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TMI Blog2016 (1) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... ake addition in the hands of the assessee when all the four prospective buyers have confirmed that they advanced the cash to the assessee. Failure on the part of the buyers of the flat to establish their source of income cannot be made as the reason to make addition in the hands of the assessee without out examining them when they themselves had admitted for having advanced the amount to the assessee. - Decided in favour of assessee. - I.T.A.No.2949/Mds./2014 - - - Dated:- 6-11-2015 - SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER For The Appellant : Dr.B.Nischal, JCIT, D.R For The Respondent : Mr.G.Bhaskar,Advocate ORDER PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: This appeal is filed by the Revenue, aggrieved by the order of the Learned Commissioner of Income Tax(A)-II, Chennai dated 31.07.2014 in ITA No.1696/2013-14 passed under Sec.143(3) read with section Sec. 250 of the Act. 2. The Revenue has raised three elaborate grounds in its appeal, however the crux of the issue is that the Revenue is aggrieved by the order of the Ld. CIT (A), who deleted the addition of ₹ 50,15,000/- on account of unexplained depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avings of ₹ 10 lakhs which had been deposited during the year as per his submission above while his actual income is only ₹ 1.80 lakhs and he is the only bread winner for the family. 2. The assessee had also furnished a copy of the bank statement of his wife Mrs.S.Inbavalli who held the account jointly with M.Rajamarrison in Axis Bank Ltd., with the Account No. 082010100484411. Examination of the bank statement of the assessee s wife reveals that there was cash deposit of ₹ 30,50,000/- only which leaves a shortfall of ₹ 9.5 lakhs. 3. It is clearly evident that the submissions by the assessee and the actual facts contradict each other. The assessee as well as the confirmation letters state that the entire sum of ₹ 80 lakhs was withdrawn and returned during the year itself whereas the bank statement of the assessee reveals that as against the deposit of ₹ 51.55 lakhs, a sum of ₹ 38.60 lakhs alone had been withdrawn and similarly the bank statement of assessee s wife reveals that as against the deposit of ₹ 30.50 lakhs, a sum of ₹ 3.60 lakhs alone was withdrawn during the year. 4. In response to the Summons u/s 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 40 Iakhs. The question whether anyone would make an advance of 50% of the total cost of the flat to a novice builder even before the plan approval is obtained or prior to the commencement of construction without securing their stake by way of some documentation remains unanswered. The examination of the copy of the document of the site shows the site being bounded on all four sides by properties owned by other individuals and has no lane or road on anyone of the side. The assessee s AR had stated that on the North of the site there exists a narrow lane which leads to the site. Considering the fact that the site of proposed construction falls within the CMDA limits, the rules regarding the FSI permissible, the narrow frontage on the road etc., the proposal of construction of 4000 sq.ft. area in four floors on an 1250 sq.ft plot appears to be a piece of imagination rather than practically viable. As per the Development Control Rules, 2002 for Chennai Metropolitan Area, no development shall be made unless a site is approved for that development by the Authority(Rule. 3(c). Rule 5(1) states that there must be minimum front set back of 1.5 meteres and 1.5 meters as rear set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 80 lakhs during the FY. 2009-10. (iii) Sri.N.Raja Marrison had stated in the statement recorded that he had not received any consideration and the site does not belong to him. 5. On appeal, the Ld. CIT (A) deleted the addition by observing as under:- 4.1.4 It is also important to mention here that the assesseeis an individual and has no business activities as such. There were no investments/purchases made by the assessee during the financial year 2009-10, at-least to the knowledge of the Revenue. In such a case, there was no need for the assessee to borrow money from others or bring any amount into the bank accounts. Further as could be seen from the above bank account, the cash deposits were made between June 2009 September 2009. The money so deposited was not used by the assessee in any form for any purpose. The money was all along remaining in the bank account till it was finally withdrawn and used for repaying the said four prospective buyers in March 2010 This fact also clearly shows that the above bank account in Axis Bank is a special purpose account meant for the proposed joint development. However, as the project could materialize the assessee and/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard. 4.1.8 It is also important to mention here that Shri N Raja Marrison, the proposed joint developer, is assessed to tax. During the course of his assessment proceedings, especially when his Assessing Officer examined and probed into the above joint development process and the cash deposits of ₹ 80 lakhs m to the above joint bank accounts, has clearly and categorically confirmed the above proposed joint development agreement with the instant assessee (and assessee s wife) and the receipt of advances of ₹ 20 lakhs each from four prospective buyers. Further, Shri N Raja Marrison also accepted the above advances of ₹ 80 lakhs as advance receipts of his business (construction) activity and estimated income thereon @ 8% and offered to tax. This fact also proves that the assessee s claim of receipt advances of ₹ 20 lakhs each from four prospective buyers and their deposits in to the bank account is genuine. 4.1.9 In view of the above reasons, the sources of income for the above cash deposits into the assessee s joint bank account is the advances received from the prospective buyers of the proposed construction. Therefore, the addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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