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TMI Blog2020 (2) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to his business with regard to the amount after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to cooperate with the AO for early disposal of the case and substantiate his claim with regard to cash deposit into the bank account and cash withdrawals from the bank account. Accordingly, we allow the sole ground raised by the assessee partly for statistical purposes. - ITA No.11/ASR/2015 - - - Dated:- 5-2-2020 - Shri L.P. Sahu, AM And Shri Ravish Sood, JM For the Assessee : Shri Sandeep Vijh, CA For the Revenue : Shri Charan Dass, DR ORDER PER L.P.SAHU, AM: The assessee has filed this appeal against the order of CIT(A), Jalandhar, dated 24.10.2014 for assessment year 2009-2010. 2. The sole issue raised by the assessee in its appeal reads as under:- 1. That the Learned Commissioner of Income Tax (Appeals), has erred in sustaining an addition of peak amount ₹ 9,18,900/- on account of alleged unexplained Cash credits/cash deposit in Savings Bank Account out of an addition of ₹ 18,16,500/- made by the Assessing Officer. The submissions made as well as the legal position has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits in saving bank account out of an addition of ₹ 18,16,500 made by the assessing officer. The submissions made as well as the legal position have not been appreciated. Even the calculation of peak at ₹ 918,900/ - is not correct. The fact of the case are that the assessee had deposits in the saving bank account with Punjab National Bank, Railway Road, Phagwara totaling ₹ 18,16,500 during the year under consideration. During the course of the assessment proceedings itself, it was explained that these deposits were out of the amounts received from three persons namely - Sh. Baljit Singh, Sh. Narinder Singh and Sh. Mohinder Singh. Even the affidavits of these persons were filed with the assessing officer wherein these persons had confirmed that they had given money to the assessee [2nd para at page no. 1 of the assessment order]. Copy of the affidavits is at page no. 14 to 16 of the paper book. During the assessment proceedings, the assessee was asked to explain as to how being a commission agent advance had been received from agriculturists whereas in general practice, the commission agent gives advance to the agriculturists [1st para at page no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rikh vs. CIT reported at 30 ITR 81 wherein was held that the contents of an affidavit cannot be rejected without cross-examining the person who gave the affidavit. In the context of violation of the principles of natural justice reliance was also placed on the decision of the IT AT Amritsar Bench in the case of Mayor Co. Copy of the order of the IT AT, Amritsar Bench is at page no. 10 to 12 of the paper book [please see para no. 19 20 at page no. 11 12]. For a better appreciation' of this decision, copy of the order of the CIT(A) against which the above mentioned appeal was filed by the revenue is enclosed at page no. 80 to 83 [please see 1st 2nd para on the reverse of page no. 83]. Relief was allowed by the ld. CIT(A) after appreciating the decision of the Supreme Court in the case of Kishinchand Chellaram vs. CIT reported at 125 ITR 713. Attention is also drawn to the decision of the Delhi High Court in the case of CIT vs. Gulati Industrial Fabrication Pvt. Ltd reported at 217 CTR 494 [SLP (CC) o. 1134/2009 has been dismissed by the Supreme Court]. Copy of the decision of the High Court is at page no. 84 85. Copy of the order dismissing the SLP of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is not a part of the books of accounts was not justified and deserves to be deleted on this score also [2nd para at page no. 3 of the paper book]. Copy of the decision is enclosed at page no. 90 91 [please see page no. 90]. This contention has also not been appreciated by the ld. CIT(A). Further, simply because the assessing officer has not accepted that funds were given by the farmers will not mean that these represent unexplained funds of the assessee. Reliance was placed on the decision of the Supreme Court in the case of Cl'T vs. Daulat Ram Rawatmull reported at 87 ITR 347 wherein it was held that from the simple fact that the explanation regarding the source of money furnished by the person in whose name money was lying in deposit was found to be false, it would be remote and far fetched conclusion to hold that the money belonged to the person with whom it was lying as a deposit [2nd para at page no. 4 of the paper book]. It has been recently held by the Punjab Haryana High Court in the case of CIT vs. Amar Chand Sons that it is not possible for the assessee to prove the source of his creditors. Copy of the decision is enclosed at page no. 92 93 [please se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Accordingly notices were issued to Sh. Baljit Singh, Sh. Narinder Singh and Sh. Mohinder Singh. Out of the above mentioned persons only Sh. Mohinder Singh who was a handicap did not attend as he had undergone surgery and was not in a position to visit the Income Tax Office. In his statement, Sh. Baljit Singh had accepted having given the money [page no. 30 of the paper book]. The J forms to show that he was an agriculturists were also filed with the CIT(A) as these were not taken on record by the assessing officer [please see page no. 33 to 47 of the paper book. Regarding Sh. Narinder Singh, the copy of receipt from one person for the land taken on lease was filed [please see page no. 49 of the paper book] along with copy of J forms [page no. 50 to 64]. Regarding Sh. Mohinder Singh who was aged about 70 years and was a handicapped person, it was explained that he had undergone surgery in December 2012 and was advised rest. Copy of the certificate from doctor was also filed and is at page no. 65 of the paper book. Copy of certain J forms were also filed and these are at page no. 66 to 70 of the paper book. When the appellate proceedings were taken up subsequently anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the simple fact that the explanation regarding the source of money furnished by X, in whose name the money was lying in deposit, had been found to be false, it would be remote and far-fetched conclusion to hold that the money belonged to Y. Thus even if there was some doubt about the source of funds in the bank account of the depositor, there was no reason to even presume that this belonged to the assessee under appeal. This decision has been followed by the Rajasthan High Court in the case of Labh Chand Bohra vs. ITO reported at 219 CTR 571 wherein it has been held that identity of the creditor having been established and that they confirmed the credits satisfies the requirement of discharge of burden on the part of the assessee to prove genuineness of the transaction. Capacity of the lender to advance money to the assessee was not a matter which the assessee could be required to establish as that would amount to calling for him to establish source of source. The addition in respect of the entries in the names of the creditor thus could not be sustained. Copy of the decision is enclosed at page no. 94 to 97 [please see page no. 94]. In the case of Aravali Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available and which could have been used for deposit in the bank account. Detail of the cash balance available in the books on the various dates on which there were deposits in the bank account along with relevant pages of cash book were filed before CIT(A). Copy of the above referred detail is enclosed at page no. 102. In the context of the above, the CIT(A) has observed in the 1st para at page no. 19 of his order that benefit of amount withdrawn from the capital account cannot be given as the withdrawals appear to be for household expenses. Also no benefit of the opening cash in hand and cash in hand available in the books of accounts on various dated has been allowed in the absence of evidence with regard to opening balance and in the absence of entry in the books of accounts. There is however a mistake in the computation of the peak balance. Various entries of the individual who gave money and whose accounts were consolidated are missing. For e.g. ₹ 125,000 received back by Mohinder Singh on 18/11/2008 [page no. 16] is not in the consolidated peak statement at page no. 18. Similarly ₹ 30,000 and ₹ 500,000 received back Sh. Narinder Singh on 4/10/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he finding of the AO along with the remand reports sought from the AO, found that the peak amount of unexplained deposits is ₹ 9,18,900/- as against worked out by the assessee at ₹ 7,12,500/-. The CIT(A) further observed that the benefit of withdrawals from capital account of assessee cannot be given as the withdrawals from capital account appear to have been withdrawn for household expenses and no benefit of opening cash in hand and cash available in books of accounts related to business can be allowed in the absence of any evidence with regard to opening cash in hand and in the absence of any entry in the cash book. Accordingly, the CIT(A) restricted the addition to ₹ 9,18,900/- out of total addition of ₹ 18,16,500/-. Before us, ld. AR submitted that documents available before the AO, shows the identity as well as creditworthiness of the transactions and affidavits confirming land on lease with two of the persons. However, the CIT(A) disbelieved the amounts received by the assessee whereas the persons who had given the affidavits had not been cross-examined before rejecting the affidavits. Ld. AR further submitted that the credits were in the bank acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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