9911796707
TMI Blog2016 (1) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently the case was taken for scrutiny through CASS and the assessment u/s.143(3) was completed on 21.03.2013 wherein the the Ld. Assessing Officer made addition of Rs. 50,15,000/- being the cash deposit in the bank account. 4. During the course of assessment proceedings, the assessee was asked to furnish the bank statement in respect of savings bank account held jointly by him with Sri M.Raja Marrison in Axis Bank Ltd. On perusal of the bank statement it was found there were cash deposits to the tune of Rs. 51,55,000/- during the financial year 2009-10. It was explained by the assessee that he owned a housing site in Tondiarpet, Chennai of 1250 sq. ft in the joint name with his wife Mrs.S.Inbavalli which he stated to have purchased on 02.03.2005 for Rs. 4/- lakhs. The assessee and his wife Ms.S.Inbavalli decided to promote a residential flat in the aforesaid property and for that purpose opened a savings bank account with Sri M.Raja Marrison on 18.06.2009. The advance received for the construction of the flats by the buyers of the flat was deposited in that account. In all four flats were proposed to be constructed @ Rs. 4000 per sq.ft. Since the approval of the flat could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come as their income had not exceeded the taxable limits in any of the year. No documentary evidence was filed such as the agreement copy, copy of receipt for the advance given, source for such advance etc. 5. The assessee had not furnished copy of the agreements that he and his wife had entered with the four persons who the assessee states had advanced a sum of Rs. 20 Iakhs each. Similarly, the assessee had not produced copies of the receipts if any given to the individuals for the advance received and evidence for repayment of such sum. 6. The assessee failed to explain why such a huge sum had been received in cash and not in cheque/DD/e-transfer and why the said sum had also been returned in cash and not in cheque/DD/e-transfer. No urgency had been established by the assesseee in receiving or repaying the sum in cash. 7. 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 The assessee as well as the confirmation letters state that the entire sum of Rs. 80 lakhs was withdrawn and returned during the year itself whereas the bank statement of the assessee reveals that as against the deposit of Rs. 51.55 lakhs, a sum of Rs. 38.60 lakhs alone had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, and unacceptable and unsatisfactory. 9. The replies of the four persons in response to the summons u/s 131 seem to be very similar. All of them had stated that they had advanced it from their own sources and parental sources and neither they nor their parents had filed the Returns of Income as their income had not exceeded the taxable limits in any of the year. No substantial evidence had been furnished for receiving the advance or return of the said advance. The credibility of the statements filed by these individuals are in doubt for the following reasons: i) No Return of Income filed. ii) The transactions were in cash iii) No receipt taken from the assessee for the advance iv) No statement of total income proving their capacity to advance Rs. 20 lakhs in cash. v) No agreement had been entered into as per the statement of SrLN.Raja Marrison as recorded above. 10. The assessee vide his letter dated 20/01/13 had stated that out of the advance of Rs. 80 lakhs from the four persons, only Rs. 40 lakhs was receiv by him and the balance sum of Rs. 40 lakhs was received by his wife whereas the Memorandum of Understanding furnished by the assessee was only betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a retired Government employee He and his wife owned the above residential site which is of size just 1250 sq.ft. only. In such plots people normally construct up to four floors and smce the size is only 1250 sq ft, one residential unit is possible in each floor. Therefore the assessee's claim of four flats proposed to be constructed and their proposed sale looks genuine. Further, Tondiarpet is on the northern outskirts of Chennai where mostly middle class and lower income group people reside. Hence people prefer small houses (flats). In this type areas only known persons buy the houses and amounts paid by way advances sometimes will be very high, amounting to almost the total value, depending upon the situation. As all the persons are kwon to each other, everything goes by trust rather than written agreements. Hence the advances received in such cases cannot equate with the commercial practices. 4.1.6 Further, in the above types of situations the documents are normally prepared only when the transactions finally materialize. In the present case, since the proposed construction did not material and the entire amount was returned, the assessee's claim that no documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom them. Since the approval of the construction could not be obtained, the assessee has returned the amount received. Further, Ld. CIT (A) has rightly observed that the following facts:- i) The assessee is an individual and has no business activities. ii) The money deposited in the bank a/c was not utilized by the assessee in any manner. iii) Subsequently the cash deposited in the bank were refunded to the prospective buyers of the flats. iv) The joint developer Sri M.Raja Marrison also confirmed to the transactions. Further, the Ld. Assessing Officer had arrived at the decision to make addition in the hands of the assessee because all the 4 prospective buyers had not filed the return of income and substantiated their sources of income for the amount advanced to the assessee. We failed to understand as to why the Ld. Assessing Officer wants to make 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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