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TMI Blog2023 (7) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... it, received on account of sale of immovable property, initially time deposit was made in HDFC bank and later on the amount was transferred to State Bank of Mysore and it was reinvested / rotated twice. CIT(A) on appreciation on the submission and evidence and found that making addition is a result of clear mistake committed by AO. The original investment was only Rs. 90.00 lakhs which was rotated twice. Similarly, the assessee also explained the FDR with Bank of Baroda and maturity amount was received back in the financial year itself out of which Rs. 90.00 lakhs was transferred to State Bank of Mysore for short term time deposit and with HDFC Bank. The original source of such time deposit was sale proceed of plots of land. The Ld. CIT(A) noted that initially assessee received Rs. 1.50 cores, out of which the assessee invested in short term FDR of Bank of Baroda to the tune of Rs. 1.498 crore and the maturity proceed were received back in first week of October, 2010. It was also noted that the assessee transferred Rs. 90.00 lakhs to the State Bank of Mysore for investment in short term deposit. The assessee also transferred Rs. 45 lakhs to another bank account with HDFC Bank. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Department : Shri Ashok B Koli, (CIT-DR) For the Assessee : Shri Rasesh Shah, CA ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the revenue is directed against the order of learned Commissioner of Income Tax (Appeals)-3, Surat (in short, the ld. CIT(A) dated 17/02/2020 for the Assessment year 2011-12. The revenue has raised following grounds of appeal: 1. Whether on facts and in law the Ld. CIT(A) was justified in deleting the addition of Rs. 10,00,000/- made by the AO on account of Unexplained cash deposit in HDFC Bank by accepting the submission of the assessee that the said cash deposit was covered by the addition of Rs. 11,29,000/-, without considering the fact that during the assessment proceedings as well as the remand proceedings, the assessee had failed to furnish with documentary evidences to prove the source of cash deposit of Rs. 10,00,000/- ? 2. Whether on facts and in law the Ld. CIT (A) was justified in deleting the addition of Rs. 2,73,91,415/- made by the AO on account of Time deposit made by the assessee in State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of unexplained time deposits made with a bank of Rs. 1,49,80,000/- (vi) Addition on account of unexplained advances given of Rs. 65,00,000/-. 3. The Assessing Officer made all the above additions by taking view that the assessee was served six show cause notices, however, despite service of notices, the assessee has not furnished any detail to substantiate various claims made in the return of income. 4. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed detailed written submissions on all the additions. On non-filing of various details, the assessee submitted that he was not keeping well from last few months and has suffered severe heart attack in the last week of February, 2014. The assessee was hospitalised under critical condition and undergone bypass surgery of heart. The assessee remained admitted in hospital from 26/02/2014 to 04/03/2014 and was advised complete bed rest and not to take any mental or physical strain for any work. Under such circumstances, the assessee was confined to bed and all his family members were busy in attending his health care, therefore, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was asked to furnish the details during the assessment, the assessee could not furnish such details due to his hospitalization, thus the Assessing Officer made addition under Section 68 of the Act. The assessee further submitted that he is engaged in the business of yarn trading and was having bank account in HDFC bank, Varachha Road, Surat. The assessee made cash deposit on various dates in his bank account. The assessee furnished such details as per para 3.1 as recorded on page No. 5 of order of ld. CIT(A). The assessee submitted that the assessee has shown turnover of Rs. 27,19,043/-, the assessee was having sufficient inflow of funds to make necessary deposits in the bank account. The Assessing Officer failed to consider the fact in right perspective and prayed for deleting the addition of Rs. 11,29,000/-. 7. On the additions of Rs. 2.37 Crore, the assessee submitted that the assessing officer made this addition by taking view that the assessee made time deposits to that extent on various dates with bank of Mysore Varachha Road. In response to the show cause notice the assessee could not filed required details as he was hospitalised. The assessee submitted that on receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale proceeds of land of Rs. 1.50 Crore. The assessing officer made addition of source as well as application of funds. The additions made by the assessing officer is erroneous and unjustified as there can be addition of either source or application. The assessee also furnished the details of persons to whom such advances were provided as recorded in sub-para-(2) on page No. 8 by ld CIT(A) in his order. The assessee further explained that out of the said total amount, the amount of Rs. 5.00 lacks each given to Bhikabhai Bharwad and Jayesh Bharwad, which was repaid by them on 14.03.3011. Both the entry is reflected in his bank statement itself. The assessing officer made addition without verifying such facts. Similarly, amount given to Samural Textile was given for temporary advance from the sale proceeds of land and there is no question for treating the same as unexplained. The assessees son is partner in the Samural Textile. The amount credited to the bank account was clearly establishing the source of funds from where the funds were received by the assessee. 11. In addition to the above facts, the assessee further explained that details of receipt of sale proceeds of land in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount transferred from maturity of time deposit to HDFC bank for advancing loan to M/s Samuria textiles 07.10.2010 4,500,000.00 Details of time Deposit (FDR) of 90 Lacs (with State Bank of Mysore) Particular Date Rs. Rs. AMT TRFD TO TIME DEPOSIT 15.09.10 A/C NO. 0064066700589 000002 9,000,000.00 AMT TRFD TO TIME DEPOSIT 20.09.10 9,000,000.00 A/C NO. 0064066700589 INTEREST EARNED ON T.D. 4/11/2010 51,041.00 LESS:TDS 5,105.00 45,936.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee has shown sufficient cause for non-appearance and not filing such evidence before the Assessing Office. The Ld. CIT(A) recorded that assessee submitted that during assessment, he suffered severe heart-attack in the month of February, 2014 and he had to undergone bypass surgery and was hospitalized from 26.02.2014 to 04.03.2014 and was advised complete bed-rest. Such facts were considered as reasonable cause by Ld. CIT(A) for non-submissions of such evidences and admitted such additional evidence for his consideration. 14. The Ld. CIT(A) on considering the contents of assessment order, submission of assessee and the evidences so furnished by assessee granted partial relief to the assessee. On the addition of Rs. 1.50 crores, the ld CIT(A) held that assessee has sold different plots of lands and received sale consideration of Rs. 1.50 crores, being his share along with co-owners. On the basis of evidence furnished by assessee, ld CIT(A) noted that assessee purchased these plots in financial year 2005-06 at the cost of Rs. 4,73,066/- and was sold in financial year 2010-11 relevant to assessment year 2011-12, thus in fairness the assessee is entitled for indexed cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o provide details called for like PAN, address of parties, nature of transaction and confirmation etc. The Ld. CIT(A) recorded that on considering the submission of assessee it is noted that assessee has given advance of Rs. 55.00 lakhs from his HDFC bank account to Samuria Textile, a partnership firm, in which his son is also a partner. The assessee has received Rs. 1.50 crores on sale of assets, out of which Rs. 90.00 lakhs was invested in time deposit. Out of the balance amount, the assessee has given advance by cheque to the said firm. The Ld. CIT(A) held that he is agreeing with the contention of assessee that either source or investment can be taxed or the application and the source of funds (land proceeds) is already taxed as per ground No1. (capital gains) therefore no reason for confirming the addition of advance of Rs. 55.00 lakhs and deleted accordingly. So far as advance of Rs. 5.00 lakhs each, given to Bhikhabhai S Bharwad and Jayesh B Bharwad, the Ld. CIT(A) noted that assessee could not provide satisfactory explanation of such advances. Therefore, addition of Rs. 10 lakhs was confirmed thereby granted substantial relief to assessee. 17. On the addition of Rs. 10.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing care of assessee, which resulted in non-compliance of notices issued by Assessing Officer. However, before Ld. CIT(A) the assessee explained the source of investment in bank deposit, time deposit with HDFC bank, which were transferred to State Bank of Mysore. The assessee also prove the source of advances given to a firm where the son of assessee is a partner. The Ld.AR for the assessee submits before Ld.CIT(A) he has furnished exhausted written submission, with additional evidence, which was appreciated by Ld. CIT(A) and on appreciation of sufficient cause, the Ld. CIT(A) remanded the additional evidence to the Assessing Officer for his remand report. The Assessing Officer has not given his adverse remarks on the evidences rather only objected for admission of such additional evidence. No comments on the evidences was made by assessing officer nor he examined such evidence. The AR for the assessee submits that he supported the order of Ld. CIT(A) on the grounds of appeal raised by Revenue. 21. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. Ground No.1 relates to deleting the addition of Rs. 10.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also transferred Rs. 45 lakhs to another bank account with HDFC Bank. Thus, addition of Rs. 1.49 crores is stand explained and deleted accordingly. For other addition of Rs. 2.73 crores the Ld. CIT(A) recorded that from the chart submitted by assessee that it is clearly explained that maturity amount of Rs. 90 lakhs FDR with Bank of Baroda was transferred to Bank of Mysore and it was rotated twice and assessee received maturity amount of Rs. 92.92 lakhs and Rs. 92.99 lakhs respectively. The ld CIT(A) held that the Assessing Officer wrongly considered this investment and maturity as a separate investment and made addition of Rs. 2,73,91,415/- (90,00,000 + 90,92,107 + 92,99,308), which is clear mistake by assessing officer. We find that Ld. CIT(A) deleted both the additions on appreciation of submission and evidence. Hence, we do not find any infirmity or illegality in the order of Ld. CIT(A). No contrary fact or evidence is brought to our notice to take other view. In the result, grounds No.2 3 of Revenue are dismissed. 23. Ground No.4 relates to deleting the addition of Rs. 55.00 lakhs on account of advance given to Samuria Textile. We find that Assessing Officer made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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