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TMI Blog2018 (11) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... ent u/s 40A(3) - Held that:- No interference is called for in the matter. Though in assessment year under appeal, CIT(A) has no power to set aside the issue to the file of A.O. but it is specific that the A.O. has not dealt with the submissions of the assessee as what was pleaded before him. Therefore, ultimately the matter would require reconsideration at the level of the A.O. Though we do not approve the Order of the CIT(A) in remanding the matter to the file of A.O. however, while setting aside the Order of the CIT(A), we direct the A.O. to examine this issue afresh in the light of material available on record. A.O. shall give reasonable and sufficient opportunity of being heard to the assessee. Accordingly, Ground No.2 of appeal of Revenue is allowed for statistical purposes. Addition on account of unsecured loans - Held that:- Bogus transaction and all documents are created and fabricated by assessee to rotate her unaccounted money through the alleged transactions of gift or loans. CIT(A) without verifying the facts and circumstances of the case and evidence on record, without any justification deleted the addition. The findings of the CIT(A) are perverse in nature and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the appeal on four grounds of appeal which are decided as under. 4. On ground No.1, Revenue challenged the deletion of addition of ₹ 3 lakhs on account of capital contributed by the assessee. 4.1. The Ld. CIT(A) noted that the assessee claimed to have opening balance of ₹ 3 lakh in capital account which according to assessee represented her accumulated savings out of her agricultural income in the past. The AO observed that she had no bank account and there was no independent evidence of holding ₹ 3 lakh by her. Assessee gave a copy of land-holding but no evidence regarding agriculture or sale of agricultural produce by her was furnished. The assessee had also not shown agricultural income in her computation of income. In view of this, the AO held that the closing balance of ₹ 3 lakh shown in her capital account furnished with the return of income for A.Y. 2008-2009 was only a calculated plan to generate the funds and treated the same as her income from undisclosed sources. 4.2. It was submitted by the assessee that she has 24 bighas of land in which various agricultural crops were grown. According to her, she had also dairy income in the pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the totality of the facts and circumstances would show that the Order of the Ld. CIT(A) cannot be sustained in law. The matter requires reconsideration. We, accordingly, set aside the impugned order and restore this issue to the file of Ld. CIT(A) with a direction to re-decide this issue strictly on the basis of merits and evidence available on record. The Ld. CIT(A) shall give reasonable and sufficient opportunity of being heard to the assessee and the A.O. Ground No.1 of appeal of Revenue is allowed for statistical purposes. 6. On ground No.2, Revenue challenged the Order of Ld. CIT(A) in setting aside the issue of cash payment under section 40A(3) of the I.T. Act, 1961. 6.1. It is noted in the impugned order that A.O. on enquiry with India Glycol Ltd., noted that the assessee had made payments for purchases of ₹ 53,06,324/ in cash in violation of provision of section 40A(3) of the I.T. Act of the I.T. Act. The assessee submitted that she had made cash payment normally below ₹ 20,000/ at a time and that payments exceeding ₹ 20,000/- had been made only on bank holidays. The AO was not satisfied with explanation of assessee and made addition of ₹ 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de initial purchase of liquor against such credit. She furnished affidavits of these persons confirming the transactions along with documents relating to the identity and capacity. The AO was however, not satisfied with the explanation of assessee and treated the amount paid as license fee out of the alleged loans as unexplained expenditure. 10.2. The assessee submitted before Ld. CIT(A) that the creditors had made payments to the Government as tender money and such tender money was subsequently transferred to the credit of assessee on their request The Ld. CIT(A), therefore, noted that burden upon assessee to explain cash credit have been duly discharged. If the AO was not satisfied, he could have summon these persons and give a finding that they did not have the capacity to deposit the tender money in question. The Ld. CIT(A), accordingly, deleted the addition. 11. After considering the rival submissions, we are of the view that the matter requires reconsideration at the level of the Ld. CIT(A). The A.O. noted that assessee has furnished affidavits of seven persons for a sum of ₹ 14,71,600/- who have deposited the money with the Excise Department. The assessee explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is an agriculturist and had taken unsecured loans of small sums from her acquaintances and relations who were also agriculturists. They did not maintain regular books of account or bank accounts. The Ld. CIT(A) accepted the explanation of assessee based on confirmation letters and accordingly, deleted the addition. 13. After considering the rival submissions, we are of the view that the Ld. CIT(A) was not justified in deleting the addition. The assessee claimed to have received unsecured loans from several persons and in support of her claim, assessee filed copy of khasra khataunies of land holdings by the lenders, their PAN and copy of the confirmation. But, no evidence have been produced to prove the genuineness of the loan in the matter. The Ld. CIT(A) noted that the A.O. could have asked the assessee to produce these persons after preliminary enquiry, if the evidences found not to be reliable. Since A.O. failed to make preliminary enquiry, therefore, addition were deleted. The Ld. CIT(A) failed to note that burden is upon assessee to prove that she has received genuine credits in the matter. In this case, initial burden upon assessee have not been discharged to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Order of the A.O. In the result, part of Ground No.3 of the Department is allowed. 14. On ground No.4, Revenue challenged the Order of the Ld. CIT(A) in deleting the addition made by A.O. on account of unexplained cash credit on account of purchases of ₹ 35,444/-, application fee of ₹ 11,000/- and cost of furniture and cash in hand of ₹ 84,786/-. 14.1. The Ld. CIT(A) noted that source of these payments/ cash was explained from opening balance of the capital account as well as loans as discussed above. The A.O. following the logic in other grounds, treated these payments as unexplained and assessed the sum as the assessee s income from undisclosed sources. The Ld. CIT(A) noted that since the amount of ₹ 3 lakhs shown by assessee as opening balance of her capital and loans and advance aggregating to ₹ 27,70,700/- was treated as unexplained by the A.O. separately, therefore, these additions should not have been made separately. These additions are deleted. 15. After considering the rival submissions, we are of the view that the matter requires reconsideration at the level of the Ld. CIT(A). A.O. noted that assessee claimed adjustment of dema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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