2022 (11) TMI 17 - AT - Income Tax

Undisclosed income - As per DR assessee failed to demonstrate the source of the amount in cash given to the CBI officials - HELD THAT - From the seizure memo available it reveals that the amount of Rs.30 lakh has been seized on 03.09.2011. Copy of savings bank passbook of the assessee reveals that the assessee had deposited cheque of Rs.10 lakh on 16.08.2011 when the assessee entered into an agreement to sell the property with Smt. Meenakshi Monsotra, wife of Shri Ashwani Kumar Sharma. Therefore, it is safely gathered that the assessee had also received cash amount of Rs.20 lakh along with cheque of Rs.10 lakh on 16.08.2012. The CBI officials seized Rs.13 lakhs in cash from the assessee after a lapse of about 18 days, therefore, I safely gather that the source of Rs.13 lakh seized by the CBI on 03.09.2011 is discernible from the documentary evidence as well as facts noted by the AO in the assessment order. Therefore, in view of the foregoing, the addition made by the AO and confirmed by the ld.CIT(A) cannot be held as sustainable and, thus, direct the AO to delete the same. Accordingly, ground No.2 of the assessee is allowed. Addition u/s 68 - unsecured loan - HELD THAT - On careful and vigilant perusal of J-Form of Shri Jagdish as clearly observed that these are light printed but clearly legible and supports the status of Shri Jagdish and explanation of the assessee that the said loan creditor was owning agricultural land and earning exempt agricultural income out of sale proceeds of crop cultivated thereon. Thus, the objection of the ld. Sr. DR being hypertechnical is dismissed. No other objection has been placed by the ld. Sr. DR on this issue. AO has accepted the unsecured loan from Shri Naveen Kaushik and Shri Satbir Kaushik without any objection, but, disputed the amounts received by the assessee from said other three creditors. On the totality of the facts and circumstances under which the assessee had to collect an amount of Rs.17 lakhs in compliance to the directions of the CBI officials and after careful consideration and thoughtful perusal of the documentary evidence submitted by all the three creditors before the authorities below, thus of the considered opinion that there is no iota of doubt regarding the identity and credit worthiness of all the three creditors and regarding genuineness of the transaction, therefore, the AO was not correct and justified in making addition in the hands of the assessee u/s 68 - findings recorded by the authorities below being contrary to the facts and circumstances of the case and not sustainable as per the provisions of the Act are directed to be deleted. - Decided in favour of assessee. Unexplained investment - Assessee failed to prove that the amount credited to her bank account was the amount of advance received under the agreement to sell the property - - HELD THAT - As assessee was owning House No.809, Ansals, Panipat and Rs.10 lakh was credited to her bank account on 16.08.2011. The assessee entered into an agreement to sell of the said property to the wife of Shri Ashwani Kumar Sharma and received Rs.10 lakh by cheque and Rs.20 lakh in cash. These facts have not been controverted by the AO or the CIT(A) in any manner. Therefore the impugned amount of Rs.10 lakh credited to the bank account of the assessee is advance against the agreement to sell the property. The factum of receipt of Rs.10 lakh under the agreement to sell House No. 809, Ansals, Panipat, which was owned by the assessee at the relevant point of time on 16.08.2011 is clearly established which cannot be doubted in any manner. Therefore, the reasons recorded for confirming the addition of Rs.10 lakh by the authorities below are baseless and perverse and, hence, the AO is directed to delete the addition. Accordingly, ground No.4 of the assessee is allowed.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Addition of Rs. 13 lakhs as undisclosed income.
3. Addition of Rs. 11 lakhs despite substantiated transactions.
4. Addition of Rs. 10 lakhs despite explanations and supporting documents.
5. Request for consequential relief and legal claims.

Detailed Analysis:

Violation of Principles of Natural Justice:
The assessee did not press this ground; hence, it was dismissed as 'not pressed.'

Addition of Rs. 13 Lakhs as Undisclosed Income:
The assessee challenged the addition of Rs. 13 lakhs, arguing that the amount was seized by the CBI and was part of a property transaction. The assessee provided documentary evidence, including a purchase deed, sale deed, bank statements, and a seizure memo, to substantiate the source of the amount. The Tribunal noted that there was no case registered against the assessee by the CBI, and the amount seized was part of a property transaction with Shri Ashwani Kumar Sharma. The Tribunal concluded that the source of Rs. 13 lakhs was discernible from the documentary evidence and directed the AO to delete the addition.

Addition of Rs. 11 Lakhs Despite Substantiated Transactions:
The assessee argued that the remaining amount of Rs. 17 lakhs was handed over to the CBI under duress and was obtained through unsecured loans from known individuals. The AO accepted loans from two individuals but disputed the creditworthiness of three others. The Tribunal examined the evidence, including affidavits, Aadhar cards, bank statements, and J-Forms, and concluded that the identity, creditworthiness, and genuineness of the transactions were established. The Tribunal directed the deletion of the addition of Rs. 11 lakhs.

Addition of Rs. 10 Lakhs Despite Explanations and Supporting Documents:
The assessee contended that the amount of Rs. 10 lakhs credited to her bank account was part of an advance received under an agreement to sell her property. The Tribunal reviewed the evidence, including the purchase deed, bank passbook, and agreement details, and found that the amount was indeed an advance against the sale of the property. The Tribunal directed the AO to delete the addition of Rs. 10 lakhs.

Request for Consequential Relief and Legal Claims:
This ground was general and required no adjudication.

Conclusion:
The Tribunal allowed the appeal filed by the assessee, directing the deletion of the additions of Rs. 13 lakhs, Rs. 11 lakhs, and Rs. 10 lakhs, and concluded that the assessee's explanations and documentary evidence were sufficient to substantiate the sources of the amounts in question. The order was pronounced in the open court on 28.10.2022.