SHRI BALJEET YADAV, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 377/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0941 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR ASHWINI HOSMANI
• Assessee Lawyers: S L PODDAR; ISHA KANOONGO
• Keywords: Unexplained cash credit; Business income; Search and seizure; Salary income; Source of fund; Additional evidence; Question of law
• Section: 12A; 131; 54; 6; 68; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S-B, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 377/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 SHRI BALJEET YADAV 27, GYAN VIHAR, AJMER ROAD, NIRMAN NAGAR, JAIPUR CUKE VS. INCOME TAX OFFICER, WARD-2(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAOPY4448C VIHYKFKHZ@ APPEL LANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODDAR & SMT. ISHA KANOONGO (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : DR ASHWINI HOSMANI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 26/11/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-1, JAIPUR DATED 17.01.2018 FOR A.Y. 2014 -15 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL. 1. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 1,44,50,000/- U/S 68 OF THE INCOME TAX ACT, 1961 MADE BY THE LEARNED ASSESSING OFFICER. 2. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 45,50,000/- U/S 69 ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 2 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF ALLEGED U NEXPLAINED INVESTMENT. 3. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN GIVING THE FINDING REGARDING CA PITAL GAIN ON TOTAL CONSIDERATION OF RS. 1,18,32,565/- BY M/S RSWS AND ALSO REGARDING INVESTMENT BY THE ASSESSEE IN THE NAME OF RSWS IN F INANCIAL YEAR 2009-10 AND 2010-11 WITHOUT PROVIDING OPPORTUNITY T O THE ASSESSEE DURING APPELLATE PROCEEDINGS. 2. FIRSTLY, WE TAKE UP GROUND NO. 1 OF THE ASSESSEE S APPEAL. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAS MADE INVESTMENT IN PURCHASE OF FOUR IMMOVABLE PROPERTIES FOR A TOTAL CONSIDERATION OF RS. 1.90 CRORES. IN ORDER TO EXAM INE THE SOURCE OF INVESTMENT IN THE SAID PROPERTY, THE ASSESSEE WAS A SKED TO EXPLAIN THE SOURCE OF INVESTMENT ALONG WITH DOCUMENTARY EVIDENC E. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT AN INVESTMENT OF RS 5 L ACS IS FROM ASSESSEES OWN PROPRIETORSHIP CONCERN M/S GENTLEMAN, AN INVEST MENT OF RS. 45.50 LAKHS IS OUT OF ASSESSEES OWN CAPITAL AND THE SOUR CE OF REMAINING INVESTMENT IN THE SAID PROPERTIES IS THE AMOUNT OF LOANS BORROWED FROM VARIOUS PERSONS AMOUNTING TO RS. 1,44,50,000/- AS P ER THE DETAILS BELOW AS UNDER:- NAME OF THE PERSON PAN AMOUNT RECEIVED (RS.) SHRI GOPI RAM YADAV AAOPY4751A RS. 4,50,000 SMT. KAVITA YADAV ABFPY6965N RS. 3,45,000 SMT. ARTI YADAV ABFPY6964P RS. 4,50,000 ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 3 SHRI RAO VIRENDRA YADAV AAOPY4727C RS. 5,00,000 RAO VIRENDRA YADAV HUF AAQHR1683C RS. 5,00,000 M/S YUVRAJ (PROP. SHRI RAO VIRENDRA YADAV) AAOPY4727C RS. 3,55,000 M/S RAJASTHALI INFRASTRUCTURAL LTD. AAGRC2136P RS.7,00,000 M/S DREAMS UNLIMITED PROJECTS LTD. AAECD5068Q RS. 7,00,000 RAJASTHALI SHIKSHA & WELFARE SAMITI. AACTR2240K RS. 1,04,50,000 TOTAL 1,44,50,000 3. FURTHER, THE ASSESSEE FILED COPY OF RETURN OF IN COME, CONFIRMATION AND COPY OF BANK ACCOUNTS IN RESPECT OF AFORESAID I NDIVIDUALS AND THE COMPANIES FROM WHOM HE HAS TAKEN THE LOAN EXCEPT TH AT RETURN OF INCOME COULD NOT BE FILED IN RESPECT OF RAO VIRENDRA YADAV , HUF AND M/S RAJASTHALI SHIKSHA & WELFARE SAMITI, JAIPUR. IN ORDER TO VERIFY THE CONTENTS OF THE DOCUMENTS SO FILED AND IMMEDIATE SO URCE OF AMOUNT CREDITED IN THE BANK ACCOUNTS OF THE ABOVE PERSONS, SUMMONS WERE ALSO ISSUED BY THE AO IN ALL THESE CASES WITH A REQUEST TO MAKE PERSONAL APPEARANCE ALONG WITH DOCUMENT MENTIONED IN THE NOT ICE. THOUGH THE NOTICES WERE DULY SERVED ON ALL THESE PERSONS, HOWE VER, NO ONE ATTENDED NOR ANY WRITTEN SUBMISSION WAS FILED BY THE ASSESSE E. THEREAFTER, THE ASSESSING OFFICER ISSUED A SHOW CAUSE DATED 05.12.2 016 AS TO WHY THE ENTIRE AMOUNT OF RS. 1,44,50,000/- SHOULD NOT BE AD DED TO THE TOTAL ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 4 INCOME TREATING THE SAME AS UNEXPLAINED INCOME U/S 68 OF THE ACT. IN THE SHOW-CAUSE NOTICE, THE AO STATED THAT ON GOING THRO UGH THE CONFIRMATIONS AND THE OTHER DETAILS FILED BY THE ASSESSEE, IT IS OBSERVED THAT THE PERSONS FROM WHOM THE LOANS HAVE BEEN RECEIVED BY THE ASSES SEE ARE EITHER FAMILY MEMBERS OF THE ASSESSEE OR THE COMPANIES IN WHICH T HE ASSESSEE IS A DIRECTOR OR THE FIRM WHEREIN THE ASSESSEE IS THE PR OPRIETOR. AND IN RESPECT OF M/S RAJASTHALI SHIKSHA & WELFARE SAMITI, THE AO OBSERVED THAT THE ASSESSEE IS THE TRUSTEE OF THE SAID TRUST/SAMITI. FURTHER, THE ASSESSING OFFICER OBSERVED THAT ON GOING THROUGH THE COPY OF THE BANK ACCOUNTS, IT IS SEEN THAT THE AMOUNT HAS BEEN DEPOSITED JUST BEFORE ADVANCING TO THE ASSESSEE. HENCE, THE INITIAL SOURCE OF DEPOSIT MADE IN THE BANK ACCOUNTS OF THE CASH CREDITORS REQUIRED TO BE EXPLAINED WITH DOCUMENTARY EVIDENCES. 4. IN RESPONSE TO THE SAID SHOW-CAUSE NOTICE ISSUED BY THE AO, THE ASSESSEE FILED HIS SUBMISSIONS AND THE RELEVANT FIN DINGS OF THE AO ARE CONTAINED AT PARA 3.1 WHICH ARE REPRODUCED AS UNDER : 3.1 IN COMPLIANCE TO THE FINAL SHOW CAUSE NOTICE, THE ASSESSEE FILED WRITTEN SUBMISSION UNDER WHICH THE ASSESSEE MADE EX PLANATION IN RESPECT OF THE CASH CREDITORS, HOWEVER, NO DOCUMENT ARY EVIDENCE HAS BEEN FILED IN SUPPORT THEREOF. HOWEVER, THE WRITTEN SUBMISSION FILED BY THE ASSESSEE HAS BEEN CONSIDERED CAREFULLY AND AFTE R GOING THROUGH THE SUBMISSION, IT IS FOUND THAT THE EXPLANATIONS M ADE BY THE ASSESSEE ARE NOT ACCEPTABLE. THE CASE WISE DISCUSSION IS MAD E AS UNDER: A) RAJASTHALI SHIKSHA & WELFARE SAMITI: RS.1,04,50 ,000/- ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 5 EXPLANATION FILED BY THE ASSESSEE : 'IT IS A SOCIETY REGISTERED UNDER THE SOCIETY ACT F ROM JUNE, 2009. IT WAS SOLD OUT ITS LAND AND RECEIVED THE AMOUNT IN BANK ACCOUNT BY SALE PROCEED OUT OF WHICH AMOUNT OF RS.1,04,50,0 00/ - PAID TO THE ASSESSEE SO THERE IS NO ANY DOUBT ABOUT THE GEN UINENESS OF THE TRANSACTION. COPY OF 5 REGISTRIES OF SALE DEED IS BEING ATTACHED): 1. BAANWARI LAL GURJA, 2. RAMESH KUMAR RAYA 3. RAMPAL 4. VIJAY KUMAR 5. RAJEEV KUMAR KASANA (COPY OF BANK STATEMENT AND SIGNED CONFIRMATION HAS ALREADY BEEN SUBMITTED , COPY OF PAN AND REGISTRATION CERTIFICAT E FROM REGISTRAR OF SOCIETIES IS BEING ATTACHED). HENCE, IDENTITY OF CREDITORS, CREDITWORTHINESS AND CREDITOR AND GENUINENESS OF PAYMENT THROUGH BAKING CHANNEL IS PR OVED. CONCLUSION : THE ASSESSEE RECEIVED AN AMOUNT OF RS.1,04,50,000/- FROM THE ABOVE NAMED SOCIETY THROUGH CHEQUES BETWEEN 7TH OCT., 201 3 TO 1ST NOV., 2013. THE SOURCE OF ADVANCE OF RS.1,04,00,000/- HAS BEEN EXPLAINED AS SALE CONSIDERATION RECEIVED ON SALE OF PROPERTIE S. THE ASSESSEE IS ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 6 THE SECRETARY IN THE SOCIETY AND ALL THE SALE DEEDS HAVE BEEN EXECUTED BY HIM UNDER HIS SIGNATURE. ON GOING THROU GH THE SALE DEEDS, IT IS FOUND THAT THE DETAILS OF SALE CONSIDE RATION RECEIVED BY THE SOCIETY ARE AS UNDER: PROPERTY SOLD TO CHEQUE CASH TOTAL BANWARI LAL GURJAR 30,00,000/- 68,0 00/- 30,68,000/- RAMESH KUMAR RAYA 23,00,000/- 1,17,000/- RS.24,17,000/- RAMPAL 21,00,000/- 84,900/- RS.21,84,900/- VIJAY KUMAR 21,00,000/- 84,900/- RS.21,84,900/- RAJEEV KUMAR KASANA 19,00,000/- 77,765/- RS. 19,77,765/- 1,14,00,000/- 4,32,565/- RS. 1,18,32,565/- ON GOING THROUGH THE SALE DEEDS/DOCUMENTS, IT IS NO TICED THAT THE ASSESSEE SOLD HIS OWN PROPERTIES AND NOT THE PROPER TIES OF THE SOCIETY. HOWEVER, IT HAS BEEN TRIED TO SHOW THAT THE PROPERT IES HAVE BEEN SOLD BY THE SOCIETY THROUGH ITS SECRETARY SHRI BALJEET YADA Y. INDIRECTLY, THE ASSESSEE RECEIVED A HUGE AMOUNT OF RS. 1,18,32,565/ - THROUGH THE BANK ACCOUNT OF THE SOCIETY. SINCE, THE SOCIETY HAS UNDE RTAKEN HIGH VALUE TRANSACTION THROUGH ITS SECRETARY, THEREFORE, IT WA S OBLIGATORY ON THE PART OF THE SOCIETY TO FILE RETURN OF INCOME AND TO DISC LOSE THE TRANSACTIONS IN IT. NOTHING HAS BEEN STATED ABOUT THE LIABILITY OF CAPITAL GAIN TAX ON THESE TRANSACTIONS. AS SUCH, THE SOCIETY HAS FAILED TO FILE ANY DOCUMENTARY EVIDENCE WITH REGARD TO DISCLOSURE OF T HE TRANSACTION IN ITS RETURN OF INCOME, THEREFORE, THE TRANSACTION REMAIN ED UNDISCLOSED INCOME IN THE HANDS OF THE SOCIETY. THEREFORE, ADVA NCING AMOUNTING TO RS.1,04,00,000/- OUT OF UNDISCLOSED INCOME OF THE S OCIETY TO THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 7 ASSESSEE CANNOT BE TREATED AS GENUINE TRANSACTION. AS REGARDS THE PAYMENT MADE THROUGH PAYEE CHEQUE IS CONCERN, IT IS ESTABLISHED THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSA NCT NOR CAN IT MAKE A NON GENUINE TRANSACTION GENUINE. IN VIEW OF THE ABOVE, THE AMOUNT OF RS.1,04,00,000/- IS ADDED TO THE TOTAL IN COME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME OF THE ASSE SSEE U/ S. 68 OF THE I.T. ACT, 1961. B) SMT. KAVITA YADAV : RS. 3,45,000/- EXPLANATION FILED BY THE ASSESSEE: SHE IS A SALARIED PERSON EARN INCOME FROM SALARY ON REGULAR BASIS FROM A LONG TIME AGO. SHE IS ALSO FILING HER INCOME TAX RETURN REGULARLY SO IT IS VERY GENUINE TO PAY ANYBODY THE AMOUNT LIKE T HIS AS IT IS VERY SMALL AMOUNT. CONCLUSION : SMT. KAVITA YADAV IS WIFE OF THE ASSESSEE. ON GOIN G THROUGH THE COPY OF BANK ACCOUNT OF SMT. KAVITA YADAV, IT I S SEEN THAT THE AMOUNT OF RS.3,45,000/- WAS CREDITED IN THE BANK AC COUNT ON 2 ND AUGUST, 2013 AND THE SAME AMOUNT GIVEN AS LOAN TO T HE ASSESSEE ON 3RD AUGUST, 2013. SUMMON U/S.131 WAS ISSUED TO HER TO E XPLAIN THE SOURCE OF DEPOSIT MADE IN HER BANK ACCOUNT, HOWEVER, SMT. KAVITA YADAV HAS FAILED TO EXPLAIN THE SOURCE OF RS. 3,45,000/- AS W ELL AS OTHER AMOUNT CREDITED IN HER BANK ACCOUNT, SPECIALLY, THE AMOUNT CREDITED ON 2 ND AUGUST, 2013. ALTHOUGH, IN THE RETURN OF INCOME FOR THE ASSTT. YEAR 2014-15, SMT. KAVITA YADAV HAS DECLARED SALARY INCO ME OF RS.2,64,000/, HOWEVER, IT DOES NOT PROVE THAT SHE WAS EARNING SAL ARY INCOME REGULARLY, ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 8 AND LOAN WAS GIVEN OUT OF HER SALARY INCOME. AS SUC H, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION COULD NOT BE PR OVED, THEREFORE, THE AMOUNT OF RS.3,45,000/- IS ADDED TO THE TOTAL INCOM E OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME U/S 68 OF T HE I.T. ACT, 1961. C) SHRI GOPI RAM YADAV : RS. 4,50,000/- EXPLANATION FILED BY THE ASSESSEE: HE IS AN INCOME TAX ASSESSEE AS WELL AS SENIOR CITI ZEN, RECEIVING PENSION FROM MILITARY AND THE SAME IS CREDITING HIS BANK IN EVERY MONTH SO IT IS VERY SMALL AMOUNT. CONCLUSION : SHRI GOPI RAM YADAV IS FATHER OF THE ASSESSEE. ON G OING THROUGH THE COPY OF BANK ACCOUNT OF SHRI GOPI RAM YADAV, IT IS SEEN THAT THE AMOUNT OF RS.4,25,000/- WAS CREDITED IN THE BANK AC COUNT ON 2ND AUGUST, 2013 AND THE SAME AMOUNT GIVEN AS LOAN TO T HE ASSESSEE ON 3 RD AUGUST, 2013. SUMMON U/S.131 WAS ISSUED TO HIM TO EXPLAIN THE SOURCE OF DEPOSIT MADE IN HIS BANK ACCOUNT, HOWEVER , SHRI GOPI RAM YADAV, HAS FAILED TO EXPLAIN THE SOURCE OF RS.4,50, 000/- AS WELL AS OTHER AMOUNT CREDITED IN HER BANK ACCOUNT, SPECIALL Y, THE AMOUNT CREDITED ON 2 N D AUGUST, 2013, AS HE FAILED TO MAKE COMPLIANCE OF THE SUMMON. ALTHOUGH, IN THE RETURN OF INCOME FOR THE A SSTT. YEAR 2014- 15, SHRI GOPI RAM YADAV, HAS DECLARED SALARY INCOME OF RS.1,30,326/-, HOWEVER, SALARY INCOME IS NOT BEING CREDITED REGULARLY IN THIS ACCOUNT, THEREFORE, IT DOES NOT PROVE THAT HE WAS EARNING SALARY INCOME REGULARLY, AND LOAN WAS GIVEN OUT OF HIS SALARY INCOME. AS SUCH, GENUINENESS AND CREDITWORTHINESS OF THE TR ANSACTION COULD ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 9 NOT BE PROVED, THEREFORE, THE AMOUNT OF RS.4,50,000 /- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS U NEXPLAINED INCOME U/S.68 OF THE I.T. ACT, 1961. D) SMT. ARTI YADAV : RS.4,50,000 EXPLANATION OF THE ASSESSEE : SHE IS A SALARIED PERSON EARN INCOME FROM SALARY O N REGULAR BASIS FROM A LONG TIME AGO. SHE IS ALSO FIL ING HER INCOME TAX RETURN REGULARLY SO IT IS VERY GENUINE TO PAY A NYBODY THE AMOUNT LIKE THIS AS IT IS VERY SMALL AMOUNT. CONCLUSION : SMT. ARTI YADAV IS WIFE OF SHRI VIREND RA YADAV, BROTHER OF THE ASSESSEE. ON GOING THROUGH THE COPY OF BANK ACC OUNT OF SMT. ARTI YADAV, IT IS SEEN THAT THE AMOUNT OF RS. 4,50,000/- WAS CREDITED IN THE BANK ACCOUNT ON 2 ND AUGUST, 2013 AND THE SAME AMOUNT GIVEN AS LOAN TO THE ASSESSEE ON 3 RD AUGUST, 2013. SUMMON U/S 131 WAS ISSUED TO HER TO EXPLAIN THE SOURCE OF DEPOSIT MADE IN HER BA NK ACCOUNT, HOWEVER, SMT. ARTI YADAV HAS FAILED TO EXPLAIN THE SOURCE OF RS.4,50,000/- AS WELL AS OTHER AMOUNT CREDITED IN H ER BANK ACCOUNT, SPECIALLY, THE AMOUNT CREDITED ON 2ND AUGUST, 2013. ALTHOUGH, IN THE RETURN OF INCOME FOR THE ASSTT. YEAR 2014-15, SMT. ARTI YADAV HAS DECLARED SALARY INCOME OF RS.3,09,000/-, HOWEVER, I T DOES NOT PROVE THAT SHE WAS EARNING SALARY INCOME REGULARLY, AS NO SALA RY AMOUNT IS CREDITED IN THE BANK ACCOUNT AND LOAN WAS GIVEN OUT OF HER S ALARY INCOME. AS SUCH, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION COULD NOT BE PROVED, THEREFORE, THE AMOUNT OF RS.4,50,000/- IS ADDED TO THE TOTAL INCOME OF THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 10 ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME U/ S.68 OF THE I.T. ACT, 1961. E) SHRI RAO VIRENDRA YADAV PROP. M/S.YUVRAJ : RS.5,00,000/- SHRI RAO VIRENDRA YADAV PROP. M/S.YUVRAJ : RS.3,55,000/- SHRI RAO VIRENDRA YADAV, HUF : RS.5,00,000/- EXPLANATION FILED BY THE ASSESSEE : 'IT IS A PROPRIETORSHIP FIRM OF THE BROTHER OF THE ASSESSEE WHICH IS DEALING WITH SALE PURCHASE OF BRANDED READ YMADE GARMENTS AND TOTAL AVERAGE SALE OF THE FIRM WAS APP ROX. RS.60 LACS FOR THE YEARS. INCOME TAX RETURN WAS REGULARLY FILE D BY HIM WHICH IS ABOVE 4-5 LAC SO THERE IS NO ANY DOUBT ABOUT THE CR EDITWORTHINESS OF THE PARTY. ' 'ASSESSEE DEALING IN REAL ESTATE'S BUSINESS AND HE RECEIVED FUNDS FROM SOME OTHER FRIEND, WHICH IS ADVANCED TO MR. BA LJEET YADAY. PAYMENT IS MADE BY PROPER BANKING CHANNEL AND PAN O F ASSESSEE IS AAQHR1683C. BANK STATEMENT ALREADY SUBMITTED TO YOU.' CONCLUSION : SHRI VIRENDRA YADAV IS BROTHER OF THE ASSESSEE. ON GOING THROUGH THE COPY OF BANK ACCOUNT OF SHRI VIRDNRA RAO AS WELL AS M/S. VIRENDRA YADA, HUF, IT IS SEEN THAT THE AMOUNT OF RS.5,00,000/- WAS CREDIT ED IN BOTH THE BANK ACCOUNT ON 2 ND AUGUST, 2013 AND THE SAME AMOUNT GIVEN AS LOAN TO THE ASSESSEE ON 3 R D AUGUST, 2013. SUMMON U/S.131 WAS ISSUED TO THEM T O EXPLAIN THE SOURCE OF DEPOSIT MADE IN HIS/THEIR BAN K ACCOUNTS, HOWEVER, ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 11 SHRI VIRENDRA YADAV, HAS FAILED TO EXPLAIN THE SOUR CE OF RS.5,00,000/- MADE IN EACH A/C AS WELL AS OTHER AMOUNT CREDITED I N THEIR BANK ACCOUNT, SPECIALLY, THE AMOUNT CREDITED ON 2ND AUGUST, 2013, AS HE FAILED TO MAKE COMPLIANCE OF THE SUMMON. ALTHOUGH, IN THE RETURN O F INCOME FOR THE ASSTT. YEAR 2014-15, SHRI VIRENDRA YADAV, INDIVIDUA L FILED RETURN OF INCOME AND HAS DECLARED BUSINESS INCOME OF RS. 5,08,204/-, HOWEVER, BUSINESS TRANSACTIONS ARE NOT BEING REFLECTED IN THIS ACCOUN T, THEREFORE, IT DOES NOT PROVE THAT THE LOAN WAS GIVEN OUT OF HIS BUSINESS I NCOME. RETURN OF INCOME IN RESPECT OF RAO VIRENDRA YADAV, HUF HAS NO T BEEN FILED. AS SUCH, GENUINENESS AND CREDITWORTHINESS OF THE CASH CREDIT ORS(S) COULD NOT BE PROVED THEREFORE, THE AMOUNT OF RS. 13,55,000/- (RS . 5,00,000/- + RS. 3,55,000/- + RS. 5,00,000/- IS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME U/S 68 OF T HE I.T. ACT, 1961. (F) M/S. RAJASTHAN INFRASTRUCTURE LIMITED : RS.7,00 ,000/- EXPLANATION FILED BY THE ASSESSEE : 'IT IS A PVT. LTD. COMPANY REGISTERED WITH R OC JAIPUR AND DEALING IN BUSINESS OF REAL ESTATE DEVELOPER SO IT WAS PAID AMOUNT OF RS.7,00,000/ - AS ADVANCE AGAINST LAND TO THE ASSES SEE FOR PURCHASE A PIECE OF LAND TO DEVELOP THE PROJECT OF THE COMPA NY. ' CONCLUSION : THE COMPANY WAS INCORPORATED ON 31.12.2012, IN WHI CH THE ASSESSEE AND HIS FAMILY MEMBERS ARE MAIN SUBSCR IBERS. THE ASSESSEE HAS FAILED TO FILE COPY OF AUDIT REPORT AS WELL AS BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND OTHER ACCOUNTS S TATEMENTS OF THE COMPANY FOR THE F.Y. 2012-13 AND 2013-14, SO THAT C REDITWORTHINESS OF THE COMPANY COULD BE EXAMINED & VERIFIED. THE AS SESSEE COULD ONLY FILE MEMORANDUM AND ARTICLES OF ASSOCIATION, C OPY OF RETURN ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 12 RECEIPT AND COPY OF BANK ACCOUNT. THE ASSESSEE FILE D RETURN OF INCOME DECLARING LOSS OF RS.14,748/-. ON GOING THROUGH THE COPY OF BANK ACCOUNT OF THE COMPANY, IT IS SEEN THAT THE AMOUNT OF RS.7,00,000/- WAS CREDITED IN THE BANK ACCOUNT ON 2ND AUGUST, 201 3 AND THE SAME AMOUNT GIVEN AS LOAN TO THE ASSESSEE ON 3RD AUGUST, 2013. SUMMON U/S.131 WAS ISSUED TO THE COMPANY TO EXPLAIN THE SO URCE OF DEPOSIT MADE IN ITS BANK ACCOUNT, HOWEVER, THE ABOVE NAMED COMPANY , HAS FAILED TO EXPLAIN THE SOURCE OF RS.7,00,000/- CREDI TED IN THE BANK ACCOUNT, SPECIALLY, THE AMOUNT CREDITED ON 211D AUG UST, 2013, AS IT FAILED TO MAKE COMPLIANCE OF THE SUMMON. AS SUCH, G ENUINENESS AND CREDITOWRTHINESS OF THE COMPANY COULD NOT BE PROVED , THEREFORE, THE AMOUNT OF RS. 7,00,000/- IS ADDED TO THE TOTAL INCO ME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME U/S 68 OF T HE I.T. ACT, 1961. (G) M/S DREAMS UNLIMITED PROJECTS LIMITED: RS. 7,0 0,000/- EXPLANATION FILED BY THE ASSESSEE: IT IS A PVT. LTD. COMPANY REGISTERED WITH ROC JAI PUR AND DEALING IN BUSINESS OF REAL ESTATE DEVELOPER SO IT WAS PAID AMOUNT OF RS.7,00,000/ - AS ADVANCE AGAINST LAND TO THE ASSES SEE FOR PURCHASE A PIECE OF LAND TO DEVELOP THE PROJECT OF THE COMPANY . ' CONCLUSION : THE COMPANY WAS INCORPORATED ON 27.02.2013, IN WH ICH THE ASSESSEE AND HIS FAMILY MEMBERS ARE MAIN SUBSCR IBERS. THE ASSESSEE HAS FAILED TO FILE COPY OF AUDIT REPORT AS WELL AS BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND OTHER ACCOUNTS S TATEMENTS OF THE COMPANY FOR THE F.Y. 2012-13 AND F.Y. 2013-14, SO T HAT CREDITWORTHINESS OF THE COMPANY COULD BE EXAMINED A ND VERIFIED. THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 13 ASSESSEE COULD ONLY FILE MEMORANDUM AND ARTICLES OF ASSOCIATION, COPY OF RETURN RECEIPT AND COPY OF BANK ACCOUNT. TH E ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2014-15 DECLARING LOS S OF RS.40,429/-. ON GOING THROUGH THE COPY OF BANK ACCOUNT OF THE CO MPANY, IT IS SEEN THAT THE AMOUNT OF RS.7,00,000/- WAS CREDITED IN THE BANK ACCOUNT ON 2 ND AUGUST, 2013 AND THE SAME AMOUNT GIVEN AS LOAN TO THE ASSESSEE ON 3 RD AUGUST, 2013. SUMMON U/S.131 WAS ISSUED TO THE COMPANY TO EXPLAIN THE SOURCE OF DEPOSIT MADE IN IT S BANK ACCOUNT, HOWEVER, THE ABOVE NAMED COMPANY , HAS FAILED TO EX PLAIN THE SOURCE OF RS.7,00,000/- CREDITED IN THE BANK ACCOUN T, SPECIALLY, THE AMOUNT CREDITED ON 2 ND AUGUST, 2013, AS IT FAILED TO MAKE COMPLIANCE OF THE SUMMON. AS SUCH, GENUINENESS AND CREDITWORTHINESS OF THE COMPANY COULD NOT BE PROVED , THEREFORE, THE AMOUNT OF RS.7,00,000/- IS ADDED TO THE TOTAL INCOM E OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED INCOME U/S.68 OF T HE I.T. ACT, 1961. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND DETAILS WRITTEN SUBMISSIONS WERE FILED WHICH HAVE BEEN REITERATED BEFORE US, HENCE, IT WOULD BE APPROPRIAT E TO REPRODUCE THE SAME AS BELOW: 3.1 IT WAS SUBMITTED BEFORE THE LD AO THAT RAJASTH ALI SHIKSHA & WELFARE SAMITI ('SOCIETY' OR 'RSWS') IS A SOCIETY R EGISTERED, FROM JUNE 2009, UNDER THE SOCIETIES REGISTRATION ACT. TH E ASSESSEE, BALJIT YADAV WAS THE SECRETARY OF THE SOCIETY. THESE FACTS HAVE NOT BEEN DISPUTED BY THE LD AO. 3.2. THE SAID SOCIETY SOLD ITS LAND DURING THE RELE VANT PREVIOUS YEAR, OUT OF WHICH IT RECEIVED AMOUNT THROUGH BANKING CHA NNEL OF ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 14 RS.1,14,00,000 AND RS.4,32,565 IN CASH. THUS, THE T OTAL CONSIDERATION RECEIVED BY THE SOCIETY OUT OF SUCH SALE DURING THE RELEVANT PREVIOUS YEAR WAS RS. 1,18,32,565. DETAILS ARE AS UNDER- PROPERTY SOLD TO CHEQUE RECEIVED CASH TOTAL PB BANWARI LAL GURJAR 30,00,000 68,000 30,68,000 43 - 48 RAMESH KUMAR RAYA 23,00,000 1,17,000 24,17,000 49 - 52 RAMPAL 21,00,000 84,900 21,84,900 59 - 62 VIJAY KUMAR 21,00,000 84,900 21,84,900 53 - 58 RAJEEV KUMAR KAS ANA 19,00,000 77,765 19,77,765 63 - 68 1,14,00,000 432565 1,18,32,565 3.3 OUT OF THE TOTAL CONSIDERATION RECEIVED, THE AM OUNT RECEIVED BY WAY OF CHEQUE OF RS. 114,00,000 WAS SUBSEQUENTLY GI VEN BY THE SOCIETY TO THE ASSESSEE AS A PART OF LOAN THROUGH P ROPER BANKING CHANNEL. CONFIRMATION IN THIS REGARD ALONG WITH REL EVANT BANK STATEMENT OF THE SAID SOCIETY WAS SUBMITTED BEFORE THE LD AO. 3.4. SALE DEED FOR THE SALES MADE BY THE SOCIETY WE RE EXECUTED THROUGH THE ASSESSEE ACTING AS ITS SECRETARY. ON NO TING THE SIGN OF THE ASSESSEE ON THE SALE DEEDS, ASSESSEE CONFUSED T HE PROPERTIES SOLD AS BELONGING TO THE ASSESSEE AND NOT THE SOCIE TY. 3.5. THE ID AO RAISED DOUBTS WITH REGARD TO THE DIS CLOSURE OF SUCH TRANSACTION BY THE SOCIETY. IT IS SUBMITTED THAT TH E SOCIETY AND THE ASSESSEE ARE THE TWO DIFFERENT PERSON AND NON FILIN G OF RETURN BY ONE PERSON, THE OTHER PERSON CANNOT BE HELD ACCOUNTABLE . ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 15 3.6. LD. AO AT PAGE 8 OF HIS ORDER HAS ADMITTED RS. 1,04,00,000 TO BE INCOME OF THE SOCIETY ALTHOUGH IN HIS OPINION UNDIS CLOSED LD. AO FOR THIS REASON TREATED THE TRANSACTION WITH THE ASSESSEE TO BE NON-GENUINE. IT IS SUBMITTED THAT, AT WORST, THE AMOUNT CAN BE TREATED AS INCOME OF THE SOCIETY, BUT NOTHING CAN BE ADDED IN THE HANDS OF T HE ASSESSEE. 3.7 ALSO, WITHOUT AGREEING TO ABOVE, IF THE ID. AO WAS OF THE VIEW THAT THE PROPERTIES SOLD BY THE SOCIETY WERE ACTUAL LY OF THE ASSESSEE, THEN ID. AO COULD HAVE ADDED SUCH SUM IN THE HANDS OF THE ASSESSEE UNDER THE HEAD 'CAPITAL GAINS'. HOWEVER, ID. AO WA S HIMSELF NOT CONVINCED WITH THE PROPOSITION AND THUS SIMPLY ON T HE BASIS OF GUESSWORK ADDITION THE LOAN AMOUNT IN THE HANDS OF THE ASSESSEE. 3.8. IT IS SUBMITTED THAT THE TRANSACTION WITH OTHE R INDIVIDUALS WERE THROUGH PROPER BANKING CHANNEL. DETAILS ARE AS UND ER:- NAME OF THE LENDER LOAN AMOUNT (RS.) SUMMON SERVED U/S 131 PAN TRANSACTI ON THROUGH PROPER BANKING CHANNEL DOCUMENTS SUBMITTED OF LENDER SUBSEQUENT STATUS LO AN AMOUNT REFLECTED IN ASSESSEES BANK ACCOUNT ITR CONFIRMATIO N BANK STATEMENT AMOUNT RETURNED BANKING CHANNEL USED FOR RETURNING RECEIPT OF LOAN REPAYMENT OF LOAN SHRI GOPI RAM YADAV 450,000 YES AAOPY4751A YES YES YES YES YES YES YES YES SMT. KAVITA YADAV 345,000 YES ABFPY6965N YES YES YES YES YES YES YES YES SMT. ARTI YADAV 450,000 YES ABFPY6964P Y ES YES YES YES YES YES YES YES SHRI RAO VIRENDRA YADAV 500,000 YES AAOPY4727C YES YES YES YES YES YES YES YES M/S YUVRAJ 350,000 YES AAOPY4727C YES YES YES YES YES YES YES YES RAO VIRENDRA YADAV HUF 500,000 YES AAQHR1683C YES YES YES YES YES YES YES YES M/S. RAJASTHALI INFRASTRUCTURE LIMITED 700,000 YES AAGCR2136P YES YES YES YES YES YES YES YES ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 16 M/S. DREAMS UNLIMITED PROJECTS LTD. 700,000 YES AAECD5068Q YES YES YES YES YES YES YES YES TOTAL 3,995,000 3.9. IDENTITY OF ALL THE PARTIES WAS ESTABLISHED BE YOND DOUBT. CREDITWORTHINESS OF THE LENDER IS ALSO ESTABLISHED. THE TRANSACTION IS GENUINE. THE ID. AO AT BEST COULD HAVE ASSESSED SUC H AMOUNT IN THE HANDS OF LENDERS . 3.10. RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS, THE EXTRACTS OF WHICH HAVE BEEN SET OUT FOR THE SAKE OF CONVENIENCE:- 3.10.I CIT VS. KAMLABEN SURESHCHANDRA BHATTI [2014] 44 TAXMANN.COM 459 (GUJARAT) '...HEAD NOTES - SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS (BANK DEPOSITS)- DURING ASSESSMENT PROCEEDINGS, ASS ESSING OFFICER MADE ADDITION TO ASSESSEES INCOME IN RESPECT OF AMOUNT DEPOSITED IN BANK ACCOUNT IN APPELLATE PROCEEDINGS, COMMISSIONER (A PPEALS) NOTED THAT ASSESSEE HAD EXPLAINED SOURCE OF A PART OF AMOUNT D EPOSITED COMING FROM BANK LOAN AND SALE OF AGRICULTURAL LAND - HE THUS D ELETED SUBSTANTIAL PORTION OF ADDITION MADE BY ASSESSING OFFICER TRIBU NAL CONFIRMED ORDER OF COMMISSIONER (APPEALS) - WHETHER SINCE ENTIRE ISSUE WAS BASED ON APPRECIATION OF EVIDENCE ON RECORD, NO SUBSTANTIAL QUESTION OF LAW AROSE THEREFROM - HELD, YES...' 3.10.II KANHAIALAL JANGID VS. ACIT [2008] 217 CTR 354 (RAJ.) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 17 ' ....WE ARE OF THE OPINION THAT IN REJECTING THE E XPLANATION OF THE ASSESSEE ON THE UNDISPUTED FACTS IS FOUNDED ON ERRO NEOUS APPLICATION OF LAW IN THE MATTER. WHILE IT WAS THE ASSESSEE'S BUFD EN TO FURNISH EXPLANATION RELATING TO SUCH CASH CREDITS, THE ASSE SSEE'S BURDEN DOES NOT EXTEND BEYOND PROVING THE EXISTENCE OF THE CREDITOR AND FURTHER PROVING THAT SUCH CREDITOR OWNS TO HAVE ADVANCED THE AMOUNT CREDITED IN THE ACCOUNT OF ASSESSEE TO HIM. HOWEVER, THE BURDEN DOE S NOT GO BEYOND TO PUT THE ASSESSEE UNDER AN OBLIGATION TO FURTHER PRO VE THAT WHEREFROM THE CREDITOR HAS GOT OR PROCURED THE MONEY TO BE DE POSITED OR ADVANCED TO THE ASSESSEE. THE FACT THAT THE EXPLANA TION FURNISHED BY THE CREDITOR ABOUT THE SOURCE FROM WHERE HE PROCURED TH E MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE, IS NOT RELEV ANT FOR THE PURPOSES OF REJECTING THE EXPLANATION FURNISHED BY THE ASSES SEE. AND MAKE ADDITIONS OF SUCH DEPOSITS AS INCOME OF THE ASSESSE E FROM UNDISCLOSED SOURCES BY INVOKING SECTION 68 OF THE IT ACT, UNLES S IT CAN BE SHOWN BY THE DEPARTMENT BY THE DEPARTMENT THAT THE SOURCE OF SUCH MONEY COMES FROM THE ASSESSEE HIMSELF OR SUCH SOURCE COUL D BE TRACED TO THE ASSESSEE ITSELF. IN THE PRESENT CASE WHILE EXISTENC E OF SRI DEVENDRA SANKHLA THE CREDITOR IS NOT IN DOUBT, AND HE HAS AD MITTED TO HAVE ADVANCED THE LOAN TO THE ASSESSEE. THE FACT THAT TH E EXPLANATION FURNISHED BY SRI DEVENDRA SANKHLA ABOUT HIS SOURCE OF SUCH ADVANCEMENT HAS NOT BEEN ACCEPTED BY THE REVENUE AU THORITY CANNOT LEAD TO ANY PRESUMPTION THAT THE SOURCE OF SUCH ADV ANCEMENT BY SRI DEVENDRA SANKHLA EMANATED FROM THE ASSESSEE. THEREF ORE, ADDITION OF RS. 16,000 IN THE INCOME OT ASSESSEE AS CASH CREDIT IN THE NAME OF SRI DEVENDRA SANKHLA CANNOT BE SUSTAINED. SUCH ADDITION OF INCOME OF ASSESSEE HAS TO BE DELETED FROM THE INCOME OF ASSES SEE...' ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 18 3.11. APPARENT IS REAL: THE TRANSACTION IS ABSOLUTE LY IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN THE LAW AND FULLY E VIDENCED. NO DEFECTS HAVE BEEN POINTED OUT IN THESE. THEREFORE, THE TRAN SACTION MUST BE ACCEPTED AS GENUINE. WE RELY ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DAULAT RAM RAWATMULL ( 1973) 87 ITR 349 (SC), WHEREIN IT WAS HELD THAT THE ONUS OF PROVING THAT THE APPARENT WAS NOT REAL WAS ON THE PARTY WHO CLAIMED IT TO BE SO. 3.12. THERE IS NO EVIDENCE, TO SHOW THAT THE MONEY SO RECEIVED ACTUALLY BELONGED TO THE ASSESSEE. NOWHERE THE LD. AO HAS SU GGESTED THAT THE MONEY GIVEN BY LENDERS HAD ACTUALLY FLOWN FROM THE ASSESSEE COMPANY. IN ABSENCE OF ANY SUCH COGENT EVIDENCE ON RECORD, NO A DDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE MERELY ON SUSPIC ION. THIS RATIO IS LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT OF RAJASTHAN IN THE CASE OF SHUBH MINES PRIVATE LIMITED (INCOME TAX APP EAL NO. 96/15), VIDE ITS ORDER DATED 03.05.2016, IN WHICH IT WAS HE LD THAT 'IN ABSENCE OF ANY COGENT EVIDENCE ON RECORD ESTABLISHING THAT THE MONEY SHOWN TO HAVE RECEIVED AS SHARE APPLICATION MONEY, WAS AS A MATTER OF FACT, UNACCOUNTED MONEY BELONGING TO THE ASSESSEE COMPANY , THE FINDING ARRIVED AT BY THE AO, WHICH IS BASED ON SUSPICION, HAS RIGHTLY ARRIVED AT BY THE CIT (A), AFFIRMED BY THE ITAT, WHICH REMA INS A FINDING OF FACT, CANNOT BE SAID TO BE CAPRICIOUS OR PERVERSE.. .' 3.13. FURTHER, THE ASSESSEE WAS RUNNING HIS BUSINES S IN THE NAME OF M/S GENTLEMEN, WHEREIN THE ASSESSEE WAS GENERATING ENOU GH MONEY THROUGH WHICH HE COULD INVEST THE AMOUNT IN THE PROPERTIES. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 19 IN VIEW OF THE ABOVE, ADDITION MADE BY THE ID. AO I S WITHOUT ANY COGENT BASIS AND SIMPLY ON THE BASIS OF CONJECTURE AND SURMISES AND DESERVES TO BE DELETED BY ALLOWING BOTH THE GRO UNDS OF APPEAL. 6. WE NOW REFER TO THE FINDING OF THE LD. CIT(A) WH O HAS CONSIDERED THE AFORESAID SUBMISSIONS OF THE ASSESSEE AND HIS F INDINGS ARE CONTAINED AT PARA 3.1.2 OF HIS ORDER AND THE RELEVANT PORTION THEREOF IS REPRODUCED AS UNDER:- (IV) IT WOULD BE APPROPRIATE TO FIRST DISCUSS THE ISSUE OF LOAN OF RS. 1,04,50,000/- CLAIMED TO BE TAKEN BY THE APPELL ANT FROM M/S RAJASTHALI SIKSHA & WELFARE SAMITI (RSWS). IT IS TO BE NOTED T HAT THE APPELLANT WAS THE FOUNDER MEMBER OF M/S RSWS AND IN FACT, WAS APP OINTED AS A SECRETARY THEREON. M/S RSWS WAS REGISTERED WITH THE REGISTRAR OF SOCIETIES, JAIPUR ON 25.06.2009 AND THE MAIN PURPOS E OF THE SAMITI WAS SETTING UP OF SCHOOLS AND COLLEGES, TO MAKE WOMEN I NDEPENDENT, SPREAD COMPUTER EDUCATION IN RURAL AREA ETC I.E. THE OBJEC TS APPEARS TO BE CHARITABLE IN NATURE. HOWEVER, NO CERTIFICATE HAS B EEN OBTAINED BY M/S RSWS U/S 12A OF THE ACT MEANING THEREBY THAT THE IN COME OF M/S RSWS IS NOT EXEMPT FROM TAXATION. THERE IS NO EVIDENCE ON R ECORD WHICH MAY SUGGEST THAT M/S RSWS WAS ENGAGED IN ANY OF THE CHA RTITABLE ACTIVITIES AS STATED IN ITS OBJECTS. DURING THE APPELLATE PROCEED INGS, IT WAS SUBMITTED BY THE APPELLANT THAT M/S RSWS HAS ADVANCED LOAN OF RS . 1,04,50,000/- OUT OF THE SALE CONSIDERATION OF ITS LANDS SOLD DURING THE YEAR UNDER CONSIDERATION. VIDE ORDER SHEET ENTRY DATED 30.10.2 017, THE APPELLANT WAS REQUIRED TO FILE A NUMBER OF DETAILS IN RELATION TO M/S RSWS INCLUDING THE COPY OF SALE DEEDS FOR ACQUIRING THE LAND BY M/S RS WS, COPY OF BANK ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 20 ACCOUNT OF M/S RSWS FOR PURCHASING THE LANDS WHICH WERE SOLD DURING THE YEAR UNDER CONSIDERATION. ON 06.12.2017, THE APPELL ANT HAS FILED SOME OF THESE DETAILS BUT DID NOT FILE THE RELEVANT COPY OF BANK ACCOUNT STATEMENT OF M/S RSWS FOR PURCHASE OF LANDS. BUT IT HAS FILED A COPY OF BANK ACCOUNT OF M/S RSWS FROM 01.04.2016 TO 17.11.2017 WHICH IS NOT RELEVANT FOR THE ISSUE UNDER CONSIDERATION. IT HAS ALSO FILED COPIES OF RETURN OF M/S RSWS FOR THE AY 2015-16 AND 2016-17 E-FILED ON 24.01.201 7 AND 31.03.2017 IN THE STATUS OF AOP DECLARING NIL INCOME. THE APPELLA NT DID NOT FILE COPY OF RETURN OF INCOME OF M/S RSWS FOR THE EARLIER YEARS. IT IS TO BE NOTED THAT THE RETURNS OF INCOME FOR AY 2015-16 AND 2016-17, A RE NOT RELEVANT FOR THE ISSUE UNDER CONSIDERATION. (V) VIDE ORDER SHEET ENTRY DATED 06.12.2017, THE AP PELLANT WAS REQUIRED TO FILE BALANCE SHEET/STATEMENT OF AFFAIRS, PROFIT AND LOSS ACCOUNT/INCOME AND EXPENDITURE STATEMENT AND COPY OF BANK ACCOUNT OF M/S RSWS FROM THE VERY BEGINNING AND THE CASE WAS ADJOURNED TO 19 .12.2017 AND THEN TO 08.01.2018, THE AR OF THE APPELLANT HAS ATTENDED BU T NO DETAILS WERE FURNISHED AS REQUIRED BY ORDER SHEET ENTRY DATED 06 .12.2017, THOUGH, SUFFICIENT OPPORTUNITIES WERE GIVEN TO IT TO SUBMIT THESE DETAILS. (VI) IT IS EVIDENT FROM THE ABOVE DISCUSSION THAT M /S RSWS WAS CONTROLLED AND MANAGED BY THE APPELLANT AND NO EVID ENCE HAS BEEN FILED WHICH MAY ESTABLISH THAT IT WAS ENGAGED IN ANY OF T HE ACTIVITIES FOR WHICH IT WAS CONSTITUTED AND IT WAS NOTHING BUT A PAPER E NTITY I.E. THE APPARENT IS NOT REAL. THEREFORE, IN VIEW OF THE ABOVE DISCUS SION, IT IS HELD THAT THE APPELLANT HAS FAILED TO PROVE THE CREDITWORTHINESS OF M/S RSWS AS WELL AS GENUINENESS OF THE TRANSACTION UNDER CONSIDERATION. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 21 (VII) REGARDING THE REMAINING ADDITION OF RS. 45 LA KH (1,49,50,000 1,04,50,000) MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS FROM OTHER PERSONS, IT IS NOTED THAT ISSUE HAS BEEN DISCUSSED IN DETAIL BY THE AO IN THE ASSESSMENT ORDER. IT IS NOTED THAT IN ALL OF TH ESE REMAINING CASES, THE MONEY WAS DEPOSITED IN CASH IN THE BANK ACCOUNTS OF THESE SUNDRY CREDITORS OF UNSECURED LOANS, ONLY A DAY BEFORE THE CHEQUES ISSUE TO THE APPELLANT WERE DEBITED IN THOSE BANK ACCOUNTS. THE APPELLANT DID NOT PRODUCE ANY OF THEM BEFORE THE AO AND IN FACT, THE AO HAS ISSUED SUMMONS U/S 131 OF THE ACT TO THESE PERSONS BUT NO COMPLIANCE WAS MADE. IT IS TO BE NOTED THAT THESE PERSONS ARE CLOS E RELATIVES OF THE APPELLANT AND TWO COMPANIES I.E. M/S RAJASTHALI INF RASTRUCTURE LTD. AND M/S DREAMS UNLIMITED PROJECTS LTD. WERE CONTROLLED AND MANAGED BY THE APPELLANT ALONG WITH ITS FAMILY MEMBERS. IT IS FURT HER NOTED THAT THERE WERE NO BUSINESS ACTIVITIES IN THESE TWO COMPANIES DURING THE F.Y 2012-13 AND 2013-14. THEREFORE, IN VIEW OF THE ABOVE DISCUS SION, IT IS HELD THAT THE GENUINENESS OF THE TRANSACTIONS AS WELL AS CREDITWO RTHINESS OF THESE ENTITIES COULD NOT BE PROVED BY THE APPELLANT AS RE QUIRED UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. IT MAY BE MENT IONED THAT THE TRANSACTIONS THROUGH BANKING CHANNELS ARE NOT SACRO SANCT AND IN THE INSTANT CASE UNDER CONSIDERATION, IT HAS ALREADY BE EN STATED EARLIER THAT THE CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF ALL THESE ENTITIES THAT THE CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF ALL THES E ENTITIES JUST A DAY BEFORE THE DEBIT OF CHEQUES ISSUED TO THE APPELLANT IN THEIR RESPECTIVE BANK ACCOUNTS. (IX) THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, LO OKING TO THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT IS HELD THA T THE AO WAS JUSTIFIED IN ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 22 MAKING ADDITION OF RS. 1,44,50,000/- U/S 68 OF THE ACT AND THUS, THE SAME IS HEREBY SUSTAINED. (X) WITHOUT PREJUDICE TO THE ABOVE FINDINGS, I HAVE ALSO CONSIDERED THE CONTENTION OF THE APPELLANT THAT IF ANY ADDITION HA S TO BE MADE, THEN IT SHOULD BE MADE IN THE HANDS OF M/S RSWS AND NOT IN THE HANDS OF THE APPELLANT AND IF THE PROPERTIES SOLD BY M/S RSWS AC TUALLY BELONG TO THE APPELLANT, THEN, AT THE MOST ONLY CAPITAL GAINS COU LD BE ADDED IN THE HANDS OF THE APPELLANT. IT HAS ALREADY BEEN HELD EARLIER THAT M/S RSWS IS NOTHING BUT A PAPER ENTITY CONTROLLED AND MANAGED BY THE AP PELLANT. IT IS NOTED FROM THE SALE DEED DATED 07.10.2009 THAT M/S RSWS H AS PURCHASED LAND AT VILLAGE PANIYALA, TEHSIL KOTPUTLI, DISTRICT JAIP UR FOR CONSIDERATIONS OF RS. 17 LAKH, THE PAYMENT OF WHICH WAS MADE THROUGH DD. IT WAS FURTHER NOTED FROM THE SALE DEED DATED 09.08.2010 THAT M/S RSWS HAS ALSO PURCHASED ANOTHER LAND IN THE SAME VILLAGE FOR A CO NSIDERATION OF RS. 53,65,508/- PAYMENT OF WHICH WAS MADE IN CASH. IT I S TO BE NOTED THAT M/S RSWS WAS REGISTERED WITH THE REGISTRAR OF SOCIE TIES ON 25.06.2009 AND THE APPELLANT HAS NOT FILED ANY DETAILS OR EVID ENCE ABOUT THESOURCES OF SUCH FUNDS FOR PURCHASE OF LANDS AS DETAILED ABOVE. MOREOVER, THERE IS NO EVIDENT ON RECORD WHICH MAY ESTABLISH THAT M/S RSWS HAS STARTED ANY OF THE ACTIVITIES FOR WHICH, IT WAS CONSTITUTED. FURTH ER, NO RETURN OF INCOME WAS FILED FOR THE AY 2010-11 AND 2011-12 IN WHICH T HESE LANDS WERE PURCHASED BY M/S RSWS. IT IS, THEREFORE, HELD THAT THE INVESTMENT OF RS. 17,00,000/- AND RS. 53,65,508/- WAS MADE BY THE APP ELLANT IN THE NAME OF M/S RSWS IN THE FY 2009-10 AND 2010-11 RESPECTIV ELY. THESE LANDS WERE SOLD BY THE APPELLANT IN THE NAME OF M/S RSWS DURING THE YEAR UNDER CONSIDERATION FOR A TOTAL CONSIDERATION OF RS . 1,18,32,565/- AND ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 23 THEREFORE, THE APPELLANT IS LIABLE FOR CAPITAL GAIN TAX ON THE SALE OF THESE PROPERTIES IN THE YEAR UNDER CONSIDERATION. 7. DURING THE COURSE OF HEARING, THE LD AR REITERAT ED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND IT WAS SUBMIT TED THAT THE ORDERS PASSED BY THE AO AS WELL AS BY THE LD CIT(A) ARE AG AINST THE SETTLED POSITION OF LAW. THE MAIN ADDITION IS OF RS. 1,04,5 0,000/- LOAN RECEIVED FROM M/S RAJASTHALI SHIKHA & WELFARE SAMITI. THE AD MITTED FACTS ARE THAT THE SOCIETY DURING THE YEAR SOLD IMMOVABLE PROPERTI ES WORTH RS. 1,18,32,565. IT WAS OUT OF THE SALE PROCEEDS OF IMM OVABLE PROPERTIES THAT ASSESSEE TOOK LOAN OF RS. 1,04,50,000/- THROUGH BAN KING CHANNELS. FURTHER, IT IS ALSO AN ADMITTED FACT THAT THE PROPE RTY SOLD BY THE RAJASTHALI SHIKHA & WELFARE SAMITI WERE PURCHASED BY IT ON 07. 10.2009 (RS. 17,00,000/-) AND 09.08.2010 (RS. 53,65,508/-) I.E. RELEVANT TO ASSESSMENT YEARS 2010-11 & 2011-12. THE RAJASTHALI SHIKHA & WE LFARE SAMITI SOLD THESE PROPERTIES DURING THE YEAR UNDER CONSIDERATIO N ON 30.09.2013 FOR A SUM OF RS. 1,18,32,565/-. APPARENTLY THE SOURCE OF RS. 1,04,50,000/- STANDS FULLY EXPLAINED. THE LD AR FURTHER SUBMITTED THAT THERE ARE INHERENT CONTRADICTIONS IN THE ORDER OF THE LEARNED ASSESSIN G OFFICER AND THAT OF THE LEARNED CIT(A) AND IN SUPPORT, RELIED UPON THE WRIT TEN SUBMISSIONS WHICH ARE REPRODUCED BELOW. 2. LOAN FROM RAJASTHALI SHIKHA & WELFARE SAMITI OF RS. 1,04,50,000/- - ADDITION BY THE LEARNED ASSESSING OFFICER IS BASED ON INHERENT CONTRADICTIONS: ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 24 THE BARE FACTS AS DISCUSSED ABOVE ARE AGAIN STATED THAT THE SOCIETY DURING THE YEAR SOLD IMMOVABLE PROPERTIES WORTH RS. 1,18,32,565/-. IT WAS OUT OF THE SALE PROCEEDS OF IMMOVABLE PROPER TIES THAT ASSESSEE TOOK LOAN OF RS. 1,04,50,000/- THROUGH BAN KING CHANNELS. HERE IS DIRECT LINK BETWEEN THE SALE PROCEEDS OF TH E IMMOVABLE PROPERTIES OF THE SOCIETY AND LOAN TO THE ASSESSEE .FURTHER IT IS ALSO AN ADMITTED FACT THAT THE PROPERTY SOLD BY THE RAJA STHALI SHIKHA & WELFARE SAMITI WERE PURCHASED BY IT ON 07.10.2009 ( RS. 17,00,000) AND 09.08.2010 (RS. 53,65,508/-) I.E. RELEVANT TO A SSESSMENT YEARS 2010-11 & 2011-12. THE RAJASTHALI SHIKHA & WELFARE SAMITI SOLD THESE PROPERTIES DURING THE YEAR UNDER CONSIDERATIO N ON 30.09.2013. APPARENTLY THE SOURCE OF RS. 1,04,50,000/- STANDS F ULLY EXPLAINED. THE SOCIETY WAS CONSTITUTED AND REGISTERED UNDER TH E SOCIETIES ACT ON 25.06.2009. A COPY OF THE CERTIFICATE OF REGISTR ATION IS AVAILABLE ON PAPER BOOK PAGE NUMBER 75. THIS ESTABLISHES THE INDEPENDENT AND INDIVIDUAL STATUS OF THE SOCIETY. THE OBJECTS O F THE SOCIETY, ITS CONSTITUTION AND PAPERS REGARDING MEMBERSHIP ARE AV AILABLE ON PAPER BOOK PAGE NUMBER 76 TO 99. THE SOCIETY HAS BEEN FILING INCOME TAX RETURNS WITH THE DEPARTMENT HAVING PAN - AACTR2240K. COPIES OF RETURNS FOR ASSESSMENT YEAR 2015-16 AND 2 016-17 ARE AVAILABLE ON PAPER BOOK PAGE NUMBER 100 TO 108. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 25 THE AFORESAID DECISION OF THE LEARNED ASSESSING OFF ICER TREATING THE LOAN OF RS. 1,04,50,000/- AS UNEXPLAINED CASH CREDI T U/S 68 OF THE INCOME TAX ACT, 1961 IS FULL OF CONTRADICTIONS MAIN LY (A) SIMPLY ON THE BASIS THAT THE ASSESSEE HAPPENS T O BE THE SECRETARY OF THE SOCIETY AND ON THE GROUND THAT THE SALE DEEDS OF PROPERTY SOLD BY THE SOCIETY WERE SIGNED BY THE ASSESSEE IN REPRESENTATIVE CAPACITY AS SECRETARY, THE LEARNED A SSESSING OFFICER ERRONEOUSLY HELD THAT THE PROPERTIES SOLD B Y THE SOCIETY WERE ACTUALLY PROPERTIES OF THE ASSESSEE AN D THESE HAVE BEEN SHOWN AS TO HAVE BEEN SOLD BY THE SOCIETY . THE LEARNED ASSESSING OFFICER HAS NOT BROUGHT ANY MATER IAL ON RECORD THAT THE PROPERTIES SOLD BY THE SOCIETY WERE OWNED/PURCHASED BY THE ASSESSEE. THE FINDING GIVEN IS TOTALLY BASED ON ASSUMPTION, PRESUMPTION AND GUESS WORK. SU SPICION HOWEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE. T HIS IS SETTLED POSITION OF LAW AND SUPPORTED BY THE FOLLOW ING JUDGMENTS: - (I) UMA CHARAN SHAW & BROTHERS 37 ITR 271 (SC) (II) CIT VS. ANUPAM KAPOOR 299 ITR 179 (P&H) (III) CIT VS. DHIRAJ LAL GIRDHARI LAL 26 OTR 736 (IV) DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) (V) STATE VS. GULZARI LAL TONDON 1979 AIR 1382 (SC) (VI) J.A. NAIDU VS. STATE OF MAHARASTRA 1979 AIR 1537 (S C) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 26 (B) HAVING HELD AT FIRST THAT THE PROPERTIES SOLD B Y THE SOCIETY WERE OWNED BY THE SOCIETY IN THE NEXT BREATH THE LE ARNED ASSESSING OFFICER HAS OBSERVED THAT THE SALE TRANSA CTIONS REMAINED UNDISCLOSED INCOME IN THE HANDS OF THE SOC IETY. IT IS THE FINDING OF THE LEARNED ASSESSING OFFICER THAT A DVANCING RS. 1,04,50,000/- OUT OF UNDISCLOSED INCOME OF THE SOCIETY TO THE ASSESSEE CANNOT BE TREATED AS GENUINE TRANSACTI ON. HERE THE LEARNED ASSESSING OFFICER IS ADMITTING AND GIVI NG A FINDING THAT THE SALE TRANSACTION OF PROPERTY OF RS. 1,18,3 2,565/- WERE OF THE SOCIETY AND THESE TRANSACTION FOR NOT DISCLO SED BY THE SOCIETY IN ITS RETURN OF INCOME. BUT THESE CONSTITU TED UNDISCLOSED INCOME IN THE HANDS OF THE SOCIETY. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE LEARNED ASSESSI NG OFFICER IS IN CONFUSION MOST CONFOUNDED. HE IS NOT CLEAR AS HOW TO APPROACH AND PROCEED IN THE MATTER. ON THE ONE HAND HE IS TREATING THE SALES PROCEEDS OF THE PROPERTIES OF TH E SOCIETY AS THAT OF THE ASSESSEE AND ON THE OTHER HAND HE IS AL SO HOLDING THAT THE SALES TRANSACTIONS OF THE PROPERTIES CONST ITUTED UNDISCLOSED INCOME IN THE HANDS OF THE SOCIETY. THE ONE FINDING CONTROVERTS THE OTHER. THE ASSESSEE SUBMITS THAT PROPERTIES SOLD BELONGED AND WERE OWNED BY THE SOCI ETY. IT WAS OUT OF THE SALE PROCEEDS OF THESE PROPERTIES OF RS. 1,18,32,565/- WHICH WERE DEPOSITED IN THE BANK ACCO UNT OF THE SOCIETY THAT ASSESSEE TOOK LOAN OF RS. 1,04,50, 000/- ON VARIOUS DATES AS IT CLEAR FROM THE BANK ACCOUNT AND ALSO DETAILED ABOVE. ONE THING WHICH IS VERY GLARING IS THAT RECEIPT ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 27 OF MONEY ON SALE OF IMMOVABLE PROPERTIES IS AN ADMI TTED FACTS. FURTHER THESE PROPERTIES WERE PURCHASED BY R AJASTHALI SHIKHA & WELFARE SAMITI IN ASSESSMENT YEAR 2010-11 & 2011- 12. IN VIEW OF THIS THERE WAS NO CASE FOR MAKING AD DITION OF LOAN OF RS. 1,04,50,000/- AS UNEXPLAINED WHEN THE SAME HAS COME FROM THE KNOWN SOURCE OF SALE OF PROPERTIES WHICH S TANDS PROVED AND IS ADMITTED BY THE LEARNED ASSESSING OFF ICER. THUS THE ADDITION IS MISPLACED AND MISCONCEIVED. (C) THE THIRD VERY IMPORTANT POINT IS THAT ADDITION MADE U/S 68 IS UNLAWFUL. THE LEARNED CIT(A) ALSO ERRED IN CONFORMI NG THE SAME. THE LEARNED ASSESSING OFFICER HAS MENTIONED I N THE ASSESSMENT ORDER AND SAME IS ALSO AN ADMITTED FACT THAT ASSESSEE DID NOT MAINTAIN BOOKS OF ACCOUNTS. THE P ROVISIONS OF SECTION 68 ARE APPLICABLE ONLY IN A CASE WHERE B OOKS OF ACCOUNTS ARE MAINTAINED. THE SUPREME COURT IN THE C ASE BALADI RAM V/S C.I.T.71 I.T.R.427 LAID DOWN THE FOL LOWING CONDITIONS FOR THE APPLICABILITY OF SECTION 68:- (I) THE MATTER AND THE EVENT SHOULD TAKE PLACE AFTE R 01.04.62 (II) THE ASSESSEE MAINTAINS THE BOOKS OF ACCOUNTS F OR THE RELEVANT PREVIOUS YEAR. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 28 (III) THE CASH CREDIT ENTRY APPEARS IN SUCH BOOKS O F ACCOUNTS. APPARENTLY THE CONDITIONS ARE NOT FULFILLED IN THE CASE AS THE RELEVANT LOANS WHICH HAVE BEEN CONSIDERED BY THE LE ARNED ASSESSING OFFICER FOR MAKING ADDITION ARE NOT APPEA RING IN THE BOOKS OF ACCOUNTS. THESE ARE BANK DEPOSITS. THEREFO RE THE LEARNED A.O. WAS NOT JUSTIFIED IN INVOKING THE PROV ISIONS OF SECTION 68. THE ADDITION THEREFORE DESERVES TO BE D ELETED. THE HONBLE SUPREME COURT IN CIT VS. P. MOHANAKALA (200 7) 291 ITR 278 OBSERVED : UNDER SECTION 68(I) THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE AS SESSEE; (II) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING TH E PREVIOUS YEAR; THE MATERIAL AND ATTENDING CIRCUMSTANCES AVAI LABLE ON RECORD DO NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS BEING TREATED AS A RECEIPT OF INCOME NATURE. THE S UPREME COURT HAS FURTHER OBSERVED THAT DEPOSITS IN BANK NO T ROUTED THROUGH BOOKS OF ACCOUNTS ARE NOT COVERED AS UNEXPL AINED CREDITS U/S 68. THE FOLLOWING CASE LAWS ARE ALSO QU OTED IN SUPPORT: - (I) DAMODAR HANS RAJ V/S C.I.T.118 ITR 999 (CAL) (II) LAXMINARAIN GUPTA 124 ITR94 (PAT) 3 (III) SHANTA DEVI VS. CIT 171 ITR 532 (P&H) (II) ANAND RAM RAITANI V/S CIT (1997) 223 ITR 544 (GAU) (III) CIT VS. BHAI CHAND S. GAUDHI 141 ITR 67 (MUM) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 29 IN VIEW OF THESE FACTS THE ADDITION MADE U/S 68 AND SO UPHELD BY THE LEARNED CIT(A) DESERVES TO BE DELETED. 3. CONFIRMING ADDITION OF LOAN FROM RAJASTHALI SHIK HA & WELFARE SAMITI OF RS. 1,04,50,000/- BY THE LEARNED CIT(A) IS ALSO BASED ON INHERENT CONTRADICTIONS: - A PERUSAL OF THE AFORESAID FINDING OF THE LEARNED C IT(A) THAT THE ADDITION HAS BEEN CONFIRMED ON IRRELEVANT FACTORS. THE LEARNED CIT(A) HAS OBSERVED AS UNDER: - (I) THE ASSESSEE DID NOT FURNISH COPY OF SALE DEEDS PER TAINING TO ACQUISITION OF LAND BY THE SOCIETY WHICH RELATE TO ASSESSMENT YEAR 2010-11 & 2011-12 AND NOT TO THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2014-15. (II) THE LEARNED CIT(A) HAS OBSERVED THAT COPY OF BANK A CCOUNT OF THE SOCIETY FOR THE PERIOD RELEVANT TO THE ACQUI SITION OF PROPERTIES FOR ASSESSMENT YEAR 2010-11 & 2011-12 WE RE NOT FURNISHED. (III) THE ASSESSEE DID NOT FURNISH COPY OF RETURNS OF INC OME FOR SOCIETY FOR EARLIER YEARS. (IV) IN THE VIEW OF THE LEARNED CIT(A) THE SOCIETY WAS C ONTROLLED AND MANAGED BY THE ASSESSEE AS SUCH IT WAS NOTHING BUT A PAPER ENTITY. HENCE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE SOCIETY WAS NOT PROVED. (V) THE LEARNED CIT(A) HAS HELD THAT INVESTMENT IN THE PURCHASE OF LAND IN THE NAME OF SOCIETY IN ASSESSMENT YEAR 2 010-11 AND 2011-12 WAS OF THE ASSESSEE AND AS SUCH ON SALE OF ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 30 THESE PROPERTIES (AGAIN IN THE NAME OF SOCIETY) CAP ITAL GAINS REQUIRED TO THE TAXED IN THE HANDS OF THE ASSESSEE. THE AFORESAID FINDING OF THE LEARNED CIT(A) ARE MIS PLACED AND MISCONCEIVED. THE ISSUE INVOLVED BEFORE THE LEA RNED CIT(A) WAS SOURCE OF INVESTMENT OF RS. 1,04,50,000/ - WHICH THE ASSESSEE HAS TAKEN LOAN FROM THE SOCIETY. THE S OCIETY HAD SOLD LANDS WORTH RS. 1,18,32,565/- AND THESE DETAIL S ARE AVAILABLE ON PAGE 4 OF THE ORDER OF THE LEARNED CIT (A). THE LINK BETWEEN THE SALE PROCEEDS AND ADVANCEMENT OF L OAN TO THE ASSESSEE IS FULLY ESTABLISHED. THE SALE PROCEED S WERE DEPOSITED BY THE SOCIETY IN THE BANK ACCOUNT NO. 27900200000161 WITH INDIAN OVERSEAS BANK, AJMER ROA D, JAIPUR. THE RELEVANT PART OF THE ACCOUNT IS SCANNED BELOW: - ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 31 ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 32 THE PERUSAL OF THE AFORESAID ACCOUNT REVEALS THAT T HE SALE PROCEEDS OF THE IMMOVABLE PROPERTIES OF RS. 1,14,00,000/- WA S DEPOSITED IN THE BANK ACCOUNT ON 30.03.2013. THE DETAILS OF RS. 1,14,00,000/- RECEIVED FROM DIFFERENT PERSONS WHO PURCHASED THE P ROPERTY OF THE SOCIETY IS DETAILED ON PAGE 4 OF THE ORDER OF THE L EARNED CIT(A) IN PARA 3.2 REPRODUCED BELOW: - IT IS SUBMITTED THAT IN THE TOTALITY OF FACTS THAT PROPERTIES WERE SOLD WORTH RS. 1,18,32,565/- OUT OF WHICH RS. 1,14,00,00 0/- WAS DEPOSITED BY THE SOCIETY IN THE BANK ACCOUNT AND TH EREAFTER A SUM OF RS. 1,04,50,000/- WAS LOANED TO THE ASSESSEE. TH E TRAIL OF TRANSACTIONS IS WELL ESTABLISHED. THE SOURCE OF INV ESTMENT BEING SALE OF IMMOVABLE IS ALSO WELL ESTABLISHED. THE SOCIETY IS REGISTERED UNDER THE SOCIETIES ACT AS SUCH ITS IDENTITY IS WEL L ESTABLISHED. THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 33 SOCIETY IS HAVING PAN AACTR2240K AND HAS BEEN FIL ING INCOME TAX RETURN, COPIES OF WHICH ARE AVAILABLE ON PAPER BOOK PAGE NUMBER 100 TO 108. COPIES OF SALE DEED ARE AVAILABLE ON PA PER BOOK PAGE NUMBER 43 TO 68. COPIES OF SALE DEEDS OF LAND ACQUI RED BY THE SOCIETY IN ASSESSMENT YEAR 2010-11 & 2011 WHICH WER E SOLD SUBSEQUENTLY ARE AVAILABLE ON PAPER BOOK PAGE NUMBE R 150 TO 168. ALL THE DOCUMENTS FULLY EXPLAINED THE AMOUNT OF LOA N TAKEN BY THE ASSESSEE OF RS. 1,04,50,000/- AS SUCH THE ADDITION DESERVES TO BE DELETED. 4. CONFIRMING OF ADDITION U/S 68 IS UNLAWFUL: - IT IS SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAD WRONGLY INVOKED THE PROVISIONS OF SECTION 68 WHICH ARE NOT APPLICABLE IN THE CASE AS NO BOOKS OF ACCOUNTS ARE MAINTAINED. IN VIE W OF THIS, THE LEARNED CIT(A) MECHANICALLY AND WITHOUT APPLICATION OF MIND CONFIRMED THE ADDITION MADE U/S 68. THE PROVISIONS OF SECTION 68 ARE APPLICABLE ONLY IN A CASE WHERE BOOKS OF ACCOUN TS ARE MAINTAINED. THE SUPREME COURT IN THE CASE BALADI RA M V/S CIT.71 I.T.R.427 LAID DOWN THE FOLLOWING CONDITIONS FOR TH E APPLICABILITY OF SECTION 68:- (I) THE MATTER AND THE EVENT SHOULD TAKE PLACE AFTE R 01.04.62 ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 34 (II) THE ASSESSEE MAINTAINS THE BOOKS OF ACCOUNTS F OR THE RELEVANT PREVIOUS YEAR. (III) THE CASH CREDIT ENTRY APPEARS IN SUCH BOOKS O F ACCOUNTS. APPARENTLY THE CONDITIONS ARE NOT FULFILLED IN THE CASE AS THE RELEVANT LOANS WHICH HAVE BEEN CONSIDERED BY THE LEARNED ASS ESSING OFFICER FOR MAKING ADDITION ARE NOT APPEARING IN THE BOOKS OF ACCOUNTS. THESE ARE BANK DEPOSITS. THEREFORE THE LEARNED A.O. WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 68. THE ADDITION THEREFORE DESERVES TO BE DELETED. THE HONBLE SUPREME COURT IN CIT VS. P. MOHANAKALA (2007) 291 ITR 278 OBSERVED : UNDER SECTION 68(I) THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOK S MAINTAINED BY THE ASSESSEE; (II) SUCH CREDIT HAS TO BE A SUM OF M ONEY DURING THE PREVIOUS YEAR; THE MATERIAL AND ATTENDING CIRCUMSTA NCES AVAILABLE ON RECORD DO NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS BEING TREATED AS A RECEIPT OF INCOME NATURE. THE SUPREME COURT HAS FURTHER OBSERVED THAT DEPOSITS IN BANK NOT ROUTED T HROUGH BOOKS OF ACCOUNTS ARE NOT COVERED AS UNEXPLAINED CREDITS U/S 68. THE FOLLOWING CASE LAWS ARE ALSO QUOTED IN SUPPORT: - (I) DAMODAR HANS RAJ V/S C.I.T.118 ITR 999 (CAL) (II) LAXMINARAIN GUPTA 124 ITR 94 (PATNA) (III) SHANTA DEVI VS. CIT 171 ITR 532 (P&H) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 35 (IV) ANAND RAM RAITANI V/S CIT (1997) 223 ITR 544 (GAU) (V) CIT VS. BHAI CHAND S. GAUDHI 141 ITR 67 (MUM) IN VIEW OF THESE FACTS THE ADDITION MADE U/S 68 AND SO UPHELD BY THE LEARNED CIT(A) DESERVES TO BE DELETED. 5. THE SOCIETY IS NOT A PAPER ENTITY: - THE LEARNED CIT(A) HAS WRONGLY HELD IN PARA 6 ON PA GE 10 OF THE APPELLATE ORDER THAT THE SOCIETY IS A PAPER ENTITY. IT WAS MANAGED AND CONTROLLED BY THE ASSESSEE AND THE SOCIETY HAS NOT CONDUCTED ANY ACTIVITY. IT IS SUBMITTED THAT SIMPLY BECAUSE T HE ASSESSEE WAS A POST HOLDER IN THE SOCIETY IT DOES NOT LEAD TO A CO NCLUSION THAT THE SOCIETY WAS ACTUALLY OWNED BY THE ASSESSEE. THE LAN DS WERE PURCHASED IN ASSESSMENT YEAR 2010-11 & 2011-12 IN T HE NAME OF THE SOCIETY AND THESE WERE SOLD DURING THE YEAR UND ER CONSIDERATION AGAIN IN THE NAME OF SOCIETY. THE BANK ACCOUNT WAS ALSO OPENED IN THE NAME OF THE SOCIETY. THE SOCIETY IS ALSO REGIST ERED UNDER THE SOCIETIES ACT. ALL THESE DOCUMENTARY EVIDENCES CANN OT BE REJECTED SIMPLY ON THE WHIMS AND GUESS WORK OF THE LEARNED C IT(A). THE ASSESSEE HAS NOW FURNISHED EVERY DOCUMENT INCLUDING THE DEEDS REGARDING PURCHASE OF LAND BY THE SOCIETY IN ASSESS MENT YEAR 2010- 11 & 2011-12. IT IS SUBMITTED THAT THE SOCIETY CONS ISTS OF A NUMBER OF MEMBERS AND IT ACTS UNDER THE PRINCIPLES OF MUTU ALITY. THE LEARNED CIT(A) HAS NOT BROUGHT ANY EVIDENCE ON RECO RD THAT MONEY ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 36 IN PURCHASE OF LANDS IN ASSESSMENT YEAR 2010-11 & 2 011-12 IN ANY WAY BELONGED TO THE ASSESSEE. IN FACT THE ISSUE OF INVESTMENTS FALLS IN ASSESSMENT YEAR 2010-11 & 2011-12 AND THE SAME H AS REMAINED UNEXAMINED IN THE HANDS OF THE SOCIETY OR IN THE HA NDS OF THE ASSESSEE. THE ORIGINAL INVESTMENT FALLS IN ASSESSME NT YEAR 2010-11 & 2011-12 CANNOT BE CONSIDERED IN ASSESSMENT YEAR 2 014-15. IT IS SUBMITTED THAT ON THE ONE HAND THAT THE LEARNED CIT (A) HAS UPHELD THE ADDITION OF RS. 1,04,00,000/- IN THE HANDS OF T HE ASSESSEE AND AT THE SAME TIME HAS HELD THAT CAPITAL GAINS REQUIR ED TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE ON SALE OF PROPERTY AS IN HIS VIEW THE INVESTMENTS IN THE PURCHASE OF PROPERTIES WAS ALSO DONE BY THE ASSESSEE. IN OTHER WORDS THE CASE OF THE LEARN ED CIT(A) IS THAT SINCE THE INVESTMENT IN ASSESSMENT YEAR 2010-11 & 2 011-12 IN THE PURCHASE OF PROPERTIES IN THE NAME OF SOCIETY WAS O F THE ASSESSEE SO ON SALE OF THESE PROPERTIES CAPITAL GAIN NEEDS T O BE TAXED IN THE HANDS OF THE ASSESSEE. ON THE ONE HAND THE LEARNED CIT(A) IS CONFIRMING THE ENTIRE AMOUNT OF RS. 1,04,50,000/- T AKEN BY THE ASSESSEE OUT OF THE SALE PROCEEDS FROM THE SOCIETY AND ON THE OTHER LAND LEARNED CIT(A) GIVES A FINDING THAT ONLY CAPIT AL GAIN DESERVES TO BE TAXED ON THE SALE PROCEEDS OF THE PROPERTIES. THE FINDINGS BEING CONTRARY TO EACH OTHER NEGATE THE BOTH. IT IS SUBMITTED THAT THE LEARNED CIT(A) HAS FURTHER OBSERVED THAT THE IN VESTMENTS IN ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 37 RESPECT OF PROPERTIES SOLD WAS MADE IN ASSESSMENT Y EAR 2010-11 & 2011-12, HAVING HELD SO THE LEARNED CIT(A) IS PRECL UDED IN CONFIRMING THE LOAN AMOUNT OF RS. 1,04,50,000/-. TH E ORIGINAL INVESTMENT OF RS. 17,00,000/- AND OF RS. 53,65,508/ - RELATING TO ASSESSMENT YEAR 2010-11 & 2011-12 RESPECTIVELY REQU IRES TO BE CONSIDERED IN THESE ASSESSMENT YEARS. SINCE THE APP EAL WAS NOT FOR THE ASSESSMENT YEAR 2010-11 & 2011-12 THE LEARNED C IT(A) HAS EXCEEDED HIS JURISDICTION IN GIVING ANY FINDING REG ARDING THESE YEARS. THEREFORE THE ORDER OF THE LEARNED CIT(A) BEING CON TRARY TO THE POSITION OF LAW AND CONTRADICTORY DESERVES TO BE QU ASHED. THE LEARNED CIT(A) HAS GIVEN THE FINDING IN RESPECT OF THE SOCIETY WITHOUT PROVIDING ANY OPPORTUNITY TO THE SOCIETY, T HEREFORE ALSO THE FINDING IS AGAINST THE PRINCIPLES OF EQUITY AND JUS TICE. 6. NO ISSUE OF CAPITAL GAINS: - IT IS FURTHER SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN HOLDING IN PARA 3.1.2 (X) THAT CAPITAL GAINS ARE TAXABLE IN THE HANDS OF THE ASSESSEE. IN THE FORGOING PARAS THE AS SESSEE HAS OBJECTED TO THIS FINDING ON THE GROUND THAT THE SOC IETY IS AN INDEPENDENT ENTITY AND THE FOLLOWING DOCUMENTS WHIC H ARE IN FAVOR OF THE SOCIETY HAS BEEN UNCONTROVERTED :- ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 38 (I) BANK ACCOUNT IN THE NAME OF SOCIETY. (II) SOCIETY IS INCOME TAX PAYER AND HAVING PAN. (III) SOCIETY HAS BEEN CERTIFICED FROM REGISTRAR OF SOCIE TIES. (IV) THE PURCHASES OF LANDS ARE REGISTERED IN THE NAME O F THE SOCIETY. (V) THE SALE DEEDS OF LANDS ARE REGISTERED IN THE NAME OF THE SOCIETY. OVER AND ABOVE THIS SUBMISSION THE ASSESSEE FURTHER WANTS TO STATE THAT OTHERWISE ALSO THE SALE OF AGRICULTURAL LAND I N THE NAME OF THE SOCIETY DID NOT ATTRACT CAPITAL GAINS. AS THE SAME WAS 9 KM. AWAY FROM MUNICIPALITY KOTPUTALI. A CERTIFICATE DATED 06 .03.2018 BY THE TEHSILDAR KOTPUTALI TO THIS EFFECT IS SCANNED BELOW : - ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 39 THE LEARNED CIT(A) GAVE THE AFORESAID FINDING WITHO UT PROVIDING ANY OPPORTUNITY TO THE ASSESSEE OR TO THE SOCIETY A ND HENCE THE CERTIFICATE IS BEING PRODUCED BEFORE THE HON'BLE TR IBUNAL FOR THE FIRST TIME. 7. DEPOSITS BY OTHER PERSONS: - (A) THE ASSESSEE HAS ALSO OBTAINED LOANS FROM FAMIL Y MEMBERS, FRIENDS AND RELATIVES AMOUNTING TO RS. 45,00,000/- DETAILED ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 40 BELOW WHICH HAVE ALSO BEEN TREATED AS UNEXPLAINED B Y THE LEARNED ASSESSING OFFICER AND ADDITION HAS BEEN MAD E U/S 68. SUCH ADDITION HAS BEEN CONFIRMED BY THE LEARNED CIT(A). THE DETAILS OF DEPOSITS ARE AS UNDER: - SR. NO. NAME OF THE PERSONS PAN DEPOSIT AMOUNT REMARKS IN SUPPORT OF GENUINENESS OF CASH CREDITS (DETAILS OF DOCUMENTS FILED) 1. GOPI RAM YADAV AAOPY 4751A 450000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 4. HE IS A MILITARY PENSIONER. 2. SMT. KAVITA YADAV ABFPY 6965N 345000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 4. COPY OF ADHAR CARD. 5. SHE IS A SALARIES PERSON. 3. SMT. ARTI YADAV ABFPY 6964P 450000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 4. COPY OF ADHAR CARD. 5. SHE IS A SALARIES PERSON. 4. SHRI RAO VIRENDRA AAOPY 4727C 500000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 41 YADAV 3. COPY OF ITR. 4. COPY OF ADHAR CARD. 5. HE IS A REAL ESTATE DEALER. 5. RAO VIRENDRA YADAV, HUF AAQHR 1683C 500000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 6. M/S THE GENTLEMAN (ASSESSEE) AAOPY 4448C 500000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 4. COPY OF ADHAR CARD. 5. IT IS A PROPRIETARY CONCERN OF THE ASSESSEE. 7. M/S YUVRAJ AAOPY 4727C 355000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR. 4. COPY OF ADHAR CARD. 5. IT IS A PROPRIETARY CONCERN OF THE BROTHER OF THE ASSESSEE. 8. M/S RAJASTHALI INFRASTRUCTURE LTD AAGCR 2136P 700000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. 3. COPY OF ITR AND AUDITED ACCOUNTS. 4. IT IS A REAL ESTATE COMPANY. 9. M/S DREAMS UNLIMITED AAECD 5068Q 700000 1. COPY OF CONFIRMATION. 2. COPY OF BANK ACCOUNT. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 42 PROJECTS LTD 3. COPY OF ITR AND AUDITED ACCOUNTS. 4. IT IS A REAL ESTATE COMPANY. TOTAL 4500000 IT IS SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAS NOT ACCEPTED THE DEPOSITS OBTAINED BY THE ASSESSEEE FROM THE AFO RESAID PERSONS WITHOUT APPRECIATING THE SUBMISSION OF THE ASSESSEE AND INDIVIDUAL FACTS OF EACH CASE. IT IS A CASE WHERE BOTH THE LE ARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) WERE BENT UPO N IN MAKING AND SUSTAINING ADDITION. THE PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE LEARNED ASSESSING OFFICER HAS REJECTED THE EXPLANATION SUBMITTED BY THE ASSESSEE IN RESPECT OF AFORESAID D EPOSITS MAINLY ON THE FOLLOWING GROUNDS: - (I) THE DEPOSITOR DID NOT APPEAL BEFORE THE LEARNED ASS ESSING OFFICER IN RESPONSE TO SUMMONS U/S 131. IN THIS REGARD, IT IS SUBMITTED THAT IT IS NOT IN T HE HANDS OF THE ASSESSSEE TO FETCH THE DEPOSITORS AND PRODUCED THEM BEFORE THE LEARNED ASSESSING OFFICER. THE DEPOSITORS ARE M AINLY SCARED TO APPEAR BEFORE THE IT AUTHORITIES BECAUSE THEY KNOW THAT MANY IRRELEVANT QUERIES WILL BE MADE TO ENTANG LE THEM IN ONE OR THE OTHER IT PROCEEDINGS. THE DEPOSITORS OR FOR THAT MATTER ANY ORDINARY CITIZEN DOES NOT HAVE ANY ESTEE M FOR THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 43 IT DEPARTMENT. THEY ARE AFRAID AND SCARRED OF IT. T HE SUBMISSION OF THE ASSESSEE IS THAT IF THE LEARNED A SSESSING OFFICER WAS SERIOUS AND GETTING THE COMPLIANCE OF S ECTION 131 HE SHOULD HAVE PROCEEDED FURTHER BY IMPOSING FINE U PON THE DEFAULTERS. BUT THIS HAS NOT BEEN DONE. IT APPEARS THAT THE LEARNED ASSESSING OFFICER KNEW THAT DEPOSITORS WOUL D NOT RESPOND AS THIS IS USUAL AND THIS WOULD STRENGTHEN HIS HANDS IN MAKING THE ADDITION. THE ASSESSEE ALSO SUBMITS T HAT FOR NON-COMPLIANCE OF SUMMONS U/S 131 BY THE DEPOSITORS THE ASSESSEE CANNOT SUFFERS. THERE MAY BE ONE AND HINDE RED REASONS FOR NON APPEARANCE BEFORE THE LEARNED ASSES SING OFFICER BY THE DEPOSITORS. THE SUPREME COURT OF IND IA HAS HELD IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD 159 ITR 78 THAT IN CASE A CREDITOR DOES NOT APP EAR IN RESPONSE TO SUMMONS U/S 131 NO ADVERSE INFERENCE CA N BE DRAWN IN THE CASE OF THE ASSESSEE. (II) THE SECOND GROUND ON WHICH THE LEARNED ASSESSING OF FICER HAS NOT ACCEPTED THE DEPOSITS IS THAT IMMEDIATELY B EFORE ISSUING CHEQUES TO THE ASSESSEE, THERE WERE DEPOSIT S IN CASH IN THE ACCOUNT OF THE DEPOSITORS. IN VIEW OF THIS, THE LEARNED ASSESSING OFFICER BECAME SUSPICIOUS REGARDING THE S OURCE OF DEPOSITS IN THE HANDS OF THE DEPOSITORS, IT IS SUBM ITTED THAT THE SUSPICION OF THE LEARNED ASSESSING OFFICER IS B ASELESS. IT ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 44 IS SETTLED POSITION OF LAW THAT ASSESSEE IS NOT SUP POSED TO EXPLAIN THE SOURCE OF SOURCE OF CREDITORS. IN SUPPO RT THE FOLLOWING DECISIONS ARE QUOTED: - (A) CIT V. DAULAT RAM RAWATMULL 87 ITR 349 (SC)/CIT VS. JAI KUMAR BAKLIWAL 366 ITR 217 . ALL THE INVESTOR COMPANIES ARE ASSESSED TO INCOME T AX AND FILED THEIR INCOME TAX RETURN. THE ASSESSEE HAS FURNISHED COPIES OF ITR ALONG WITH COMPUTATION OF INCOME FOR PROVING THEIR CREDITWORTHINESS/ SOURCE O F INCOME. FURTHER THE ASSESSEE IS NOT SUPPOSED TO PRO VE THE SOURCE OF THE SOURCE. (B) S. HASTIMAL V. CIT [1963] 49 ITR 273 (MAD), (C) TOLARAM DAGA V. CIT [1966] 59 ITR 632 (ASSAM), (D) SAROGI CREDIT CORPORATION V. CIT 1975 CTR (PAT)1: (1976) 103 ITR 344 (PAT). (E) HONBLE RAJASTHAN HIGH COURT VIDE ITS JUDGMENT AND ORDER DATED 28.4.2008 IN THE CASE OF LABH CHAND BOHRA V. ITO [2010] 189 TAXMAN 141 HAS TAKEN THE FOLLOWING VIEW IN THIS RESPECT :- EXAMINING THE PRESENT CASE EVEN ON THESE PARAMETER S, FIRST REQUIREMENT IS NOT RELEVANT. SO FAR AS SECOND REQUIREMENT IS CONCERNED, THERE IS NO DOUBT ABOUT INITIAL BURDEN BEING ON THE ASSESSEE. SO FAR AS THI RD ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 45 REQUIREMENT IS CONCERNED, OBVIOUSLY IF THE EXPLANAT ION IS NOT SATISFACTORY, THEN IT IS ADDED. THEN FOURTH REQUIREMENT IS, THAT THE FIRM HAS TO ESTABLISH THAT THE AMOUNT WAS ACTUALLY GIVEN BY THE LENDER. FIFTH REQUIREMENT IS ABOUT GENUINENESS AND REGULARITY IN MAINTENANCE OF THE ACCOUNTS, OBVIOUSLY OF THE ASSESSEE, AND IT IS NOT THE FINDING, THAT THE ACCOU NTS WERE NOT REGULARLY MAINTAINED. THEN SIXTH REQUIREME NT IS THAT IF THE EXPLANATION IS NOT SUPPORTED BY ANY DOCUMENTARY OR OTHER EVIDENCE, THEN THE DEEMING FICTION CREATED BY S.68 CAN BE INVOKED, IN THE PRES ENT CASE, SO FAR AS 6TH REQUIREMENT IS CONCERNED, IT IS VERY MUCH THERE IN EXISTENCE, INASMUCH AS THE AMOUNT HAS BEEN ADVANCED BY ACCOUNT PAYEE CHEQUES, THROUGH BANK, AND IS DULY SUPPORTED BY DOCUMENTARY EVIDENCE , AS WELL AS THE EVIDENCE OF THE TWO LENDERS, AND THA T SATISFIES THE 2 ND REQUIREMENT ALSO, ABOUT THE DISCHARGE OF BURDEN ON THE PART OF THE ASSESSEE TO PROVE IDEN TITY AND GENUINENESS OF THE TRANSACTION. SO FAR AS CAPAC ITY OF THE LENDER IS CONCERNED, IN OUR VIEW, ON THE FAC E OF THE JUDGEMENT OF HONBLE SCUPREME COURT, IN DAUIAT RAMS CASE ( SUPRA ), AND OTHER JUDGMENTS, CAPACITY OF THE LENDER TO ADVANCE MONEY TO THE ASSESSEE, WAS NO T A MATTER WHICH COULD BE REQUIRED OF THE ASSESSEE TO BE ESTABLISHED, AS THAT WOULD AMOUNT TO CALLING UPON H IM TO ESTABLISH SOURCE OF THE SOURCE. IN THAT VIEW OF THE ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 46 MATTER, SINCE THIS PART OF THE JUDGMENT RUNS CONTRA RY TO THE JUDGMENT OF THE HONBLE SUPREME COURT, IN DAULAT RAMS CASE ( SUPRA ), WHILE THIS COURT IN A SUBSEQUENT JUDGMENT IN MANGILALS CASE ( SUPRA ) RELYING UPON DAULAT RAMS CASE ( SUPRA ), HAS TAKEN A CONTRARY VIEW, WE STAND BETTER ADVISED TO FOLLOW THE VIEW, WHICH HAS BEEN TAKEN IN MANGILALS CASE ( SUPRA ) IT IS FURTHER SUBMITTED THAT THE LEARNED ASSESSING OFFICER ENTERTAIN A WRONG BELIEF THAT DEPOSITS IN T HE BANK ACCOUNT OF THE DEPOSITORS SHORTLY BEFORE ISSUI NG CHEQUES TO THE ASSESSEE MAKES THE CREDITORS DUBIOUS . THE RAJASTHAN HIGH COURT HAS DEALT THE ISSUE AND HE LD IN THE CASE OF CIT VS. H.S. BUILDING 78 DTR 169 THA T DEPOSITS OF CASH IN THE ACCOUNT OF CREDITOR JUST BE FORE GIVING LOAN TO THE ASSESSEE CO, WOULD NOT LEAD TO T HE CONCLUSION THAT THE MONEY WAS DEPOSITED BY THE ASSESSEE CO. THEREFORE THE ITAT WAS JUSTIFIED IN DE LETING THE ADDITION. FURTHER THE RAJASTHAN HIGH COURT HAS AGAIN DEALT THE ISSUE ELABORATELY IN THE CASE OF CI T VS. JAI KUMAR BAKLIWAL (2014) 366 ITR 217 (RAJ) AND HEL D THAT CERTAINLY, DEPOSIT OF CASH AND IMMEDIATE TRANS FER OF CHEQUE OR CLEARANCE OF THE CHEQUE WITHIN A DAY O R ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 47 TWO CASTS A DOUBT AS THE TRANSACTION APPEARS TO BE SOMEWHAT DOUBTFUL BUT SUSPICION HOWSOEVER STRONG IT MAY BE IS NOT SUFFICIENT ITSELF AND CANNOT RESULT I N ADDITION U/S 68. THE ASSESSEE IS NOT REQUIRED TO PR OVE THE SOURCE OF THE SOURCE. IN VIEW OF THE RATIO OF THE AFORESAID DECISIONS OF THE RAJASTHAN HIGH COURT WHICH IS FULLY APPLICABLE TO T HE FACTS OF THE CASE. THE LEARNED ASSESSING OFFICER WAS PRECLUD ED IN MAKING ADDITION AND THE LEARNED CIT(A) ERRED IN CON FIRMING SUCH ADDITIONS MADE ON THE BASIS OF SUSPICION, DOUB T, CONJECTURES AND GUESS WORK. THE ADDITION MADE DESER VES TO BE DELETED. (B) THE DEPOSITS ARE GENUINE: - IN RESPECT OF CASH CREDITORS THE POSITION OF LAW IS SETTLED. THERE ARE A NUMBER OF DECISIONS OF THE HIGH COURT O F RAJASTHAN AS WELL AS OF OTHER COURTS INCLUDING THE APEX COURTS THAT FOR ESTABLISHING GENUINENESS OF A CASH CREDIT THE FOLLOWING IS REQUIRED: - (I) IDENTITY OF THE DEPOSITOR. (II) GENUINENESS OF THE TRANSACTION BEING THROUGH BANKIN G CHANNEL. (III) CONFIRMATION OF THE ASSSESSEE. (IV) CREDITWORTHINESS OF ASSESSEE. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 48 THE DEPOSITORS ARE GENUINE AS THEY NEED THE AFORESA ID PARAMETERS IN THE FOLLOWING MANNER (A) ALL THE DEPOSITORS ARE INCOME TAX PAYERS. HENCE THE RE IDENTITY IS PROVED BEYOND DOUBT. (B) ALL THE DEPOSITORS HAVE BANK ACCOUNT AND DEPOSIT HA S BEEN MADE BY WAY OF CHEQUES. HENCE THE TRANSACTION IS GENUINE. (C) ALL THE DEPOSITORS HAVE FURNISHED CONFIRMATIONS. (D) ALL THE DEPOSITORS HAVE KNOWN SOURCES OF INCOME AS INDICATED IN THE CHART ABOVE. HENCE CREDITWORTHINES S IS PROVED. THEREFORE THE ADDITION MADE U/S 68 DESERVES TO BE D ELETED. THE LEARNED CIT(A) HAS QUOTED A NUMBER OF CITATIONS WHILE CONFIRMING THE ADDITION. SIMILARLY THE LEARNED ASSE SSING OFFICER HAS ALSO QUOTED A NUMBER OF DECISIONS. SUFF ICE TO SAY THAT DECISIONS OF THE RAJASTHAN HIGH COURT QUOTED A BOVE WOULD PREVAIL OVER ANY OTHER DECISION. IT IS FURTHE R SUBMITTED THAT IF THERE ARE DIVERGENT OPINION ON SAME ISSUE T HE ONE FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. CIT VS. VEGETABLE PRODUCTS 88 ITR 192. CONTROVERTING THE DE CISIONS QUOTED BY THE LEARNED ASSESSING OFFICER AND THE LEA RNED CIT(A), THE FOLLOWING CASE LAWS ARE QUOTED IN SUPPO RT: - (I) CIT VS ORISSA CORPORATION (P) LTD (159 ITR 78) (SC) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 49 IT WAS HELD THAT THE ASSESSEE HAD GIVEN NAMES AND A DDRESSES OF THE ALLEGED CREDITORS, WHICH WERE INCOME TAX ASS ESSEES, THEIR INDEX NOS. WERE ALSO IN THE FILE OF THE REVEN UE, HOWEVER, REVENUE AFTER ISSUING NOTICES U/S 131 DID NOT PURSU E THE MATTER FURTHER AND EXAMINED THE SOURCE OF INCOME OF THE ALLEGED CREDITORS. THERE WAS NO EFFORT MADE TO PURS UE THE SO CALLED ALLEGED CREDITORS. IN THESE CIRCUMSTANCES, S UPREME COURT HELD THAT NO ADDITION COULD BE MADE. THE ASSE SSEE HAD DISCHARGED THE BURDEN LAID UPON IT. (II) CIT VS. CHANDELA TRADING CORPORATION PVT LTD (2015) 372 ITR 232 (KOLKATA HIGH COURT) MERE OMISSION ON THE PART OF THE CREDITORS TO SUBJE CT THEMSELVES TO THE ENQUIRY BY THE REVENUE OR THEIR F AILURE TO FURNISH ACCOUNTS WOULD NOT LEAD TO THE CONCLUSION T HAT THE CREDITORS WERE BOGUS (III) CIT VS. H.S. BUILDERS 78 DTR 169 (RAJASTHAN H IGH COURT) DEPOSIT OF CASH IN THE ACCOUNT OF CREDITORS JUST B EFORE GIVING LOAN TO THE ASSESSEE WOULD NOT LEAD TO THE CONCLUSI ON THAT THE MONEY WAS DEPOSITED BY THE ASSESSEE. (IV) ARAVALI TRADING CO. V/S ITO 25-1-2007 (2008) 8 DTR (RAJ) 199 ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 50 ONCE THE EXISTENCE OF THE CREDITORS IS PROVED AND S UCH PERSON OWN THE CREDITS WHICH ARE FOUND IN THE BOOKS OF THE ASSESSEE, THE ASSESSEE'S ONUS STAND DISCHARGED AND THE LATER IS NOT FURTHER REQUIRED TO PROVE THE SOURCE FROM WHICH THE CREDITORS COULD HAVE ACQUIRED THE MONEY DEPOSITED WITH HIM EI THER IN TERMS OF SECTION 68 OR ON GENERAL PRINCIPLE. (V) KANAHIYA LAL JANGID V/S CIT (2008) 217 CTR 354 (RAJ ASTHAN HIGH COURT) IN THE CASE OF CASH CREDITS CONFIRMATION AND EXISTE NCE OF THE CREDIT IS ENOUGH. (VI) CIT V. HEERA LAL CHAGAN LAL 257 ITR 281(RAJ.) IT HAS BEEN HELD THAT WHERE THE IDENTITY OF THE CRE DITOR IS ESTABLISHED AND THE CREDITOR HAS CONFIRMED THE LOAN , ADDITION CANT BE MADE. (VII) CIT VS. CHANDRA PRAKASH RANA 48 DTR 271 (VIII) CIT VS. JAI KUMAR BAKLIWAL 101 DTR 377 ONCE THE AMOUNT WAS ADVANCED BY THE CREDITORS BY AC COUNT PAYEE CHEQUES FROM THEIR RESPECTIVE BANK ACCOUNTS A ND THE CREDITORS WERE BEING ASSESSED TO INCOME TAX, THE CA PACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION STOOD PROVED. ADDITION U/S 68 WAS NOT SUSTAINABLE. (IX) MANGILAL AGARWAL VS. ACIT REPORTED IN 300 ITR 372 (RAJASTHAN HIGH COURT) ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 51 IT WAS HELD THAT WHERE THE ASSESSEE POINTS OUT A DE POSITOR FROM WHOM HE HAS RECEIVED MONEY AND IF THE DEPOSITO R OWNS ADVANCEMENT OF THE MONEY TO THE ASSESSEE, FURTHER E NQUIRY INTO THE SOURCE CANNOT RESULT IN INVOKING THE PROVI SIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961. IT WAS HELD THAT ONCE THE CREDITOR IS PROVED TO EXIST AND HE ADMITS HAVIN G LENT MONEY TO THE ASSESSEE, THE MONEY CANNOT BE CONSIDER ED AS INCOME OF THE ASSESSEE UNLESS THE REVENUE ESTABLISH ES BY SOME EVIDENCE THAT IT CLEARLY FLOWED DIRECTLY FROM ASSESSEE HIMSELF. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATIO N RELATES TO DETERMINING THE SOURCE OF INVESTMENT IN PURCHASE OF FOUR IMMOVA BLE PROPERTIES BY THE ASSESSEE FOR A TOTAL CONSIDERATION OF RS. 1.90 CROR ES AND WHETHER THE EXPLANATION SO FURNISHED BY THE ASSESSEE IS SATISFA CTORY OR NOT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THAT AN INVESTMENT OF RS 5 LACS IS FROM ASSESSEES OWN PROP RIETORSHIP CONCERN M/S GENTLEMAN, AN INVESTMENT OF RS. 45.50 LAKHS IS OUT OF ASSESSEES OWN CAPITAL AND THE SOURCE OF REMAINING INVESTMENT IN T HE SAID PROPERTIES IS THE AMOUNT OF LOANS BORROWED FROM VARIOUS PERSONS A MOUNTING TO RS. 1.44 CRORES. THE AO HAS NOT FOUND THE SAID EXP LANATION SATISFACTORY AND HAS MADE AN ADDITION OF RS 1.44 CRORES UNDER SE CTION 68 OF THE ACT AND AN ADDITION OF RS 45.50 LACS UNDER SECTION 69 O F THE ACT. THE LD CIT(A) HAS CONFIRMED THE SAID ADDITIONS AND ALTERNA TIVELY, ALSO DIRECTED TO ASSESSEE RS 1.44 CRORES UNDER THE HEAD CAPITAL GAI NS. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 52 9. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS, W E NOW REFER TO THE EXPLANATION OF THE ASSESSEE AND SUPPORTING DOCUMENT ATION AND RELATED FINDINGS OF THE AO AND THE LD CIT(A) IN RESPECT OF EACH OF THE SOURCE OF INVESTMENT SO CLAIMED BY THE ASSESSEE. 10. FIRSTLY, WE REFER TO THE SOURCE OF INVESTMENT O F RS 1,04,50,000 WHICH THE ASSESSEE CLAIMS TO HAVE RECEIVED FROM RAJ ASTHALI SHIKSHA & WELFARE SAMITI. ON PERUSAL OF RECORDS, IT IS NOTED THAT IT IS CONSTITUTED AND REGISTERED AS A SOCIETY UNDER THE SOCIETIES REGISTR ATION ACT ON 25.06.2009 AND THUS AN INDEPENDENT ASSESSABLE PERSON HAVING PA N AACTR2240K UNDER THE PROVISIONS OF THE INCOME TAX ACT. THE RE TURN OF INCOME FILED FOR ASSESSMENT YEAR 2015-16 & 2016-17 IS ALSO AVAILABLE ON RECORD. AS PER COPIES OF SALE DEEDS AVAILABLE ON RECORD, IT HAS SO LD CERTAIN PROPERTIES TO FIVE PERSONS NAMELY, BANWARI LAL GURJAR, RAMESH KUM AR RAYA, RAMPAL, VIJAY KUMAR AND RAJEEV KUMAR KASANA AND HAS RECEIVE D A TOTAL CONSIDERATION OF RS 1,18,32,565 WHICH CONSISTS OF C HEQUE RECEIPT OF RS 1,14,00,000 AND REMAINING IN CASH AMOUNTING TO R S 4,32,565. THE CHEQUE RECEIPT OF RS 1,14,00,000 IS FOUND CREDITED ON 3.10.2013 IN THE BANK ACCOUNT OF THE SAMITI MAINTAINED WITH INDIAN O VERSEAS BANK, JAIPUR, AJMER ROAD BRANCH. SUBSEQUENTLY, THE SAMITI HAS IS SUED 6 CHEQUES TO THE ASSESSEE TOTALING TO RS 1,04,50,000/- WHICH HAVE BE EN CLEARED AND DEBITED IN THE SAMITIS BANK ACCOUNT BETWEEN 7TH OC T, 2013 TO 1ST NOV, 2013 AND THE CORRESPONDING CREDIT IN THE ASSESSEES BANK ACCOUNT MAINTAINED WITH INDIAN OVERSEAS BANK, JAIPUR, AJMER ROAD BRANCH. WE THEREFORE FIND THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS CAST ON HIM ON TERMS OF IDENTITY, CREDITWORTHINESS AND GENU INENESS OF THE TRANSACTION UNDER SECTION 68 OF THE ACT. ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 53 11. NOW, COMING TO THE CONTENTIONS OF THE REVENUE IN NOT ACCEPTING THE EXPLANATION SO OFFERED BY THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER, ON GOING THROUGH THE SALE DEEDS/DOCUMENTS, IT IS NOTICED THAT THE ASSESSEE SOLD HIS OWN PROPERTIES AND NOT THE PROPER TIES OF THE SOCIETY, HOWEVER, IT HAS BEEN TRIED TO SHOW THAT THE PROPERT IES HAVE BEEN SOLD BY THE SOCIETY THROUGH ITS SECRETARY SHRI BALJEET YADA V. FURTHER, THE ASSESSING OFFICER OBSERVED THAT SINCE, THE SOCIETY HAS UNDERT AKEN HIGH VALUE TRANSACTION THROUGH ITS SECRETARY, THEREFORE, IT WA S OBLIGATORY ON THE PART OF THE SOCIETY TO FILE ITS RETURN OF INCOME AND TO DISCLOSE THE TRANSACTIONS IN IT. NOTHING HAS BEEN STATED ABOUT THE LIABILITY OF CAPITAL GAIN TAX ON THESE TRANSACTIONS. AS SUCH, THE SOCIETY HAS FAILED TO FILE ANY DOCUMENTARY EVIDENCE WITH REGARD TO DISCLOSURE OF T HE TRANSACTION IN ITS RETURN OF INCOME, THEREFORE, THE TRANSACTION REMAIN ED UNDISCLOSED INCOME IN THE HANDS OF THE SOCIETY. THEREFORE, IT W AS HELD BY THE ASSESSING OFFICER THAT ADVANCING AMOUNTING TO RS.1, 04,00,000/- OUT OF UNDISCLOSED INCOME OF THE SOCIETY TO THE ASSESSEE C ANNOT BE TREATED AS GENUINE TRANSACTION. SIMILARLY, THE LD CIT(A) HAS H ELD THAT THE SAMITI IS A PAPER ENTITY WHICH IS CONTROLLED AND MANAGED BY THE ASSESSEE AND THE CAPITAL GAINS LIABILITY SHALL FASTEN ON THE ASSESSE E. 12. WE ARE HOWEVER UNABLE TO ACCEDE TO THE SAID CON TENTIONS OF THE REVENUE. FIRSTLY, WE DONOT FIND ANY MATERIAL ON RE CORD WHICH SUBSTANTIATE THE CONTENTION OF THE REVENUE THAT THE ASSESSEE SOLD HIS OWN PROPERTIES AND NOT THE PROPERTIES OF THE SAMITI . ALL THAT IS AVAILABLE ON RECORD IS THE COPIES OF THE PURCHASE DEEDS, SALE DEEDS AND THE BANK ACCOUNT WHERE THE SALE PROCEEDS HAVE BEEN CREDITED. THE PURCHASE AND SALE DEEDS HAVE BEEN EXECUTED IN THE NAME OF THE SA MITI THROUGH ITS ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 54 SECRETARY, BALJEET YADAV. FURTHER, THE SALE PROCEED S HAVE BEEN CREDITED IN THE BANK ACCOUNT OF THE SAMITI. THEREFORE, IN ABSE NCE OF ANY EVIDENCE WHICH DEMONSTRATE THAT THE ASSESSEE HAS ROUTED HIS OWN FUNDS IN THE NAME OF THE SAMITI AND UTILIZED IT FOR PURCHASE OF THE SAID PROPERTIES, IT WOULD BE PREMATURE TO HOLD THAT THE PROPERTIES BELO NG TO THE ASSESSEE AND NOT THAT OF THE SAMITI. FURTHER, MERELY BECAUS E THE SAMITI HAS NOT FILED ITS TAX RETURN OR SOUGHT REGISTRATION UNDER S ECTION 12A, THE SAME CANNOT BE A BASIS FOR FASTENING THE LIABILITY ON TH E ASSESSEE. IT MAY BE THAT THE SAMITI IS CONTROLLED AND MANAGED BY THE AS SESSEE, HOWEVER, GIVEN THE FACT THAT IT IS A SEPARABLE ASSESSABLE PERSON H AVING REGISTERED UNDER THE SOCIETIES REGISTRATION ACT AND HAVING ITS OWN P ERMANENT ACCOUNT NUMBER, ANY ACTION HAS TO BE TAKEN AGAINST THE SAMI TI AND WHERE THE SAMITI FAILS OR UNABLE TO RESPOND/CO-OPERATIVE, THE REVENUE HAS THE NECESSARY RECOURSE TO REACH OUT TO THE TRUSTEES AND OFFICE BEARERS INCLUDING THE ASSESSEE. HOWEVER, FOR THAT, THE REV ENUE HAS TO FOLLOW THE DUE PROCEES AND IT CANNOT SHORT-CIRCUIT THE WELL-LA ID DOWN PROCEDURE IN THE STATUE AND THAT TOO, WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE AND THE SAMITI. CONSEQUENTLY, WE FIND THAT BASIS THE MATER IAL AVAILABLE ON RECORD, THE PROPERTIES BELONG TO THE SAMITI AND THE FACT TH AT SALE PROCEEDS HAVE BEEN CREDITED IN ITS BANK ACCOUNT, THE CAPITAL GAIN S, IF ANY ARISING ON TRANSFER OF SUCH PROPERTIES WILL ARISE IN HANDS OF THE SAMITI AND NOT IN HANDS OF THE ASSESSEE AND THE REVENUE IS FREE TO TA KE APPROPRIATE ACTION AS PER LAW. HOWEVER, AS FAR AS ASSESSEE IS CONCERN ED, IT HAS DISCHARGED THE INITIAL ONUS CAST ON HIM ON TERMS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION UNDER SECTION 68 OF THE ACT. IN THE RESULT, GROUND NO. 1 SO FAR AS IT RELATES TO TRANSACTION AM OUNTING TO RS ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 55 1,04,50,000 WITH RAJASTHALI SHIKSHA & WELFARE SAMIT I IS CONCERNED, IS ALLOWED IN FAVOUR OF THE ASSESSEE. 13. IN RESPECT OF REMAINING PERSONS FROM WHOM THE A SSESSEE HAS BORROWED THE REMAINING FUNDS, IT IS NOTED THAT COPI ES OF THEIR CONFIRMATION, BANK ACCOUNTS, INCOME TAX RETURNS ARE AVAILABLE ON RECORD WHICH ESTABLISHES THEIR IDENTITY. FURTHER, THESE INDIV IDUALS ARE DRAWING SALARY, PENSIONS OR ENGAGED IN THE REAL ESTATE BUSINESS AND SIMILARLY, THE TWO COMPANIES ARE ENGAGED IN THE REAL-ESTATE BUSINESS, THUS THEIR CREDITWORTHINESS HAS BEEN ESTABLISHED. FURTHER, WE FIND THAT ONLY REASON WHY THE REVENUE HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE IS THAT THERE WERE CASH DEPOSITS ON 2.08.2013 IN RESPECTIVE ACCOUNTS AND CHEQUE OF AN EQUIVALENT AMOUNT IN FAVOUR OF THE ASSESSEE H AS BEEN CLEARED ON THE NEXT DAY IE 3.08.2013 FROM THE RESPECTIVE ACCOUNTS. WE FIND THE SAID FINDINGS OF THE REVENUE TO BE CORRECT BUT AT THE SA ME TIME, WE ALSO FIND THAT THESE ARE NOT SOLITARY TRANSACTIONS IN THE RES PECTIVE BANK ACCOUNTS, THERE ARE OTHER REGULAR TRANSACTIONS OF DEPOSITS IN CLUDING CASH DEPOSITS AND WITHDRAWALS IN THEIR RESPECTIVE BANK ACCOUNTS, THEREFORE, THE SAID FACT ALONE (WHICH RAISES A SUSPICION) BUT AT THE SAME TI ME, DISREGARDING REST ALL FACTS WHICH ESTABLISHED THE CREDITWORTHINESS OF THE RESPECTIVE PERSONS WOULD NOT BE APPROPRIATE. IN ANY CASE, THE DECISIO N OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. JAI KUMAR B AKLIWAL (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE WHERE IT WAS HELD THAT CERTAINLY DEPOSIT OF CASH AND IMMEDIATE TRANSFER OF CHEQUE OR CLEARAN CE OF THE CHEQUE WITHIN A DAY OR TWO CASTS A DOUBT AS THE TRANSACTIO N APPEARS TO BE SOMEWHAT DOUBTFUL BUT SUSPICION HOWSOEVER STRONG IT MAY BE IS NOT SUFFICIENT ITSELF AND CANNOT RESULT IN ADDITION U/S 68. IN LIGHT OF THE SAME, ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 56 WE FIND THAT THE ASSESSEE HAS DISCHARGED THE INITIA L ONUS CAST ON HIM ON TERMS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION UNDER SECTION 68 OF THE ACT. IN THE RESULT, REMAIN ING ADDITIONS MADE BY THE AO UNDER SECTION 68 IS HEREBY ALSO DELETED. IN THE RESULT, THE GROUND NO. 1 IS ALLOWED. 14. REGARDING GROUND NO. 3, AS WE HAVE HELD ABOVE, BASIS THE MATERIAL AVAILABLE ON RECORD, THE CAPITAL GAINS IF ANY ON TH E SALE OF THE PROPERTIES WILL ARISE IN HANDS OF THE SAMITI AND NOT IN THE HA NDS OF THE ASSESSEE, THEREFORE, GROUND NO. 3 IS ALLOWED IN FAVOUR OF THE ASSESSEE. 15. IN RESPECT OF GROUND NO. 2 RELATING TO ADDITIO N OF RS 45,50,000, THE LD. AR HAS MOVED AN APPLICATION UNDER RULE 29 OF TH E INCOME TAX RULES, 1963 AND SOUGHT PERMISSION TO FILE ADDITIONAL EVIDE NCE WHICH FIND PLACE IN ASSESSEES ADDITIONAL PAPER BOOK. IT WAS SUBMITTED BY THE LD AR THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE COULD NOT FURNISH ALL THE EVIDENCES AND SINCE THE ISSUE GOES TO THE ROOT OF THE MATTER, THE ADDITIONAL EVIDENCES NOW BEING FURNISHED MAY KI NDLY BE ADMITTED. IT WAS SUBMITTED BY THE LD AR THAT WHEN T ECHNICALITIES ARE PITCHED AGAINST THE SUBSTANTIVE DISCHARGE OF JU STICE, THE LATER HAS TO PREVAIL, IN A CASE WHERE THE BONAFIDES ARE N OT IN DOUBT (MARUTI CIVIL WORKS VS. ITO [2011] 136 TTJ 448 [PUN E]). 16. THE LD DR IS HEARD WHO HAS OPPOSED THE APPLICA TION FILED BY THE ASSESSEE FOR CONSIDERING THE ADDITIONAL EVIDENC ES. IT WAS SUBMITTED BY THE LD DR THAT THE ASSESSEE WAS GRANTE D SUFFICIENT ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 57 OPPORTUNITY BOTH DURING THE ASSESSMENT AND APPELLAT E PROCEEDINGS AND HE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPOR T OF ITS CLAIM. IT WAS FURTHER SUBMITTED THAT ON PERUSAL OF ADDITIONAL EVIDENCE SOUGHT TO BE SUBMITTED BY THE ASSESSEE, THE SAME RELATES T O CONFIRMATION/AFFIDAVITS FROM THIRD PARTIES, HOWEVER , DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE CONTENTION OF THE ASSESSEE HAS BEEN THAT THE SOURCE OF INVESTMENT IS ASSESSEES OWN CAPITAL. IT WAS ACCORDING SUBMITTED THAT THE A SSESSEE SHOULD NOT BE PERMITTED TO SUBMIT THE ADDITIONAL EVIDENCE. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. THE SUBJECT MATTER OF ADDITIO N AND THE CONSEQUENT GROUND OF APPEAL RELATES TO ADDITION MAD E BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE ACT. SEC TION 69 OF THE ACT STATES THAT WHERE IN THE FINANCIAL YEAR IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINE D BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANA TION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER , SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE IN COME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. THE ADDITION WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 69 AS THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONTENDED THAT OUT OF TOTAL INVESTMENT OF RS 1.90 CRORES, RS 1,44,50,000 WAS TA KEN AS LOAN FROM HIS FAMILY MEMBERS AND OTHER ENTITIES AND AN A MOUNT OF RS 45,50,000 HAS BEEN INVESTED OUT OF HIS OWN CAPITAL. THE AO ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 58 THEREAFTER NOT FINDING THE EXPLANATION OF THE ASSES SEE AS SATISFACTORY HAS MADE AN ADDITION OF RS 1,44,50,000 UNDER SECTION 68 WHICH WAS SUBJECT MATTER OF GROUND NO 1 AND 3 AN D WHICH WE HAVE ALREADY ADJUDICATED ABOVE. IN RESPECT OF REMA INING AMOUNT OF RS 45,50,000, AS THE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM OF MAKING THE INVE STMENT OUT OF HIS OWN CAPITAL, THE ASSESSING OFFICER WENT AHEAD AND M ADE THE ADDITION UNDER SECTION 69 OF THE ACT. DURING THE A PPELLATE PROCEEDINGS ALSO, THE ASSESSEE COULD NOT EXPLAIN TH E SOURCE OF INVESTMENT AND THE FINDINGS OF THE AO WERE CONFIRME D BY THE LD CIT(A). NOW, BEFORE US, THE LD AR HAS RAISED A FRE SH CONTENTION THAT THE ASSESSEE HAS ARRANGED LOANS AT PERSONAL LE VEL AND IN ABSENCE OF ADEQUATE OPPORTUNITY, THE ASSESSEE COULD NOT ARRANGE THE RELEVANT EVIDENCES WHICH INCLUDES COPY OF BANK ACCOUNTS, AFFIDAVITS/CONFIRMATIONS OF THE RELEVANT PERSONS FR OM THE LOAN AT PERSONAL LEVEL WAS TAKEN WHICH IS NOW SOUGHT TO BE ADMITTED BY WAY OF ADDITIONAL EVIDENCES. WE HAVE GIVEN A CAREF UL CONSIDERATION TO THE SAID REQUEST SO MADE BY THE LD AR ON BEHALF OF THE ASSESSEE BUT WE ARE UNABLE TO ACCEDE TO THE SAID REQUEST. F IRSTLY, WE FIND THAT THE ASSESSEE HAS BEEN GRANTED ADEQUATE OPPORTU NITY DURING THE ASSESSMENT AND APPELLATE STAGE AND NOTHING HAS BEEN BROUGHT ON RECORD WHICH SUGGEST THAT THE ASSESSEE WAS PREVE NTED BY ANY SUFFICIENT CAUSE FOR FILING THE RELEVANT DOCUMENTS. SECONDLY AND MORE IMPORTANTLY, WE FIND THAT THE LD AR HAS SOUGHT TO RAISE FRESH CONTENTION BEFORE US FOR THE FIRST TIME AND WHICH I S NOT BORNE OUT OF THE RECORDS AND THAT IS, THE ASSESSEE HAS ARRANGED THE LOANS AT PERSONAL LEVEL AS AGAINST THE CONTENTION BEFORE THE LOWER ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 59 AUTHORITIES THAT THE INVESTMENT HAS BEEN MADE OUT O F ASSESSEES OWN CAPITAL. AS FAR AS ARRANGING LOAN AT PERSONAL LEVEL IS CONCERNED, THE SAME WAS DULY CONSIDERED BY THE AO T HOUGH NOT FOUND ACCEPTABLE AND ADDITION WAS MADE UNDER SECTIO N 68 OF THE ACT. AS THE ASSESSEE COULD NOT PRODUCE SUFFICIENT EVIDENCE IN SUPPORT OF INVESTMENT OUT OF HIS OWN CAPITAL, THE I MPUNGED ADDITION WAS MADE UNDER SECTION 69 OF THE ACT. IF WE WERE T O ACCEPT THE ADDITIONAL EVIDENCE, IT WOULD BE ACCEPTING THE FRES H CONTENTION RAISED FOR A FIRST TIME BEFORE US WHICH CANNOT BE A CCEPTED. THE ADDITIONAL EVIDENCE IN SUPPORT OF THE ASSESSEES EX ISTING CONTENTIONS BORNE OUT OF THE RECORD AND THAT TOO, W HERE THE ASSESSEE DEMONSTRATE SUFFICIENT CAUSE CAN BE ADMITT ED IN LIGHT OF SUBSTANTIVE JUSTICE, HOWEVER, THE ADDITIONAL EVIDEN CE IN SUPPORT OF FRESH CONTENTIONS RAISED FOR THE FIRST TIME BEFORE US CANNOT BE ACCEPTED. IN THE RESULT, THE PRAYER FOR SUBMITTING THE ADDITIONAL EVIDENCE IS HEREBY DECLINED. ON MERITS, IN ABSENCE OF ANY EVIDENCE TO SUPPORT THE SOURCE OF INVESTMENT OUT OF ASSESSEE S OWN CAPITAL, THE ADDITION SO MADE BY THE ASSESSING OFFICER IS SU STAINED AND THE GROUND OF APPEAL IS HEREBY DISMISSED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26/11/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 377/JP/2018 SHRI BALJEET YADAV, JAIPUR VS. ITO, JAIPUR 60 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26/11/2018. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BALJEET YADAV, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- INCOME TAX OFFICER, WARD-2(3), JAIP UR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 377/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR