ANUJ KUMAR, Jaipur V. ITO, Jaipur

ITA 62/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2133 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68; 69; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 62/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SHRI ANUJ KUMAR V & PO: MATALWAS TEHSIL: KOTKASIM, ALWAR CUKE VS. THE ITO WARD- 1(3) ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: DUXPK 2498 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/04/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /04/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 30-11-2016 FOR THE ASSESSMENT YEAR 2009-10 RAISING THEREIN FOLLOWING GROUND:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ADDITION OF RS. 5,76,200/- OF THE AC T. 2.1 APROPOS SOLITARY GROUND OF THE ASSESSEE, THE FA CTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 2 7.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWIN G FACTS HAVE EMERGED. 1. THE APPELLANT IS A FARMER AND HIS SOURCE OF INCOME IS AGRICULTURE. 2. THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS RECEIVED AN AMOUNT OF RS. 25,00,000/- IN HIS SAVING BANK ACCOUNT MAINTAINED AT SAVINGS BANK A/C NO. 30526003761 OF SBI KOTKASIM. THE AMOUNT WAS FOUND CREDITED IN HIS BANK ACCOUNTS ON 16- 10-2008. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD CLAIMED THAT THE CASH DEPOSIT WAS OUT OF CASH PROCEEDS RECEIVED FROM HIS BROTHER- IN-LAW SHRI HARPAL SINGH WHO IN TURN HAD RECEIVED THE AMOUNT ON ACCOUNT OF SALE OF 2 AGRICULTURAL PLOTS. 4. THAT SHRI HARPAL SINGH HAS ADMITTED THROUGH AFFIDAVITS AND STATEMENT THAT HE HAD GIVEN THE CASH OF RS. 25 LAKHS TO SHRI ANUJ KUMAR FOR MAKING PURCHASE OF AGRICULTURAL LAND IN THE NAME OF HIS WIFE SMT. RAJNESH DEVI. 5. THAT SHRI HARPAL IS ASSESSABLE TO INCOME TAX AT WARD- 2(1), GURGAON AND HIS PAN IS ASTPP 5543 J 6. THAT THE AO HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE AND ACCORDINGLY ADDED THE CASH DEPOSIT OF RS. 25,00,000/- IN THE INCOME OF SHRI ANUJ KUMAR UNDER SECTION 68 OF THE ACT, CITING REASONS OF IDENTITY OF THE CREDITORS, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 3 7. THAT THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS. 25,00,000/- UNDER SECTION 68 OF THE ACT. 7.3.2 I HAVE CONSIDERED THE ABOVE MENTIONED FACTS O F THE CASE, I HAVE PARTICULARLY TAKEN INTO ACCOUNTS T HE FACTS THAT WITH REGARD TO SOURCE OF CASH DEPOSITS AMOUNTING TO RS. 25 LAKHS IN THE SAVING BANK ACCOUNT OF SHRI ANUJ KUMAR , IT WAS ADMITTED BY SHRI HARPAL SINGH, BROTHER-IN-LAW OF TH E APPELLANT TO HAVE ADVANCED THE AMOUNT TO THE APPEL LANT AND THAT THE SOURCE OF SUCH CASH DEPOSITS WAS OUT OF CA SH PROCEEDS RECEIVED FROM THE SALE OF 2 AGRICULTURAL P LOTS. I HAVE ALSO CONSIDERED THE FACT THAT TOTAL CASH RECEIVED B Y SHRI HARPAL SINGH FROM SALE PROCEEDS COMES TO RS. 25,87, 200/-. NECESSARY EVIDENCE FOR THIS WAS FILED DURING THE AS SESSMENT PROCEEDINGS AS WELL AS DURING APPELLATE PROCEEDINGS . I HAVE ALSO TAKEN INTO CONSIDERATION THAT SHRI HARPAL SING H IS HAVING A VALID PAN AND ASSESSABLE AT WARD- 2(1), GU RGAON, HARYANA. 7.3.3 NOW VARIOUS JUDICIAL PRONOUNCEMENT HAVE LAID DOWN PARAMETERS TO DETERMINE WHETHER A CASH CREDIT CAN BE TREATED AS EXPLAINED IN THE HAND OF THE RECIPIENT O R NOT. SOME OF THE IMPORTANT JUDICIAL PRONOUNCEMENT ARE AS UNDE R:- IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT: INCOME TAX ACT, 1961, ITA NO. 342 OF 2011 RESERVED ON :DECEMBER 12, 2011, DATE OF DECISION: FEBRUARY 15,2 012. COMMISSIONER OF INCOME TAX APPELLANT THROUGH: MR. DEEPAK CHOPRA, ADVOCATE VERSUS NOVA PROMOTERS & FINANCE (P) LTD. RESPONDENT THROUGH MR. C.S. AGAR WAL, SR. ADVOCATE WITH MR. PRAKASH KUMAR AND MR.ARTA TRA NA PANDA, ADVOCATES, CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA, HON'BLE MR. JUSTICE R.V. EASWAR, J. ..36. IT IS NOT ONLY RELEVANT TO NOTE THE ABOVE FACTS, WHICH DISTINGUISH THOSE THREE CASES (SUPRA) FROM THE CASE BEFORE US, BUT IT IS ALSO RELEVANT TO NOTE THA T THE FOLLOWING OBSERVATIONS MADE BY THIS COURT IN THE AB OVE THREE CASES: THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 4 PERNICIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MO NEY THROUGH THE MASQUERADE OF OR CHANNEL OF INVESTMENT IN THE SHARE CAPITAL OF A COMPANY MUST BE FIRMLY EXCORIATE D BY THE REVENUE. EQUALLY, WHERE THE PREPONDERANCE OF EVIDEN CE INDICATES ABSENCE OF CULPABILITY AND COMPLEXITY OF THE ASSESSED IT SHOULD NOT BE HARASSED BY THE REVENUES INSISTENCE THAT IT SHOULD PROVE THE NEGATIVE. IN THE CASE OF A PUBLIC ISSUE, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBERS. THE COMPANY MUST, HOWEVER, MAINTAIN AND MAKE AVAILABLE TO THE AO FOR HIS PERUSAL, ALL THE INFORMATION CONTAINED IN THE STATU TORY SHARE APPLICATION DOCUMENTS. IN THE CASE OF PRIVATE PLACE MENT THE LEGAL REGIME WOULD NOT BE THE SAME. A DELICATE BALA NCE MUST BE MAINTAINED WHILE MAKING THE TIGHTROPE OF SECTIO NS 68 & 69 OF THE I.T. ACT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASSESSEE; IF THE AO H ARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED, NAY DUTY BOUND TO CARRYOUT THROUGH INVESTIGATIONS. BUT IF THE AO FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT OBDURATELY ADHERE TO HI S SUSPICIONS AND TEAT THE SUBSCRIBED CAPITAL AS THE U NDISCLOSED INCOME OF THE COMPANY. WE MAY ALSO NOTE THAT A REF ERENCE WAS MADE BY THIS COURT TO SEVERAL AUTHORITIES INCLU DING AT LEAST SEVEN JUDGMENT OF THIS COURT ON THE QUESTION OF APPLICABILITY OF SECTION 68 TO SHARE APPLICATION MO NIES, AND THE POSITION WAS PITHILY SUMMED UP AS FOLLOWS AT PA GES 282 OF 299 ITR: IN THIS ANALYSIS, A DISTILLATION OF T HE PRECEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CON TEXT OF SECTION 68 OF THE I.T. ACT. THE ASSESSEE HAS TO PRI MA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY WHETHER IT H AS BEEN TRANSMITTED THROUGH BANKING OR INDISPUTABLE CHANNEL S; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDI TOR / SUBSCRIBER, (4) IF THE RELEVANT DETAILS O THE ADDRE SS OR PAN IDENTITY OF THE CREDITOR / SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONGWITH COPIES OF THE SHAREHOLDERS REG ISTERS, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER ET C. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATI ON BY THE ASSESSEE (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 5 DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CRED ITOR / SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSED OR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE AS SESSEE, (7) THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER THE GE NUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIAT ION. 37HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGEMENT SUBJECT TO THE ABOVE, SPECIAL LEAVE PETI TION IS DISMISSED 38. THE RATIO OF A DECISION IS TO BE UN DERSTOOD AND APPRECIATED IN THE BACKGROUND OF THE FACTS OF T HAT CASE. SO UNDERSTOOD, IT WILL BE SEEN THAT WHERE THE COMPL ETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR N AMES AND ADDRESS, INCOME TAX FILE NUMBERS, THEIR CREDITWORTH INESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTERS , SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSI NG OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQ UIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTE D UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE CO MPANY UNDER SECTION 68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. . THUS THE HIGH COURT HAS LAID DOWN FOLLOWING PARAMET ERS TO BE DISCHARGED BY THE ASSESSEE ON THE APPLICABILITY OF SECTION 68 OF THE ACT ON SHARE APPLICATION MONEY/ CASH CRED ITS; THE ASSESSEE HAS TO PRIMA FACIE PROVE; 1. THE IDENTITY OF THE CREDITOR/ SUBSCRIBER. 2. THE GENUINENESS OF THE TRANSACTIONS NAMELY, WHE THER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER IN DISPUTABLE CHANNELS. 3. THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF TH E CREDITOR / SUBSCRIBER. 4. IF RELEVANT DETAILS ARE FURNISHED TO THE DEPART MENT IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXP LANATION BY THE ASSESSED. ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 6 5. THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/ SUBSCR IBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES. 6. THE ONUS WOULD NOT STAND DISCHARGE IF THE CREDIT OR/ SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSED NOR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE AS SESSED. 7. THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGA TE THE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER THE GE NUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIAT ION. THUS, GOING BY THE PARAMETERS SET BY ABOVE MENTIONE D JUDGEMENTS, IN THIS PARTICULAR CASE THE SOURCE OF T HE CASH DEPOSITS HAS BEEN PROVED AND THE CREDITOR HAS ACCEP TED BY WAY OF AFFIDAVIT ALSO THAT HE HAS GIVEN THE AMOUNT. HE HAS ALSO GIVEN THE SOURCE OF SUCH GENERATION OF CASH AM OUNTS. HE HAS ALSO PROVIDED PAN DETAILS. THEREFORE, IT IS MY CONSIDERED VIEW THAT THE SOURCE OF CASH DEPOSITS AM OUNTING TO RS. 25 LAKHS IN THE BANK ACCOUNT OF THE APPELLAN T IS REASONABLY EXPLAINED IN THE HAND OF THE APPELLANT. HOWEVER, EVEN IF THE SOURCE OF THE CASH DEPOSIT IS REASONABLY EXPLAINED THE QUESTION REMAINS AS TO WHAT IS THE NA TURE OF SUCH CASH RECEIPTS. IT HAS BEEN CLAIMED BY THE APPE LLANT THAT THE MONEY IS RECEIVED IN HIS ACCOUNTS FOR THE PURP OSE OF PURCHASE OF AGRICULTURAL LAND IN THE NAME OF THE WI FE OF THE CREDITOR SHRI HARPAL SINGH. THE CLAIM OF THE APPELL ANT IS EXAMINED. IT IS FOUND THAT THE MONEY HAS BEEN WITHD RAWN FROM THE BANK ACCOUNT OF THE APPELLANT TO COINCIDE WITH THE ADVANCEMENT OF MONEY FOR THE PURCHASE OF 3 PLOTS OF AGRICULTURAL LAND IN THE NAME OF SMT. RAJNESH DEVI W/O SHRI HARPAL SINGH. TOTAL MONEY ADVANCED FROM HIS BANK AC COUNT TO PURCHASE LAND IN THE NAME OF SMT. RAJNESH DEVI C OMES TO RS. 19,23,800/- INCLUDING STAMP DUTY. THIS LEAVES A BALANCE OF RS. 5,76,200/- IN THE CUSTODY OF THE APPELLANT W HICH WAS NOT GIVEN BACK TO SHRI HARPAL SINGH. IF, WE CLOSELY LOOK AT THE TRANSACTION, THE CLAIM OF THE APPELLANT SEEMS T O BE PARTLY ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 7 TRUE THAT AN AMOUNT OF RS. 19,23,800/- OUT OF CASH RECEIVED FROM SHRI HARPAL SINGH WAS INDEED UTILIZED FOR THE PURPOSE OF PURCHASE OF LAND IN THE NAME OF SMT. RAJNESH DEV I,W/O SHRI HARPAL SINGH. BUT THE BALANCE AMOUNT OF RS. 5 ,76,200/- WAS KEPT BY THE APPELLANT, WHICH REASONABLY CAN BE INFERRED TO HAVE BEEN RETAINED BY HIM AS THE COMMISSION /BEN EFIT FOR FACILITATING THE PURCHASE OF LAND AS WELL AS FOR GI VING THE FACILITY TO SHRI HARPAL SINGH TO USE HIS BANK ACCOU NT FOR PARKING OF THE CASH. EVEN THE BALANCE SHEET SUBMITT ED BY THE APPELLANT FOR FINANCIAL YEAR ENDING ON 31-03-2009, AN AMOUNT OF RS. 8,75,000/- IS SHOWN AS CASH IN HAND. THEREFORE, IN MY CONSIDERED VIEW, THE AMOUNT OF RS. 5,76,200/- RETAINED BY HIM IS TAXABLE IN THE HAND O F SHRI ANUJ KUMAR, THE APPELLANT AS BENEFIT/ COMMISSION IN COME. IN VIEW OF THE ABOVE MENTIONED FACTS/ DISCUSSION, I N MY CONSIDERED VIEW ALTHOUGH THE AMOUNT OF RS. 25 LAKHS IS EXPLAINED AND HENCE NOT JUSTIFIED IN ADDITION UNDER SECTION 68 OF THE ACT BUT THE AMOUNT OF RS. 5,76,200/- IS A SSESSABLE IN HIS HAND AS COMMISSION /BENEFIT INCOME. THEREFOR E, THE ADDITION IS SUSTAINED FOR AN AMOUNT OF RS. 5,76,200 /-. ACCORDINGLY, THE APPELLANTS GROUND OF APPEAL ON TH IS ISSUE IS PARTLY ALLOWED. 2.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION OF RS. 5,76,200/- SUSTAINED BY THE LD. CIT(A) FOR WHICH THE LD. AR OF THE ASSESSEE FILED THE WRITTEN SUBMISSION AND THE SAME HAS BEEN TAKEN INTO CONSIDERATION. FACTS:- 1. THE ASSESSEE HAS NO SOURCE OF INCOME EXCEPT TH AT HE IS DOING AGRICULTURE ON 14 BHIGAS OF THE LAND OWNED BY HIS F ATHER AT VILLAGE MATALWAS, TEHSIL KOTKASIM, ALWAR. HITHERTO HE NEITHER HAD A P AN NOR WAS FILING ANY RETURN OF INCOME. 2. THE AO ON THE BASIS OF THE INFORMATION THAT IN T HE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH SBI, KOTKASIM, THER E IS A CASH DEPOSIT OF RS. 25 ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 8 LAKHS ON 16.10.2008, ISSUED NOTICE U/S 148 TO THE A SSESSEE. IN RESPONSE TO THIS NOTICE, IT WAS EXPLAINED THAT HIS BROTHER-IN-LAW, S HRI HARPAL SINGH, SOLD 2 AGRICULTURAL LANDS AT VILLAGE MOONPUR, TEHSIL KOTKA SIM, ON 16.10.2008 (PB 7-14) FOR RS. 25,87,200/- OUT OF WHICH HE GAVE RS. 25 LAK HS TO THE ASSESSEE FOR PURCHASE OF AGRICULTURAL LAND IN THE NAME OF HIS WI FE, SMT. RAJNESH DEVI, IN TEHSIL KOTKASIM AND THIS AMOUNT WAS DEPOSITED BY TH E ASSESSEE IN HIS BANK OPENED ON THAT DAY ITSELF. THE AFFIDAVIT OF SHRI HA RPAL SINGH IN THIS CONNECTION WAS FILED (PB 6) . IT WAS FURTHER EXPLAINED THAT THE AMOUNT SO DEPOS ITED WAS WITHDRAWN BETWEEN 06.12.2008 TO 18.12.2008 FOR PURC HASE OF AGRICULTURAL LAND IN THE NAME OF SMT. RAJNESH DEVI IN SUPPORT OF WHIC H THE COPY OF THE RECEIPT OF PAYMENT AGAINST THE SALE AGREEMENTS / REGISTERED SA LE DEEDS WERE FILED (PB 20- 40) . THESE FACTS ARE ALSO MENTIONED AT PAGE 6 OF THE ASSESSMENT ORDER. 3. THE LD. AO HOWEVER HELD THAT ASSESSEE FAILED TO ESTABLISH THAT THE CASH DEPOSITED IN THE BANK ACCOUNT IS THE SAME AMOUNT WHICH WAS RECEIVED FROM SHRI HARPAL SINGH AND THERE IS NO SUBSTANTIAL EVIDENCE IN SUPPORT OF THIS CLAIM. THE ASSESSEE HAS FAILED TO EXPLAIN THE CIRCU MSTANCES IN WHICH THE SAID CASH WAS RECEIVED, HE FAILED TO MATCH THE CASH WITH DRAWALS FROM THE BANK ACCOUNT WITH THE DATE OF THE TRANSACTIONS MADE WITH DIFFERENT PARTIES AND FAILED TO PRODUCE THE SAID PARTIES FOR CROSS EXAMINATION. HE THEREFORE CONSIDERED THE AMOUNT OF RS. 25 LAKHS AS UNEXPLAINED CASH CREDIT A ND MADE ADDITION FOR THE SAME. THE AO FURTHER ASSUMED THAT AMOUNT WITHDRAWN FROM THE BANK ACCOUNT MIGHT HAVE BEEN ADVANCED TO DIFFERENT PERSONS ON IN TEREST. SUCH INTEREST WAS CALCULATED AT RS. 85,000/- FOR WHICH SEPARATE ADDIT ION WAS MADE. 4. THE LD. CIT(A) AFTER CONSIDERING THE EVIDENCES O N RECORD, AT PAGE 9 OF HIS ORDER, HELD THAT THE ASSESSEE HAS PRO VED THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT AND THEREFORE THE ADDITION MADE BY THE AO WAS DELETED. HOWEVER, AT THE SAME TIME, HE HELD THAT OUT OF THE AMOUNT OF RS. 25 LAKHS RECEIVED FROM SHRI HARPAL SINGH WHICH IS DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT, ONLY AN AMOUNT OF RS. 19,23,800/- HAS BEE N UTILISED OUT OF THE WITHDRAWALS MADE FROM THE BANK ACCOUNT FOR THE PURC HASE OF LAND IN THE NAME OF SMT. RAJNESH DEVI, WIFE OF SHRI HARPAL SINGH. THE L D. CIT(A) THEREFORE INFERRED THAT THE BALANCE AMOUNT OF RS. 5,76,200/- IS KEPT BY THE APPELLANT WHICH CAN REASONABLY BE ATTRIBUTED AS BEING RETAINED BY H IM AS THE COMMISSION / BENEFIT FOR FACILITATING THE PURCHASE OF LAND AS WE LL AS FOR GIVING THE FACILITY TO SHRI HARPAL SINGH TO USE HIS BANK ACCOUNT FOR PARKI NG THE CASH. HE FURTHER HELD THAT EVEN IN THE BALANCE SHEET FOR THE FY ENDING ON 31.03.2009 AN AMOUNT OF RS. 8,75,000/- IS SHOWN AS CASH IN HAND. HE THEREFO RE, MADE AN ADDITION OF RS. 5,76,200/- ON ACCOUNT OF ALLEGED BENEFIT / COMMISSI ON INCOME RETAINED BY THE ASSESSEE. SUBMISSION : 1. FROM THE FACTS STATED ABOVE IT CAN BE NOTED THAT THE LD. CIT(A) HAS ACCEPTED THE SOURCE OF DEPOSIT OF RS. 25 LAKHS IN THE BANK ACCOUNT OF THE ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 9 ASSESSEE ON 16.10.2008 BEING THE AMOUNT RECEIVED FR OM HIS BROTHER-IN-LAW, SHRI HARPAL SINGH OUT OF THE SALE PROCEEDS OF THE AGRICU LTURAL LANDS. ACCORDINGLY, THE ADDITION MADE BY THE AO IS RIGHTLY DELETED BY THE L D. CIT(A). 2. THE LD. CIT(A) ALSO ACCEPTED THE THAT THE ASSESS EE HAS WITHDRAWN RS. 25 LAKHS FROM HIS BANK ACCOUNT BETWEE N 06.12.2008 TO 18.12.2008. TO EXPLAIN THE UTILISATION OF SUCH WITH DRAWAL, THE ASSESSEE FILED A CASH STATEMENT (PB 19) LINKING THE WITHDRAWALS FROM THE BANK ACCOUNT WITH THE AMOUNT ADVANCED TO VARIOUS PERSONS FOR PURCHASE OF LAND ON ACCOUNT OF SHRI HARPAL SINGH. THIS IS SUPPORTED BY THE RECEIPT OF A DVANCE GIVEN TO THESE 4 PERSONS AND ALSO THE SALE DEEDS EXECUTED BY 3 PERSO NS IN THE NAME OF SMT. RAJESH DEVI, WIFE OF SHRI HARPAL SINGH (PB 20-40) . THE LD. CIT(A) AFTER CONSIDERING THE SAME ACCEPTED THE UTILISATION OF TH E AMOUNT OF RS. 19,23,800/- (CORRECT AMOUNT IS RS. 19,42,880/-) WHERE THE SALE DEED HAS BEEN EXECUTED BUT WITHOUT ANY BASIS FAILED TO CONSIDER THE AMOUNT OF RS. 5 LAKHS ADVANCED ON 18.12.2008 TO SMT. BHARTI DEVI AND SATISH DEVI (PB 22) AGAINST THE AGREEMENT FOR PURCHASE OF AGRICULTURAL LAND. THE LD. CIT(A) F URTHER WRONGLY HELD THAT AS PER THE BALANCE SHEET FOR FY ENDING ON 31.03.2009 R S. 8,75,000/- IS SHOWN AS CASH IN HAND, WHEREAS ASSESSEE HAS NOT PREPARED / F ILED SUCH BALANCE SHEET. INFACT, THE AMOUNT OF RS. 8,75,000/- IS THE TOTAL O F THE CASH STATEMENT (PB 19) . THUS, THE UTILISATION OF RS. 25 LAKHS WITHDRAWN FRO M THE BANK ACCOUNT FOR THE PURPOSE OF PURCHASE OF AGRICULTURAL LANDS FOR SHRI HARPAL SINGH IS FULLY ESTABLISHED. IN ANY CASE, THERE IS NO MATERIAL WIT H THE LD. CIT(A) TO PRESUME THAT THE ASSESSEE HAS RETAINED ANY AMOUNT OUT OF TH E AMOUNT RECEIVED FROM SHRI HARPAL SINGH TOWARDS ANY COMMISSION / BENEFIT FOR F ACILITATING THE PURCHASE OF LAND / USE OF HIS BANK ACCOUNT, MORE PARTICULARLY W HEN SHRI HARPAL SINGH IS THE BROTHER-IN-LAW OF THE ASSESSEE. IT IS A SETTLED LAW THAT ONLY REAL INCOME CAN BE TAXED, HYPOTHETICAL INCOME CANNOT BE TAXED NOR INCO ME CANNOT BE TAXED IN VACUUM AS HELD BY THE HONBLE SUPREME COURT IN CASE E.D. SASOON & CO. & ORS. VS. CIT (1954) 26 ITR 27 AND GODHRA ELECTRICIT Y CO. LTD. VS. CIT (1997) 225 ITR 746. 2.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LD. CIT(A). 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT T HAT THE LD. CIT(A) HAS ACCEPTED THE SOURCE OF DEPOSIT OF RS. 25 LACS MADE IN THE BANK A CCOUNT OF THE ASSESSEE BEING SALE PROCEEDS OF THE AGRICULTURAL LAND SOLD B Y HIS BROTHER-IN-LAW, SHRI HARIPAL SINGH. HOWEVER, HE STILL CONFIRMED AN ADDITION OF ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 10 RS. 5,76,200/- FOR THE REASON THAT OUT OF THE AMOU NT OF RS. 25 LACS SO DEPOSITED ONLY AN AMOUNT OF RS. 19,23,800/- HAS BEE N UTILIZED FOR PURCHASE OF LAND IN THE NAME OF SMT. RAJNESH DEVI, WIFE OF SHRI HARPAL SINGH. THEREFORE, THE BALANCE AMOUNT OF RS. 5,76,20 0/- RETAINED BY THE ASSESSEE IS HIS BENEFIT/ COMMISSION INCOME FOR THE SERVICES GIVEN BY THE ASSESSEE FOR USING HIS BANK ACCOUNT AND FACILITATIN G THE PURCHASE OF LAND. THIS VIEW TAKEN BY THE LD. CIT(A) IN MY CONSIDERED VIEW IS NEITHER FACTUALLY CORRECT NOR LEGALLY TENABLE. THIS IS FOR THE REASON THAT FROM THE BANK ACCOUNT AND THE DOCUMENT PLACED ON RECORD FROM WHICH A CASH FLOW STATEMENT IS PREPARED AND AVAILABLE AT PAGE 19 OF T HE ASSESSEE'S PAPER BOOK IN WHICH IT IS MENTIONED THAT THE AMOUNT THE O F RS. 25 LACS HAS BEEN WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNT OUT OF WHICH RS. 19,42,880/- IS UTILIZED FOR PURCHASE OF LAND IN THE NAME OF SMT. RAJNESH DEVI AND ON EXPENSES OF REGISTRY. FURTHER AN AMOUNT OF RS. 5 LAKH IS ADVANCED TO SMT. BHARTI DEVI AND SATISH DEVI FOR PU RCHASE OF LAND. THUS, AN AMOUNT OF RS. 24,42,800/- HAS BEEN UTILIZED. THE RE IS NO MATERIAL TO HOLD THAT ANY PART OF THE WITHDRAWN AMOUNT OF RS. 2 5 LACS HAS BEEN RETAINED BY THE ASSESSEE AS HIS COMMISSION FOR FACI LITATING THE PURCHASE OF LAND/ USE OF HIS BANK ACCOUNT. THEREFORE, ON SUCH H YPOTHETICAL ITA NO.62/JP/2017 SHRI ANUJ KUMAR VS. ITO, WARD- 1(3), ALWAR . 11 ASSUMPTION, THE ADDITION CANNOT BE SUSTAINED AND TH US THE SAME IS DIRECTED TO BE DELETED. HENCE, THE SOLITARY GROUND OF THE AS SESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 /04/2017 . SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /04/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ANUJ KUMAR, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1(3), ALWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 62/JP/2017 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR