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TMI Blog2021 (10) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... credit that she has received it from her husband and also brought on record that assessee s husband is having vast agricultural lands. The owning of agricultural lands by assessee s spouse is not at all doubted by the AO. It is also brought on record by the assessee that she is also owning agricultural land and entered into sale deed in favour of M/s. Dreamz Infra India Pvt. Ltd. on 05.9.2012 in respect of converted property bearing Survey No.121/3 (Old No.121/1) measuring 1 acre 10 guntas at Boganahali Village, Varthur Hobli, Bangalore East Taluk for a consideration of ₹ 3,20,00,000. The genuineness of assessee s spouse entered into sale agreements with various parties cannot be doubted without any material in hand. Provision to section 68 inserted w.e.f. 1.4.2013 requires the assessee to prove the source of source. This proviso shall apply to funds collected by a closely held company from resident shareholders. Hence the same will not be applicable to the assessee as she is an individual.In our opinion, the assessee discharged the burden cast upon her to explain the identity of parties, capacity and genuineness of the transaction. Accordingly, this addition is deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal. In our opinion, the assessee was pursuing alternative remedy by way of application u/s. 154 of the Act before the CIT(Appeals). The reasons put forth by the assessee are considered. We are of the view that there was sufficient and reasonable cause for the delay of 88 days in filing the appeal. The Hon ble Supreme Court judgment in the case of Collector of Land Acquisition v. Mst. Katiji, 167 ITR 471 (SC) wherein it was held as under:- (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) Every day s delay must be explained does not mean that a pedantic approach should be made. Why not every hour s delay, every second s delay? The doctrine must be applied in a rational, common sense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,00,00,000 8. The AO made an addition of ₹ 1 crore observing that Assessee has failed to discharge the onus of proving the Cash Credit in the Bank Account to the extent and made addition u/s. 68 of the Act. 9. Before the CIT(Appeals), the assessee that she has not made a deposit of ₹ 1,00,00,000 on 13-07-2012 as alleged by the AO. The AO has not mentioned the name of the Bank, its Branch and name of the account where the amount is alleged to have been deposited. The assessee has maintained her Bank Account bearing No. 912010016161631 with Axis Bank Ltd., No. 21, 80 Feet Road, 4th Block, Koramangala, Bangalore - 560085. In the said Bank Account no entry is found as regards alleged Cash Deposit of ₹ 1,00,00,000 on 13-07-2012. 10. It was further submitted that assessee s husband, Sri. Jagadish, has maintained a Joint Bank Account along with the assessee bearing No. 912010034699138 with Axis Bank Ltd. and even in the said Joint Account no Cash deposit was found on 13-07-2012. On the contrary in the said Joint Account, a withdrawal entry was found on 13-07-2012 amounting to Rs. 1,00,00,000. Therefore the. AO has with a wrong perception stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 68 of the Act is not applicable to the assessee since she has not maintained any books of account in the absence of any business. It is an admitted fact on record that she has declared a sum of Rs. 23,47,900 consisting of House property income of Rs. 2,97,638, Capital Gains of Rs. 12,89,631 and Bank Interest of Rs. 8,43,580 as per the Statement of Income filed. The AO has also discussed in para 1 of the Assessment Order that the declared income of Rs. 23,47,900 represents income from House Property, Income from Capital Gains and Income from other sources being the Bank Interest. The addition made by the AO was on a mistaken fact in as much as the withdrawal of Rs. 1,00,00,000 on 13-07- 2012 by Cheque No. 3564 by the Husband of the Appellant was held as deposit. Hence it is submitted that the amount of Rs. 1,00,00,000 withdrawn by the Husband by Cheque No. 3564 on 13-07-2012 as evidenced from the Bank Account cannot be held as deposit and the addition made on a mistaken fact is not justifiable in law and the same is liable to be deleted. 13. On the other hand, the ld. DR submitted that in terms of applicability of section 68 of the Act in the instant case, merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n owning agricultural lands measuring 1 Acre 38 Guntas in Sy. No. 24, situated at Maragondanahalli Village, Kundana Hobli, Devanahalli Taluk, Bangalore Rural District and he entered into a Sale Agreement dated 10.07.2012 with Sri. R. Rajanna in respect of the aforesaid land for a consideration of Rs. 1,36,50,000 against which an advance of Sale Consideration was received amounting to Rs. 50,00,000 and the same amount was utilised for depositing into the assessee s Bank Account. 18. Thus the amount of advance received from Sri. Venkata Gowda and Sri. Rajanna amounting to Rs. 1,25,00,000 ( 75,00,000 + 50,00,000) by virtue of Sale Agreements acknowledged by the spouse of the Appellant was deposited into the Bank of the assessee. The relevant copies of the sale agreements were produced before the AO in the course of the Assessment Proceedings. However, the AO has not appreciated and accepted the sale Agreements mainly on the ground that the creditworthiness of the Purchasers Sri. Venkata Gowda and Sri. Rajanna was not established. 19. In this regard, it was submitted that the assessee has not received the amount directly from the Intending Buyers Sri. Venkata Gowda an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness relating to Sri. Venkatesh Gowda and Sri. Rajanna, since the AO has not examined neither the husband of the Appellant nor the purchasers Sri. Venkatesh Gowda and Sri. Rajanna. The AO without examination of the purchasers and the Appellant's husband who has received the advance sale consideration which was paid to the assessee and the same was served as a part of Cash Deposit. He relied on the following judgments:- CIT v. Orissa Corporation Pvt. Ltd. (1986) 71 ITR 427 (SC) Baladin Ram v. CIT (1969) 71 ITR 427 (SC) Smt. Manjushree v. ITO in ITA No.374/Bang/2017 dated 28.4.2017. Subbaiah Ramanathan v. ITO in ITA No.2314/Mds/2013 dated 19.6.2015 23. The ld. DR relied on the orders of the lower authorities. 24. We have heard both the parties and perused the material on record. The assessee has produced sale agreement date 10.7.2012 entered into by Mr. T.C. Jagadish Gowda in favour of Mr. R. Venkate Gowda and received an advance of ₹ 75 lakhs. Copy of this sale agreement is placed at pages 39 to 43 of PB (Kannada English versions). Copy of Confirmation letter from Mr. Venkate Gowda is placed at pages 44 45 of PB. The assessee explained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad it been a case of the AO that identity of the lender is not known and genuineness and creditworthiness of the purchaser is doubtful, he should have conducted further enquiry, which he failed to do so. The AO has not doubted the identity or genuineness of the transaction, but his findings are based on suspicion and surmises and not on any cogent evidence. More so, he wanted the assessee to prove the source of source, which is not required and it is the duty of the AO to conduct further enquiry if he feels so. In this case, the AO has failed to bring on record any evidence that the transaction between Jagadish Gowda and Venkate Gowda is a sham transaction or that the money is not received in the form of advance. The addition made by the AO is on flimsy grounds. Therefore, we are of the considered view that once the initial burden cast on the assessee has been satisfactorily proved with necessary evidence, then there is no reason for the AO to doubt the genuineness of the transaction between the parties to make an addition u/s. 68 of the Act. Therefore, when the assessee has discharged the initial burden by filing the necessary evidence to prove the genuineness of the transaction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to these assessees as loan. Further, M/s. Mahalakshmi Estates also confirmed that they have advanced money to Shri. R. Balasubramanian whose PAN No. has also been given. Inspite of this, lower authorities were not ready to accept the transaction as genuine. There was a doubt in the mind of the Assessing Officer regarding genuineness of the transaction. In the present case there is positive evidence like (1) Existence of Creditors. (2) Their PAN Nos. (3) The confirmation letter from them. The creditors given loans to the assessees through Demand Draft and the assessees furnished the details of the same alongwith confirmation letter and also explained mode of transaction, which is through banking channel and also repaid the said loan through banking channel. Considering these facts, in our opinion the assessee herein had discharged their onus placed on them. The fact that credit entry shown in the name of a person other than the actual lender of the money would not by itself, be relevant where cogent evidence is independently available. In the case of CIT vs. Orissa Corporation P. Ltd 159 ITR 78 (SC) wherein it was held that the assessee produced before the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome information or evidence which is in his possession. The AO cannot by merely rejecting a reasonably good explanation by converting it as no proof. In our opinion, the explanation offered by the assessee was reasonable and genuine explanation cannot be rejected by the AO without any cogent material. 27. In the present case, the AO wants the assessee to prove the source of source of credits which is not required u/s. 68 in the case of these kind of credits. Primarily the assessee has established the source of credit that she has received it from her husband and also brought on record that assessee s husband is having vast agricultural lands. The owning of agricultural lands by assessee s spouse is not at all doubted by the AO. It is also brought on record by the assessee that she is also owning agricultural land and entered into sale deed in favour of M/s. Dreamz Infra India Pvt. Ltd. on 05.9.2012 in respect of converted property bearing Survey No.121/3 (Old No.121/1) measuring 1 acre 10 guntas at Boganahali Village, Varthur Hobli, Bangalore East Taluk for a consideration of ₹ 3,20,00,000. The genuineness of assessee s spouse entered into sale agreements with various pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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