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2021 (2) TMI 221 - AT - Income TaxReopening of assessment u/s 147 - additions made u/s 69 towards the source of purchase of land - Addition u/s 68 - HELD THAT - We find that in the instant case, there are two independent transactions of purchase and sale of land and where there are no additions made u/s 69 towards the source of purchase of land for which the AO issues notice u/s 148, the AO cannot bring to tax the other transaction to tax u/s 68 of the Act. On merits, we find that once the summons have been issued and these persons have appeared and given their statements before the AO wherein they have confirmed that they have advanced the amount to the assessee towards purchase of the agricultural land and has also disclosed the source of their earnings/savings, the assessee has discharged the necessary onus cast on her in terms of identity, creditworthiness and genuineness of the transactions in the facts and circumstances of the present case. Similar is the position regarding receipt of gifts from father and father-in-law which is duly supported by the respective gift deeds, the contents and authencity of which are not in dispute. - Decided in favour of assessee.
Issues Involved:
1. Acceptance of additional evidence under Rule 46A. 2. Initiation of reassessment proceedings under Section 147. 3. Addition of ?45,33,000 under Section 68 as unexplained cash credits. 4. Addition of ?8,02,000 under Section 68 as unexplained cash gifts. 5. Issuance and service of notice under Section 143(2). Issue-wise Detailed Analysis: 1. Acceptance of Additional Evidence under Rule 46A: The assessee did not press this ground of appeal, and thus, it was dismissed as not pressed. 2. Initiation of Reassessment Proceedings under Section 147: The assessee did not press this ground of appeal, and thus, it was dismissed as not pressed. 3. Addition of ?45,33,000 under Section 68 as Unexplained Cash Credits: The assessee received advances from nine individuals for the sale of agricultural land, which were treated as unexplained cash credits by the Assessing Officer (AO). The AO issued summons and recorded statements under Section 131, confirming the transactions but doubting the creditworthiness of the individuals. The Tribunal noted that the primary reason for reopening the assessment was to verify the source of investment in agricultural land purchase. Since no additions were made under Section 69 for unexplained investments, the Tribunal held that the AO could not make additions under Section 68 for other transactions. The Tribunal emphasized that the AO cannot travel beyond the scope of the reassessment notice. The Tribunal cited the Rajasthan High Court decision in CIT vs. Shri Ram Singh, which held that if the AO does not find the initial reason for reopening valid, he cannot assess other income under Section 68. The Tribunal found that the assessee had discharged the necessary onus by providing the identity, creditworthiness, and genuineness of the transactions. 4. Addition of ?8,02,000 under Section 68 as Unexplained Cash Gifts: The assessee received gifts from her father and father-in-law, supported by gift deeds. The AO doubted the creditworthiness of the donors and treated the gifts as unexplained cash credits. The Tribunal found that the assessee had submitted the necessary gift deeds and that the contents and authenticity of these deeds were not disputed. The Tribunal referred to the Rajasthan High Court decision in CIT vs. Bhim Singh Chundawat, which held that the assessee is not required to prove the source of the source. The Tribunal concluded that the assessee had discharged the necessary onus regarding the identity, creditworthiness, and genuineness of the transactions. 5. Issuance and Service of Notice under Section 143(2): The assessee did not press this ground of appeal, and thus, it was dismissed as not pressed. Conclusion: The Tribunal allowed the appeal of the assessee, deleting the additions made under Section 68 for both the advances received and the gifts. The Tribunal emphasized that the AO could not make additions under Section 68 when the initial reason for reopening the assessment under Section 69 was not sustained. The Tribunal also highlighted that the assessee had adequately discharged the onus of proving the identity, creditworthiness, and genuineness of the transactions.
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