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TMI Blog2017 (5) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in law for the assessee to prove the genuineness and creditworthiness of the sub-creditor. Thus we delete the addition made by the Assessing Officer u/s.68 of the Act as unexplained cash credit. - Decided in favour of assessee Denying deduction u/s.54F claimed out of long term capital gain on sale of land - Held that:- We are of the considered view that if during the course of assessment proceedings, the assessee filed details of claim of exemption of the same u/s.54F of the Act, the Assessing Officer is duty bound to entertain those details and verify the same and if the assessee is found eligible otherwise as per the conditions u/s.54F of the Act, he is bound to allow deduction to the assessee. Our view finds support from the circular of CBDT No.014(XL)-35) dated 11.4.1955. Further, we find that the assessee has filed all details for claim of deduction u/s.54F before the CIT(A), who held against the assessee on the ground that the assessee had not claimed deduction in the return of income. We find that Hon’ble Supreme Court in the case of Goetz (India) Ltd (2006 (3) TMI 75 - SUPREME Court ) has categorically held that the decision does not impinge upon the power of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein, they had admitted of advancing loan to the assessee on interest @ 12% per month. Thus, the loan creditors have confirmed the fact of advancing loan to the assessee. He relied on the decision of Hon ble Gujarat High Court in the case of DCIT vs. Rohini Builders 256 ITR 360 (Guj), wherein it has been held that the assessee was not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source. Ld A.R. also relied on the decision of Hon ble Gauhati High Court in the case of Nemchand Kothari vs CIT another, 264 ITR 254 (Gau), wherein, it was held that the burden of the assessee to prove the genuineness of the transactions as well as creditworthiness of the creditor is confined to transactions which have taken place between the assessee and creditors, and it is not the burden of the assessee to show the source(s) of his creditor or to prove the creditworthiness of the source(s) of the sub-creditors. He also relied on the decision of of Hon ble M.P. High Court in the case of CIT vs. Metachem Industries, 245 ITR 160 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of source i.e. the source of the credit in the account of the sub-creditor. All the moneys were received by cheque. Therefore, we find that the assessee has discharged his initial burden which established the identity of the loan creditors beyond any shadow of doubt. Thereafter, the department could not bring any positive material on record to show that the either the loan creditors have not actually advanced the money in question or they could not have advanced the same. The Assessing Officer as well as CIT(A) has drawn adverse inference regarding creditworthiness of the loan creditors merely on the basis of suspicion alone. It is not the case of the assesse that the loan creditors had advanced the money out of the income of the year alone and no positive material has been brought on record to show that loan creditors could not have any other source like his capital i.e. saving of earlier years or receipt from any other person from which the loan creditors could not have advanced the loan. The Assessing Officer observed that the loan creditors have deposited the amount in cash before issuing cheque to the assessee. In our view where a borrowing or a credit is shown to have come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,059/- on construction of new residential house and assumed that the capital gain was exempt u/s.54B after taking benefits of indexed cost of land and had no tax liability of such gain. On the above bonafide belief, the assessee had inadvertently missed the disclosure on computation of sale of said land which on the other hand had no tax liability. 14. The Assessing Officer observed that it has been gathered that there was dispute between the assessee and Shri Leela Ram Soni regarding sale of land. Summons u/s.131 of the Act was issued to Shri Leela Ram Soni, who issued power of attorney in favour of his son Shri Sanjay Soni to appear on his behalf before the Assessing Officer, who in his statement recorded stated that the land was purchased by his father Shri Leela Ram Soni from Smt. Krishna Devi, W/o Shri Suresh Agrawal on 9.2.1996 for ₹ 41,000/-. The land was purchased by Smt. Krishna Devi in 1994 in the name of her minor son Shri Amit Kumar Agrawal. The transaction of purchase and sale of piece of land had been disclosed in the books of account of Smt. Krishna Devi. He furnished copy of her balance sheet as on 31.3.1995 and 31.3.1996 and details of land account from 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who is the father of the assessee on the pretext of sale of this property cannot be considered as sale consideration but deemed to be the income from other sources. Further, the assessee has not shown either capital gain or exemption in his computation of income, therefore, the amount of ₹ 13,15,000/- received from Shri Naveen Bansal was held to be the income of the assessee and added the same to the income of the assessee. 15. On appeal, the CIT(A) held that the assessee had filed return of income on 31.3.2010 by showing profit and gains of business or profession at ₹ 1,46,316/-, income from other source i.e. interest income from banks and other interest income, director s remuneration at ₹ 87,782/-. The return of income was filed in ITR-4 and the capital gain and deduction U/S.54F had been shown as Nil. There was no declaration of long term capital gain or investment of the gain for purchase of house property and claim of exemption of long term capital gain u/s.54F of the Act either in the return of income or in the computation of income filed along with return. The fact regarding the sale of the impugned piece of land at ₹ 13,15,000/-, the long term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment proceedings before the Assessing Officer, the Assessing Officer is bound to accept the same and allow the benefit of the same to the assessee if all the evidence and details are made available to the Assessing officer. He submitted that Hon ble Supreme Court in the case of Goetze (India) Ltd vs CIT (2006) 284 ITR 323 (SC) has held that the deduction not claimed in the return of income cannot be allowed by the Assessing Officer but does not impinge upon the power of the appellate authority. Ld A.R. relied on the CBDT Circular No.014(XL)-35) dated 11.4.1955, wherein, it has been stated that Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would in the long run benefit the department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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