The Principal Commissioner Of Income Tax 1 v. Oral Order

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 242 of 2021 ==========================================================THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 VersusGOPAL HERITAGE P. LTD. ========================================================== Appearance:MR MR BHATT FOR M R BHATT & CO.(5953) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKOREDate : 10/01/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.This appeal under Section 260A of the Income Tax Act ( forshort “The Act, 1961”) is at the instance of the Revenue and isdirected against the order passed by the Income AppellateTribunal, Ahmedabad Bench ‘A’, Ahmedabad, dated 17.02.2020 inITA No.824/Ahd/2016 for the A.Y. 2012-13. The Revenue hasproposed a solitary question of law for the consideration of thisCourt. 2.We straightaway go to the findings recorded by the Tribunalwith respect to the amount of Rs.40 Lakh deposited in cash in thebank account of the assessee. We quote the relevant observationof para 5 as under: “We have duly considered rival contention and gonethrough the record carefully. The assessee was required toexplain the source of cash deposited in the bank totaling toRs.40 Lakhs, whereas it has a negative cash balance inthe cash book by Rs.37,13,752/-. Both the authorities haverejected explanation of the assessee. However, a perusalof the record, we find that both the authorities have failed toappreciate true nature of the transaction. If a company isengaged in the business of real-estate and it hasunderstanding with some buyers, then it is always not necessary that it would receive the advances only when itis owner of that real-estate. Sometime, at the very initialstage negotiations were being made orally on the basis ofconfidence level among the parties. Otherwise thecontention of the assessee was only corroborative factorthat it was received advance from Shri Dilip Suthar. Even ifit has not received advance for sale of the land, then alsothe assessee alleged that the amount was received fromthe said Shri Dilip Suthar. In case the asssessee able todemonstrate that identity of the creditors, genuineness ofthe transaction and his credit-worthiness, then also it couldnot be added in the hands of the asssessee. As far as ShriDilip Suthar is concerned, it is not in dispute. He has givenconfirmation; he has given PAN and other details. Theassessee has called that it has received advance in cash.Shri Dilip Suthar has been proved to be man of meansbecause he has purchased a land worth ofRs.2,69,00,000/- by way of sale deed by way of sale deeddated 8.2.2011. This amount has also been advanced inthe month of April, 2011. Thus, the period of advance takenfrom this man as well as his capacity to purchase a pieceof land for Rs.2.69 crores, was of same time. It shows thathe was man of means and he has owned the transaction.In the above circumstances, the ld. Revenue authoritiesare not justified to disbelieve the version of the assessee.We allow this ground and delete addition ofRS.37,13,652/-.” 3.Mr. M.R. Bhatt, the learned senior counsel appearing for theRevenue invited the attention of this Court to Section 68 of the Act,the relevant portion of which reads as under: “Section 68: Where any sum is found credited in the books of anassessee maintained for any previous year, and theassessee offers no explanation about the nature andsource thereof or the explanation offered by him is not, inthe opinion of the [Assessing] Officer, satisfactory, the sumso credited may be charged to income-tax as the incomeof the assessee of that previous year.” 3.Mr. M.R. Bhatt, the learned senior counsel appearing for theRevenue invited the attention of this Court to Section 68 of the Act,the relevant portion of which reads as under: “Section 68: Where any sum is found credited in the books of anassessee maintained for any previous year, and theassessee offers no explanation about the nature andsource thereof or the explanation offered by him is not, inthe opinion of the [Assessing] Officer, satisfactory, the sumso credited may be charged to income-tax as the incomeof the assessee of that previous year.” 4.Mr. Bhatt, the learned senior counsel would submit that it isnot in dispute that the amount of Rs.40 Lakh in cash wasdeposited in the bank account of the assessee. So far as thedeposit of this amount is concerned, the assessee offered anexplanation that such amount was transferred into its account byone Mr. Dilip Suthar in connection with a transaction relating saleof a immovable property. The identity of Mr. Dilip Suthar is not indispute. Mr. Dilip Suthar also seems to have confirmed about thetransfer of such amount of Rs.40 Lakh in the bank account of theassessee. The PAN details of Mr. Dilip Suthar is also with theDepartment. However, the fact remains that the transaction did notmaterialize and the very same amount came to be repaid by theassessee to Mr. Dilip Suthar. Mr. Bhatt, the learned senior counselwould submit that the transaction appears to be doubtful as thereis nothing on record to indicate that such amount was transferredin the account of the assessee with respect to any saletransaction. 5.We are of the view having regard to the findings of factrecorded by the Tribunal that the question as proposed by theRevenue cannot be termed as a substantial question of law. Thequestion of law as proposed is more on the factual aspect. Wedecline to interfere with the impugned order passed by the Tribunalin the facts and circumstances of the case. In the result, this Appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J)