9911796707
TMI Blog2019 (10) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that no material has been brought on record to show that ₹ 18,00,000/-, ₹ 23,00,000/- and ₹ 13,00,000/- has flown from the exchequer of the assessee and was routed back by way of loan from Sh. Rajinder Singh, Sh. Raj Pal and Sh. Ramesh Yadav. It is an established position of law that u/s 68 of the Act in respect of loan creditor, the assessee is required to establish his source and not the source of the source. Therefore, the addition made of ₹ 18,00,000/- received from Sh. Rajnder Singh, ₹ 23,00,000/- received from Sh. Raj Pal and ₹ 13,00,000/- received from Sh. Ramesh Yadav by doubting their source cannot be sustained. - Decided in favour of assessee Addition on account of closing stock - AO was not satisfied with the explanation of the assessee and observing that the assessee has not explained the basis of allocation of opening WIP between cost and closing WIP, therefore, WIP transferred to cost is disallowed and added to income of the assessee CIT(A) reducing the addition made by the AO on account of closing stock - HELD THAT:- Both the parties before us could not point out any error in the order of the CIT(A), therefore, the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was asked to produce the three parties before him, the assessee failed to produce the creditors. The assessee submitted that they were unsecured depositor and wrongly mentioned in balance sheet under the head sundry creditors. The Assessing Officer observed that explanation of the assessee was not acceptable as this was not reflected in the Tax Audit Report. The assessee accepted this fact only when assessee was required to furnish bills of goods supplied by them. Therefore, the Assessing Officer concluded from the confirmations, bank statement and purchase/sale deed that all the bank account maintained are in joint name of Sh. Vijay Pal Yadav with Union Bank of India, who is the director in the assessee company. All cheques of loaners for the amount of loan received by the company for ₹ 18,00,000/-, ₹ 23,00,000/- and ₹ 13,00,000/- is only signed by director himself and cheques does not contain any signature of loaners. All loaners gave loan out of sale consideration of property which is sold to the sister concern of the said company where both the directors and shareholders are same and purchase deed is also executed by Sh. Vijay Pal Yadav in his capacity of Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional evidence being affidavit needs to be admitted, more so, also because the AO has examined the additional evidence on merits and has offered his comments on merits also. The appellant has also filed reply to remand report vide his letter dated 17.02.2016. It has been stated that Sh. Rajinder Singh was down with cancer and still under treatment, therefore, could not attend. The appellant furnished the confirmation of Sh. Rajinder Singh, copy of his PAN card, copy of ITR acknowledgment of assessment year 2012-13 showing gross income of ₹ 5,18,780/-, computation of income of assessment year 2012-13 and bank statement of Sh. Rajinder Singh. The appellant has claimed that the source of this loan by the creditor is out of the sale proceeds of properties. Copies of sale deeds were also filed. However, on examining the bank statement of Sh. Rajinder Singh and Sh. Vijay Pal Yadav, the CIT(A) found that the immediate preceding credit of ₹ 20,00,000/- on 24.03.2012 is through some clearing vide instrument no. 345031. It is out of this credit that ₹ 18,00,000/- has given to the assessee. The sale proceeds of the property credited in the bank account was already utilize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Sh. Ramesh Yadav. The CIT(A) observed that it was important to point out that the sale proceeds of properties which were credited in the same bank earlier already stood consumed/exhausted prior to receipt of immediate preceding credit of ₹ 15,00,000/- on 24.03.2012. Therefore, the claim that the source in the bank account of Sh. Ramesh Yadav is out of sale proceeds of properties remains unsubstantiated. Under these facts, although the identity of the loan creditor is not in doubt, however, creditworthiness stands unproved. The appellant has not successfully discharged his full onus in respect of this credit and therefore, he held that the AO were justified in making addition of ₹ 13,00,000/- u/s 68 of the Act for unsecured loan in the name of Sh. Ramesh Yadav. 10. The CIT(A) observed that in the case of Raj Pal, the loan amount of ₹ 23,00,000/- all the facts and circumstances are similar in the above two cases. The additional evidence being affidavit stands admitted for the reason already given above. The only difference in this case is that during remand proceedings, Raj Pal attended before the AO on 13.01.2016 when his statement was recorded. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 EMM VEE Infrastructures (India) Pvt. Ltd. returned ₹ 20,00,000/- vide DD No. 345031 dated 22.03.2012 to the assessee. He pointed out from the bank statement of Union Bank of India of Sh. Rajinder Singh and Sh. Vijay Pal Yadav that there was a credit of ₹ 20,00,000/- on 24.03.2012 and on 26.03.2012 Sh. Rajinder Singh vide RTGS from the same bank account with Union Bank of India in the name of Sh. Rajinder Singh and Sh. Vijay Pal Yadav advance a loan of ₹ 18,00,000/- to the assessee. 12. Similarly, in the case of Mr. Raj Pal Singh, the assessee has filed copy of ledger account in the books of EMM VEE Infrastructures (India) Pvt. Ltd. which is placed at page no. 190 of the paper book and pointed out there from that assessee has advanced ₹ 21,00,000/- to the said M/s EMM VEE Infrastructures (India) Pvt. Ltd. on 06.01.2012 vide cheque no. 650813 dated 06.01.2012 drawn on UBI Main Branch, Meerut. He has also placed copy of bank statement of Sh. Raj Pal Singh and Sh. Vijay Pal Yadav at page no. 180 of the paper book wherein on 06.01.2012 there is debit of ₹ 21,00,000/- vide cheque no. 650813 in the name of M/s EMM VEE Infrastructures (India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of affidavit of the loan creditors wherein they accepted the giving of loan to the assessee. 16. The CIT(A) after admitting the above documents as additional evidences called for remand report from the AO. After considering the remand report and submissions of the assessee, the CIT(A) confirmed the action of the AO in respect of all the three loan creditors. 17. The AR of the assessee submitted at bar that all the three loan creditors in questions are brothers of Director of the assessee company, namely, Sh. Vijay Pal Yadav. All of them are assessed to tax and have been allotted PAN by the department. Thus, their identities are not in dispute. 18. Further, the loans in question were advanced through banking channel and were also confirmed by the said creditors by way of their affidavits. Thus, the genuineness of the transactions are also not in dispute. 19. The lower authorities made the addition only because they doubted the creditworthiness of the said loan creditors. All the three creditors had three piece of land jointly owned by them which were sold vide registered deed dated 24.12.2011 for ₹ 35,98,500/-, deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 18,00,000/-, ₹ 23,00,000/- and ₹ 13,00,000/- has flown from the exchequer of the assessee and was routed back by way of loan from Sh. Rajinder Singh, Sh. Raj Pal and Sh. Ramesh Yadav. It is an established position of law that u/s 68 of the Act in respect of loan creditor, the assessee is required to establish his source and not the source of the source. Therefore, the addition made of ₹ 18,00,000/- received from Sh. Rajnder Singh, ₹ 23,00,000/- received from Sh. Raj Pal and ₹ 13,00,000/- received from Sh. Ramesh Yadav by doubting their source cannot be sustained. We, therefore, set aside the orders of the lower authorities and delete the addition of ₹ 18,00,000/-, ₹ 23,00,000/- and ₹ 13,00,000/- all aggregating to ₹ 54,00,000/- and allow the ground of appeal of the assessee. 21. In ground no. 2 of the appeal of the assessee and in ground no. 1 of the appeal of the revenue, the grievance of the assessee is that the CIT(A) erred in confirming the addition of ₹ 9,34,394/- on account of closing stock and the grievance of the revenue is that the CIT(A) was not justified in reducing the addition made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not point out any error in the order of the CIT(A), therefore, the grounds of appeal of the assessee as well as revenue are dismissed. 27. Ground no. 2 in the revenue s appeal is directed against the order of the CIT(A) deleting the addition of ₹ 46,54,068/- on account of disallowance of cost on development of land claimed by the assessee. 28. The brief facts of the case are that the assessee claimed ₹ 46,54,068/- as cost incurred on development of land at Rajpura which was sold during the year. According to the Assessing Officer from the sale and purchase documents it is not coming out that any cost of development was incurred on the said land and that the claim was not supported by bills and vouchers. Therefore, he added ₹ 46,54,068/- to the income of the assessee. 29. On appeal, before the CIT(A), the assessee submitted that the development cost of ₹ 46,54,068/- was incurred prior to the assessment year 2012-13 and therefore, no addition can be made in the year under appeal. 30. The CIT(A) observed that he has examined the issue from the trading and profit and loss account of the current year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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