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TMI Blog2018 (11) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... er by way of a gift. Therefore, the genuineness of the transaction and also the creditworthiness of the father has been established which has been supported by land records/earnings. The addition so made by the AO is hereby deleted and the ground is allowed. - ITA No. 1014/JP/2015 - - - Dated:- 1-10-2018 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Shiwangi Samdhani Shri Rajiv Sogani (CA) For the Revenue : Shri J. C. Kulhari (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-2, Jaipur dated 27.10.2015 for A.Y. 2009-10 wherein the assessee has taken following grounds of appeal. 1. (a) In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the action of ld. AO in treating cash deposits of ₹ 10,33,563/- as undisclosed income. The action of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said additions of ₹ 10,33,563/-. (b) In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sales and the cash deposits. The assessee on various dates deposited a part of cash generated from business and used the same for making purchases of liquor from Government agencies namely Rajasthan State Beverages Corporation Limited (RSBCL) and Rajasthan State Ganganagar Sugar Mills (RSGSM) and for making purchases of the liquor licenses. 3.3 Further, it is pertinent to note that out of the entire money deposited in the bank account, some of the money was of assessee s father. The assessee s father is a farmer and do not have a bank account. It is a well known fact that small farmers do not keep bank accounts. Thus, in order to keep money in safe custody, assessee s father gave his money to the assessee as trust money with a direction to deposit the same in bank. 3.4 It is submitted that ld. AO erred in making the addition in an arbitrary manner without looking into the nature of the business of the assessee. Further, ld. AO failed to discharge his duty for making addition by brining on record any other source of income for generation of cash. Hence, there can be no doubt on deposition of ₹ 19,22,790/- keeping in view the above submissions. 3.5 It is further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 69 to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case... 5. The ld. DR relied on the findings of the lower authorities and taken us through the findings of the ld. CIT(A) which is contained at Para 2.3 of his order which is reproduced as under: 2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The facts of the case as they emerge are that the Assessing Officer had information of a Bank Account of the assessee with SBBJ Chakasu in which huge cash transaction had been made. This is the first year of business in liquor, of the assessee. The assessee initially did not disclose this Bank Account and also the cash book produced by the assessee did not have any entry related to this account. This was an account which was concealed and was being used to deposit unrecorded receipts of the assessee. Further as per the Audit Report, the statutory Auditors have reported that no stock register is being maintained by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough other contentions so raised by the ld AR as well as the legal decision relied upon by the ld AR however, we find that the same doesn t support the case of the assessee. In the result, we donot see any infirmity in the order of the lower authorities and the same is hereby confirmed. The ground so taken by the assessee is hereby dismissed. 7. Regarding ground No. 2, the ld. AR has submitted as under:- 31. It is submitted that in the year under consideration the assessee for the first time started his business. Prior to starting the said business of liquor shop, the assessee was assisting his father in carrying out agriculture activities. It is a well known fact that when a new business is set up there is requirement of capital which is generally provided by the father out of his love and affection. In the present case also, the assessee's father gifted him a sum of ₹ 6,31,450 so as to help him to set up his own new business. 3.2. During the assessment proceedings elaborate submissions along with the following evidences establishing the identity, genuineness and creditworthiness were made before Id. CIT(A): Copy of Jamabandi Report in the name of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avit and by making a request to produce his father the assessee has discharged his onus. 3.6 The lower authorities have erred in making/ confirming the addition without bringing any evidence, direct or indirect, to show that the money so received actually belonged to the assessee. Nowhere the Id. AO or Id. CIT(A) has suggested that the money given by the father has actually flown from the assessee. In absence of this finding, no addition can be made to the income of the assessee merely on suspicion. Since the identity of the assessee's father is duly established by the assessee, the Id. AO at best could have assessed such amount in the hands of the assessee's father. Reliance is placed on the decision of Hon'ble Rajasthan High Court in the case of PCIT vs. Shubh Mines Pvt. Ltd. - Appeal No.m 96/15. The relevant extract is as under:- ...In the considered opinion of this court, in absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,00,000 and added an amount of ₹ 4,31,450. Firstly, we find it difficult to understand if the AO has doubted the gift transaction, what made him to restrict the addition to ₹ 4.31 lacs. Either the transaction has to be accepted or rejected in totality. To our mind, this arbitrariness in the approach of the AO is a good ground for us to delete the subject addition. Further, during the appellate proceedings, the assessee submitted the affidavit of the father of having given the gift to the assessee and also other supporting documentation in support of creditworthiness which we have noted above. In peculiar facts of the case, where the assessee has started a new business, it would be reasonable to believe the contention of the assessee of having received the initial finance from his father by way of a gift. Therefore, the genuineness of the transaction and also the creditworthiness of the father has been established which has been supported by land records/earnings. In light of the same, the addition so made by the AO is hereby deleted and the ground is allowed. 10. Ground No. 3 was not pressed during the course of hearing, hence the same is dismissed as not pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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