant has not discharged the onus in terms of section 69 of the Act. In view of the above discussion, this ground of appeal is hereby dismissed. 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant has raised a legal issue regarding the applicability year of the amendment in section 115BBE of the Act. There is no merit in the issue as the same has already been rejected in the following judicial pronouncements:- • Maruthi Babu Rao Jadav vs. Asst. CIT [2021] 430 ITR 504 (Ker.) [WA. No. 984 of 2019] x x x x • Karthick Nataranjan v. Deputy Commissioner of Income-tax, International Taxation [2023] 154 taxmann.com 136 (Chennai-Trib.)/[2023] 202 ITD 552 (Chennai-Trib.) (11.07.2023) x x x x In view of the above, provisions of section 115BBE of the Act as amended by second amendment Act by the Taxation Laws (second amendment) Act, 2016 will apply w.e.f 1.04.2017 on enhanced rate of tax @ 60%, instead of @ 30%. The enhanced rates applies from the commencement of the assessment year relevant to previous financial year. In this case, this applies to Financial Year 2016-17 relevant to Assessment Year 2017-18. Accordingly, this ground of appeal is dismissed.” 14 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT 5. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A), assessee has preferred this appeal before this tribunal. To support the grounds of appeal so raised by the assessee the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; Facts:- 1. The assessee society was constituted on 25.03.2013 with the main object of imparting education (PB 1-18). It was in the process of acquiring land to carry out educational activity. Except for membership fees of Rs.1,80,000/- there is no other receipt during the year under consideration (PB 21-22) and therefore since the income was below the maximum amount chargeable to tax, the return was not filed. 2. A search u/s 132 was carried out on Prince Group, Sikar on 10.03.2018 of which assessee is one of the entity. In response to notice u/s 153C return was filed declaring total income of Rs.1,51,250/- which is below the maximum amount chargeable to tax (PB 19-20). 3. The AO at Pg 2, Para 7 of the order observed that in search of the premises of Sh. Joginder Sunda, Sh. Piyush Sunda and Smt. Urmila, a registered sale deed/ loose paper was found at Page 1 to 7 of Annexure AS, Exhibit 18 (PB 23-29). According to the sale deed land measuring 2.40 hectare situated at Village Kanwarpura, Dhod, Sikar was purchased by M/s Vivekanand Shiksha Samiti for total sales consideration of Rs.15,00,000/- (Rs.50,000/- paid in cash and Rs.14,50,000/- paid by cheque). Further an image from the mobile data of Shri Jogindar Singh Sunda was seized as reproduced at Pg 3 of the assessment order from which the AO observed that (i) it is dated 30.06.2016 which is also the date of sale deed (ii) the area of land mentioned on it is same as mentioned in the sale deed and (iii) as per the image the total consideration is Rs.1,92,17,000/- out of which amount paid by cheque is Rs.14,50,000/- which is same as mentioned in the sale deed. Accordingly AO concluded that the actual sales consideration is Rs.1,92,17,000 /- whereas the consideration recorded in the sale deed is Rs.14,50,000/- and thus the difference of Rs.1,77,67,000/- is paid in cash. 4. The assessee explained that the cash consideration was paid by Shri Jogendra Singh Sunda Rs.77,67,000/- and by Shri Piyush Sunda Rs.1,00,00,000/- out of their additional income for FY 2016-17 offered for tax before the Hon’ble Settlement Commission, New Delhi. In support of the same 15 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT copy of settlement application and cash flow statement filed by Sh. Jogendra Singh Sunda (PB 30-50) and Sh. Piyush Sunda (PB 51-64) before the Settlement Commission was filed. Affidavit of Shri Jogendra Singh Sunda was also filed (PB 65). 5. The AO however held that the property purchased is an asset of the society, why individual will invest his unaccounted money in the property of society and since Sh. Jogendra Singh Sunda and Sh. Piyush Sunda have excess fund on account of undisclosed receipt, they offered the same as utilization in the aforesaid property which is only an adjustment to avoid addition in the hands of assessee and is nothing but an eye wash. Accordingly addition of Rs.1,77,67,000/- was made u/s 69 of the Income Tax Act, 1961. 6. Before the Ld. CIT(A) assessee filed the relevant pages of order dt. 29.05.2023 passed by Interim Board of Settlement (IBS) (PB 66-74). The Interim Board of Settlement after considering the utilization of undisclosed income by Jogendra Singh Sunda and Piyush Sunda in the land purchased by the assessee to the extent of Rs.1,77,67,000/-, settled the income of Jogendra Singh Sunda and Piyush Sunda. 7. The Ld. CIT(A) at Para 4.2, Pg 8-11 of the order observed that order of Hon’ble Interim Board of Settlement was passed after the date of passing of the assessment order and in that order Sh. Joginder Singh Sunda and Piyush Sunda have claimed that if the office bearers of society have paid the amount out of their own sources and not claimed the same from society, it cannot be construed to be undisclosed investment of the society and if it is claimed by the office bearers, it will be only liability of the society to pay them and therefore AO is directed to examine the applicability of section 271D/271E of the Act. Further in none of the submissions the assessee has made any categorical statement that payment of unaccounted cash for the land was made by the two individuals on its behalf. The two individuals have no right on such asset. No documentary or corroborative evidence has been filed to show the money flow from the two individuals and the same cannot be presumed. The statements of two individuals have not been produced. There is no evidence on record that cash from earlier years as per cash flow statement was accumulated and not spent. There cannot be a reverse onus on the AO as it is a settled law that where assessee failed to prove satisfactorily the onus and the nature of credit entries in his books, it is the income of assessee and it is not necessary for the department to locate its exact source. Under these circumstances the onus is even greater on the assessee to show what has been claimed with stronger evidences. Even in the order of Hon’ble IBS, there is no direction or finding that addition in the hands of assessee is liable to be deleted or the source stands explained. No document is filed to show how the effect of order of Hon’ble IBS has been given between the two individuals and the assessee. Accordingly the addition made by AO is confirmed. 16 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Submission:- 1. At the outset it may be noted that Jogendra Singh Sunda and Piyush Sunda are office bearers of the assessee society. This fact is stated in the settlement application filed by Sh. Jogendra Singh Sunda (PB 33). Since to start the education activities the assessee was in need of land, it purchased the same from Smt. Mohini Devi by making payment of Rs.14,50,000/- by cheque against the actual consideration of Rs.1,92,17,000/- and the balance Rs.1,77,67,000/- was paid by Jogendra Singh Sunda and Piyush Sunda from their undisclosed income which was offered to tax by them in their settlement application. This fact is disclosed at Para 14(h) of the settlement application of Jogendra Singh Sunda (PB 46) and at Para 13 of the settlement application of Piyush Sunda (PB 60) and also in the affidavit dt. 30.10.2019 filed by Joginder Singh Sunda before the AO (PB 65). The assessee has no source of income except the nominal membership fees from which it could have paid such amount and this fact is not in dispute. The amount so paid by Joginder Singh Sunda and Piyush Sunda is shown in the cash flow statement filed before the Hon’ble Settlement Commission (PB 50 & 64). Considering the same the Hon’ble IBS have settled the undisclosed income of Joginder Singh Sunda at Rs.14,19,50,801/- and of Piyush Sunda at Rs.3,63,98,529/-. The Hon’ble IBS at Para 9.6.1 and Para 9.6.2 (PB 68) after considering the objection of Ld. PCIT and the contention of Joginder Singh Sunda and Piyush Sunda, at Para 55 (PB 73) has allowed the capitalization of income offered by them in their SOF. Thus when assessee has explained the source of ‘on money’ in purchase of land as out of the undisclosed income offered for tax by Joginder Singh Sunda and Piyush Sunda and the same is allowed for capitalization by the Hon’ble IBS, addition confirmed by Ld. CIT(A) u/s 69 of the Act is unlawful. 2. The various observations made by Ld. CIT(A) in its order are incorrect. The same is explained hereunder:- (i) The Ld. CIT(A) at Pg 8 of the order has directed the AO to pass the information to the jurisdictional officers to examine the applicability of section 271D/271E of the Act. This means that the Ld. CIT(A) has accepted that amount is not paid by the society out of income but by arranging funds from Joginder Singh Sunda and Piyush Sunda. Therefore, addition confirmed is prima facie incorrect. (ii) Right from the inception assessee has claimed that the difference amount was paid by Joginder Singh Sunda and Piyush Sunda out of their undisclosed income offered before the Hon’ble Settlement Commission. This is noted by AO at Para 7.3 of his order. Thus it is incorrect on the part of Ld. CIT(A) to observe that in none of the submissions the assessee has made any categorical statement that payment of unaccounted cash for the land was made by the two individuals on its behalf. 17 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT (iii) Of course the two individuals have no legal right on the land purchased by the assessee but it is incorrect on part of Ld. CIT(A) to observe that no documentary or corroborative evidence has been filed to show that the money flowed from the two individuals ignoring that the paper on the basis of which on money payment is worked out is found from mobile data of Sh. Joginder Singh Sunda and is also signed by him. Thus the paper itself shows that on money amount is paid by Joginder Singh Sunda/ Piyush Sunda. This is further evident from the cash flow statement filed before the Hon’ble IBS (PB 50 & 64). (iv) The statement of Joginder Singh Sunda/ Piyush Sunda was not recorded on the seized paper by the search party. Further no material has been brought on record by the lower authorities to establish that the cash as per the cash flow statement has been spent elsewhere. Therefore, it cannot be presumed by the Ld. CIT(A) that the same was not available in payment of on money by these persons. In fact it is the onus of AO to prove that the same has been spent for which reference can be made to the following cases where it is held that if the amount has been withdrawn from the bank and after lapse of time it is deposited back in the bank account, it is the onus of the department to prove that the same was not available with the assessee but has been utilized elsewhere:- Muon Computing (P) Ltd. Vs. ITO ITA No. 7606/Del/2019 order dt. 04.08.2021 (Del.) (Trib.) Para 9 of this decision is reproduced as under:- "9. There is no dispute with regard to the fact that Revenue has not brought any material suggesting that the withdrawal made by the assessee were utilized for making payments. It is also not brought on record that the amounts so withdrawn from the bank account was utilized for any other undisclosed purposes. Further, it is noticed that learned CIT(A) observed that despite having sufficient cash in hand, the assessee withdraw the amount. It is correct that the assessee has withdrawn higher amounts than the immediate preceding years but that cannot be sole reason for making addition purely on the basis of suspicion. Further, I failed to understand the reasoning of the AO that the amount was withdrawn to justify the cash deposits during demonetization period i.e., between 9th Nov., 2016 to 30th Dec., 2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the AO that such expenses are bogus. Therefore, in my considered view, the addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed. I, therefore, direct the AO to delete the impugned addition. Thus, ground raised by the assessee in this appeal is allowed." Krishna Agarwal Vs. ITO (2021) 63 CCH 0048 (Jodh.) (Trib) Para 14 of the decision is reproduced as under:- 18 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT “14. In this regard, it is noted that the assessee has explained that out of earlier year's cash withdrawals from her bank account which were available as cash balance as on 01/04/2016, the assessee had deposited a sum of Rs. 68,95,000/- in her bank account during the year under consideration. It has been submitted that the assessee has sold a property, transferred in her name after the death of her husband, for a consideration of Rs 1,31,45,200/- during the financial year 2015-16 and the sale consideration has been received in installments during the financial year 2014-15 and financial 2015-16 directly in her bank account which has been subsequently withdrawn from time to time and due to non-fulfillment of purpose for which the cash was withdrawn, it was again re-deposited in the bank account during the year under consideration. In this regard, it is noted that the assessee in her return of income for A.Y 2016-17 has disclosed sale consideration on sale of plot of land for Rs 1,31,45,200/- and offered capital gains to tax. The plot has been sold through a registered deed and the valuation has been determined at Rs 1,31,45,200/- by the stamp duty authority. Thus, the sale consideration equivalent to stamp duty value has been duly disclosed by the assessee and there is no finding that the assessee has received any amount over and above the declared sale consideration. Therefore, given that the sale consideration has been received directly in the assessee's bank account, the source of cash withdrawals in the earlier two years has been clearly demonstrated by the assessee and we see no reason but to accept the said explanation which is clearly demonstrated through the sale documentation and tax filings by the assessee”. Vinatha Madhusudan Reddy Vs. ACIT (2018) 54 CCH 0151 (Mum) (Trib.) It is seen that the cash deposits in the bank account are preceded by withdrawal from the very same bank account. The cash flow statement filed by the Assessee explaining availability of cash on the various dates of deposit of cash in the bank account has not been disbelieved by the Revenue authorities. They have proceeded on the basis that since there was sufficient time lag between the dates of withdrawal of cash from the bank account and the dates of deposits, the availability of cash cannot be believed. The legal position in this regard is that if the deposit of money in the bank account is preceded by withdrawal of money from the very same bank account then the source of funds is prima facie demonstrated or explained by the Assessee. The Karnataka High Court in the case of S.R. Ventakaratnam Vs. CIT (1981) 127 ITR 0807 has held that once the Assessee discloses the source as having come from the withdrawals made on a given date from a given bank, it was not open to the revenue to examine as to what the Assessee did with that money and cannot chose to disbelieve the plea of the Assessee merely on the surmise that it would not be probable for the Assessee to keep the money unutilized. The ratio laid down in such judgment will apply to the facts of the present case. If the revenue wants to disbelieve the plea of the Assessee then it must show that the previous withdrawal of cash would not have been available with the Assessee on the date of deposit of cash in the bank account. The AO and CIT(A) have proceeded purely on assumption and surmises that cash would not be lying idle with the Assessee for such a long 19 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT time. The Assessee has satisfactorily explained the source of funds out of which deposit of cash was made in the bank account. Therefore, addition is deleted. Ramilaben B. Patel Vs. ITO (2019) 71 ITR (Trib) 0048 (Ahd.) Certain credit entries were reflecting the cash deposit in the bank account of the assessee. But the assessee failed to substantiate his claim for the source of such cash deposit. Therefore, the same was treated as undisclosed income and added to the total income of the assessee. The CIT(A) subsequently confirmed the view taken by the AO. CIT(A) rejected the contention of the assessee that the cash was deposited out of the cash withdrawal from the bank without adducing the cogent reasons. The cash withdrawal has not been doubted by the lower authorities, and nothing has been brought on records suggesting that the cash withdrawn from the bank has been incurred either as revenue expenses or capital expenses. In the absence of any documentary evidence, we can safely presume that the cash withdrawn from the bank was available with the assessee which was subsequently deposited with the bank. Therefore, we cannot treat the same as undisclosed income of the assessee. (v) It may be noted that Hon’ble IBS at Para 55 (PB 73) of its order has accepted the capitalization of income as requested in the respective SOF. This order is dt. 29.05.2023 and its effect would be given while filing the return for FY 2023-24. Therefore, the observation of Ld. CIT(A) in this regard is incorrect. In view of above, addition confirmed by Ld. CIT(A) be deleted. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming that taxing of alleged unexplained investment u/s 69 @ 60% instead of taxing the same @ 30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is not applicable to AY 2017-18. Facts & Submission:- The lower authorities have taxed the alleged unexplained investment @ 60% u/s 115BBE. It is submitted that substituted section 115BBE by Taxation Laws (Second Amendment Act), 2016 received the assent of President on 15.12.2016. The section is made applicable w.e.f. 01.04.2017. Hon’ble ITAT, Jabalpur Bench in case of ACIT Vs. Sandesh Kumar Jain ITA 41/JAB/2020 order dt. 31.10.2022 at Para 4.2 of the order while interpreting the amendment made in section 115BBE which received the assent of President on 15.12.2016 held as under:- 4.2 As regards the assessee s second, without prejudice, argument, i.e., qua nonretrospectivity, we find considerable force therein. Section 1(2) of the Amending Act provides that save as otherwise provided therein, it shall come into force „at once . The same only conveys the intent for, except where a later date 20 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT is specified, the legislation to take immediate effect, i.e., as soon the assent of the Hon'ble President of India is received, by signing the same. The words „at once convey an urgency, so that the same represents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words „at once would loose significance if the provisions of the Act are to, as stated by the ld. CIT(A), be read as effective 01/04/2017, implying AY 2018-19. The same, for substantive amendments, as in the instant case, represents the first day of the assessment year, i.e., AY 2017-18, which explains the assessee’s grievance of it being thus effective for fy 2016-17 or, w.e.f. 01/4/2016. Enacting it mid-year and, further, making it applicable „at once , becomes meaningless if the same is to take effect retrospectively, or is made effective from a later date (01/4/2017), which could in that case be by Finance Act, 2017. True, the amendment, where so read, does gives rise to a peculiar situation inasmuch as two tax rates would obtain for the current year, i.e., one from 01/04/2016 to 14/12/2016, and another from 15/12/2016 to 31/03/2017, but, then, that is no reason to read retrospectivity where the applicable date is clear and, further, there is nothing to suggest retrospectivity. Further, extraordinary and supervening circumstance of the Demonetization Scheme, 2016, brought out by the Government of India in November, 2016, explains the urgency in bringing an amendment mid-year. Further, the tax rate being in respect of incomes which are imputed with reference to a transaction/s, it is possible to administer the same, another aspect of the matter that stands considered by us. That is, a tax rate for transactions made up to 14/12/2016, and another for those thereafter. Subsequent mention of the applicability of the amended provisions of ss. 271AAB and 271AAC with reference to the date on which the Presidential assent to the Act is received, further corroborates this view, which is based on the clear language of the Amending Act, as well as the principle that a substantive amendment is to be generally prospective. We draw support from the decision in Vatika Township Pvt. Ltd. (supra), reiterating the settled law of the rule against retrospectivity. The tax rate applicable to the impugned income would, therefore, be at 30%, i.e., the rate specified in sec. 115BBE as on 30/11/2016, the date of the surrender of income per statement u/s133A (PB-1, pgs.35-44). This, it may be noted, is also consistent with our view that the income is liable to be assessed u/s. 69B (see para 4.1). The Ld. CIT(A) has relied on the decision of Kerala High Court and ITAT Chennai Bench but in these cases the law as laid down by Jabalpur bench is not discussed. Hence, these decisions cannot be applied as such. In the present case also, the amount was paid on 30.06.2016 as evident from the seized paper which is prior to 15.12.2016 and therefore the decision of Jabalpur Bench is squarely applicable. Hence even if it is held that amount is taxable u/s 69 of the Act, tax rate applicable u/s 115BBE would be 30% and not 60%.” 21 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT 6. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: 7. The ld. AR of the assessee submitted that the assessee carry out educational activities. For the year under consideration except for membership receipt of Rs. 1,80,000/- no other income or receipt accrues and whatever receipt received being below the maximum amount not chargeable to tax, the assessee not filed any return of income. A search and seizure operation were carried out on Prince Group on 10.03.2018 of 22 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT which assessee is one of the group entities. In the search operation at premises of Shri Joginder Sunda, Shri Piyush Sunda and Smt. Urmila, a registered sale deed / loose paper was found at Page 1 to 7 of Annexure AS, Exhibit 18 (APB 23-29). According to the sale deed land measuring 2.40 hectare situated at Village Kanwarpura, Dhod, Sikar was purchased by M/s Vivekanand Shiksha Samiti. The sale deed records the total sales consideration of Rs.15,00,000/-, Rs.50,000/- paid in cash and Rs.14,50,000/- paid by cheque. Based on the image found by the search team from the mobile data of Shri Jogindar Singh Sunda [ reproduced at Pg 3 of the assessment order] it is observed that (i) it is dated 30.06.2016 which is also the date of sale deed (ii) the area of land mentioned on it is same as mentioned in the sale deed and (iii) as per the image the total consideration is Rs.1,92,17,000/- out of which amount paid by cheque is Rs.14,50,000/- which is same as mentioned in the sale deed. Accordingly, AO concluded that the actual sales consideration of the property purchased is Rs.1,92,17,000 /- whereas the consideration recorded in the sale deed is Rs.14,50,000/-. On that finding it was held that the difference of Rs.1,77,67,000/- paid in cash by the society. 23 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT 7.1 In the proceeding u/s. 153C of the Act after filling the return, in the assessment proceeding it was not disputed that the purchase of land. But in fact even the source of the same was claimed to have been paid by Shri Jogendra Singh Sunda for Rs.77,67,000/- and by Shri Piyush Sunda Rs.1,00,00,000/-. Further, the source of that source explained out income for F.Y. 2016-17 offered for tax before the Hon’ble Settlement Commission, New Delhi. To support the contention so raised copy of settlement application and cash flow statement filed by Shri Jogendra Singh Sunda (APB 30-50) and Shri Piyush Sunda (APB 51-64) before the Settlement Commission was filed. Affidavit of Shri Jogendra Singh Sunda was also filed (APB 65) in support of the contention so raised. The ld. AO did not consider this contention and proof filed. He held that the property purchased is an asset of the society, why individual will invest his unaccounted money in the property of society and since Shri Jogendra Singh Sunda and Shri Piyush Sunda have excess fund on account of undisclosed receipt, they offered the same as utilization in the aforesaid property which is only an adjustment to avoid addition in the hands of assessee. He also noted that the explanation so furnished by the assessee and their trustee is nothing but an eye wash. Accordingly, based on these contentions which are based on surmises and conjectures addition of 24 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Rs.1,77,67,000/- was made u/s 69 of the Income Tax Act, 1961 in the hands of the assessee. 7.2 When the matter carried before the ld. CIT(A), the assessee to further strengthen the contention so raised also filed the relevant pages of order dated 29.05.2023 passed by Interim Board of Settlement (IBS) (APB 66- 74), in that order the utilization of undisclosed income by Shri Jogendra Singh Sunda and Shri Piyush Sunda in the land purchased by the assessee to the extent of Rs.1,77,67,000/-, were settled and accepted. Thus, there is no reason to add same amount second time. In the order of ld. CIT(A) he contended that the order of Hon’ble Interim Board of Settlement was passed after the date of passing of the assessment order. Not only that the office bearers of society have paid the amount out of their own sources and not claimed the same from society, but it also cannot be construed to be an undisclosed investment of society. 7.3 The ld. CIT(A) has not appreciated the fact that the assessee purchased the land to start the educational activities the land was purchased and consideration so paid by the trustees. The ld. CIT(A) has not appreciated the fact that without starting of activity what is the source of the 25 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT earning income by the assessee trust and it is obvious that the same has been paid by the trustees. In support of the contention the ld. CIT(A) has not appreciated the order of the Interim Board of Settlement (IBS) and affidavit placed on record. When the capitalization has been allowed by the IBS there is no meaning to again add as income of assessee. In the written submission the ld. AR of the assessee dealt with all the objection raised by the ld. CIT(A) and the same read by him while arguing the appeal of the assessee. The ld. AR of the assessee to support his contention he also relies on the various judicial precedence in the written submission. Ground no. 2 being consequential he relied upon the written submission. 8. Per contra, the ld. DR is heard who relies on the orders of the lower authority. The ld. DR submitted that by the trust and trustees are separate legal entity the income disclosed by the trustee cannot be allowed to be set off against the undisclosed assets of the trust. The contention so raised by the assessee before the Interim board for settlement is nothing but an afterthought and to avoid the legitimate tax by the assessee. Further in none of the submissions the assessee has made any categorical statement that payment of unaccounted cash for the land was made by the two individuals on its behalf. The two individuals have no right on such asset. 26 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT No documentary or corroborative evidence has been filed to show the money flow from the two individuals and the same cannot be presumed. There is no evidence on record that cash from earlier years as per cash flow statement was accumulated and not spent. There cannot be a reverse onus on the AO as it is a settled law that where assessee failed to prove satisfactorily the onus and the nature of credit entries in his books, it is the income of assessee and it is not necessary for the department to locate its exact source. Under these circumstances the onus is even greater on the assessee to show what has been claimed with stronger evidences. Even in the order of Hon’ble IBS, there is no direction or finding that addition in the hands of assessee is liable to be deleted or the source stands explained. Based on these set of facts the ld. DR submitted that the addition be sustained as the order of the ld. CIT(A) is fair and deals all the aspect of the matter argued by the assessee. 9. We have heard the rival contentions and perused the material available on record. The assessee is one of the group entities where the search and seizure action was carried out on 10.03.2018. The assessee belong to Prince Group Sikar. During the search and seizure action a registered sale deed / loose paper was found at page 1 to 7 of Annexure 27 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT AS, Exhibit 18 found. From the said sale deed it is noted that the assessee has purchased land measuring 2.40 hectare situated at Village Kanwarpura, Dhod, Sikar for total sales consideration of Rs.15,00,000/-. The said consideration was paid Rs.50,000/- in cash and Rs.14,50,000/- paid by account payee cheque. 10. During the search from the mobile data of Shri Jogindar Singh Sunda an image was extract and the same is reproduced at Page 3 of the assessment order. From that image it is noted the whole transaction of the land purchased by the assessee was recorded where in the details of payment made in cash and cheque recorded. The ld. AO comparing the sale deed with that of the image found noted that (i) sale deed is dated 30.06.2016 which is also the date of sale recorded in the image (ii) the area of land mentioned on the image is same as mentioned in the sale deed and (iii) as per the image the total consideration is Rs.1,92,17,000/- out of which amount paid by cheque is Rs.14,50,000/- which is same as mentioned in the sale deed and rest amount was paid in cash. Thus, it is concluded by the ld. AO that the actual sales consideration is Rs.1,92,17,000 /- whereas the consideration recorded in the sale deed is Rs.14,50,000/- and thus the 28 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT difference of Rs.1,77,67,000/- is paid in cash which was considered as unexplained investment of the assessee. 11. In the year under consideration assessee except the income of the membership fees for an amount of Rs. 1,80,000/- there is no other income which supports the source of purchase of property for the differential amount of Rs. 1,77,67,000/-. But the assessee explained that the cash consideration was paid by Shri Jogendra Singh Sunda Rs.77,67,000/- and by Shri Piyush Sunda Rs.1,00,00,000/- out of their additional income for Financial year 2016-17. They have consequent to the search offered for tax before the Hon’ble Settlement Commission, New Delhi and contended by filling a cash flow statement filed the income thereof and the utilization of that income. The assessee also submitted the affidavit of Shri Jogendra Singh Sunda was also filed (APB 65). In the assessment proceeding the ld. AO did not considered this explanation of the assessee and taken a view that the property purchased is an asset of the society, why individual will invest his unaccounted money in the property of society and since Shri Jogendra Singh Sunda and Shri Piyush Sunda have excess fund on account of undisclosed receipt, they offered the same as utilization in the aforesaid property which is only an adjustment to avoid addition in the 29 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT hands of assessee and is nothing but an eye wash. Accordingly, ld. AO made the addition of Rs.1,77,67,000/- in the hands of the assessee u/s 69 of the Income Tax Act, 1961. 12. Before the first appellate proceeding the assessee repeated the contention raised before the ld. AO and also submitted the relevant pages of order dated 29.05.2023 passed by Interim Board of Settlement (IBS) (APB 66-74) allowing the utilization of undisclosed income by Shri Jogendra Singh Sunda and Shri Piyush Sunda in the land purchased by the assessee to the extent of Rs.1,77,67,000/-. That contention of the trustees were accepted by the revenue. After considering that submission of the assessee the ld. CIT(A) went on observing that if the office bearers of society have paid the amount out of their own sources and not claimed the same from society, it cannot be construed to be undisclosed investment of the society and if it is claimed by the office bearers, it will be only liability of the society to pay them. He further directed the ld. AO to examine the applicability of section 271D/271E of the Act. The ld. CIT(A) also noted that the two individuals have no right to such asset. No documentary or corroborative evidence has been filed to show the money flow from the two individuals. The statements of two individuals have not been produced. There is no 30 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT evidence on record that cash from earlier years as per the cash flow statement was accumulated and not spent. There cannot be a reverse onus on the AO as it is a settled law that where assessee failed to prove satisfactorily the onus and the nature of credit entries in his books, it is the income of assessee, and it is not necessary for the department to locate its exact source. Under these circumstances the onus is even greater on the assessee to show what has been claimed with stronger evidence. Even in the order of Hon’ble IBS, there is no direction or finding that addition in the hands of assessee is liable to be deleted or the source stands explained. No document is filed to show how the effect of order of Hon’ble IBS has been given between the two individuals and the assessee. Based on these contentions the addition made by the ld. AO was confirmed by the ld. CIT(A). 13. The bench noted that Shri Jogendra Singh Sunda and Shri Piyush Sunda are office bearers of the assessee society. The assessee trust was constituted on 25.03.2013 with the main object of imparting education. The assessee was in process of acquiring the land to carry out the educational activity. During the year under consideration except for the membership fees of Rs. 1,80,000/- there is no other receipt. There are no records seized 31 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT which suggest the unaccounted income of the assessee trust or any other loose paper found or seized. The only image found from the mobile data of Shri Joginder Singh Sunda which records the accounted and unaccounted transactions pertaining to the purchase of property made in the name of the assessee trust. In the proceeding consequent to the search the assessee claimed and contended that to start the education activities the assessee was in need of land, it purchased the same from Smt. Mohini Devi by making payment of Rs.14,50,000/- by cheque. But as per the image of Mobile data found from the possession of Shri Joginder Singh Sunda the actual consideration of the said property Rs.1,92,17,000/-. Since, the assessee paid and accounted the property based on the sale deed consideration the balance Rs.1,77,67,000/- was claimed to have been paid by Shri Jogendra Singh Sunda and Shri Piyush Sunda from their undisclosed income. Consequent to search at their premises they have offered to tax by the said investment in their settlement application. This fact is disclosed at Para 14(h) of the settlement application of Shri Jogendra Singh Sunda (APB 46) and at Para 13 of the settlement application of Shri Piyush Sunda (APB 60). This fact is also strengthened by an affidavit dated 30.10.2019 filed by Shri Joginder Singh Sunda before the ld. AO (APB 65). The assessee also contended that they have no source of income except 32 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT the nominal membership fees this fact is not in dispute. The amount paid by Shei Joginder Singh Sunda and Shri Piyush Sunda is shown in the cash flow statement filed before the Hon’ble Settlement Commission (APB 50 & 64). Considering all facts and evidence so presented before the IBS wherein Shri Joginder Singh Sundar settled the undisclosed income at Rs.14,19,50,801/-. Whereas Shri Piyush Sunda at Rs.3,63,98,529/-. The Hon’ble IBS at Para 9.6.1 and Para 9.6.2 recorded his finding after considering the objections of the revenue in Rule 9 report. The relevant finding is reproduced here in below, wherein the IBS has considered the source of investment for purchase of the land under dispute: “Land purchased by Vivekanand Shikshan Samition: 9.6.1 The PCIT in his Rule 9 report mentioned that, as per the applicant, Vivekanand Shikshan Samition purchased a land at Sikar on 02.07.2016 for Rs. 1,82,17,000/- but the sale deed was executed for Rs.14,50,000/- and the differential consideration is Rs.1,77,67,000/- and this was paid by the applicant and his brother Sh. Piyush Sunda. This was not disclosed in their returns of income. Out of Rs.1,77,67,000/ the applicant has paid Rs.77,67,000/- and the balance amount of Rs. 1,00,00,000/- was paid by his brother. However, both have not offered any additional income on this account. Further, the PCIT submitted the following for the consideration of IBS. i) The land was purchased by the society and the asset is in the name of the society Hence, the investment made thereon has to be considered in the hands of the society. ii) The society is an Association of a person iii) The question arises why the individual has invested his unaccounted money when he cannot gain or earn from the same. 33 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT iv) Assessment of the society has been completed u/s. 1530 of the Act for AY 2016-17 and appropriate addition has been made in its hands, 9.6.2 In this regard, the applicant stated that the society has no Income for payment towards purchase of land and also there is no reference of society in the seized material. It clearly shows that the office bearer of the society has paid extra sale consideration but the, sale deed was executed in the name of society, if the office bearers of the society have paid the amount out of their own sources and not claimed the same from the society it cannot be construed to be undisclosed investment of the society and if it is claimed by the office bearer, it will be only a liability of the society to pay them. In view of the said facts, the reasons cited by the PCIT in the above pare la irrelevant. The society has also filed an appeal before CIT(A) against the assessment made u/s 153C which is pending for disposal, in these circumstances, on money paid by the applicant. In respect of land purchased by Samithi has been correctly considered by the applicant as application of his undisclosed Income.” 14. As it is evident from the above finding of the IBS wherein the objection of the revenue was considered even though based on the overall facts presented before the IBS the capitalization was allowed. The IBS also noted that the society has no income for payment towards purchase of land and also there is no reference of society in the seized material. This fact recorded in the order of the IBS is not controverted by the revenue by bringing any contrary evidence, so we do not see any reason not allow that benefit of the investment to the trustees. Not only that there is no finding in the order of the lower authority that there is unaccounted income of the assessee trust, but contrary to that the IBS has accepted the additional income of the trustees and considered the utilization of that additional 34 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT income with that of the investment made while purchasing the land in the name of the assessee trust, and trustees have been found the record of the on money and not the assessee trust. Thus, we see no infirmity in the finding of IBS allowing the benefit of on money paid by the trustee for the land purchase of land in the name of the assessee trust. 15. The bench also noted that ld. CIT(A) at Pg 8 of the order has directed the AO to pass the information to the jurisdictional officers to examine the applicability of section 271D/271E of the Act, this itself suggest that the ld. CIT(A) consider that the money is not paid by the society out of income but sourced from Shri Joginder Singh Sunda and Shri Piyush Sunda. The observation of ld. CIT(A) that in none of the submissions the assessee has made any categorical statement that payment of unaccounted cash for the land was made by the two individuals on its behalf is in correct because the assessee submitted all the details related to that available with the assessee. The ld. CIT(A) has not appreciated the fact that two brother though has no legal right on the land purchased by the assessee but it is incorrect on part of Ld. CIT(A) to observe that no documentary or corroborative evidence has been filed to show that the money flowed from the two individuals when the working of the on money is found from the 35 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT mobile of Shri Joginder Singh Sunda. The source for making the payment once considered in the hands of that two brother and trustees as it is evident form the order of the IBS the same sourced investment again cannot be taxed in the hands of the assessee. As regards the non- submission of the statement recorded, the same were not submitted as there is no question raised by the search team. This contention was raised by the assessee was not controverted by the ld. DR. Further no material has been brought on record by the lower authorities to establish that the cash as per the cash flow statement has been spent elsewhere. Therefore, it cannot be presumed by ld. CIT(A) that the same was not available in payment of on money by these persons. In fact, it is the onus of the ld. AO to prove that the same has been spent elsewhere. Thus, considering the overall facts presented, content written in the seized document found from Shri Joginder Singh Sunda we are of the considered view that the payment of on money paid for purchase of land cannot be added in the hands of the assessee trust. Based on these observations ground no. 1 raised by the assessee is allowed. 16. Ground no. 2 being the consequential charge of tax the same is not required to be adjudicated. Ground no. 3 being general not requires any 36 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT adjudication. For the ground no. 4 raised by the assessee in the absence of any arguments made in the written submission and even at the time of hearing of the appeal the same was not argued and pressed the same is treated as not pressed and consequently that ground no 4 is dismissed. In terms of these observations, the appeal of the assessee in ITA no. 203/JP/2024 is partly allowed. 17. The fact of the case in ITA No. 260/JP/2024 is similar to the case of the assessee in ITA No. 203/JP/2024. As we have heard both the parties on the same day together and having persuaded the materials available on record we note that the issues raised by the assessee in the appeal No. 260/JP/2024 are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts, grounds and arguments raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 203/JP/2024 for the Assessment Year 2017-18 shall apply mutatis mutandis in the case of Gargi Global Academy Sansthan in ITA No. 260/JP/2024 for the Assessment Year 2016-17. In the result, both appeals of the assessee are partly allowed. 37 ITA Nos. 203 & 260/JP/2024 Vivekanand Shiksha Samiti vs. DCIT Order pronounced in the open court on 05/07/2024. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 05/07/2024 * Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Vivekanand Shiksha Samiti, Palwas Road, Sikar Gargi Global Academy Sansthan, Sikar 2. izR;FkhZ@ The Respondent- DCIT, Central Circle-02, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA Nos. 203 & 260/JP/2024) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar