R.C. Bhaskar Vs Addl. CIT (ITAT Bangalore)
It is not disputed that there was an outstanding balance receivable from Bindu Promoters, Bangalore as on 31.3.2007 at Rs.4.5 lakhs. The contention of the Ld. A.R. is that the said amount has been given towards purchase of land, which was not materialized and same was returned back to the assessee. The same was shown as receipt from the said party by way of cash. The only reason for treating this amount as unexplained u/s 68 of the Act is that the assessee has not filed the confirmation letter from Bindu Promoters, Bangalore. In our opinion, the balance sheet of the assessee as on 31.3.2007, wherein this amount is duly reflected as receivable and same has been received by the assessee in AY 200809. This claim of the assessee cannot be rejected without bringing any material on record to suggest that this is only accommodation entry. The plea of the assessee is to be considered as genuine unless proved otherwise. In the present case, revenue authorities have no material to suggest that the assessee has not received this amount from M/s. Bindu Promoters, Bangalore in this AY 2008-09. If the AO had any doubt, he could have very well verified the same with Bindu Promoters, Bangalore, which he failed to do so. In these circumstances, we have no hesitation in deleting addition by the AO to the tune of Rs.4.5 lakhs. Accordingly, this addition is deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal by assessee is directed against order of CIT(A) dated 7.2.2020. The grounds of appeal raised by the assessee are as follows:-
2. The orders of the authorities below in so far as they are against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
The learned CIT[A] is not justified in upholding the addition of Rs.11,01,453/– in respect of outstanding balances of certain sundry creditors, which had been brought to tax invoking the provisions of section 41[1] of the Act under the facts and in the circumstances of the appellant’s case.
2.1 The learned CIT[A] ought to have appreciated that there was no case to presume or infer cessation of liability u/s 41(1) of the Act under the facts and circumstances of the appellant’s case, in as much as the balances due to sundry creditors were still outstanding and the appellant was liable to discharge the same and hence, the addition sustained by the learned CIT[A] is misconceived both on facts and in law.
3. The learned CIT[A] is not justified in upholding the aggregate sum of Rs.16,05,130/– added u/s 68 of the Act, treating the same as “unexplained cash credits” under the facts and in the circumstances of the appellant‘s case.
3.1 The learned CIT[A] is not justified in upholding the addition of Rs.2, 05,130/– as unexplained cash credit u/s 68 of the Act on account of the alleged difference in the brought forward opening balance in the cash book on 17/09/2007 under the facts and in the circumstances of the appellant‘s case.
3.2 as The Ld. CIT(A) is not justified in upholding the addition of Rs4,50,000/- as unexplained cash credit u/s 68 of the Act, being the amount realized by the appellant from M/s Bindu Promoters upon the failure of allotment of land to the appellant, which advance given by the appellant wa duly disclosed in the financial statements of the earlier years under the facts and in the circumstances of the appellant‘s case.
3.3 The learned CIT[A] is not justified in upholding the addition of Rs.9,50,000/– as unexplained cash credit u/s 68 of the Act, being the amount of cash deposited in the bank on 14/03/2008 that came to be recorded in the cash book on 24/03/2008 due to the absence of the accountant especially when the source of cash received was explained from a receipt of Rs. 10,00,000/– from Mis Om Traders, Kanpur that was also similarly recorded on 24/03/2008 when the cash book was updated by the accountant after his return under the facts and in the circumstances of the appellant‘s case.
4. The learned CIT[A] is not justified in sustaining the addition of Rs. 9,51,000/– as unexplained investment u/s 69 of the Act out of the original addition of Rs.19,02,709/– after deleting a sum of Rs. 9,51,709/– under the facts and in the circumstances of the appellant‘s case.
4.1 The learned CIT[A] erred in upholding the addition of Rs. 9,51,000/– out of an addition of Rs. 19,02,709/– made by the learned A.O. in respect of a house which was still under construction by the appellant and for which there were numerous outstanding bills yet to be discharged..2 The learned CIT[A] erred in placing reliance on the report of the valuer dated 25/09/2007 wherein the valuer had arrived at the interim value of the house by considering the market value of land as on the date of valuation as opposed to the amount actually invested by the appellant in the said land.
5. Without prejudice to the right to seek waiver with the Hon‘ble CCIT/DG, the appellant denies himself liable to be charged to interest u/234-8 and 234• C of the Act, which under the facts and in the circumstances of the appellant’s case and the levy deserves to be cancelled.
6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
2. First ground is with regard to the addition made u/s 41(1) of the Act at Rs.11,01,453/-. Facts of the case are that the assessee’s books of accounts shows sundry creditors of Rs.11,01,453/- from the following parties:-
