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TMI Blog2016 (4) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... e has claimed to have received ₹ 6.5 lakhs and also continue to hold the land. There is no evidence to show that the above land was transferred or the money taken as advance is returned. Also in the sale agreement clause, it was stated “that it is agreed between the parties that the balance sale consideration shall be paid within three years from the date mentioned above or at the time of registration whichever is earlier” and also “that if the purchaser fails to pay the agreed balance payment on or before agreed period, the vendor is agreed to repay 6 lakhs by retaining ₹ 50,000 towards termination of this sale agreement. We have not come across any refund or cancellation of this agreement to show that the transaction is genuine, hence, we reject the claim of the assessee on this count. Past rental income and house hold savings - Held that:- CIT(A) could have allowed the balance of ₹ 3.2 lakhs also as the assessee was in the possession of residential property from 1983 onwards i.e. for a period of 19 years and on an average, five portions of the house property were on lease, therefore, assessee could have made the savings to the extent of ₹ 6.2 lakhs ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a warehouse under Grameen Bhandar Yozana Scheme at Gundaram Village of Nizamabad District. The total cost of the warehouse was ₹ 77,96,876/-. Assessee has borrowed loan from ICICI Bank to construct the warehouse. When the Assessing Officer asked the assessee to explain the sources for the funds for making the investment, there was no proper compliance from the assessee and the Assessing Officer after considering the evidence available on record made the following additions: 1. ₹ 39,04,888/- as unexplained investment u/s 69 of the Act. 2. 1,89,330/- towards unexplained expenditure for repayment of interest on bank loan u/s 69C of the IT Act. 4. Aggrieved by the order of Assessing Officer, the assessee preferred an appeal before the CIT(A). 5. In the course of appeal proceedings, the assessee had submitted that to construct warehouse, she has mobilised investment as under apart from loan, from ICICI Bank: a) Agricultural income ₹ 84,000 b) Tailoring receipts ₹ 69,000 c) Past rental income house hold sav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on the loan taken form ICICI Bank is not properly explained. 8. With regard to ground No. 2, the ld. AR submitted that assessee has claimed ₹ 6.20 lakhs as past rental income and household savings. He submitted that assessee was holding a house bearing No. 74-11-4, Prakash Nagar, Rajahmundry since 1983. It has seven portions of dwelling house, out of which, she was getting rent from five portions. He submitted that since the assessee is a house wife and she need not have to spend household expenditure and savings of ₹ 6.20 lakhs out of this source is genuine and reasonable. 8.1 With regard to sundry creditors, the ld. AR submitted that all these sundry creditors were genuine and the advances taken from the creditors were incurred for construction of warehouse building. These sundry creditors are consist of small agents, who are dealing with the construction materials. There is a total of 38 creditors and confirmations from them were already filed before the Assessing Officer. These are all small farmers in and around the village of the assessee. These sundry creditors were genuine because these creditors were settled in the subsequent FY by taking further lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee filed before the CIT(A) and also before us, the assessee has rental income to the extent of ₹ 7.59 lakhs and after settling the interest liability to bank, the assessee had surplus of ₹ 1.51 lakhs. The assessee has also taken additional bank loan during FY 2003-04 to the extent of ₹ 9.25 lakhs. From the above surplus of rental income and additional loan from bank as well as agriculture income, she had settled the sundry creditors to the extent of ₹ 11.63 lakhs. From the above, it is clear that assessee has enough funds to repay the sundry creditors to the extent of ₹ 11.63 lakhs. Therefore, we are of the view that assessee has already submitted the confirmations from the creditors and they are from the small farmer community and the assessee is hailing from a small village and moreover no involvement of bank. In our view, the assessee has already established the genuineness of the creditors and the transaction may be under scrutiny due to the fact that in villages, funds are settled in cash. Since it is a small village and involvement of small farmers, we are inclined to accept the submissions of the assessee in this regard. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following sources for making investment in the construction of warehouse: 1. Professional income ₹ 78,000 2. Agricultural income ₹ 68,000 3. Past salary savings ₹ 8,80,000 4. Gift from his brother, Sri JRK Rao ₹ 6,50,000 5. GPF amount ₹ 2,25,000 6. Creditors ₹ 18,28,337 15. Out of the said claims, the CIT(A) has sustained the following additions: 1. Past salary savings to the extent of ₹ 4.30 lakhs 2. GP amount of Rs. ₹ 2,25,000 3. Creditors ₹ 18,28,337 15.1 The CIT(A) also confirmed the addition of ₹ 1,75,995/- made by the Assessing Officer towards unexplained expenditure u/s 69C of the Act on account of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the findings of the CIT(A). 22. As regards GPF amount, the assessee claimed that this amount was utilized for construction of the warehouse. Assessing Officer verified the claim and rejected the claim. The CIT(A) held that it is seen from the evidence that the GPF amount was received by the assessee on 05/05/2003 relevant to AY 2004-05 and hence same was not available for AY 2003- 04. 23. Ld. AR submitted that the CIT(A) was wrong that the GPF amount was not available in AY 2003-04 as the assessee received the same on 05/05/2003. 24. Learned Departmental Representative relied on the order of CIT(A). 25. We have considered the rival submissions. As the CIT(A) categorically held that the assessee received the GPF amount on 05/05/2003 relevant to AY 2004-05 and hence the same was not available for AY 2003-04. We, therefore, reject the submissions of assessee and confirm the action of the CIT(A). 26. As regards sundry creditors of ₹ 18,28,337/-, it is observed that similar issue on identical set of facts has been decided by us in ITA No. 1619/H/11 (supra) vide para No. 10.1, therefore, following the conclusions drawn therein, we delete the addition made on this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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