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TMI Blog2024 (7) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has also not furnished copy of bank statement of the donors to establish that the source of such gifts made by them to the assessee was sourced out of agreement to sale. Accordingly, in our considered view, in view of the apparent contradiction between the findings of the assessing officer and ld. CIT(A), in the interest of justice, the matter is restored to the file of assessing officer to confirm whether the donors had entered into agreement of sale in respect of certain immovable property and also to examine the copy of bank statement of the donors to confirm whether any amounts were received by the donors pursuant to such agreement of sale , which formed the source of such amounts being given as gift to the assessee. As assessee has not been able to establish the creditworthiness of the donors and in our considered view, necessary verification needs to be carried out to ascertain whether the donors had the capacity to make the aforesaid gift to the assessee. Ground No.1 of Departments appeal is allowed for statistical purposes. Addition on account of Loan Receipts - AO held that the deposit represents the unaccounted income of the assessee - CIT(A), while allowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of assessing officer for carrying out necessary verification, accordingly, Ground no. 4 is restored to the file of assessing officer as well. Unexplained Investment in Mutual Funds - during the course of assessment proceedings, the assessing officer observed that the assessee is not in a position to give details of mutual funds transactions and source thereof - As per CIT(A) entire additions are made without any evidence in possession of A.O. or making any enquiry about the correctness of the information about the unrecorded investments by the appellant, the addition cannot be sustained - HELD THAT:- Assessee has furnished a chart in support of investments made by the assessee in various mutual funds, during the impugned year under consideration - the contents of the chart and the details of investments made by the assessee as coming in the chart/table furnished by the assessee is clearly at variance with the details of investments in mutual funds noted by the assessing officer during the course of assessment proceedings. We observe that at several places, there is a clear mismatch between the date of transaction as coming from the assessment order and the table furnished by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as an after-thought and fabricated since assessee had not furnished the same during the course of assessment proceedings even though sufficient opportunity was given to the assessee to substantiate his claim with supporting evidence. 5. On the facts and in the circumstances of the case and in law, ld.CIT (Appeals) erred in deleting addition of 36 lacs towards investment in Mutual Funds on account of loan receipts without appreciating that assessee had not furnished the same during the course of assessment proceedings even though sufficient opportunity was given to the assessee to substantiate his claim with supporting evidence. 6. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. 4. Ground No. 1: Unexplained Cash Deposits: 5. The brief facts of the case are that during the course of assessment, the assessing officer observed that the assessee made cash deposits in various bank accounts held by the assessee. The banks were Makarpura Industrial Cooperative Bank, Bank of Baroda, Makarpura Branch and State Bank of India, Baroda (though the account was opened in the name of Smt. Meeta Patel wife of the assessee, but it was operated by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit earned outside the books of accounts and the so called gift deed is only an afterthought submitted at the fag end of assessment proceedings and, therefore, the assessing officer added the amount of Rs. 41,56,400/- as undisclosed income of the assessee. 6. In appeal, the Ld. CIT(A) restricted the addition to only Rs. 9,56,400/- by holding that the assessee has been able to prove the identity, creditworthiness and genuineness of the balance gifts. The Ld. CIT(A) held that the source of cash deposit was out of agreement for sale of agricultural land, which was placed before the assessing officer, during the course of assessment proceedings, Accordingly, if the assessing officer was having doubts regarding the source of cash deposit, he ought to have made further enquiries into the matter. Accordingly, Ld. CIT(A) partly allowed the appeal of the assessee, with the following observations: 3.3.1. I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. The assessee has explained the source of deposit of Rs. 21,00,000/- as gift from his father and Rs. 11,00,000/- as gift received from his brother-in-law. The documents rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource of such deposits has been provided and hence, the additions of this amount as unexplained loans/deposit is upheld. The appellant, therefore, gets a relief of Rs. 32,00,000/-. This ground of the appellant succeeds. 7. The Department is in appeal before us against the aforesaid order passed by Ld. CIT(A) restricting the addition to Rs. 9,56,400/. Before us, the ld. D.R. submitted that the gift deed furnished by the assessee was clearly an afterthought and the assessee has not at all been to establish the creditworthiness of the donors. Further the assessee has been regularly depositing a sum of Rs. 49,900/- in these bank accounts on regular basis, for and which no plausible explanation has been given and clearly this was done in order to avoid reporting of such transaction by the bank to the Tax Authorities. The gift deeds were submitted at the fag end of the assessment proceedings on the plain piece of paper and same was clearly an afterthought. Further, the assessing officer has also observed that while the assessee has also taken unsecured loan from these parties (father and brother-in-law) and also has taken gifts from these parties as well, for no justifiable reason. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of assessment proceedings, clearly this fact is not coming either from the contents of the assessment order and neither from the assessment records placed before us. The assessee has not been able to conclusively proof that copy of agreement to sale of land was furnished before the assessing officer and further, the assessee has also not furnished copy of bank statement of the donors to establish that the source of such gifts made by them to the assessee was sourced out of agreement to sale. Accordingly, in our considered view, in view of the apparent contradiction between the findings of the assessing officer and ld. CIT(A), in the interest of justice, the matter is restored to the file of assessing officer to confirm whether the donors had entered into agreement of sale in respect of certain immovable property and also to examine the copy of bank statement of the donors to confirm whether any amounts were received by the donors pursuant to such agreement of sale , which formed the source of such amounts being given as gift to the assessee. In our considered view, from the instant facts, the assessee has not been able to establish the creditworthiness of the don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the Ld. D.R. submitted that there is an apparent contradiction between the findings of the assessing officer and findings of Ld. CIT(A) in their respective orders. While in the assessment order, the assessing officer has specifically taken note of the fact that the assessee has not filed any confirmation from these parties, on the other hand, the Ld. CIT(A), while allowing the appeal of the assessee has held that the assessee has submitted PAN, Address, Bank statement and confirmation of both the parties from whom the short term loans were taken. Accordingly, in view of the above, it was submitted that the matter may be restored to the file of assessing officer to carry out the necessary verification. 15. On going through the facts of the instant case, we observe that there is a clear contradiction between the findings of the assessing officer in the assessment order and findings of the Ld. CIT(A) in the appellate order. While in the assessment order, the assessing officer has observed that the assessee has failed to furnish confirmation of the parties and the assessee has not furnished any documentary evidence to show when the loans were taken etc, in the appellate order, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans have already been repaid along with interest till 31 March, 2012. Further, the copies of confirmation and bank statements of all the parties have also been furnished by the appellant. From the copies of the bank statements filed it is seen that there were sufficient balance in the credit of the persons who have advanced the loans to the appellant. When identity creditworthiness has been proved beyond doubts, there seems no occasion to disbelieve the genuineness of the loan which have been received by account payee cheques and in most of the cases, loan has been returned in full or in part during the subsequent years, again by account payee cheques together with the interest. Complete details can be seen from the table above. As all the loans stand explained by the appellant, the Assessing Officer is directed to delete the entire additions of Rs. 71,34,329/-. This ground of the assessee succeeds. 19. Before us, it has been pointed out that there is an apparent contradiction between the findings of the assessing officer and the Ld. CIT(A). While the assessing officer has observed that the assessee has failed to file confirmation of the parties as well as the copy of the bank s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been some errors of duplication etc. in the data uploaded by the Mutual Funds for which no additions can be made in the hands of the appellant. Simply on the basis of some information about the investment in mutual funds by the assessee, addition cannot be made. Even the assessee has not been confronted with the information or source of information. A.O. should have conducted some enquiry from the managers of the mutual funds before proceeding to make additions in the hands of the appellant. Since the entire additions are made without any evidence in possession of A.O. or making any enquiry about the correctness of the information about the unrecorded investments by the appellant, the addition cannot be sustained and the Assessing Officer is, therefore, directed to delete the additions of Rs. 36,00,000/- made. This ground of the appellant also succeeds. 26. The Department is in appeal before us against the aforesaid order passed by Ld. CIT(A) deleting the additions. Before us, we observed that the assessee has furnished a chart in support of investments made by the assessee in various mutual funds, during the impugned year under consideration. However, we observe that the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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