Decided on December 12,2008



P. Mohanarajan, J.M. - (1.) THIS appeal is by the assessee directed against the order of the learned CIT(A)-IV, Bangalore, dt. 29th Nov., 2007.
(2.) We have heard both sides and perused records. The assessee has raised the following effective grounds in the appeal: 2. The assessment order of the, ITO is purely speculative, baseless, unfounded and unsustainable on facts and in law. The CIT(A) mechanically followed the prejudiced order of the AO. Hence, challenged. The disallowance of the stamp duty in computing the capital gains disallowed by the ITO and confirmed by the CIT(A) is challenged. The CIT(A) failed to note that all the facts being on record, the appeal proceedings are continuation of the assessment proceedings. The CIT(A)'s denial to do justice is bad in law.
(3.) THE confirmation of the addition of Rs. 18,38,133 deserves to be deleted. 3. Learned Counsel for assessee submitted that the assessee filed return of income declaring business income of Rs. 60,000, remuneration received from M/s Cue Club a partnership firm, capital gains loss of Rs. 3,36,022 and income from other sources of Rs. 18,854, the total income returned was Rs. 78,854. While completing the assessment, the AO made addition of Rs. 18,38,133 under Section 68 of the IT Act, 1961 ("the Act" for short). This represents amount received from one A.S. Patil, residing at No. 61, Ground Floor, BTS Road, near 11th Cross, Wilson Garden, Bangalore. THE AO sought to examine A.S. Patil to verify the bona fides of the claim and sought the assessee's help to produce him. For this purpose, the AO issued summons in the name of A.S. Patil for appearance without indicating any fixed date. A.S. Patil was not traceable for one reason or the other. It was also not possible for the assessee to talk to A.S. Patil over phone/mobile. This matter was brought to the notice of the AO. THEreupon, the AO contacted him over the phone from his office in the presence of assessee's chartered accountant, Mr. Gurulingayya. It was learnt that A.S. Patil had committed to appear before him. But, for reasons not known, A.S. Patil did not enter into appearance. THE AO therefore assessed the receipts shown in the books of assessee at Rs. 18,38,133 received from A.S. Patil as unexplained cash credit under Section 68 of the Act. THE AO was fully aware of the fact that A.S. Patil was indulging in flowery cultural farming activities and the said Patil used the assessee's land to cultivate asparagus. It was also brought to the notice of the AO that permission was given to Patil to cultivate the land but not possession. Patil, in turn, agreed to pay/supply him the agricultural produce either in cash or kind but predominantly he was paying cash @ Rs. 5,000 per day on the condition that the use of the land will not be meddled for the term of three years, with no interference from the assessee. Unfortunately, Patil did not appear before the AO to confirm the above facts. THE entire amount shown as received from Patil was assessed as unexplained cash credit. Penalty notice was also issued in this regard. In view of this development the assessee was virtually hunting to get at Patil as he was not available at the given address. Eventually, he could trace him at Wilson Garden, Bangalore, as a tenant. On a surprise visit by the assessee he founds flowers at his place which confirmed his continued activity in flowers even though he got himself disconnected from the assessee. During the conversation with him it was explained that non-appearance before the AO was not wilful and deliberate and that he would file an affidavit before the AO. 4. Learned Counsel for assessee further submitted that the aforesaid facts are borne out on records. THErefore, the Revenue authorities are not justified in making addition and the same has to be deleted. Learned Counsel for assessee also relied on the written submissions filed before the authorities below and also before this Tribunal.;

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