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2023 (7) TMI 402 - AT - Income TaxUnexplained cash deposit - unexplained and undisclosed sales consideration - HELD THAT - AO made addition by taking view that no explanation of evidence was furnished by assessee against such cash deposit in bank. CIT(A) deleted the addition by taking view that AO made double addition, which includes addition on account of cash deposit in HDFC bank, which has been upheld by him. CIT(A) categorically held that the addition of Rs. 10.00 lakhs is a duplication of addition which is covered by addition of Rs. 11.29 lakhs. We find that the ld CIT(A) granted relief to the assessee on verification of facts and evidences. No contrary facts or evidence is brought to our notice to take the other view that addition of Rs. 10 lakhs was not a part of addition of Rs. 11.29 lakhs. Thus, we affirm the order of Ld. CIT(A). In the result, ground No.1 of the appeal is dismissed. Unexplained time deposit - Assessee has not filed any submission or explanation during assessment - HELD THAT - As before CIT(A) the assessee filed detailed written submission including the source of time deposit, received on account of sale of immovable property, initially time deposit was made in HDFC bank and later on the amount was transferred to State Bank of Mysore and it was reinvested / rotated twice. CIT(A) on appreciation on the submission and evidence and found that making addition is a result of clear mistake committed by AO. The original investment was only Rs. 90.00 lakhs which was rotated twice. Similarly, the assessee also explained the FDR with Bank of Baroda and maturity amount was received back in the financial year itself out of which Rs. 90.00 lakhs was transferred to State Bank of Mysore for short term time deposit and with HDFC Bank. The original source of such time deposit was sale proceed of plots of land. The Ld. CIT(A) noted that initially assessee received Rs. 1.50 cores, out of which the assessee invested in short term FDR of Bank of Baroda to the tune of Rs. 1.498 crore and the maturity proceed were received back in first week of October, 2010. It was also noted that the assessee transferred Rs. 90.00 lakhs to the State Bank of Mysore for investment in short term deposit. The assessee also transferred Rs. 45 lakhs to another bank account with HDFC Bank. Thus, addition of Rs. 1.49 crores is stand explained and deleted accordingly. For other addition CIT(A) recorded that from the chart submitted by assessee that it is clearly explained that maturity amount of Rs. 90 lakhs FDR with Bank of Baroda was transferred to Bank of Mysore and it was rotated twice and assessee received maturity amount of Rs. 92.92 lakhs and Rs. 92.99 lakhs respectively. CIT(A) held that the Assessing Officer wrongly considered this investment and maturity as a separate investment and made addition of Rs. 2,73,91,415/- (90,00,000 90,92,107 92,99,308), which is clear mistake by assessing officer. We find that Ld. CIT(A) deleted both the additions on appreciation of submission and evidence.Grounds No.2 3 of Revenue are dismissed. Addition on account of advance given to Samuria Textile . - AO made addition which was advanced by assessee to various parties by taking view that assessee has not given any explanation or evidence to substantiate such transaction - HELD THAT - As before Ld. CIT(A) the assessee explained the source of advance and the identity of persons. CIT(A) granted relief to the extent of Rs. 55.00 lakhs, advanced to Samuria Textile by taking view that the advances were given through account payee cheque to a firm wherein the son of assessee is also a partner. Thus, the identity of recipient was proved. The source of fund was from the sale proceed of land which is already taxed as a capital gain. Therefore, Ld. CIT(A) held that either source of investment or application of income, can be taxed. CIT(A) held that source of advance was part of sale proceed of land. Therefore, there was no reason for confirming the addition to the extent of Rs. 55.00 lakhs advance to Samuria Textile. Remaining advance which was not satisfactory explained was upheld. Before us the Ld. CIT-DR for the Revenue has not shown any contrary facts or evidence to take other view, except making submission that Ld. CIT(A) granted relief to the assessee by accepting explanation of assessee. assessee discharged his onus in proving identity, source of investment and genuineness of transaction. Therefore, we do not find any reason to interfere with the finding of Ld.CIT(A), which we affirm. This ground No.4 of Revenue s appeal is dismissed. Appeal of the revenue is dismissed.
Issues Involved:
1. Deletion of addition of Rs. 10,00,000/- on account of unexplained cash deposit. 2. Deletion of addition of Rs. 2,73,91,415/- on account of time deposit in State Bank of Mysore. 3. Deletion of addition of Rs. 1,49,80,000/- on account of time deposit in HDFC Bank. 4. Deletion of addition of Rs. 55,00,000/- on account of unexplained advances given. Summary: Issue 1: Deletion of Addition of Rs. 10,00,000/- on Account of Unexplained Cash Deposit The Assessing Officer (AO) added Rs. 10,00,000/- as unexplained cash deposit in HDFC Bank. The CIT(A) deleted this addition, noting it was a duplication of the Rs. 11,29,000/- addition already made for unexplained cash deposits. The Tribunal affirmed this view, finding no contrary evidence presented by the Revenue. Issue 2: Deletion of Addition of Rs. 2,73,91,415/- on Account of Time Deposit in State Bank of Mysore The AO added Rs. 2,73,91,415/- for unexplained time deposits. The CIT(A) found that the original investment of Rs. 90,00,000/- was rotated twice, and the AO erroneously treated these rotations as separate investments. The Tribunal upheld the CIT(A)'s decision, noting the original source of funds was the sale proceeds of land, and no contrary evidence was presented by the Revenue. Issue 3: Deletion of Addition of Rs. 1,49,80,000/- on Account of Time Deposit in HDFC Bank The AO added Rs. 1,49,80,000/- for unexplained time deposits in HDFC Bank. The CIT(A) found the source of funds was from the sale proceeds of land, initially deposited in Bank of Baroda and then transferred to State Bank of Mysore and HDFC Bank. The Tribunal upheld the CIT(A)'s decision, finding the source of funds was adequately explained and no contrary evidence was presented by the Revenue. Issue 4: Deletion of Addition of Rs. 55,00,000/- on Account of Unexplained Advances Given The AO added Rs. 65,00,000/- for unexplained advances. The CIT(A) deleted Rs. 55,00,000/- of this amount, finding the advances were given through account payee cheques to a firm where the assessee's son was a partner, and the source of funds was the sale proceeds of land. The Tribunal upheld the CIT(A)'s decision, noting the identity, source, and genuineness of the transaction were satisfactorily explained, and no contrary evidence was presented by the Revenue. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s deletions of the additions on account of unexplained cash deposits, time deposits, and advances given, based on satisfactory explanations and evidence provided by the assessee.
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