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TMI Blog2017 (10) TMI 1628X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thus under the totality of facts and circumstances of the case, the addition of Rs.12,50,000/- is hereby deleted and the balance addition of Rs.20,64,000/-is sustained. Unexplained investment u/s 69 - cash deposited into the bank and payment made for purchase of agriculture land - HELD THAT:- As appears from the transactions contained in the bank accounts of the purchasers, it cannot be said that they have no means for paying relevant advance. There is a weight in the submission of the ld.AR that the burden lying upon the assessee u/s 68 of the Act, is to explain the source of funds and not the source of the source, therefore it is not the burden of the assessee to explain the source of funds of the purchasers paying advance for purchase of the land. The Hon ble Jurisdictional High Court in the case of Labh Chand Bohra [ 2008 (4) TMI 731 - RAJASTHAN HIGH COURT] held that so far as capacity of the lender is concerned, in our view on the face of the judgment of the Daulat Ram s case [ 1972 (9) TMI 9 - SUPREME COURT ] capacity of the lender to advance money to the assessee was not a matter which could be required of the assessee to be established, as that would amount to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,50,000/- during the year and has also made cash payment of Rs. 14,64,000/- for purchase of agricultural land, during the year. The appellant has stated that the source of above cash deposits in bank and cash payment of agricultural land is (a) agricultural income and advances recovered of Rs. 20,00,000/-; and (b) bank withdrawals of Rs. 17,50,000/-. 4. Explanation relating to bank withdrawals of Rs. 17,50,000/- 4.1 As regards, these bank withdrawals of Rs. 17,50,000/- made by the appellant in F.Y. 2005-06, it was seen that these withdrawals have been made by cheque which cannot prima facie explain cash deposits in the bank account or cash payments for purchase of land. During assessment proceedings, it was stated by the assessee that these withdrawals made by cheques were given to land owners as advances for purchase of land which was subsequently received back in cash from them on cancellation of agreement. The Assessing Officer has rightly pointed out in the assessment order that no evidences have been given by the assessee in support of this contention. It is to be noted that even basic details like name and addresses of the persons to whom advances have been give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- has not been furnished by the appellant. The appellant has relied on the judgement in the case of Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC) to support his case. However, the facts of the appellant s case are different from the case law cited in so far as in the case law cited - (a) names addresses of the alleged creditors had been submitted. In the appellant s case, names addresses were not submitted during assessment proceedings and the additional evidences submitted during appeal proceedings have not been admitted. Furthermore, it was seen during remand proceedings that the names addresses of some of these persons who had returned back the advance in cash were false, (b) PAN / GIR no. of the alleged creditors had been submitted in the case law cited above. However, in the instant case, no PAN / GIR no. have been submitted. Therefore, the ratio of the above case law cannot be applied in this case. Hence, the explanation of the assessee regarding source, to the extent of Rs. 12,50,000/-, to be out of advances, by cheque to land owners, returned back in cash, cannot be accepted. 4.4 With respect to the explanation regarding the balance bank withdrawals by cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence with respect to agricultural income, during this year or the preceding years except for the agreement to purchase 16 bighas of agricultural land in 2003, as also the facts in the case of Kalu Ram Meena, the explanation of the appellant with respect to agricultural income can be accepted only to the tune of Rs. 3,00,000/- based on a liberal estimation of agricultural income. Regarding the explanation that the source of the balance amount of bank deposits and cash payments is out of other income and return of old loans, the same is not acceptable as no basic details whatsoever about the nature of other income and names addresses of the persons to whom these advances had been given, have been furnished by the assessee either during assessment proceedings or appeal proceedings. 6. In view of the above discussion, in paras 3, 4 5 above, the addition made by the Assessing Officer on account of unexplained cash deposits in bank of Rs. 21,50,000/- and unexplained cash payments for purchase of land amounting to Rs. 14,64,000/-, u/s. 69 of the I.T. Act, is upheld to the extent of Rs. 33,14,000/-, u/s. 69 of the I.T. Act. The Assessing Officer is directed to delete the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date of cancellation of agreement/ receipt of cash back Date of cash deposited in bank 27.04.05 126751 Phoola Devi w/o Laduram, village-Luniawash, Tehsil Sanganer, Jaipur, Agreement for purchase of land 500000/- 20.12.05 31.12.05 14.10.05 126760, 126762 126763 Ramphool, Lala, Rawan, Nanda and Prabhati, Village Kacherawala, Tehsil Amer , Jaipur,Rs.70000/- each. Agreement for purchase of land 350000/- 05.01.06 10.01.06 15.02.06 126769 Ramchandra, Jagdish, Ramkaran and Kaushlya Devi, Village- Gunawata, Tehsil Amer Jaipur Rs.200000*2 400000/- The amount received back, without any written agreement. 23.03.06 TOTAL 1250000/- 7. The ld. CIT (A) sent the additional evidences for comment of the AO and the AO vide his remand report dated 04.03.2015 (PB No.28-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. 15.This is apparent from the relevant details that there is a direct nexus between the amount and date of cancellation agreement with that of the cash deposits in to the bank and thereby it is duly established that that the amount withdrawn from bank of Rs.1250000/- as mentioned above has been utilized for re depositing the same in to bank account of the assessee. 16.The amount withdrawn from bank vide Ch. No.126768 of Rs.500000/-on 02.01.2006, was initially paid as loan to some friend/relative which was received back in cash and the same has been utilized by the assessee for making cash payment towards purchase of land on 18.03.2006.The assessee in spite of his best efforts could not collect the details from his bank account about the initial payee to whom the loan/advance was given. 17. Therefore the relevant claim of the assessee that the earlier withdrawals of Rs.1750000/- from the bank have been utilized for cash deposits in to the bank, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and details mentioned in application u/r 46A . It is evident from the agreement dated 20.04.2005 placed at PB page No.19-26, that the assessee paid advance of Rs.5,00,000/- to Phooli Devi vide Ch No.126751 and as per endorsement dated 20.12.2005 (PB Page No.26) the said agreement was cancelled and the advance of Rs.5,00,000/-was refunded to the assessee by way of cash payment. It is also evident from the another agreement dated 05.01.2006 placed at PB page No.27 that the advance of Rs.3,50,000/-paid to Ram Phool and others was cancelled and the advance of Rs.3,50,000/- was refunded to the assessee by way of cash payment. The assessee has filed details of another advance of Rs.4,00,000/-paid to Ram Chandra and others vide Ch. No.126769 which was also refunded to the assessee by way of cash payment (PBP-11). The assessee has provided necessary details in support of his claim and the AO in remand proceedings has neither doubted the genuineness of the relevant agreements/details nor given any contradictory finding. The claim of the assessee duly supported by documentary evidences cannot be rejected simply for the reason that the assessee could not produce the witnesses personally that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanki and Diwan Solanki were produced as wittiness for this transaction. It was noticed by the Assessing Officer that the value of land as per this agreement was taken at Rs.30 lacs per bighas whereas in another agreement dated 30.11.2006, relating to land situated close to this land, the rate have been taken at Rs.5 Lacs per bigha. The Assessing Officer was not convinced as the assessee could not explain the huge difference in price for similar land. Further Shri Suresh Solanki and Rakesh Solanki when produced before the Assessing Officer, agreed to advancing in cash but did not present any sources for this cash. The bank accounts of these people also did not show enough cash and their income tax return have been filed for a low income of Rs.1,28,000/- and Rs. 1,28,000/- respectively and the balance sheet and other papers were not produced. Further, while Shri Suresh Solanki appearing on behalf of Shri Diwan Solanki, stated that he has received back the cash amount of Rs.20 lacs, Shri Rakesh Solanki stated that the same had not been received. Thus, there was contradiction in the statement of the parties who had signed the agreement. Further it is seen that even after eleven years, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural land holding of eight bighas, the Assessing Officer has accepted explanation of the assessee with regard to agricultural income to the tune of Rs. 1,19,000/- . Further, in the previous year, the A.Y. 2006-07, my predecessor, the CIT(A)-2 vide order dated 16.03.2015 had accepted agricultural income of an amount of Rs. 3.00 lacs. in view of the above, the claim of the assessee regarding the agricultural income of Rs. 2,93,520/- is accepted. Since, the transactions of cash deposit and cash payment for purchase of land could not be explained by the assessee, the amounts reflected as received would be its unexplained income and applicability of any particular section would be in consequential Reliance is placed on 41 taxmann.com123 (Mumbai - Trib.) in the case of Alliance Hotels vs. Assistant Commissioner of Income Tax -12(1). In the present case, the above ratio applies squarely. Since the amounts reflect investments, the same are being added u/s 69 of the I.T. Act. The Assessing Officer has added an amount of Rs.30,00,000/- under section 68 as unexplained investment. However ,in view of the above discussion, the section for unexplained investment would be section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3000000/- and other Income of Rs.391000/-. 3.The assessee in support of his claim submitted copy of agreement dated 25.07.2006 ( PB No.22-24) executed between the assessee and (i) Smt. Deewan Solanki w/o Shri Ramesh Solanki (ii) Shri Suresh Solanki s/o Shri Nand Ram Solanki and (iii) Rakesh Solanki s/o Shri Dalel Singh Solanki, for sale of his agriculture land at Village Gunawata evidencing receipt of Rs.3000000/- as advance towards the same and certain sales slips of agriculture produce. 4. The assessee has produced before the AO Shri Suresh Solanki and Rakesh Solanki the purchasers of the land personally for their examination along with their bank statements, IT returns etc. Pan Cards etc. (Bank statement and PAN Card of Suresh Solanki (PB No.25-27) (Bank Statement of Rakesh Solanki PB No.28-30) (Bank statement and PAN Card of Smt. Deewan Solanki PB No.31-33) 9. The AO rejected the claim of the assessee and made addition of Rs.3503520/- to returned income. 10. The ld. ld. CIT (A) after allowing set off of agriculture income sustained the addition to the extent of Rs.2556440/-. 11. The claim of the assessee in respect of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited different amounts in his bank account on different dates as considered convenient and necessary and simply for the reason that the entire amount of Rs.3000000/- has not been deposited on single day the receipt of the same against agreement dated 25.07.2006 cannot be doubted. 12.Without prejudice to the submission cited above it is humbly submitted that even if it is assumed that the appellant could not explained the source of funds of the purchasers for paying advance for purchase of land pursuant to agreement dated 25.07.2006, the said advance paid by the purchasers of land cannot be held as unexplained simply on the basis of the same. 13. It is not the burden of the assessee to explain the source of funds of the purchasers paying advance for purchase of land. The burden lying upon the assessee u/s 68 of the Act, is to explain the source of the credit found in his books of accounts not the source of the source. If the assessee is enforced to explain the source of funds of the purchasers, it shall amount to enforce the assessee to explain the source of the source. 14.As held by Hon ble jurisdictional high court in Labh chand Bohra vs ITO 219 CTR 571, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -24, bank statements, IT returns, Pan Cards etc. of the purchasers of the land placed at PB page No.25-33.The ld.AR also relied on statements of Shri Suresh Solanki and Rakesh Solanki referred by the AO at page No.4 of the assessment order. It is evident from the agreement dated 25.07.2006 that the purchasers of the land paid advance of Rs.30,00,000/- to the assessee for purchase of agriculture land of the assessee at village Gunawata, Patwar- Labana, Tehsil-Amer, Distt-Jaipur. It is also evident from the assessment order itself that the purchasers personally appeared before the AO, filed their IT returns, Bank statement and PAN Cards etc and categorically admitted that they have purchased the relevant land and paid advance of Rs.30,00,000/-to the assessee by way of cash payment. As appears from the transactions contained in the bank accounts of the purchasers, it cannot be said that they have no means for paying relevant advance. There is a weight in the submission of the ld.AR that the burden lying upon the assessee u/s 68 of the Act, is to explain the source of funds and not the source of the source, therefore it is not the burden of the assessee to explain the source of funds o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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