9911796707
TMI Blog2023 (4) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... aging Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account. Revenue does not show any reason as to how the CIT(A) was wrong in holding that by producing the copy of the Development Agreement and Deed of Infrastructure Development Agreement Managing Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account the assessee discharged the onus of establishing the creditworthiness of M/s. Royal Home Constructions or the genuineness of the transaction. We are in agreement with theCIT(A) that when once the Managing Partner of M/s. Royal Home Constructions was produced and he confirmed the agreements and the payments and such confirmation is well supported by the bank statement with Axis Bank where the funds available and the withdrawals were sufficient to meet the obligations under the Development Agreement the assessee stands discharged of his burden to establish the creditworthiness of M/s. Royal Home Constructions and the genuineness of transaction. The closure of office of M/s. Royal Home Constructions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispose of these appeals by this common order, taking the appeal of Revenue and cross objections of assessee for the assessment year 2014-15 as lead cases. 2. It could be seen from the record that the appeals and cross objections are filed with delay and the reasons attributed for the delay in filing these appeals of Revenue is pandemic whereas the assessee pleads that he was being diagnosed with Covid-19 and admitted to Yashoda Hospital, Somajiguda, Hyderabad on 13/03/2021 and discharged on 19/03/2021. In respect of pandemic period, the Hon'ble Supreme Court in the Suo Motu proceedings in the case of M.A.No. 21/2022 in M.A.No. 665/2021 in SMW(C) No.3 of 2020 by order dated 10/01/2022 held that in cases, where the limitation would have expired during the period between 15/03/2020 and 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022, and in the event of actual balance period of limitation remaining with effect from 01/03/2022 is greater than 90 days, that longer period shall apply. On account of this, delay in Revenue s appeal is condoned. 3. Insofar as the delay in cross o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt statements, reconciliation statement, copy of the letter submitted before the learned Assessing Officer. In respect of the first addition on a reappraisal of all this material, learned CIT(A) concluded that only Rs. 5,21,199/- remain unexplained and has to be sustained. In respect of the second addition, learned CIT(A) recorded that the assessee filed the copies of the Deed of Infrastructure Development Agreement dated 14/03/2017, confirmation letter 23/04/2015 from the Managing Director of M/s. Royal Home Constructions supported by his affidavit and after obtaining the remand report. On a perusal of the same, learned CIT(A) reached a conclusion that the assessee satisfactorily discharged the onus cost upon it and, therefore, the second addition also was to be deleted. 8. Aggrieved by the action of the learned CIT(A), the Revenue filed this appeal; whereas, the assessee filed the cross objection supporting the findings of the learned CIT(A). 9. It is the submission on behalf of the Revenue that while deciding the additions in this matter, learned CIT(A) did not give an opportunity to the learned Assessing Officer to verify the various bank accounts and the other material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) only a reappraisal the material that was available on record on this aspect and proceeded to decide the issue. Since the learned CIT(A) did not do anything more than what the learned Assessing Officer was expected to do but did not do, there is no need to restore the issue to the file of the learned Assessing Officer and the learned CIT(A) is right in his approach. It could be seen from the grounds of the cross objections the assessee supported the order of the learned CIT(A) on this aspect. 11. We have gone through the record in the light of the submissions made on either side. There is no dispute that the letter dated 20/12/2017 was filed by the assessee before the learned Assessing Officer during the assessment proceedings. This letter reads that in the notice issued under section 148 of the Act the learned Assessing Officer referred to the total cash deposits to the tune of Rs. 6,64,06,799/- and the assessee explained to the learned Assessing Officer that such amount was incorrectly mentioned, but as a matter of fact, the cash deposits in the respective bank accounts were only to the tune of Rs. 5,98,72,400/-. The assessee had also given the breakup figures in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only after verification of the bank statement. Since the learned CIT(A) did nothing more than what the learned Assessing Officer was expected to do, on the same material that was available before the learned Assessing Officer, we do not find any need to restore the issue to the file of the learned Assessing Officer. 16. With this view of the matter, we are of the considered opinion that the ground No. 1 of Revenue s appeal is devoid of merits and is liable to be dismissed. Ground No. 1 of cross objections is consequently allowed. 17. Now coming to ground No. 2 of Revenue s appeal and ground No. 2 of assessee s cross objections, it relates to the addition of Rs. 2.35 crores on the ground that the assessee failed to establish the creditworthiness of the M/s. Royal Home Constructions and the genuineness of transaction of the Refundable Fidelity Guarantee as per the development agreement dated 26/02/2007. According to the learned Assessing Officer, the assessee furnished the copy of certification of confirmation from M/s. Royal Home Constructions, but failed to furnish the copy of accounts of the assessee in the books of M/s. Royal Home Constructions or their return of income or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e could not be produced before the learned Assessing Officer, because it was traced out subsequently with the advocate, who drafted it. Assessee submitted before the learned CIT(A) that as a matter of fact, the assessee produced the Managing Partner of M/s. Royal Home Constructions on 15/11/2017, but instead of examining him on the contents of confirmation letter relating to the fidelity guarantee amounts, the learned Assessing Officer grew wild stating that wrong address was furnished and, therefore, such Managing Partner was liable to be prosecuted and thereupon the Managing Partner left the office. Assessee, however, produced the affidavit of the Managing Partner on 17/11/2017 confirming the fact of paying the amounts as per refundable fidelity guarantee, supported by the firm s bank account with M/s. Axis Bank and abstract of cash withdrawals made by M/s. Royal Home Constructions towards payment of the fidelity guarantee, thereby revealing the sources for such funds. Assessee further pleaded that there were disputes among the partners of M/s. Royal Home Constructions due to which, the delay occasioned in filing the affidavit of the Managing Partner. 21. When the additional e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Royal Home Constructions are well supported by the statement of the Managing Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account. Revenue does not show any reason as to how the learned CIT(A) was wrong in holding that by producing the copy of the Development Agreement dated 26/02/2007 and Deed of Infrastructure Development Agreement dated 14/03/2017 Managing Partner of M/s. Royal Home Constructions, his affidavit, his confirmation letter, bank statement and the abstract of withdrawals from the account the assessee discharged the onus of establishing the creditworthiness of M/s. Royal Home Constructions or the genuineness of the transaction. 25. We are in agreement with the learned CIT(A) that when once the Managing Partner of M/s. Royal Home Constructions was produced and he confirmed the agreements and the payments and such confirmation is well supported by the bank statement of M/s. Royal Home Constructions with Axis Bank where the funds available and the withdrawals were sufficient to meet the obligations under the Development Agreement dated 26/02/2007, the assessee stands discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural income of Rs. 28.50 lakhs in the return of income. Learned CIT(A) found that the assessee declared Rs. 34.35 lakhs under IDS and it falls under clause (c) of sub-section (i) of section 183 of the Act. In these circumstances, learned CIT(A) accepted the plea of the assessee that the IDS declaration of Rs. 34.35 lakhs should be considered as inclusive of agricultural income. 31. Nothing contrary is brought to our notice on behalf of the Revenue and the IDS declaration and the declaration of agricultural income by the assessee in the return of income are all borne by record. It is also not in dispute that the case of the assessee falls within the permissible categories of un-disclosed income under IDS vide 183(1)(c) of the Finance Act, 2016. We, therefore, decline to interfere with the findings of the learned CIT(A) on this aspect and dismiss the relevant grounds of appeal and allow the ground in cross objection of the assessee. 32. Lastly coming to the addition of Rs. 5 lakhs under section 69A of the Act, learned CIT(A) on a perusal of the bank statement of the assessee found that the deposited a sum of Rs. 5 lakhs on 23/09/2014, withdrew the same on the same day, again d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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