Shivaji Laxman Sahane, Nashik V. Assistant Commissioner of Income-tax,

ITA 534/PUN/2015

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 1183 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF POWER OF ATTORNEY
• Keywords: Unexplained cash credit; Revised return
• Section: 131; 68; 143(3); 43; 22

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.534/PUN/2015 धििाारण वर्ा / Assessment Year : 2010-11 Shivaji Laxman Sahane, Sahane Mala, Jaibhavani Road, Nahik Road, Nashik – 422101 PAN : AOXPS7118G .......अपीलार्थी / Appellant बिाम / V/s. The Asstt. Commissioner of Income Tax, Circle – 2, Nashik ......प्रत्यर्थी / Respondent Assessee by : Shri Pramod S. Shingte Revenue by : Shri S.P. Walimbe सुनवाई की तारीख / Date of Hearing : 26-05-2022 घोषणा की तारीख / Date of Pronouncement : 01-08-2022 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 05-02-2015 passed by the Commissioner of Income Tax (Appeals)-2, Nashik [‘CIT(A)’] for assessment year 2010-11. 2. Brief facts relating to the issues on hand involving ground Nos. 1, 2, 3 and 4 are that the assessee is an individual engaged in the business of land trading. He filed return of income for the assessment year under 2 ITA No.534/PUN/2015, A.Y. 2010-11 consideration declaring a total income at Rs.4,71,14,700/-. Under scrutiny, the AO finalized assessment and determined the total income at Rs.9,27,06,722/- inter alia making addition of Rs.2,77,50,000/- on account of unexplained cash credit u/s. 68 of the Act, disallowance of interest of Rs.3,42,022/- paid to Mr. Rangnath Dattatraya Gadekar, Rs.38,00,000/- on account of profit of property and Rs.1,37,00,000/- on account of non-genuine liability vide its order dated 12-03-2013 passed u/s. 143(3) of the Act. Having aggrieved by the said order of AO, the assessee preferred an appeal before the CIT(A) challenging the additions and disallowances made by the AO in the assessment order. The CIT(A) having considered the written submissions dated 02-04-2014 of the assessee from pages 4 to 22 and the remand report dated 10-12-2014 which is reproduced from pages 22 to 27 of the impugned order. The CIT(A) confirmed the additions and disallowances made by the AO. Having not satisfied with the order of CIT(A), the assessee is before us. 3. Ground Nos. 1 and 2 raised by the assessee challenging the action of CIT(A) in confirming the addition of Rs.2,77,50,000/- on account of unexplained cash credit and disallowance of interest of Rs.3,42,022/- in the facts and circumstances of the case. 4. Since, the issue raised in ground Nos. 1 and 2 are interlinked, we proceed to adjudicate the same collectively. 5. Before us, the ld. AR, Shri Pramod S. Shingte filed synopsis of the case and submissions vide letter dated 30-05-2022. On perusal of the same, we find the same were filed before the CIT(A) and it is reiteration of the same submissions as made before the CIT(A). As discussed above, the 3 ITA No.534/PUN/2015, A.Y. 2010-11 facts and submissions relating to ground Nos. 1 and 2, the CIT(A) reproduced the same from pages 4 to 10, considering the written submissions along with remand report of AO the CIT(A) recorded his reasons from page 27 vide paras 6.1 to 7.4 of the impugned order, held there is no genuine loan and no amount is payable to Mr. Rangnath Dattatraya Gadekar and confirmed the order of AO on account of unexplained cash credit and consequently the disallowance on account of interest being non-genuine. The relevant portion from paras 6.1 to 7.4 of impugned order is reproduced here-in-below : “6.1 Grounds 1 to 7 relate to the addition of Rs.2,77,50,000/- u/s. 68 of the Act on account of unsecured loan taken from Rangnath Dattatraya Gadekar and disallowance of Rs.3,47,022/- on account of interest claimed on unsecured loan taken from Rangnath D Gadekar (referred to as Shri Gadekar hereafter). Facts of the case 1. As per the ledger account furnished to the A.O. during the assessment proceedings, the appellant had received Rs.2,77,50,000/- from Shri Rangnath D Gadekar on 5/10/2009 and he had repaid back Rs.1,38,00,000/- to Shri Gadekar from 15/11/2009 to 02/01/2010. The outstanding credit balance was Rs.1,42,91,022/- as on 31/03/2010. 2. In order to verify the above loan, Shri Rangnath D. Gadekar was summoned by the A.O. and his statement was recorded on 15/01/2013. He had stated that his agricultural land bearing Survey No.37/2 (94R) at Deolali was acquired by Nashik Municipal Corporation (NMC) in the year 2009 and he had received Rs.4,28,53,376/-. 3. In the course of recording his statement, Shri R. D. Gadekar had furnished a copy of the agreement/General Power of Attorney(GPA) dated 13/07/2007 entered between the appellant and Shri Rangnath D. Gadekar. As per this agreement, Shri Rangnath D. Gadekar had given general power of Attorney of the said land to the appellant (Power of Attorney Holder). Shri Gadekar had stated that he had received Rs.1.5 crores from the appellant in lieu of giving power of attorney as per the agreement dated 13/07/2007. As per the bank statement of Shri Gadekar maintained with PNB, he had received Rs.4,28,53,376/- from NMC on 05/10/2009. Almost the entire amount received by Shri Gadekar on account of acquisition of his land was transferred to the account of the appellant on the same date i.e. 06/10/2009 as under: 1. Rs.1,33,89,000/- on 06/10/2009 2. Rs.2,77,50,000/- on 06/10/2009 3. Rs.17,10,000/- on 06/10/2009 _____________ Rs.4,28,49,000/- 4 ITA No.534/PUN/2015, A.Y. 2010-11 4. On further enquiry by the A.O., Shri Gadekar stated that the appellant had taken blank cheques from his when he gave the amount of Rs.1.5 crores to him and the appellant had used these blank cheques to transfer the said amounts to his own bank account. The statement of Shri Gadekar may be summarized as under: 1. The appellant had transferred the amounts received by Shri Gadekar on account of acquisition of the land to his own bank account using blank cheques taken from Gadekar by the appellant when he gave the amount of Rs.1.5 crores as per the agreement dated l3/07/2007. 2. Cash were withdrawn from the bank account of Shri Gadekar by the appellant using the said blank cheques taken from him (Gadekar). 3. Shri Gadekar had explained to the AO. that he was not aware that the appellant had shown Rs.2,77,50,000/- as loan in his name. According to Shri Gadekar, he had not given any loan to the appellant. 4. Shri Gadekar had taken ~ 1.5 crores from the appellant in lieu of General Power of Attorney dated 13/07/2007. In short, Shri Gadekar had transferred the right of his land to the appellant by way of power of attorney. 5. Shri Gadekar had deposited the amount of Rs.1.5 crores in his NDCC Bank. 5. The AO. had provided a copy of the statement of Shri Gadekar recorded u/s, l31 of the Act to the appellant for his explanation. In the meantime, Shri Gadekar had sent a letter to the A.O. enclosing therein an affidavit dated 16/01/2013. In the affidavit, Shri Gadekar had inter alia stated-that he had given loan of Rs.2,77,50,000/- to the appellant Shri Shivaji Sahane. He had further stated that the statement given under section l31 of the Act on 15/01/2013 be considered as cancelled. In view of his affidavit and the contents therein, the AO. was forced to summon him again. But due to his health, Shri Gadekar was re-examined and his statement u/s, 131 of the Act was recorded at his residence as per his request. In this statement recorded on 07/02/2013, he had stated that the statement given by him on 15/01/2013 was the correct statement and the said affidavit be treated as invalid and cancelled. According to his statement, the appellant had prepared the affidavit and he was not aware of the contents of the affidavit. When he was informed of the contents of the affidavit, he expressed his disagreement with the contents therein. He also stated that the return of income for AY, 2010- 11 was prepared and filed by the CA of the appellant and the refund was also transferred to the account of the appellant using blank cheques of PNB. He had also stated that no interest was receivable from the appellant as there was no loan given buy him to the appellant. In his conduding statement, Shri Gadekar had categorically stated that any affidavit furnished on behalf of him should be ignored and should be treated as invalid. 6. The appellant was provided with the copy of the second statement of Shri Gadekar dated 07/02/2013. The appellant had reiterated that Shri Gadekar had given loan to him on interest out of the amount received by him as compensation for land acquisition by 5 ITA No.534/PUN/2015, A.Y. 2010-11 Govt. The appellant had also submitted that Shri Gadekar is greedy. His affidavit should be. considered instead of his statement. The appellant had also asked for cross examination of Shri Gadekar. The A.O. had tried to arrange the cross examination of Shri Gadekar several time, but he expressed his inability to attend the office of the A.O. due to ill health. He was not in position to face the cross examination. Instead, he sent a letter to the A.O. expressing his regret and reiterated that he had stated all the facts in his statement dated 07/02/2013 and in his earlier statement. He also stated that the affidavit with his signature submitted to the AO. was incorrect and false. This office has also received an affidavit dated 06/06/2014 purportedly signed by Shri R. D. Gadekar with a covering letter through the tapal. This office has not asked any assistance from Shri Gadekar. This office is not in touch with him even remotely. This affidavit dated 06/06/2014 appears to be foreged, if not mischievous. This affidavit is not to be admitted and thus ignored. 7. From the analysis of the facts discussed above, the following facts documents are considered important and crucial. They are discussed as under : The General Power of Attorney dated 13/07/2007 In my considered view, the general power of attorney dated 13/07/2007 is the most important document in this case. The relevant portion of the same is reproduced as under: "3. The said property is totally reserved for pay-ground and up till now the Nashik Municipal Corporation not taken any action to take the possession of said property. The Executors were willing to release the said property from the reservation from Nashik Municipal Corporation or to develop the same or to take possession of said property as per the reservation by the Nashik Municipal Corporation and to give compensation for the same to executors, but the Executors or any person of said family on their behalf could not do the compliance, and hence Executors have decided to give the development rights of said property to any third person and to accept the fixed compensation amount from him and the persons giving developments rights, as per their will may this land released from reservation or receive compensation from Nashik Municipal Corporation for the same. As mentioned above, the Executors have offered the development rights to the Power of Attorney Holder and discussions were held between the Executors and the power of Attorney Holder accepted to develop the same as per the terms as mentioned below. Accordingly both the parties have written and registered a Development Agreement. As on of the inseparable part of said document, the Executors has executed today this General Power of Attorney in favour of the Power of Attorney Holder. 4. For facilitating the development of said property and to carry out the all ancillary work independently by the Power 'of Attorney Holder, the Executors have accepted to appoint him as a Power of Attorney Holder of said property and have executed this General power of Attorney for the same. 5. The Executors have given development rights of said 6 ITA No.534/PUN/2015, A.Y. 2010-11 property to the Power of Attorney Holder forever. 6. The said property is owned and possessed by us. We have given development rights of said property to you and for the purpose of same both of us together have written a Development Agreement. The said Development Agreement is written on a Stamp of ( /: and the same is submitted for registration alongwith the General Power of Attorney to Sub- Registrar, Nashik: As per said Development Agreement, we have admitted to appoint you as our General Power of Attorney. By this General Power of Attorney, we have appointed you as our General Power of Attorney. 7. As our General Power of Attorney, you should carry out the following works in respect of said property for and on our behalf. 8. The Executors have obtained the order of the return filed as per the provision of Urban Land Ceiling Act of said property and as per the said order, all the area is declared as Non- Vacant. The Development Agreement is given with reference to the said full non-vacant declared area. i.e. the area of the property as mentioned in column 1 above. As per the said Development Agreement, the Executors have given all right to the Power of Attorney Holder, to carry out the following works in respect of the said property. If the said property is not released from the reservation, to give the possession of the said property as per the reservation to the Nashik Municipal Corporation and to accept full compensation amount for the acquisition of said property, in the name of Power of Attorney Holder by cheque, to deposit the said cheque in the name of Power of Attorney Holder in his account. But before that, the Power of Attorney Holder shall pay full consideration, as mentioned in the Agreement. to the Executors within the stipulated period. Otherwise, the Power of Attorney Holder has no right to receive the compensation for the acquisition of said property in his name. And after paying complete consideration as mentioned in the said Agreement, to the Executors, the Power of Attorney Holder will get right to create any type of financial charges upon the said property. 7.1 The said property was ultimately acquired by the Nashik Municipal Corp ation and the compensation of Rs.4,28,53,376/- was paid on 05/10/2009. As the said land was registered in the name of Shri Gadekar, the cheque was issued in his name being the owner of the land. Shri Gadekar had received the compensation amount on behalf of the appellant as stipulated in the said power of attorney agreement. Thus, the compensation amount of Rs.4,28,49,000/- was immediately transferred to the bank account of the appellant on the same date i.e.06/10/2009. 7.2 As per the terms and conditions of the power of attorney dated 13/07/2007, the appellant had already paid Rs.1.51 crores to Shri Gadekar as under:- 7 ITA No.534/PUN/2015, A.Y. 2010-11 1. Rs.1,07,50,0008/- 2. Rs.26,39,000/- 3. Rs.17,11,000/- _______________ Rs.1,51,00,000/- Shri Gadekar had deposited the amounts of Rs.1.51 crores in his account with NDCC bank and had taken 3 fixed deposit receipts of Union Bank of India on 24/09/2009, 06/10/2009 and 09/10/2009. The appellant has claimed to have another power of attorney dated 17/06/2009. This document was never produced before the AO. This document was produced at the later part of the appellate proceedings. There was no reference to this document in any submission of the appellant prior to the sudden appearance of this document on 06/12/2014. Therefore, the authencity of this document is not free from doubt. As stated above, the most authentic and the relevant document is the general power of attorney dated 13/07/2007 signed by the appellant and Shri Gadekar. Without this document dated 13/07/2007, the transaction in question would not have taken place. 7.3 It appears that the appellant and his chartered accountant (CA) had prepared the returns of income of Shri Gadekar for A.Y. 2010-11 showing the amount received from the N.M.C. In the revised return of income, a refund of Rs.57,78,630/- was claimed. The Department had issued the refund and the same was deposited in the account of Shri Gadekar with PNB on 07/05/2011. However, the same was again transferred to the appellant's account on 09/05/2011. This transaction also demonstrates that Shri Gadekar has to receive Rs.1.51 crores only as agreed as per the power of attorney dated 13/07/2007 and nothing more. There is no genuine loan and no amount is payable to Shri Gadekar. It also appears that Shri Gadekar does not know anything about the returns of income being filed and refund being deposited in his account and transferred to the account of the appellant using blank cheques as stated by Shri Gadekar in his statements recorded u/s 131 of the Act. Even after many years, the said loan has not being repaid to Shri Gadekar. 7.4 After considering the facts and circumstances of the case in totality and the materials on record, I am of the considered view that the addition of Rs.2,77,50,000/- as unexplained cash credit u/s 68 of the Act and the disallowance of Rs.3,42,022/- on account of interest being non-genuine are justified and the same are confirmed.” 6. The main contention before us advanced by the ld. AR is about non- granting opportunity of cross-examination of Mr. Rangnath Dattatraya Gadekar. We note that during assessment proceedings, the AO in order to verify loan of Rs.2,77,50,000/- which was availed by the assessee from Mr. Rangnath Dattatraya Gadekar recorded the statement u/s. 131 of the Act on 15-01-2013, wherein he specifically stated that he had received Rs.1.5 crore from the assessee in lieu of giving Power of Attorney as per the 8 ITA No.534/PUN/2015, A.Y. 2010-11 Agreement dated 13-07-2007. The AO provided the said copy of statement recorded u/s. 131 of the Act of Mr. Rangnath Dattatraya Gadekar to the assessee for his explanation. As matter stood thus, Mr. Rangnath Dattatraya Gadekar has sent a letter to the AO enclosing the affidavit dated 16-01-2013 stating that he had given loan of Rs.2,77,50,000/- to the assessee and further, the statement given by him u/s. 131 of the Act on 15-01-2013 be cancelled. In view of the same, the AO again summoned the said Mr. Rangnath Dattatraya Gadekar and recorded statement u/s. 131 of the Act as per his request at his residence of Mr. Rangnath Dattatraya Gadekar on 07-02-2013. We note that the said Mr. Rangnath Dattatraya Gadekar stated that the statement given by him on 15-01-2013 is correct and the affidavit dated 16-01-2013 be treated as invalid and cancelled. According to the CIT(A) that the assessee had no knowledge about the contents of the affidavit dated 16-01-2013 and the assessee only prepared the said affidavit without the knowledge of said Mr. Rangnath Dattatraya Gadekar and filed before the AO. 7. We note the said Mr. Rangnath Dattatraya Gadekar affirmed the statement what was made on 15-01-2013 in the second statement made before the AO at his residence on 07-02-2013. Therefore, as contended by the ld. AR about non-granting of cross-examination of the assessee is not acceptable on the ground that the AO provided the copy of second statement recorded u/s. 131 of the Act on 07-02-2013 was supplied to the assessee and in response he stated that the said Mr. Rangnath Dattatraya Gadekar is greedy about money and the affidavit stated to have been filed by the said Mr. Rangnath Dattatraya Gadekar is to be considered instead of his statement. We are unable to accept the contention of ld. AR in non- granting cross-examination for the reason that the AO had given 9 ITA No.534/PUN/2015, A.Y. 2010-11 opportunity of cross-examination of said Mr. Rangnath Dattatraya Gadekar and reiterated the same what had stated in the first statement on 15-01- 2013 in his second statement on 07-02-2013. There is no rebuttal by the assessee regarding the two statements of said Mr. Rangnath Dattatraya Gadekar except contending that there was no cross-examination, in our opinion, is not tenable. On perusal of the impugned order relating to ground Nos. 1 and 2 we find the CIT(A) discussed the issue in detail by recording reasons taking into consideration all the evidences on record which were also filed before us by way of paper book by the ld. AR. 8. The ld. AR relied on the decision of Hon’ble High Court of Bombay in the case of Gaurav Triyugi Singh reported in 121 taxmann.com 86 (Bombay) for the proposition since the loan amount was received by the assessee through cheque and the identity of creditor and genuineness of the transaction is proved and argued when the source of credit is established and the addition u/s. 68 of the Act is not maintainable. We note that in the present case we held the loan itself is not genuine as the loan creditor himself stated in the cross-examination and through affidavit he did not give any loan to assessee. The facts before the Hon’ble High Court of Bombay is different from the facts on hand, therefore, the ratio laid down by the Hon’ble High Court of Bombay is not applicable to the facts on hand. 9. The ld. AR further placed reliance on the decision of Hon’ble High Court of Bombay in the case of Jainam Investments reported in 131 taxmann.com 327 (Bombay) and submits, since, the assessee has furnished all the information regarding loan availed and the AO failed to prove the same as not genuine. We note that in the present case, the AO 10 ITA No.534/PUN/2015, A.Y. 2010-11 summoned the alleged loan creditor and recorded his statement u/s. 131 of the Act wherein he clearly stated that he did not given any loan to the assessee. Therefore, the facts before the Hon’ble High Court of Bombay is different from the facts on hand, therefore, the ratio laid down by the Hon’ble High Court of Bombay in the case of Jainam Investments (supra) is not applicable to the facts in the present case. Therefore, we find no infirmity in the order of CIT(A) in holding that there is no loan advanced by Mr. Rangnath Dattatraya Gadekar to assessee and consequently, disallowance of interest is not justified. We concur with the findings of CIT(A) in toto from Para Nos. 6.1 to 7.4 of the impugned order. Thus, ground Nos. 1 and 2 raised by the assessee fails and are dismissed. 10. Ground No. 3 raised by the assessee challenging the action of CIT(A) in confirming the addition of Rs.38,00,000/- on account of claim of excess payment. 11. We find the assessee claimed that he paid an amount of Rs.92,00,000/- and payable Rs.1,37,00,000/- to three persons that are Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. The AO had issued summons to the said three persons in order to verify the claim of the assessee. We note that they had stated in their statements that they had entered into an agreement by giving General Power Attorney (GPA) to assessee regarding their land, in pursuance of the same, the assessee paid sum of Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively to the above said persons. The assessee also requested them to open bank account and obtained blank cheques. They found that their land was acquired by the Government and they got compensation amount to their accounts. Further, they stated the assessee transferred the said 11 ITA No.534/PUN/2015, A.Y. 2010-11 compensation amount from their accounts to his accounts without their knowledge. Further, they stated that they did not receive amount of Rs.92,00,000/- as claimed by the assessee except Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively. The assessee requested the AO to allow him to cross-examine the said three persons and in the cross- examination the above said three persons reiterated what they stated in their statements about the receipt of above stated amounts only, but not as claimed by the assessee of Rs.92,00,000/-. The CIT(A) recorded his reasoning to this effect at Para No. 8.5 of the impugned order after verifying the discussion made by the AO in this regard from the record. We find the cross-examination which was reproduced by the CIT(A) at Page No. 43 of the impugned order and on perusal of the cross-examination of the above said three persons, we note that they clearly stated that they wanted to receive entire amount of money which was deposited in their account against the acquisition of their land. They also stated they did not receive any amount from the assessee as claimed by him except Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively. On perusal of the impugned order and also written submissions as filed by the ld. AR vide letter dated 30-05-2022 before us, we note that admittedly there is no proof to show that the assessee paid Rs.92,00,000/- except, payment totaling to Rs.54,00,000/- to the above said three persons. Therefore, we find no infirmity in the order of CIT(A) in confirming addition of Rs.38,00,000/- (Rs.92,00,000/- - Rs.54,00,000/-) on account of claim of excess payment. Thus, ground No. 3 raised by the assessee fails and is dismissed. 12. Ground No. 4 raised by the assessee challenging the action of CIT(A) in confirming the addition of Rs.1,37,00,000/- on account of payable to 12 ITA No.534/PUN/2015, A.Y. 2010-11 Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. 13. We note that the assessee has shown gross profit of Rs.1,61,15,468/- from sale of Adgaon land (Gat No. 772) belong to three persons i.e. Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. The assessee has shown an amount of Rs.1,37,00,000/- as payable to the said three persons at Rs.28,00,000/-, Rs.45,75,000/- and Rs.63,25,000/-, respectively. According to the profit and loss account of the assessee it was shown an amount of Rs.71,00,000/-, Rs.79,75,000/- and Rs.78,25,000/-, respectively but however in the cross-examination they denied the payment of the said amount. We find that the amount of Rs.1,37,00,000/- payable to the above said three persons in his Balance sheet. We discussed above while dealing the ground No. 3 where we noted the assessee claimed payment of Rs.92,00,000/- to the above said three persons. According to the CIT(A) he found that during the cross-examination the assessee did not put a question to them as to an amount of Rs.1,37,00,000/- is payable. Admittedly, the said amount has been shown as payable to the assessee since 2009 and in the cross-examination of the above said three persons on 11-02-2013, no suggestion was made to them that he is liable to pay Rs.1,37,00,000/- to the above said three persons. Further, as discussed above that the above said three persons admitted to have demanded the assessee to pay entire compensation as against acquisition of their land by Nashik Municipal Corporation. Further, it is also noted that they had counter-claims by filing complaints and suits against each other. We note that the AO requested the assessee to furnish the copies of such suits and complaints but the assessee did not furnish the same. The CIT(A) 13 ITA No.534/PUN/2015, A.Y. 2010-11 considered the issue in detail and by recording his reasons at Page No. 43 of the impugned order, confirmed the order of AO in disallowing Rs.1,37,00,000/- by holding that the liability is not crystallized. The relevant portion at Page No. 47 to 49 is reproduced here-in-below : “Regarding the amount of Rs.1,37,00,000/- payable to the three Jadhav family members, the following facts have emerged: 1. The appellant has claimed that the said amount of Rs.1,37,00,000/- is payable to the said three Jadhav family members and therefore, allowable expenditure as the appellant is following mercantile system of accounting. According to the appellant, the said amount is crystallized and ascertained liability. 2. On the other hand, the A.O. is of the view that the amounts claimed to be payable to the Jadhav family members are not crystallized and are not ascertained liability. 3. The three jadhav family members were not aware of the fact that the acquisition amounts were deposited in their bank accounts and the same were transferred to the appellant's bank account. They were also not aware that the appellant had claimed Rs.1,37,00,000/- as payable to them in the balance sheet and books of account of the appellant. 4. Once they came to know about the acquisition amount being received and transferred to the appellant's bank account, the said three land owners wanted the entire amount for themselves. They have stated such desire while replying to the appellant at the time of cross examination. 5. While cross examining the said three land owners, the appellant has not admitted to them that he has to pay Rs.1,37,00,000/- to them. The land owners have expressed their desire to get the entire acquisition amount from the appellant, but the appellant has not said anything to them while cross examining them. The cross examination of the three land owners is one great opportunity for the appellant to announce to them and the Department that he has to pay Rs.1,37,00,000/- to the three land owners. The appellant could have proved his contention at this stage. 6. The appellant has not paid the said amount to the land owners till date. As per the appellant's own record and contention, the amount has been shown as payable since 2009. Now it is more than 5 years and yet, the said amount has not been paid and is not likely to be paid in future. 7. There are claims and counter-claims between the appellant and the three Jadhav family members and they have filed complaints and suits against each other. I have demanded from the appellant copies of such suits and affidavits filed before the courts. The appellant was given the opportunity to furnish the same by 15/01/2015. But the appellant has failed to furnish the same. These copies are in possession of the appellant, but still they are not furnished. These court 14 ITA No.534/PUN/2015, A.Y. 2010-11 documents would have established the actual stand of the appellant as to whether the appellant is admitting or not admitting the amount payable to the said three land owners. From details available so far, it appears that the appellant is not admitting any amount payable to the three owners in the courts and to the three persons. 8.8 Therefore, the only conclusion that can be drawn at this stage is that the said amount of Rs.1,37,00,000/- claimed to be payable to the three land owners of Jadhav family is not an ascertained liability and it not crystallized during the year under consideration. Therefore, the clam is not justified. Accordingly, the addition of Rs.1,37,00,000/- is confirmed.” 14. On perusal of the above and our discussion made here-in-above, there is no proof to show that the liability of Rs.1,37,00,000/- is crystallized before us, therefore, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground No. 4 raised by the assessee is dismissed. 15. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 01 st August, 2022. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 01 st August, 2022. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-2, Nashik 4. The Pr. CIT-2, Nashik 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune