The Commissioner Of Income Tax-24 v. M/S. Fairdeal Construction Co

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 6790 OF 2010 The Commissioner of Income Tax-24.v. M/s. Fairdeal Construction Co. ..Appellant. ..Respondent. Mr. Arvind Pinto for the Appellant. Dr. Daniel with Mr. V.S.Hadade for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 3rd December, 2012 PC: This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (“the Act”) challenges the order dated 18/6/2010 passed by the Income Tax Appellate Tribunal (“the Tribunal”) relating to assessment year 2005-06. 2)The question which arises in this appeal is thus: Whether the Tribunal was right in holding that the advances received by the assesseein cash (unexplained cash credit) was genuine and thus not chargeable to tax under Section 68 of the Act? ASN 3)The respondent-assessee is a partnership firm engaged in construction and development of properties. For the assessment year 2005-06, the respondent-assessee filed its return of income declaring its income as Nil. During the course of assessment proceedings, the Assessing Officer concluded that there was cash credit in the names of 15 parties in the respondent's books of accounts. The explanation offered by the respondent-assessee in support of its contention was that the amounts credited in its account were genuine and paid for while booking flats with the respondent-assessee. However, the Assessing officer did not accept the respondent-assessee's explanation and added an amount of Rs.62.25 lacs to the income of the respondent-assessee by an order dated 27/12/2001. 4)In appeal, the Commissioner of Income Tax (Appeals) examined the evidence led by the respondent-assessee and found that out of Rs.1.46crores received as advance for the purchase of flats/shops, a sum of Rs.72.25lacs had been received in cash. The Commissioner of Income Tax (Appeals) examined the evidence led by the respondent-assessee and found that out of Rs.62.25lacs which has been held as cash credit by the Assessing officer. Out of the aforesaid sum an amount of Rs.43.75lacs was found to be genuinely recived from various parties and the explanation offered by the respondent-assessee with regard to it was accepted and the addition of RS.43.75lacs was deleted. However, the explanation offered for the amount of Rs.18.25lacs was rejected and the addition of the same by the Assessing Officer was upheld by order dated 4/7/2008 of the Commissioner of Income Tax (Appeals). 5)Being aggrieved, both the appellant-revenue as well as respondent-assessee filed appeals before the Tribunal. The Tribunal upheld the finding of the Commissioner of Income Tax(Appeals) by inter alia observing as under: “It is not in dispute that the assessee was engaged in the construction of properties. The assessee has also not disputed that all the monies were taken in cash and were repaid by bearer cheques. The facts relating to all the creditsaremoreorless similar……………………………………..The CIT(A) has made a distinction between monies advanced by a creditor all by himself and monies advanced by him after collecting funds from his close relatives. He has examined each credit and has also given some weightage to cases where there was some agricultural income. A perusal of the remand report of the Assessing officer submitted before the CIT(A)(pages 31 and 32 of the Paper Book) shows that some of the parties who were staying in Gujarat and Rajasthan have received the summons issued by the Assessing officer and six persons have also filed extracts of 7/12 to show their land holdings. All these facts have been duly taken into consideration by the CIT(A) and he has examined each and every credit item by item. After going through his order, we are of the opinion that the CIT(A) has taken a decision based on the evidence adduced before him in respect of each credit. The parties have relied on the same evidence even before us. However, they have not been able to point out any serious infirmity in the manner in which the evidence was appreciated by the CIT(A). In this view of the matter, we hold that the order of the CIT(A) deserves to be confirmed. We do so and dismiss the appeals filed both by the assessee as well as the Department”. 6)We have considered the submissions. We find that the Commissioner of Income Tax (Appeals) as well as the Tribunal have arrived at concurrent finding of fact that the credit aggregating to Rs.43.75 has been explained by the assessee and the same cannot be added to the income of the assessee. This finding was reached after detailed examination of each of the cash credits by the Commissioner of Income Tax (Appeals).This finding of fact has been upheld by the Tribunal. The revenue has not been able to show that a concurrent finding of fact arrived by the authorities below is either perverse or arbitrary. 7. In view of the above, no substantial question of law arises in the present appeal. Therefore, the appeal is dismissed with no order as to costs. (M.S.SANKLECHA, J.) (J.P. DEVADHAR, J.)