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TMI Blog2018 (7) TMI 1879X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Ld. CIT(A). Unexplained cash credits u/s. 68 - all the partners were regularly filing their returns of income and had sufficient funds to invest in the AOP - Held that:- CIT(A) has rightly held that the assessee had duly discharged the onus of proving the source of said cash received from M/s Veerandra Kumar (AOP) deposited in the bank account. As regards the amount received from M/s Triveni Motors and Triveni Media Ltd., the assessee duly submitted the PAN details of both these parties, along with the financial statements before the AO. A perusal of the financial statements of M/s Triveni Motors clearly shows that the party had sufficient own funds available with it. This fact has also been appreciated by the Ld. CIT(A). Therefore, in view of above submissions and evidences filed by the assessee, the assessee has duly established along with evidences the source of cash deposited by the assessee, and thus, the Ld. CIT(A) has rightly deleted the addition. Allowing the claim of business loss - loss of ₹ 3,62,384/- comprises of depreciation on JCB (Rs. 36,494/-) and loss on business transactions (Rs. 3,70,890) - Held that:- From the perusal of computation she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the AO on account of unexplained cash credits under section 68 of the Income Tax Act, 1961. iv) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in holding the cash flow statement to be correct when it is merely a self serving document and the source of cash deposits was not explained before the AO. v) On facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in allowing the assessee to claim business loss of ₹ 3,62,384/- when no details thereof were furnished before the AO. vi) The order of the CIT(A) is erroneous and is not tenable on facts and in law. vii) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The following grounds have been raised in the assessment year 2008-09:- i) On facts and in the circumstances of the case, the CIT(A) has erred in deleting the disallowance of ₹ 4,95,000/- in respect of agricultural income without giving an opportunity to the AO on account of agricultural income. ii) On facts and in the circumstances of the case, the Ld. CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed the case for hearing on 4.1.2013. During the assessee has declared income from agricultural at ₹ 4,95,000/-. The agriculture land is in the name of deceased father of the assessee at Dholpur. Assessee has not filed any proof regarding the agricultural activity carried on the agricultural land or any sale bill of the agriculture produce. Therefore, the entire agricultural income shown by the assessee is added in the taxable income of the assessee as income from undisclosed sources. AO further observed that assessee is maintaining bank account with Axis Bank and cash amounting to ₹ 7,56,54,052/- was found credited in the Axis Bank. The assessee has filed the cash flow statement which is a self serving document as no proof in support of various cash receipt is filed. The assessee has filed the cash flow statement in earlier years from which opening balance is coming, but no explanation is given in earlier year too. Therefore, the same was added to the income of the assessee u/s. 68 of the Act. Accordingly, the assessment was completed at ₹ 7,66,97,720/- u/s. 153A r.w.s. 143(3) of the I.T. Act, 1961. 4.1 Aggrieved by the order of the AO, the assessee preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee that cash of ₹ 39,OO,OOO was received from Mittal Traders. No evidence has been filed of cash withdrawn from Mittal Traders. No justification has been filed as to why the amount was received in cash. Similarly, no justification has been filed as to why the amount was received in cash from Smt Raj Kumari In the above case, it is humbly submitted that the following decisions may kindly be considered with regard to addition made u/s 68 of I.T. Act: 1. PCIT Vs Bikram Singh [ITA No.55/2017] (Delhi) (Copy Enclosed) where Hon'ble Delhi High Court held that even if a transaction of loan is made through cheque, it cannot be presumed to be genuine in the absence of any agreement, security and interest payment. Mere submission of PAN Card of creditor does not establish the authenticity of a huge loan transaction particularly when the ITR does not inspire such confidence. Mere submission of ID proof and the fact that the loan transactions were through the banking channel, does not establish the genuineness of transactions. Loan entries are generally masked to pump in black money into banking channels and such practices continue to plague Indian economy. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the returns of the three creditor? it should go to mean that the amounts given by those creditors were also genuine. 3. Neeru Devi Kothari vs ITO(2001) 116 Taxman 224 (Jodhpur) Where the creditor was an income tax assessee and had filed confirmation letter, credit in his account could not be added to the assessee's income on the ground that assessee-has filed to prove the creditworthiness of the creditor. 4. Sarogi Credit Corporation vs CIT(1976) 103 ITRE 344 (Patna HC) Once the identity of the third party is established before the Income Tax Officer and such other evuidence are prima facie placed before him pointing to the fact that the entry is not fictitious, the initial burden lying on the assessee can be said to have been duly discharged by him. It will not, therefore, be for the assessee to explain further as to how or in what circumstances the third party obtained the money or how or why he came to make advance of the money as a loan to the assessee. Once such identity is established and the creditors, as in the present case, have pledged their oath that they have advanced the amounts in question to the assessee, the burden immediately shifts on the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositor has obtained money. Tola Ram Daga vs CIT 59 ITR 632 (Assam) and CIT vs Daulat Ram Rawat Mal 87 ITR 349 9. CIT vs Pithampur Conzima (P) Ud.(2000) 244 ITR 442 (MP High Court Where in appeal before Tribunal, the assessee showed that the credit given to the assessee company were duly declared by the creditors in their respective returns, whereupon the Tribunal concluded that the investment in the assessee firm was duly explained and no addition was called for in the hands of the assessee and deleted the addition. 8. We have heard both the parties and perused the records, especially the impugned order and the case laws cited by both the parties. As regards ground no. 1 relating to addition of ₹ 4,95,000/- on account of agricultural income is concerned, we find that AO has made the addition alleging that the assessee had not filed any proof regarding the agricultural activity carried on the agricultural land. However, the Ld. CIT(A), has deleted the addition made by the AO after considering the fact that the assessee has been consistently showing the agricultural income in the preceding years as well, which has been accepted by the Revenue as well. We note that the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained cash credits u/s. 68 of the Act is concerned, we find that during the year under consideration, assessee has deposited an amount of RS.7,56,54,052/- in its bank account. The bank statement of the assessee in this regard is enclosed at PB 97 -100. It was submitted by the assessee before the AO that the said deposits were out of the cash received by the assessee on various accounts, which has also been disclosed in the cash flow statement provided by the assessee to the AO, enclosed at PB 22-24. A perusal of the cash flow statement clearly shows that the cash deposited by the assessee in its bank account is out of the opening cash in hand available with the assessee for ₹ 52,153/-, rental income received by the assessee amounting to RS.90,000/-, the agricultural income earned by the assessee amounting to ₹ 4,92,000/-, sale proceeds of land amounting to ₹ 2,63,40,000/- and cash received from Triveni Media Ltd. (Rs.1,65,000/-), Triveni Motors (Rs.73,00,000/-) and Veerandra Kumar (AOP) (Rs.5,09,00,000/-). As regards the agricultural income earned of ₹ 4,95,000/-, it is established that the said income has been regularly shown by the assessee in its retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sending 4 reminders to the AO, the AO chose not to send its report on the said documents. Therefore, the Ld. CIT(A) has accepted the said additional evidences filed by the assessee and after considering the same, has decided the case on merits. These facts are clearly evident from Page 13 - 14 of the Ld. CIT A 's order. It is also pertinent to mention here that the Ld. CIT(A) duly sent a letter to the DIT(Systems) to check the reliability of the Acknowledgment of ITRs filed by the assessee, in response to which, it was submitted that almost all the partners were regularly filing their returns of income and had sufficient funds to invest in the AOP . Therefore, in view of the above, the Ld. CIT(A) has rightly held that the assessee had duly discharged the onus of proving the source of said cash received from M/s Veerandra Kumar (AOP) deposited in the bank account. As regards the amount received from M/s Triveni Motors and Triveni Media Ltd., the assessee duly submitted the PAN details of both these parties, along with the financial statements before the AO, which is enclosed at PB 93-95. A perusal of the financial statements of M/s Triveni Motors clearly shows that the party h ..... 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