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TMI Blog2019 (9) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Jagmohan Ram Chandra Vs. CIT [ 2004 (8) TMI 46 - ALLAHABAD HIGH COURT] we hereby upheld the order the ld. CIT(A) and confirmed the addition - Decided against assessee. - I.T.A No.212/Agra/2018 - - - Dated:- 11-9-2019 - SHRI LALIET KUMAR, JUDICIAL MEMBER, AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER Appellant by : Shri R. K. Agarwal Rahul Agarwal, Advs. Respondent by : Shri Waseem Arshad, Sr. DR. ORDER This appeal by the assessee is directed against the order dated 29.12.2017 passed by the Commissioner of Income Tax (Appeals)-2, in respect of A.Y. 2009- 10 wherein the assessee has raised the following grounds of appeal: 1. Because Ld. Commissioner of Income Tax (Appeals) hereinafter referred to as Ld. CIT (A) grossly erred both in law and on facts in sustaining addition of ₹ 92,00,000/- being the Date of Hearing 18.07.2019 Date of Pronouncement 11.09.2019 deposit made by the partners despite necessary evidence already on record. The appellant having proved identity, genuineness and creditworthiness of both the partners, the addition sustained by the Ld. CIT (A) is wholly arbitrary, illegal and in utt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gone through the assessment order, submissions of the assessee and legal position in this regard. It is seen that the two partners Sri Naveen Chandra Verma Smt. Bharti Verma have deposited ₹ 65,00,000/- and ₹ 27,00,000/- in cash. It was explained that this cash has been received against advance for sale of land in individual hands. During the course of assessment proceedings AO has specifically asked for the evidence of holding of land, agreement with the purchasers and date / mode / source of receipts. However, the assessee could not furnish any details before the assessing officer, it was further seen that AO has issue summons dated 10.05.2016 for attendance on 18.05.2016 and thereafter, on 14,07.2016 and 23.08.2016 but no compliance to any summons was made and no documents in support of contention that these amounts are received from sale of land were filed. 5.4 During the course of appellate proceedings assessee was again asked that the partner should be produced with all these documentary proofs for receipt of cash against advance for sale of land. However, during the appellate proceedings also could not file any evidence regarding cash received agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Section 68 enacts a golden rule of evidence which is not in dispute, i.e., if any sum is found credited in the books of account of an assessee, the onus is on him to explain the said entry. The principle embodied in Section 68 is only a statutory recognition of what was always understood to be the law based upon the rule that the burden of proof is on the taxpayer to prove the genuineness of borrowings since the relevant facts are exclusively within his knowledge. Even before the enactment of Section 68, this rule of evidence was applicable vide Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1(SC). The expression nature and source in Section 68 has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred. 5.6.2 The onus does not get discharged merely by such confirmatory letters as found in CIT Vs. United Commercial and Industrial Co. (Pvt.) Ltd, (1991) 187 ITR 596 (Cal), nor is the fact that the amount is received by account payee cheques is sacrosanct as was pointed out in CIT vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal). This view was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's knowledge. In fact, the principle of onus, that the assessee is required to establish the identity, prove the genuineness of the transaction and establish the creditworthiness of the donor, has been reiterated even in a recent decision of Hon. Delhi High Court in the case of CIT vs. Oasis Hospitalities Pvt. Ltd., 333 ITR 119 (Delhi)(201 1). In this case it was held by the Hon. Court that The initial onus is upon the assessee to establish three things necessary to obviate the mischief of Section 68. Those are: (i) identity of the investors; (ii) their creditworthiness/investments: and (ii) genuineness of the transaction. Only when these three ingredients are established prima facie, the department is required to undertake further exercise. 5.6.4 A decision of Hon. ITAT Agra Bench in the case of Smt. Suman Gupta vs. Income-tax Officer, Ward 1, Aligarh [2012] 25 taxmann.com 220 (Agra) may also be referred to on this issue. In this case the assessee was found to have received ₹ 13 lakh as loans from six persons. Assessing Officer noted that immediately before amounts were lent to assessee, identical amounts were deposited in bank accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution has been made by the partners of ₹ 65 lacs and 27 lacs from their own sources. It was further submitted that both the partners are assessed to income tax and are maintaining their individual books of account. The AO however, made addition of entire deposits made by the partners. On appeal before the ld. CIT(A), the addition made by the AO has been sustained vide para 5. To 9 of the impugned order without appreciating the facts of the case.He has filed affidavits balance sheets etc. documents of partners of the firms as additional evidence in Rule 29 of ITAT Rules, is admitted. (APB-pg.1-20). The ld. AR further contended that the evidence of computation of income ITR-V copy of account and balance sheet as well as affidavit of respective partners have been arbitrarily ignored by the ld. CIT(A). He has urged to delete the addition. The counsel of the assessee has placed reliance on the Plethora of Judgment as follows: 1. CIT vs. Noorjahan, 237 ITR 570 (SC) 2. CIT vs. Orissa Corporation 159 ITR 78 (SC) 3. CIT vs. Daulatram 87 ITR 349 (SC) 4. CIT vs. V.S. Kamaljeet Singh 147 Taxman 18 (All.). 5. CIT vs. Johrimal Goyal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. Copy of balance sheet is reproduced for ready reference: 7.2 The ld. DR further argued that APB 3 and APB 15, is an affidavit filed by Sh. Naveen Chandra Verma and Smt. Bharti verma W/o Sh. Naveen Chandra Verma respectively, wherein vide point no. 2, both states to have deposited in cash, a sum of ₹ 65 lacs and ₹ 27 lacs in their respective accounts with the firm on different dates pertaining to F.Y. 2008-09. These deposits were made out of cash in hand available with the deponent although as per their return income they have disclosed a returned income of ₹ 4,21,280/- and ₹ 2,30,590/- respectively for the relevant assessment year. The ld. DR had contended that the explanation has to be accompanied by evidence . 7.3 The ld. DR in support rely on the following judgments: 1. Shri Banarsi Prasad vs. CITAll. High Court dated 29.02.2008 2. CIT vs. Dr. G. G. Dheer, ITA No.55/2010 All. High Court dated March 31st 2017. 3. Bisakha Sales Pvt. Ltd. Vs. CIT(A), 1493/2013 ITAT (Cal) 4. Rajmandir States Pvt. Ltd. Vs. Pr. CIT, ITA No. 113/2016 (Cal) 7.4 The Ld. DR contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of sale of land as also the partners were not produced to give their statements. 10. In the case of Jagmohan Ram Ram Chandra vs. CIT (2005) 274 ITR 405 (All) wherevide para 20 and 21 held as under: 20. In the case of Jairamdass Lokesh Kumar (supra), the Rajasthan High Court has held that the assessment of different persons in respect of the same income will not absolve one from liability to be taxed. It has held as follows: We are of the opinion that in view of the decision of the Supreme Court in Jain Brothers v. Union of India (1970) 77 ITR 107 (SC), it should be no more in doubt that the assessment of different persons in respect of the very same income will not absolve one from liability to be taxed de hors the finding recorded in one proceeding with reference to the finding recorded in somebody else s assessment. If in the case of A it has been found that A has earned income, then the obligation is on A to be assessed and pay tax on the income earned by him. 21. Thus, from the aforesaid decisions, it is settled that if an entry of cash credits is found in the books of account of a firm, it is for the firm to give explanation regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained the source of such cash credits that the M/s Venus Auto has transferred ₹ 62,00,000/- to M/S Krishna Bulk Movers (P) Ltd. and thereafter M/s Krishna Bulk Movers (P) Ltd. has transferred this amount to M/s Verma Service Station (P) Ltd. Copy of all these accounts were available in the case of Venus Auto and hence, assessee's contention that this amount has now come from some advance for land sold held to be after thought were being not supported by any documentary evidence and these concerns were having zero sales turnover. Again, the value of the land has been shown to be sold as ₹ 10 lacs as evident from the balance sheet of the firm M/s Verma Service Station as above. Under these circumstances, AO was correct in holding these credits as unexplained in the hands of the assessee and the ld. CIT(A)was justified in confirming the addition as unexplained capital of the assessee firm u/s 68 of the Act. 13. Considering the factual matrix and legal proposition of law we are of the considered opinion that the facts of case on hand demonstrate unexplained cash deposit in the books of account of M/s Verma Service Station P. Ltd. for which neither the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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