Income Tax Appellate Tribunal - Jaipur
Shri Baljeet Yadav, Jaipur vs Income Tax Officer, Jaipur on 26 November, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES-B, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 377/JP/2018
fu/kZkj.k o"kZ@Assessment Year :2014-15
Shri Baljeet Yadav cuke Income Tax Officer,
27, Gyan Vihar, Ajmer Road, Vs. Ward-2(3),
Nirman Nagar, Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAOPY4448C
vihykFkhZ@Appellant 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 case, 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 case, the Learned CIT(A) has erred in sustaining the addition of Rs. 45,50,000/- u/s 69 2 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur of the Income Tax Act, 1961 on account of alleged unexplained investment.
3. In the facts and in the circumstances of the case, the Learned CIT(A) has erred in giving the finding regarding capital 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 Financial Year 2009-10 and 2010-11 without providing opportunity to 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 course of assessment proceedings, the Assessing Officer observed that the assessee has made investment in purchase of four immovable properties for a total consideration of Rs. 1.90 crores. In order to examine the source of investment in the said property, the assessee was asked to explain the source of investment along with documentary evidence. In response, the assessee has submitted that an investment of Rs 5 lacs is from assessee's own proprietorship concern M/s Gentleman, an investment of Rs. 45.50 lakhs is out of assessee's own capital and the source of remaining investment in the said properties is the amount of loans borrowed from various persons amounting to Rs. 1,44,50,000/- as per 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
3 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
Shri Rao Virendra Yadav Rs. 5,00,000
AAOPY4727C
Rao Virendra Yadav HUF AAQHR1683C Rs. 5,00,000
M/s Yuvraj (Prop. Shri Rs. 3,55,000
AAOPY4727C
Rao Virendra Yadav)
M/s Rajasthali AAGRC2136P Rs.7,00,000
Infrastructural Ltd.
M/s Dreams Unlimited Rs. 7,00,000
AAECD5068Q
Projects Ltd.
Rajasthali Shiksha & Rs. 1,04,50,000
AACTR2240K
Welfare Samiti.
Total 1,44,50,000
3. Further, the assessee filed copy of return of income, confirmation and copy of bank accounts in respect of aforesaid individuals and the Companies from whom he has taken the loan except that 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 source 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 notice. Though the notices were duly served on all these persons, however, no one attended nor any written submission was filed by the assessee. Thereafter, the Assessing Officer issued a show cause dated 05.12.2016 as to why the entire amount of Rs. 1,44,50,000/- should not be added to the total 4 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur income treating the same as unexplained income u/s 68 of the Act. In the show-cause notice, the AO stated that on going through 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 assessee are either family members of the assessee or the companies in which the assessee is a Director or the firm wherein the assessee is the proprietor. 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 findings 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 explanation in respect of the Cash Creditors, however, no documentary evidence has been filed in support thereof. However, the written submission filed by the assessee has been considered carefully and after going through the submission, it is found that the explanations made by the assessee are not acceptable. The case wise discussion is made as under:
a) Rajasthali Shiksha & Welfare Samiti: Rs.1,04,50,000/-5 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Explanation filed by the assessee :
"It is a Society registered under the Society Act from June, 2009. It was sold out its land and received the amount in bank account by sale proceed out of which amount of Rs.1,04,50,000/ - paid to the assessee so there is no any doubt about the genuineness 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 certificate from Registrar of Societies is being attached).
Hence, Identity of creditors, Creditworthiness and creditor and genuineness of payment through baking channel is proved.
CONCLUSION :
The assessee received an amount of Rs.1,04,50,000/- from the above named Society through cheques between 7th Oct., 2013 to 1st Nov., 2013. The source of advance of Rs.1,04,00,000/- has been explained as sale consideration received on sale of properties. The assessee is 6 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur the Secretary in the Society and all the sale deeds have been executed by him under his signature. On going through the sale deeds, it is found that the details of sale consideration received by the Society are as under:
Property sold to Cheque Cash Total
Banwari Lal Gurjar 30,00,000/- 68,000/- 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 noticed that the assessee sold his own properties and not the properties of the Society. However, it has been tried to show that the properties have been sold by the Society through its secretary Shri Baljeet Yaday. Indirectly, the assessee received a huge amount of Rs. 1,18,32,565/- through the Bank Account of the Society. Since, the Society has undertaken high value transaction through its Secretary, therefore, it was obligatory on the part of the society to file 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 the transaction in its return of income, therefore, the transaction remained undisclosed income in the hands of the Society. Therefore, advancing amounting to Rs.1,04,00,000/- out of undisclosed income of the Society to the 7 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 sacrosanct 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 Income of the assessee treating the same as unexplained income of the assessee 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 this as it is very small amount.
Conclusion : Smt. Kavita Yadav is wife of the assessee. On going through the Copy of Bank Account of Smt. Kavita Yadav, it is seen that the amount of Rs.3,45,000/- was credited in the bank account on 2nd August, 2013 and the same amount given as loan to the assessee on 3rd August, 2013. Summon U/s.131 was issued to her to explain 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 well as other amount credited in her bank account, specially, the amount credited on 2nd August, 2013. Although, in the return of Income for the Asstt. Year 2014-15, Smt. Kavita Yadav has declared Salary Income of Rs.2,64,000/, however, it does not prove that she was earning salary income regularly, 8 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur and loan was given out of her salary Income. As such, genuineness and creditworthiness of the transaction could not be proved, therefore, the amount of Rs.3,45,000/- is added to the total Income of the assessee treating the same as unexplained Income U/s 68 of the 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 Citizen, 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 going 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 account on 2nd August, 2013 and the same amount given as loan to the 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, specially, the amount credited on 2nd August, 2013, as he failed to make compliance of the Summon. Although, in the return of Income for the Asstt. 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 transaction could 9 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur not be proved, therefore, the amount of Rs.4,50,000/- is added to the total Income of the assessee treating the same as unexplained 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 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 this as it is very small amount.
Conclusion : Smt. Arti Yadav is wife of Shri Virendra Yadav, brother of the assessee. On going through the Copy of Bank Account of Smt. Arti Yadav, it is seen that the amount of Rs. 4,50,000/- was credited in the bank account on 2nd 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 bank account, however, Smt. Arti Yadav has failed to explain the source of Rs.4,50,000/- as well as other amount credited in her 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, it does not prove that she was earning salary Income regularly, as no salary amount is credited in the bank account and loan was given out of her salary 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 10 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 Readymade Garments and total average sale of the firm was approx. Rs.60 Lacs for the years. Income tax return was regularly filed by him which is above 4-5 lac so there is no any doubt about the creditworthiness of the party. "
"Assessee dealing in real estate's business and he received funds from some other friend, which is advanced to Mr. Baljeet Yaday. Payment is made by proper banking channel and PAN of 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 credited in both the bank account on 2nd August, 2013 and the same amount given as loan to the assessee on 3rd August, 2013. Summon U/s.131 was issued to them to explain the source of deposit made in his/their bank accounts, however, 11 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Shri Virendra Yadav, has failed to explain the source of Rs.5,00,000/- made in each A/c as well as other amount credited in their bank account, specially, the amount credited on 2nd August, 2013, as he failed to make compliance of the Summon. Although, in the return of income for the Asstt. Year 2014-15, Shri Virendra Yadav, Individual filed return of income and has declared Business Income of Rs. 5,08,204/-, however, business transactions are not being reflected in this account, therefore, it does not prove that the loan was given out of his Business Income. Return of Income in respect of Rao Virendra Yadav, HUF has not been filed. As such, genuineness and creditworthiness of the Cash Creditors(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 Income of the assessee treating the same as unexplained Income u/s 68 of the 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 ROC 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 assessee for purchase a piece of land to develop the project of the company. "
Conclusion : The Company was incorporated on 31.12.2012, in which the assessee and his family members are main subscribers. The assessee has failed to file copy of Audit Report as well as Balance Sheet, Profit and Loss Account and other Accounts Statements of the Company for the F.Y. 2012-13 and 2013-14, so that creditworthiness of the Company could be examined & verified. The assessee could only file Memorandum and Articles of Association, copy of return 12 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur receipt and copy of bank account. The assessee filed 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, 2013 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 source of deposit made in its bank account, however, the above named Company , has failed to explain the source of Rs.7,00,000/- credited in the bank account, specially, the amount credited on 211d August, 2013, as it failed to make compliance of the Summon. As such, genuineness and creditowrthiness of the Company could not be proved, therefore, the amount of Rs. 7,00,000/- is added to the total Income of the assessee treating the same as unexplained Income u/s 68 of the I.T. Act, 1961.
(g) M/s Dreams Unlimited Projects Limited: Rs. 7,00,000/-
Explanation filed by the assessee:
"It is a Pvt. Ltd. Company registered with ROC 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 assessee for purchase a piece of land to develop the project of the company. "
Conclusion : The Company was incorporated on 27.02.2013, in which the assessee and his family members are main subscribers. The assessee has failed to file copy of Audit Report as well as Balance Sheet, Profit and Loss Account and other Accounts Statements of the Company for the F.Y. 2012-13 and F.Y. 2013-14, so that creditworthiness of the Company could be examined and verified. The 13 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur assessee could only file Memorandum and Articles of Association, copy of return receipt and copy of bank account. The assessee filed return of Income for the A.Y. 2014-15 declaring loss of Rs.40,429/-. 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, 2013 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 source of deposit made in its bank account, however, the above named Company , has failed to explain the source of Rs.7,00,000/- credited in the bank account, specially, the amount credited on 2nd 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 Income of the assessee treating the same as unexplained Income u/s.68 of the 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 appropriate to reproduce the same as below:
"3.1 It was submitted before the ld AO that Rajasthali Shiksha & Welfare Samiti ("society" or "RSWS") is a society registered, from June 2009, under the Societies Registration Act. The 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 relevant previous year, out of which it received amount through Banking Channel of 14 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Rs.1,14,00,000 and Rs.4,32,565 in cash. Thus, the total 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 84,900 21,84,900 53-58
21,00,000
Rajeev Kumar Kasana 19,00,000 77,765 19,77,765 63-68
1,14,00,000 1,18,32,565
432565
3.3 Out of the total consideration received, the amount received by way of cheque of Rs. 114,00,000 was subsequently given by the society to the assessee as a part of loan through proper banking channel. Confirmation in this regard along with relevant Bank Statement of the said society was submitted before the ld AO.
3.4. Sale deed for the sales made by the Society were executed through the assessee acting as its Secretary. On noting the sign of the assessee on the sale deeds, assessee confused the properties sold as belonging to the assessee and not the society.
3.5. The Id AO raised doubts with regard to the disclosure of such transaction by the society. It is submitted that the society and the assessee are the two different person and non filing of return by one person, the other person cannot be held accountable.15 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 undisclosed 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 the assessee.
3.7 Also, without agreeing to above, if the Id. AO was of the view that the properties sold by the Society were actually 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 was himself not convinced with the proposition and thus simply on the basis of guesswork addition the loan amount in the hands of the assessee.
3.8. It is submitted that the transaction with other individuals were through proper banking channel. Details are as under:-
Name of the Loan Summon PAN Transacti Documents submitted of Lender Subsequent Status Loan Amount Reflected in Lender Amount served on Assessee's Bank Account (Rs.) u/s 131 through Proper ITR Confirmatio Bank Amount Banking Receipt Repayment Banking n Statement Returned Channel of Loan of Loan Channel used for returning Shri Gopi Ram Yes Yes Yes Yes Yes Yes Yes Yes Yadav 450,000 AAOPY4751A Yes Smt. Kavita Yes Yes Yes Yes Yes Yes Yes Yes Yes 345,000 ABFPY6965N Yadav Yes Yes Yes Yes Yes Yes Yes Yes Yes Smt. Arti Yadav 450,000 ABFPY6964P Shri Rao Yes Yes Yes Yes Yes Yes Yes Yes Yes Virendra Yadav 500,000 AAOPY4727C Yes Yes Yes Yes Yes Yes Yes Yes Yes M/s Yuvraj 350,000 AAOPY4727C Rao Virendra Yes Yes Yes Yes Yes Yes Yes Yes Yes 500,000 AAQHR1683C Yadav HUF M/s. Rajasthali Yes Yes Yes Yes Yes Yes Yes Yes Yes Infrastructure 700,000 AAGCR2136P Limited 16 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur M/s. Yes Yes Yes Yes Yes Yes Yes Yes Yes Dreams Unlimited 700,000 AAECD5068Q Projects Ltd.
3,995,000 Total 3.9. Identity of all the parties was established beyond doubt.
Creditworthiness of the lender is also established. The transaction is genuine. The Id. AO at best could have assessed such 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, Assessing Officer made addition to assessee's income in respect of amount deposited in bank account - In appellate proceedings, Commissioner (Appeals) noted that assessee had explained source of a part of amount deposited coming from bank loan and sale of agricultural land - He thus deleted substantial portion of addition made by Assessing Officer Tribunal 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.) 17 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur " ....We are of the opinion that in rejecting the explanation of the assessee on the undisputed facts is founded on erroneous application of law in the matter. While it was the assessee's bufden to furnish explanation relating to such cash credits, the assessee'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 does not go beyond to put the assessee under an obligation to further prove that wherefrom the creditor has got or procured the money to be deposited or advanced to the assessee. The fact that the explanation furnished by the creditor about the source from where he procured the money to be deposited or advanced to the assessee, is not relevant for the purposes of rejecting the explanation furnished by the assessee. and make additions of such deposits as income of the assessee from undisclosed sources by invoking section 68 of the IT Act, unless it can be shown by the Department by the Department that the source of such money comes from the assessee himself or such source could be traced to the assessee itself. In the present case while existence of Sri Devendra Sankhla the creditor is not in doubt, and he has admitted to have advanced the loan to the assessee. The fact that the explanation furnished by Sri Devendra Sankhla about his source of such advancement has not been accepted by the Revenue authority cannot lead to any presumption that the source of such advancement by Sri Devendra Sankhla emanated from the assessee. Therefore, 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 assessee..."18 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 3.11. APPARENT IS REAL: The transaction is absolutely in accordance with the procedure laid down in the law and fully evidenced. No defects have been pointed out in these. Therefore, the transaction 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 suggested that the money given by lenders had actually flown from the assessee company. In absence of any such cogent evidence on record, no addition can be made to the income of the assessee merely on suspicion. This ratio is laid down by the Hon'ble Jurisdictional High Court of Rajasthan in the case of Shubh Mines Private Limited (Income Tax Appeal No. 96/15), vide its order dated 03.05.2016, in which it was held 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 remains a finding of fact, cannot be said to be capricious or perverse..."
3.13. Further, the assessee was running his business in the name of M/s Gentlemen, wherein the assessee was generating enough money through which he could invest the amount in the properties.
19 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur In view of the above, addition made by the Id. AO is without any cogent basis and simply on the basis of conjecture and surmises and deserves to be deleted by allowing both the grounds of appeal."
6. We now refer to the finding of the ld. CIT(A) who has considered the aforesaid submissions of the assessee and his findings 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 appellant from M/s Rajasthali Siksha & Welfare Samiti (RSWS). It is to be noted that the appellant was the founder member of M/s RSWS and in fact, was appointed as a Secretary thereon. M/s RSWS was registered with the Registrar of Societies, Jaipur on 25.06.2009 and the main purpose of the Samiti was setting up of schools and colleges, to make women independent, spread computer education in rural area etc i.e. the objects appears to be charitable in nature. However, no certificate has been obtained by M/s RSWS u/s 12A of the Act meaning thereby that the income of M/s RSWS is not exempt from taxation. There is no evidence on record which may suggest that M/s RSWS was engaged in any of the chartitable activities as stated in its objects. During the appellate proceedings, 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 30.10.2017, 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 RSWS, copy of bank 20 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur account of M/s RSWS for purchasing the lands which were sold during the year under consideration. On 06.12.2017, the appellant 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 24.01.2017 and 31.03.2017 in the status of AOP declaring Nil income. The appellant 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, are not relevant for the issue under consideration.
(v) Vide order sheet entry dated 06.12.2017, the appellant 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 but 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 evidence has been filed which may establish that it was engaged in any of the activities for which it was constituted and it was nothing but a paper entity i.e. the apparent is not real. Therefore, in view of the above discussion, 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.21 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(vii) Regarding the remaining addition of Rs. 45 lakh (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 these 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 close relatives of the appellant and two companies i.e. M/s Rajasthali Infrastructure Ltd. and M/s Dreams Unlimited Projects Ltd. were controlled and managed by the appellant along with its family members. It is further 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 discussion, it is held that the genuineness of the transactions as well as creditworthiness of these entities could not be proved by the appellant as required under the provisions of section 68 of the Act. It may be mentioned that the transactions through banking channels are not sacrosanct and in the instant case under consideration, it has already been 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 these 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, looking to the totality of facts and circumstances of the case, it is held that the AO was justified in 22 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 has 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 actually belong to the appellant, then, at the most only capital gains could 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 appellant. It is noted from the sale deed dated 07.10.2009 that M/s RSWS has purchased land at village Paniyala, Tehsil Kotputli, District Jaipur 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 consideration of Rs. 53,65,508/- payment of which was made in cash. It is to be noted that M/s RSWS was registered with the Registrar of Societies on 25.06.2009 and the appellant has not filed any details or evidence 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. Further, no return of income was filed for the AY 2010-11 and 2011-12 in which these 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 appellant in the name of M/s RSWS in the FY 2009-10 and 2010-11 respectively. 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 23 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 reiterated the submissions made before the lower authorities and it was submitted that the orders passed by the AO as well as by the ld CIT(A) are against the settled position of law. The main addition is of Rs. 1,04,50,000/- loan received from M/s Rajasthali Shikha & Welfare Samiti. The admitted facts are that the society during the year sold immovable properties worth Rs. 1,18,32,565. It was out of the sale proceeds of immovable properties that assessee took loan of Rs. 1,04,50,000/- through banking channels. Further, it is also an admitted fact that the property 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 & Welfare Samiti sold these properties during the year under consideration 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 Assessing Officer and that of the Learned CIT(A) and in support, relied upon the written 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:24 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 properties that assessee took loan of Rs. 1,04,50,000/- through banking channels.
Here is direct link between the sale proceeds of the immovable properties of the society and loan to the assessee .Further it is also an admitted fact that the property 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 & Welfare Samiti sold these properties during the year under consideration on 30.09.2013.
Apparently the source of Rs. 1,04,50,000/- stands fully explained.
The society was constituted and registered under the societies act on 25.06.2009. A copy of the certificate of registration is available on paper book page number 75. This establishes the independent and individual status of the society. The objects of the society, its constitution and papers regarding membership are available 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 2016-17 are available on paper book page number 100 to 108.25 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur The aforesaid decision of the Learned Assessing Officer treating the loan of Rs. 1,04,50,000/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961 is full of contradictions mainly -
(a) Simply on the basis that the assessee happens to 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 Assessing Officer erroneously held that the properties sold by the society were actually properties of the assessee and these have been shown as to have been sold by the society. The Learned Assessing Officer has not brought any material 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. Suspicion however strong cannot take the place of evidence. This is settled position of law and supported by the following 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 (SC) 26 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(b) Having held at first that the properties sold by the society were owned by the society in the next breath the Learned Assessing Officer has observed that the sale transactions remained undisclosed income in the hands of the society. It is the finding of the Learned Assessing Officer that advancing Rs. 1,04,50,000/- out of undisclosed income of the society to the assessee cannot be treated as genuine transaction. Here the Learned Assessing Officer is admitting and giving a finding that the sale transaction of property of Rs. 1,18,32,565/- were of the society and these transaction for not disclosed by the society in its return of income. But these constituted undisclosed income in the hands of the society. It is the submission of the assessee that the Learned Assessing 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 the society as that of the assessee and on the other hand he is also holding that the sales transactions of the properties constituted 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 society. It was out of the sale proceeds of these properties of Rs.
1,18,32,565/- which were deposited in the bank account 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 27 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur of money on sale of immovable properties is an admitted facts. Further these properties were purchased by Rajasthali Shikha & Welfare Samiti in Assessment Year 2010-11 & 2011-
12. In view of this there was no case for making addition of loan of Rs. 1,04,50,000/- as unexplained when the same has come from the known source of sale of properties which stands proved and is admitted by the Learned Assessing Officer. 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 conforming the same. The Learned Assessing Officer has mentioned in the assessment order and same is also an admitted fact that assessee did not maintain books of accounts. The provisions of section 68 are applicable only in a case where books of accounts are maintained. The Supreme Court in the case Baladi Ram v/s C.I.T.71 I.T.R.427 laid down the following conditions for the applicability of section 68:-
(i) The matter and the event should take place after 01.04.62
(ii) The assessee maintains the books of accounts for the relevant previous year.28 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(iii) The cash credit entry appears in such books of accounts.
Apparently the conditions are not fulfilled in the case as the relevant loans which have been considered by the Learned Assessing 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 Hon'ble 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 books maintained by the assessee;
(ii) such credit has to be a sum of money during the previous year; the material and attending circumstances 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 through 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 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) 29 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 Shikha & 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 CIT(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 pertaining 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 account of the society for the period relevant to the acquisition of properties for Assessment Year 2010-11 & 2011-12 were not furnished.
(iii) The assessee did not furnish copy of returns of income for society for earlier years.
(iv) In the view of the Learned CIT(A) the society was controlled 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 2010-11 and 2011-12 was of the assessee and as such on sale of 30 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur these properties (again in the name of society) capital gains required to the taxed in the hands of the assessee.
The aforesaid finding of the Learned CIT(A) are misplaced and misconceived. The issue involved before the Learned CIT(A) was source of investment of Rs. 1,04,50,000/- which the assessee has taken loan from the society. The society had sold lands worth Rs. 1,18,32,565/- and these details are available on page 4 of the order of the Learned CIT(A). The link between the sale proceeds and advancement of loan to the assessee is fully established. The sale proceeds were deposited by the society in the bank account no.
27900200000161 with Indian Overseas Bank, Ajmer Road, Jaipur. The relevant part of the account is scanned below: -
31 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 32 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur The perusal of the aforesaid account reveals that the sale proceeds of the immovable properties of Rs. 1,14,00,000/- was deposited in the bank account on 30.03.2013. The details of Rs. 1,14,00,000/- received from different persons who purchased the property of the society is detailed on page 4 of the order of the Learned 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. 1,14,00,000/- was deposited by the society in the bank account and thereafter a sum of Rs. 1,04,50,000/- was loaned to the assessee. The trail of transactions is well established. The source of investment being sale of immovable is also well established. The society is registered under the societies act as such its identity is well established. The 33 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur society is having PAN - AACTR2240K and has been filing income tax return, copies of which are available on paper book page number 100 to 108. Copies of sale deed are available on paper book page number 43 to 68. Copies of sale deeds of land acquired by the society in Assessment Year 2010-11 & 2011 which were sold subsequently are available on paper book page number 150 to 168.
All the documents fully explained the amount of loan 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 view 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 accounts are maintained. The Supreme Court in the case Baladi Ram v/s CIT.71 I.T.R.427 laid down the following conditions for the applicability of section 68:-
(i) The matter and the event should take place after 01.04.62 34 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(ii) The assessee maintains the books of accounts for the relevant previous year.
(iii) The cash credit entry appears in such books of accounts.
Apparently the conditions are not fulfilled in the case as the relevant loans which have been considered by the Learned Assessing 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 Hon'ble 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 books maintained by the assessee; (ii) such credit has to be a sum of money during the previous year; the material and attending circumstances 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 through 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) 35 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(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 page 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 the assessee was a post holder in the society it does not lead to a conclusion that the society was actually owned by the assessee. The lands were purchased in Assessment Year 2010-11 & 2011-12 in the name of the society and these were sold during the year under consideration again in the name of society. The bank account was also opened in the name of the society. The society is also registered under the societies act. All these documentary evidences cannot be rejected simply on the whims and guess work of the Learned CIT(A). The assessee has now furnished every document including the deeds regarding purchase of land by the society in Assessment Year 2010- 11 & 2011-12. It is submitted that the society consists of a number of members and it acts under the principles of mutuality. The Learned CIT(A) has not brought any evidence on record that money 36 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur in purchase of lands in Assessment Year 2010-11 & 2011-12 in any way belonged to the assessee. In fact the issue of investments falls in Assessment Year 2010-11 & 2011-12 and the same has remained unexamined in the hands of the society or in the hands of the assessee. The original investment falls in assessment year 2010-11 & 2011-12 cannot be considered in Assessment Year 2014-15. 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 the assessee and at the same time has held that capital gains required 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 Learned CIT(A) is that since the investment in Assessment Year 2010-11 & 2011-12 in the purchase of properties in the name of society was of the assessee so on sale of these properties capital gain needs to 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/- taken by the assessee out of the sale proceeds from the society and on the other land Learned CIT(A) gives a finding that only capital 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 investments in 37 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur respect of properties sold was made in Assessment Year 2010-11 & 2011-12, having held so the Learned CIT(A) is precluded in confirming the loan amount of Rs. 1,04,50,000/-. The original investment of Rs. 17,00,000/- and of Rs. 53,65,508/- relating to Assessment Year 2010-11 & 2011-12 respectively requires to be considered in these Assessment Years. Since the appeal was not for the Assessment Year 2010-11 & 2011-12 the Learned CIT(A) has exceeded his jurisdiction in giving any finding regarding these years.
Therefore the order of the Learned CIT(A) being contrary to the position of law and contradictory deserves to be quashed. The Learned CIT(A) has given the finding in respect of the society without providing any opportunity to the society, therefore also the finding is against the principles of equity and justice.
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 assessee has objected to this finding on the ground that the society is an independent entity and the following documents which are in favor of the society has been uncontroverted :-38 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
(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 Societies.
(iv) The purchases of lands are registered in the name of 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 in 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: -
39 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur The Learned CIT(A) gave the aforesaid finding without providing any opportunity to the assessee or to the society and hence the certificate is being produced before the Hon'ble Tribunal for the first time.
7. Deposits by other persons: -
(A) The assessee has also obtained loans from family members, friends and relatives amounting to Rs. 45,00,000/- detailed 40 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur below which have also been treated as unexplained by the Learned Assessing Officer and addition has been made u/s
68. Such addition has been confirmed by the Learned CIT(A).
The details of deposits are as under: -
Sr. Name of the PAN Deposit Remarks in support of No. persons Amount genuineness of cash credits (details of documents filed)
1. Gopi Ram AAOPY 450000 1. Copy of confirmation.
Yadav 4751A 2. Copy of bank account.
3. Copy of ITR.
4. He is a military pensioner.
2. Smt. Kavita ABFPY 345000 1. Copy of confirmation.
Yadav 6965N 2. Copy of bank account.
3. Copy of ITR.
4. Copy of adhar card.
5. She is a salaries person.
3. Smt. Arti ABFPY 450000 1. Copy of confirmation.
Yadav 6964P 2. Copy of bank account.
3. Copy of ITR.
4. Copy of adhar card.
5. She is a salaries person.
4. Shri Rao AAOPY 500000 1. Copy of confirmation.
Virendra 4727C 2. Copy of bank account.
41 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Yadav 3. Copy of ITR.
4. Copy of adhar card.
5. He is a real estate dealer.
5. Rao Virendra AAQHR 500000 1. Copy of confirmation.
Yadav, HUF 1683C 2. Copy of bank account.
3. Copy of ITR.
6. M/s The AAOPY 500000 1. Copy of confirmation.
Gentleman 4448C 2. Copy of bank account.
(Assessee) 3. Copy of ITR.
4. Copy of adhar card.
5. It is a proprietary concern of the assessee.
7. M/s Yuvraj AAOPY 355000 1. Copy of confirmation.
4727C 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 AAGCR 700000 1. Copy of confirmation.
Infrastructure 2136P 2. Copy of bank account.
Ltd 3. Copy of ITR and
audited accounts.
4. It is a real estate
company.
9. M/s Dreams AAECD 700000 1. Copy of confirmation.
Unlimited 5068Q 2. Copy of bank account.
42 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
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 aforesaid persons without appreciating the submission of the assessee and individual facts of each case. It is a case where both the Learned Assessing Officer as well as the Learned CIT(A) were bent upon 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 deposits mainly on the following grounds: -
(i) The depositor did not appeal before the Learned Assessing Officer in response to summons u/s 131.
In this regard, it is submitted that it is not in the hands of the assesssee to fetch the depositors and produced them before the Learned Assessing Officer. The depositors are mainly scared to appear before the IT authorities because they know that many irrelevant queries will be made to entangle them in one or the other IT proceedings. The depositors or for that matter any ordinary citizen does not have any esteem for the 43 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur IT department. They are afraid and scarred of it. The submission of the assessee is that if the Learned Assessing Officer was serious and getting the compliance of section 131 he should have proceeded further by imposing fine upon the defaulters. But this has not been done. It appears that the Learned Assessing Officer knew that depositors would not respond as this is usual and this would strengthen his hands in making the addition. The assessee also submits that for non-compliance of summons u/s 131 by the depositors the assessee cannot suffers. There may be one and hindered reasons for non appearance before the Learned Assessing Officer by the depositors. The SUPREME COURT OF INDIA has held in the case of CIT vs. ORISSA CORPORATION (P) LTD 159 ITR 78 that in case a creditor does not appear in response to summons u/s 131 no adverse inference can be drawn in the case of the assessee.
(ii) The second ground on which the Learned Assessing Officer has not accepted the deposits is that immediately before issuing cheques to the assessee, there were deposits in cash in the account of the depositors. In view of this, the Learned Assessing Officer became suspicious regarding the source of deposits in the hands of the depositors, it is submitted that the suspicion of the Learned Assessing Officer is baseless. It 44 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur is settled position of law that assessee is not supposed to explain the source of source of creditors. In support 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 tax and filed their income tax return. The assessee has furnished copies of ITR along with computation of income for proving their creditworthiness/ source of income. Further the assessee is not supposed to prove 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) Hon'ble 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 parameters, 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 third 45 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur requirement is concerned, obviously if the explanation 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 accounts were not regularly maintained. Then sixth requirement 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 present 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 that satisfies the 2nd requirement also, about the discharge of burden on the part of the assessee to prove identity and genuineness of the transaction. So far as capacity of the lender is concerned, in our view, on the face of the judgement of Hon'ble SCupreme Court, in Dauiat Ram's case (supra), and other judgments, capacity of the lender to advance money to the assessee, was not a matter which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. In that view of the 46 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur matter, since this part of the judgment runs contrary to the judgment of the Hon'ble Supreme Court, in Daulat Ram's case (supra), while this Court in a subsequent judgment in Mangilal's case (supra) relying upon Daulat Ram's case (supra), has taken a contrary view, we stand better advised to follow the view, which has been taken in Mangilal's case (supra)"
It is further submitted that the Learned Assessing Officer entertain a wrong belief that deposits in the bank account of the depositors shortly before issuing cheques to the assessee makes the creditors dubious.
The Rajasthan High Court has dealt the issue and held in the case of CIT vs. H.S. Building 78 DTR 169 that deposits of cash in the account of creditor just before giving loan to the assessee co, would not lead to the conclusion that the money was deposited by the assessee co. therefore the ITAT was justified in deleting the addition. Further the Rajasthan High Court has again dealt the issue elaborately in the case of CIT vs. Jai Kumar Bakliwal (2014) 366 ITR 217 (Raj) and held that certainly, deposit of cash and immediate transfer of cheque or clearance of the cheque within a day or 47 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 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 in addition u/s 68. The assessee is not required to prove the source of the source.
In view of the ratio of the aforesaid decisions of the Rajasthan High Court which is fully applicable to the facts of the case. The Learned Assessing Officer was precluded in making addition and the Learned CIT(A) erred in confirming such additions made on the basis of suspicion, doubt, conjectures and guess work. The addition made deserves 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 of 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 banking
channel.
(iii) Confirmation of the asssessee.
(iv) Creditworthiness of assessee.
48 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
The depositors are genuine as they need the aforesaid parameters in the following manner -
(a) All the depositors are income tax payers. Hence there identity is proved beyond doubt.
(b) All the depositors have bank account and deposit has 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 creditworthiness is proved.
Therefore the addition made u/s 68 deserves to be deleted. The Learned CIT(A) has quoted a number of citations while confirming the addition. Similarly the Learned Assessing Officer has also quoted a number of decisions. Suffice to say that decisions of the Rajasthan High Court quoted above would prevail over any other decision. It is further submitted that if there are divergent opinion on same issue the one favourable to the assessee has to be followed. CIT vs. Vegetable Products 88 ITR 192. Controverting the decisions quoted by the Learned Assessing Officer and the Learned CIT(A), the following case laws are quoted in support: -
(i) CIT vs Orissa Corporation (P) Ltd (159 ITR 78) (SC) 49 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur It was held that the assessee had given names and addresses of the alleged creditors, which were income tax assessees, their index nos. were also in the file of the Revenue, however, Revenue after issuing notices u/s 131 did not pursue the matter further and examined the source of income of the alleged creditors. There was no effort made to pursue the so called alleged creditors. In these circumstances, Supreme Court held that no addition could be made. The assessee 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 subject themselves to the enquiry by the revenue or their failure to furnish accounts would not lead to the conclusion that the creditors were bogus
(iii) CIT vs. H.S. Builders 78 DTR 169 (Rajasthan High Court) Deposit of cash in the account of creditors just before giving loan to the assessee would not lead to the conclusion that the money was deposited by the assessee.
(iv) Aravali Trading Co. V/s ITO 25-1-2007 (2008) 8 DTR (Raj) 199 50 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Once the existence of the creditors is proved and such 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 either in terms of section 68 or on general principle.
(v) Kanahiya Lal jangid V/s CIT (2008) 217 CTR 354 (Rajasthan high court) In the case of cash credits confirmation and existence 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 creditor is established and the creditor has confirmed the loan, addition can't 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 account payee cheques from their respective bank accounts and the creditors were being assessed to income tax, the capacity 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) 51 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur It was held that where the assessee points out a depositor from whom he has received money and if the depositor owns advancement of the money to the assessee, further enquiry into the source cannot result in invoking the provisions of section 68 of the Income Tax Act, 1961. It was held that once the creditor is proved to exist and he admits having lent money to the assessee, the money cannot be considered as income of the assessee unless the revenue establishes 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 consideration relates to determining the source of investment in purchase of four immovable properties by the assessee for a total consideration of Rs. 1.90 crores and whether the explanation so furnished by the assessee is satisfactory or not. During the course of assessment proceedings, the assessee has submitted that an investment of Rs 5 lacs is from assessee's own proprietorship concern M/s Gentleman, an investment of Rs. 45.50 lakhs is out of assessee's own capital and the source of remaining investment in the said properties is the amount of loans borrowed from various persons amounting to Rs. 1.44 crores. The AO has not found the said explanation satisfactory and has made an addition of Rs 1.44 crores under section 68 of the Act and an addition of Rs 45.50 lacs under section 69 of the Act. The ld CIT(A) has confirmed the said additions and alternatively, also directed to assessee Rs 1.44 crores under the head "capital gains".
52 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
9. In order to appreciate the rival contentions, we now refer to the explanation of the assessee and supporting documentation 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 of Rs 1,04,50,000 which the assessee claims to have received from Rajasthali Shiksha & Welfare Samiti. On perusal of records, it is noted that it is constituted and registered as a society under the Societies Registration Act on 25.06.2009 and thus an independent assessable person having PAN AACTR2240K under the provisions of the Income tax Act. The return 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 sold certain properties to five persons namely, Banwari Lal Gurjar, Ramesh Kumar Raya, Rampal, Vijay Kumar and Rajeev Kumar Kasana and has received a total consideration of Rs 1,18,32,565 which consists of cheque receipt of Rs 1,14,00,000 and remaining in cash amounting to Rs 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 Overseas Bank, Jaipur, Ajmer Road Branch. Subsequently, the Samiti has issued 6 cheques to the assessee totaling to Rs 1,04,50,000/- which have been cleared and debited in the Samiti's bank account between 7th Oct, 2013 to 1st Nov, 2013 and the corresponding credit in the assessee's 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 genuineness of the transaction under section 68 of the Act.
53 ITA No. 377/JP/2018Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
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 properties of the Society, however, it has been tried to show that the properties have been sold by the Society through its secretary Shri Baljeet Yadav. Further, the Assessing officer observed that since, the society has undertaken high value transaction through its Secretary, therefore, it was 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 the transaction in its return of income, therefore, the transaction remained undisclosed income in the hands of the Society. Therefore, it was held by the Assessing officer that advancing amounting to Rs.1,04,00,000/- out of undisclosed income of the Society to the assessee cannot be treated as genuine transaction. Similarly, the ld CIT(A) has held that the samiti is a paper entity which is controlled and managed by the assessee and the capital gains liability shall fasten on the assessee.
12. We are however unable to accede to the said contentions of the Revenue. Firstly, we donot find any material on record 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 Samiti through its 54 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur Secretary, Baljeet yadav. Further, the sale proceeds have been credited in the bank account of the Samiti. Therefore, in absence 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 belong to the assessee and not that of the Samiti. Further, merely because the Samiti has not filed its tax return or sought registration under section 12A, the same cannot be a basis for fastening the liability on the assessee. It may be that the samiti is controlled and managed by the assessee, however, given the fact that it is a separable assessable person having registered under the societies registration Act and having its own permanent account number, any action has to be taken against the samiti 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 Revenue has to follow the due procees and it cannot short-circuit the well-laid down procedure in the statue and that too, without giving an opportunity to the assessee and the samiti. Consequently, we find that basis the material available on record, the properties belong to the samiti and the fact that sale proceeds have been credited in its bank account, the capital gains, 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 take appropriate action as per law. However, as far as assessee is concerned, 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 amounting to Rs 55 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur 1,04,50,000 with Rajasthali Shiksha & Welfare Samiti is concerned, is allowed in favour of the assessee.
13. In respect of remaining persons from whom the assessee has borrowed the remaining funds, it is noted that copies of their confirmation, bank accounts, income tax returns are available on record which establishes their identity. Further, these individuals 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 has 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 same time, we also find that these are not solitary transactions in the respective bank accounts, there are other regular transactions of deposits including cash deposits and withdrawals in their respective bank accounts, therefore, the said fact alone (which raises a suspicion) but at the same time, disregarding rest all facts which established the creditworthiness of the respective persons would not be appropriate. In any case, the decision of the Hon'ble Rajasthan High Court in case of CIT vs. Jai Kumar Bakliwal (supra) supports the case of the assessee where it was held that certainly deposit of cash and immediate transfer of cheque or clearance of the cheque within a day or 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 in addition u/s 68. In light of the same, 56 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur we find that the assessee 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, remaining 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 the sale of the properties will arise in hands of the samiti and not in the hands of the assessee, therefore, ground no. 3 is allowed in favour of the assessee.
15. In respect of ground no. 2 relating to addition of Rs 45,50,000, the ld. AR has moved an application under Rule 29 of the Income Tax Rules, 1963 and sought permission to file additional evidence which find place in assessee's 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 kindly be admitted. It was submitted by the ld AR that when technicalities are pitched against the substantive discharge of justice, the later has to prevail, in a case where the bonafides are not in doubt (Maruti Civil Works Vs. ITO [2011] 136 TTJ 448 [Pune]).
16. The ld DR is heard who has opposed the application filed by the assessee for considering the additional evidences. It was submitted by the ld DR that the assessee was granted sufficient 57 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur opportunity both during the assessment and appellate proceedings and he has failed to produce any evidence in support of its claim. It was further submitted that on perusal of additional evidence sought to be submitted by the assessee, the same relates to 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 assessee's own capital. It was according submitted that the assessee should not be permitted to submit the additional evidence.
17. We have heard the rival contentions and pursued the material available on record. The subject matter of addition and the consequent ground of appeal relates to addition made by the Assessing officer under Section 69 of the Act. Section 69 of the Act states that "Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income 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 taken as loan from his family members and other entities and an amount of Rs 45,50,000 has been invested out of his own capital. The AO 58 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur thereafter not finding the explanation of the assessee 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 and which we have already adjudicated above. In respect of remaining amount of Rs 45,50,000, as the assessee failed to furnish any documentary evidence in support of its claim of making the investment out of his own capital, the Assessing officer went ahead and made the addition under section 69 of the Act. During the appellate proceedings also, the assessee could not explain the source of investment and the findings of the AO were confirmed by the ld CIT(A). Now, before us, the ld AR has raised a fresh contention that the assessee has arranged loans at personal level 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 from the loan at personal level was taken which is now sought to be admitted by way of additional evidences. We have given a careful 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. Firstly, we find that the assessee has been granted adequate opportunity during the assessment and appellate stage and nothing has been brought on record which suggest that the assessee was prevented 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 is 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 59 ITA No. 377/JP/2018 Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur authorities that the investment has been made out of assessee's own capital. As far as arranging loan at personal level is concerned, the same was duly considered by the AO though not found acceptable and addition was made under section 68 of the Act. As the assessee could not produce sufficient evidence in support of investment out of his own capital, the impunged addition was made under section 69 of the Act. If we were to accept the additional evidence, it would be accepting the fresh contention raised for a first time before us which cannot be accepted. The additional evidence in support of the assessee's existing contentions borne out of the record and that too, where the assessee demonstrate sufficient cause can be admitted in light of substantive justice, however, the additional evidence 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 sustained and the ground of appeal is hereby dismissed.
In the result, appeal filed by the assessee is partly allowed.
Pronounced in the Open Court on 26/11/2018.
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(Vijay Pal Rao) (Vikram Singh Yadav)
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60 ITA No. 377/JP/2018
Shri Baljeet Yadav, Jaipur Vs. ITO, Jaipur
Tk;iqj@Jaipur
fnukad@Dated:- 26/11/2018.
*Ganesh Kr.
vkns'k dh izfrfyfi vxzfs 'kr@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), Jaipur
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