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2017 (11) TMI 1500 - AT - Income TaxAddition u/s. 68 - amount received from Sh. Kripa Shankar as advance for sale of property - assessee has not filed any evidence regarding ownership of the aforesaid property; genuineness of the transaction not proved and Sh. Kripa Ram not appeared in response to summons u/s. 131 - Held that - The aforesaid property is inherited by the assessee from his father, who was died on 10.8.2008 and after his death, assessee becomes the owner of this property. The house tax receipt shows that the property belongs to the father of assessee (Sh. Deep Chand). Also to prove the genuineness of the transaction the assessee has filed the copy of the agreement to sell and purchase dated 06.5.2009; acknowledgement receipt issued by the assessee to Kripa Ram; Ration card of Kripa Ram; DL of Kripa Ram; Copy of relevant OBC Bank statement of assessee showing cash deposit of ₹ 10 lacs on 8.5.2009; copy of relevant OBC bank statement of assessee showing return of ₹ 10 lacs clearing cheque on 13.3.2013; copy of relevant SBI Bank statement of Kripa Ram showing credit of ₹ 10 lacs on 13.3.201 and copy of confirmation dated 12.3.2013 from Kripa Ram furnished to AO. AS we further note that Sh. Kripa Ram did not comply with the summon issued to him u/s. 131 of the Act by the AO and assessee did not have any control on Sh. Kripa Ram. In view of the above, assessee has proved his burden and as per settled position of law, the assessee need not to be proved the source of source, hence, the addition made on the assessee is not sustainable in the yes of law, therefore, delete the addition in dispute and allow the appeal of the assessee.
Issues involved:
1. Addition of ?10 lakhs under section 68 for the amount received as advance for the sale of property. Detailed Analysis: 1. The appeal was against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition of ?10 lakhs under section 68 for the amount received as advance for the sale of property. The assessment was completed under section 143(3) of the Income Tax Act, 1961, making an addition of ?12 lakhs on account of unexplained cash credits/cheques. The Ld. CIT(A) restricted the addition to ?10 lakhs and partly allowed the appeal. 2. The Assessee contended that the ?10 lakhs received as advance against the sale of property was later returned. Various documents were submitted to prove the genuineness of the transaction, including the agreement to sell and purchase, bank statements, and confirmation from the party involved. The Assessee argued that the addition was unjustified, citing legal precedents to support the case. 3. The Tribunal observed that the Assessee had entered into a sell and purchase agreement for the property with the party in question. As the balance payment was not made, the transaction was canceled, and the advance amount was returned. The Assessee provided evidence of ownership of the property and the genuineness of the transaction. Despite the non-compliance of the party summoned by the AO, the Assessee fulfilled the burden of proof as per settled legal principles. 4. The Tribunal noted that the Assessee need not prove the source of the source of funds under section 68. The Assessee's burden was discharged by providing relevant documents and explanations. Citing legal precedents, the Tribunal held that the addition made by the AO was not sustainable in law. Consequently, the Tribunal deleted the addition of ?10 lakhs and allowed the appeal of the Assessee. The Tribunal's decision was supported by case laws and the specific circumstances of the case. 5. The Tribunal's detailed analysis considered the ownership of the property, the cancellation of the transaction, and the evidence provided by the Assessee to establish the genuineness of the transaction. The Tribunal emphasized the Assessee's compliance with legal requirements and the lack of necessity to prove the source of the source of funds under section 68. Ultimately, the Tribunal allowed the Assessee's appeal, highlighting the importance of meeting legal standards in such cases.
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