Vishnu Prasad Vs DCIT (ITAT Jaipur)
In the case of the assessee, (i) the identity of Shri Hanuman remains undisputed, as the summons issued by the AO was duly served upon him, (ii) genuineness of the transaction is also proved (from books of accounts) beyond doubt, as amount paid as advance to him, duly appeared in the balance sheet of the assessee since FY 2004-05, as also the agreement to sale, that duly substantiates the transaction was available on records. As far as the third condition is concerned, it is submitted, that the assessee had not received any loan/ advance from him, but had only recovered his own money, thus, capacity is not the issue involved. Thus, all the conditions envisaged above are completely satisfied by the assessee. Section 68 makes it clear that in respect of a cash credit entry the explanation offered by the assessee can be rejected by the Income tax Officer only on cogent grounds, that is, only if such grounds are not based upon any evidence and the assessee has filed complete evidences for the explanation offered by it, and the sole reason to reject the assessee’s explanation, was that the persons did not appear in person for the assessment proceedings. Your honors would appreciate the fact in such kind of land deals, normally advance paid is never returned and Sh. Hanuman was also not willing to repay advance taken by him and assessee had to put continuous efforts and follow up to persuade him to pay back money (which was eventually received in installments) and he was not in good terms with assessee for this reason. In such circumstances, it was not accepted from him to cooperate with Income Tax department in the case of assessee. In the case of CIT v. U.M. Shah, Proprietor, Shrenik Trading Co. [1973] 90 ITR 396 (Bom.) wherein the Hon’ble High Court has held that, if the parties had received the summons but did not appear, the assessee could not be blamed. In view of the above facts and circumstances, cash deposit of Rs. 15,00,000/- appearing in the bank statement also stands fully explained and substantiated, therefore, we direct the A.O. to delete the addition made.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal has been filed by the assessee against the order of the ld. CIT(A)-3, Jaipur dated 30/10/2018 for the A.Y. 2011-12, wherein the assessee has raised following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, ld. CIT(A) erred in confirming addition of Rs. 30,50,000/- made by A.O. U/s 68 alleging cash deposits in bank account as undisclosed income.
1.1 That, ld. CIT(A) erred in confirming addition of Rs. 30,50,000/- ignoring the submission of assessee that the said amount represented sale consideration received by assessee for sale of land.
1.2 That, ld. CIR(A) erred in confirming addition of Rs. 30,50,000/- ignoring the facts in written submissions and also evidences produced in the shape of sale agreement, merely for the reason that agreement was not registered. Appellant prays addition so made may please be deleted.
2. On the facts and in the circumstances of the case and in law, ld. CIT(A) erred in confirming addition of Rs. 15,00,000/- made by AO u/s 68 alleging cash deposits in bank account of assessee as undisclosed income.
2.1 That, ld. CIT(A) erred in confirming addition made by AO completely ignoring the submission of the assesssee that the cash deposits were made out of sum received back of advance from one Shri Hanuman to whom advance was made for purchase of land in earlier years.
3. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal.”
2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic.
3. Brief facts of the case are that the assessee derived income from capital gain and interest income. For the year under consideration, the assessee filed his return of income on 29/03/2012 declaring total income of Rs. 5,72,221/-. The case of the assessee was selected for scrutiny under CASS and notices were issued. The A.O. passed assessment order vide order dated 25/03/2014 assessing total income of Rs. 54,88,057/- by making the following additions:
