2017 (6) TMI 343 - AT - Income Tax

Unexplained money u/s 69A - Held that - Assessing Officer in remand proceedings called the three purchasers and recorded their statement. AO however, did not accept explanation of the assessee and also alleged that against the cheque deposits on cancellation of agreement, cash was withdrawn and repaid to the assessee. However, no such evidence is available with the Assessing Officer in this regard. The allegation is merely on surmise and conjecture. The assessee has discharged the onus by producing the persons and specially where the assessee has produced the parties who have accepted that they had made advances to the assessee against agreement to sell and such agreement has been cancelled and amount has been repaid by cheque; the assessee having discharged his onus then the explanation of the assessee merits to be accepted. In the gamut of evidence filed by the assessee i.e Visar Pavati issued at the initial stage, thereafter legal notice issued, cancellation of agreement and statement recorded of the parties, the onus upon assessee has been discharged and the plea of the assessee merits to be accepted. No addition is warranted on account of said cash deposits in the bank accounts on the surmise that cash has been withdrawn from bank account of the said persons. - Decided in favour of assessee. Addition made on account of two loan receipts by the assessee as advance from two different persons - Held that - The amounts were received through cheques and deposits in the bank account of the assessee. The onus was upon the assessee to prove the identity of the persons, creditworthiness of the persons and genuineness of the transactions. However, the assessee was unable to discharge his onus in this regard. In the absence of the same, there is no merit raised by the assessee.

Summary

Issues:
1. Addition of ?14,69,000 on account of unexplained money u/s 69A of the Act.
2. Addition of ?14,00,000 as unexplained money.
3. Addition of ?10,00,000 as unexplained money.

Issue 1:
The first issue pertains to the addition of ?14,69,000 on account of unexplained money u/s 69A of the Act. The assessee claimed the cash deposits in the bank account were from the sale of land. However, the Assessing Officer doubted the claim due to an unregistered agreement. The CIT(A) upheld the addition, stating the explanation was incorrect. The assessee provided evidence of agreement cancellation and statements from purchasers, but the Assessing Officer alleged cash withdrawals without evidence. The Tribunal found the assessee had discharged the onus by producing evidence, including the cancellation of the agreement and statements from parties. Consequently, the addition of ?14,69,000 was deleted.

Issue 2 & 3:
Regarding the additions of ?14,00,000 and ?10,00,000 as unexplained money from loans, the Tribunal found the assessee failed to prove the identity, creditworthiness, and genuineness of the transactions. As a result, these additions were upheld, and the corresponding grounds raised by the assessee were dismissed.

In conclusion, the Tribunal partly allowed the appeal, deleting the addition of ?14,69,000 while upholding the additions of ?14,00,000 and ?10,00,000. The Tribunal emphasized the importance of discharging the onus of proof in such cases, leading to the varying outcomes for each issue.

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