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TMI Blog2021 (10) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... given credit because agricultural property was sold in June 2004 and the same in all likelihood would not have been available for making a purchase of the site much subsequently, i.e., on 09.03.2006. In this context, it is important to mention that the A.O. has already given a credit out of the sale proceeds of agricultural land of HUF towards the purchase of the site (since the initial installment towards payment for the purchase of site was made by the assessee in August 2004). Therefore, confirm the addition made by the A.O. Unexplained credit - addition of credits in two bank accounts of the assessee - HELD THAT:- As credits are transactions which pertains to loan availed or receipts of interest either from FD or SB accounts. The remaining amount of ₹ 4,86,500, the assessee has explained by stating that Vijaya Bank account is a joint bank account of assessee and his father and this fact has been accepted by the A.O. in the remand report submitted. The Chief Manager, Vijaya Bank has confirmed that the impugned account is joint account of the assessee and his father (Refer page 25 of the paper book). Hence, the observation of the A.O. that Vijaya Bank account is in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e delay in filing this appeal and proceed to dispose of the appeal on merits. 3. Two issues are raised in this appeal - (i) addition in respect of unexplained investment of ₹ 5,62,854; and (ii) addition in respect of unexplained credit of ₹ 4,46,086. We shall adjudicate the above issues as under: Addition of ₹ 5,62,854 (Unexplained investment) 4. The assessee had purchased a vacant site in a public auction conducted by the Bangalore Development Authority (BDA) on 28.10.2005 for a total amount of ₹ 41,89,654. (land cost of ₹ 38,07,140 + stamp duty of ₹ 3,44,200 + registration charges of ₹ 38,340 totaling to ₹ 41,89,654). The assessee was directed to give the source of investment amounting to ₹ 41,89,654. The assessee explained that he had availed bank loan from ABN Amro Bank amounting to ₹ 26,75,000, amount received from HUF ₹ 10,25,505 and balance ₹ 4,89,149 was out of savings from his salary income. It was further stated by the assessee that no construction was undertaken in the site purchased from BDA and the same is still lying vacant. The Assessing Officer gave credit to the extent the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made before the Income Tax Authorities. 4.3. The learned Standing Counsel supported the orders of the AO/CIT. 4.4. I have heard rival submissions and perused the material on record. The total cost including other incidental charges for purchase of a site through auction from BDA by the assessee is a sum of ₹ 41,89,654. During the course of assessment proceedings, the assessee explained the source of investment in the purchase of the said site in the following manner:- Particulars Amount Total cost of the site 41,89,654 Loan availed from ABN Amro Bank 26,75,000 Amount recived from HUF source 10,25,505 Amount from savings and salary 4,89,149 41,89,654 4.5. The assessee filed copies of the loan availed from ABN Amro Bank. Therefore, the source to the extent of ₹ 26,75,000 was accepted by the A.O. With regard to the balance amount (₹ 15,14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing from Citi Bank is concerned, I noticed from the statement of the Citi Bank (which is placed at pages 13 to 18 of the paper book filed by the assessee), the withdrawals are for meeting the specific expenditure such as credit card payments and cheque payments to specified entities. The cash withdrawals in the Citi Bank account is not much. The few cash withdrawals, in all probabilities, would have been only for the purpose of meeting the personal expenses of the assessee. Therefore, I confirm the addition of ₹ 1,44,500 made by the A.O. As regards the sales proceeds of HUF property, I am of the view that a sum of ₹ 3,00,000 cannot be given credit because agricultural property was sold in June 2004 and the same in all likelihood would not have been available for making a purchase of the site much subsequently, i.e., on 09.03.2006. In this context, it is important to mention that the A.O. has already given a credit of ₹ 9,51,800 out of the sale proceeds of agricultural land of HUF towards the purchase of the site (since the initial installment towards payment for the purchase of site was made by the assessee in August 2004). Therefore, I confirm the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,760 u/s. 69 of the I.T. Act as unexplained investment. The relevant findings of the A.O. in this regard reads as follow:- The assessee's contentions are answered as under, after verifying the facts and the documents collected- (a) The assessee's contention that, the bank account No. 139401011000055 is a joint account in the name of himself and his father Sri. Lakshminarayana Reddy, is not correct, as it is evident from the statement furnished by the Chief Manager, Vijaya Bank, Koramangala branch, Bangalore that, the said account is only in the name of the assessee and there are not joint account holders. (b) The said account may be operated by the assessee's father, only on the assessee's behalf, as he is the Power of Attorney holder of the assessee. (c) The assessee has indeed obtained two Demand drafts, of ₹ 1,80,908 and ₹ 3,44,597 from his above account. The demand draft for ₹ 3,44,597 has been taken on 09-03-2006 after depositing cash, of ₹ 3,44,500 on the same day. (d) It is seen from the account statement, of Sri. Mohan. L, who happens to be the assessee's brother that, he has given a cheque for ₹ 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redits of [₹ 23,000] could not be proved. In house credit for ₹ 30,790 is acceptable and is allowed. Thus, this is partly allowed to the extent of ₹ 30,790. 20. Thus, I find that the AR has mostly failed to justify availability of money/which explains Appellant's position [except ₹ 30,790 which is allowed]. 21. Thus, these grounds of appeal are partly allowed as above. 5.4. Aggrieved by the order of the CIT(A), the assessee has raised this issue before the Tribunal. Copies of the bank statement of Citi Bank and Vijaya Bank, copy of the certificate issued by Vijay Bank stating that the assessee's bank account is a joint account with assessee's father, reconciliation of credit in Vijaya Bank, copy of the loan application filed with employer, copy of bank statement depicting the cash in hand and credits are placed on record. The learned Counsel for the assessee reiterated the submissions made before the Income Tax Authorities. 5.5. The learned Standing Counsel supported the assessment and the CIT(A)'s order. 5.6. I have heard rival submissions and perused the material on record. With regard to the credits of Citi Bank, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 50,000 and ₹ 20,000 appearing in the Citi Bank on 19.07.2005 and 25.07.2005. Further, I noticed that there is a reversal of entry to the extent of ₹ 23,000. Therefore, the credits to the extent of ₹ 20,000 on 07.06.2005 and 09.08.2005 to the extent of ₹ 3,000 are reduced. Insofar as reimbursement of expenses amounting to ₹ 23,011 on various dates (4 credits in April 2005, one credit of ₹ 12,410 on 16.11.2005 and ₹ 3,617 credited on 13.03.2006), there is no explanation or confirmation from the employer how these amounts have been paid to the assessee. Hence, I confirm the addition of ₹ 23,011. As regards in house transfers of ₹ 31,709, I find that the CIT(A) has given substantial relief of ₹ 30,790. Hence, in view of the aforesaid reasoning, I sustain an addition of ₹ 24,011 (reimbursement of ₹ 23,011 + in house transfers of ₹ 1,000). Therefore, the assessee gets a relief of ₹ 1,05,350 on account of addition made by the A.O. for unexplained credits made in Citi Bank account maintained by the assessee. In other words, the addition to the extent of ₹ 24,011 is sustained instead of addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000 05.01.2006 Cash deposited rent 2,000 07.02.2006 Cash deposited rent 5,000 09.03.2006 Cash deposited HUF proceeds and withdrawals 3,44,500 4,86,500 Difference NIL 5.9. From the above tabulation, it is clear that the credits amounting to ₹ 27,38,057 are transactions which pertains to loan availed or receipts of interest either from FD or SB accounts. The remaining amount of ₹ 4,86,500, the assessee has explained by stating that Vijaya Bank account is a joint bank account of assessee and his father and this fact has been accepted by the A.O. in the remand report submitted. The Chief Manager, Vijaya Bank has confirmed that the impugned account is joint account of the assessee and his father (Refer page 25 of the paper book). Hence, the observation of the A.O. that Vijaya Bank account is in the single name of assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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