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Issues:
1. Addition of Rs. 90,000 on account of cash credits. 2. Addition of Rs. 35,000 on account of creditors without issuing summons under s. 131. Detailed Analysis: 1. Addition of Rs. 90,000 on Account of Cash Credits Cash Credit of Rs. 20,000 in the Name of Shri Satinder Pal Singh: The AO noted that Shri Satinder Pal Singh confirmed the credit but failed to disclose the source. He claimed the amount was a gift from Smt. Kuldip Kaur but could not provide her particulars. The CIT(A) upheld the addition, stating that neither the source nor the genuineness of the transaction was proved. However, the Tribunal found that the assessee had provided sufficient evidence, including an affidavit from Shri Satinder Pal Singh and a bank statement showing the withdrawal by Smt. Kuldip Kaur. The Tribunal held that the assessee had discharged the burden of proving the identity, capacity, and genuineness of the transaction, and thus, the addition of Rs. 20,000 was deleted. Cash Credit of Rs. 10,000 in the Name of Shri Nirmal Singh: The AO and CIT(A) doubted the capacity of Shri Nirmal Singh, who was a cloth seller, to advance Rs. 10,000. However, the Tribunal noted that Shri Nirmal Singh was an income-tax assessee and had provided an affidavit confirming the loan. The Tribunal concluded that the assessee had proved the genuineness and capacity of the depositor, and thus, the addition of Rs. 10,000 was deleted. Cash Credit of Rs. 10,000 in the Name of Shri Paramjit Singh: The AO and CIT(A) questioned the capacity of Shri Paramjit Singh, who sold tea on a Rehri, to advance Rs. 10,000. However, the Tribunal found that Shri Paramjit Singh was an income-tax assessee and had provided an affidavit confirming the loan. The Tribunal held that the assessee had proved the genuineness and capacity of the depositor, and thus, the addition of Rs. 10,000 was deleted. Cash Credit of Rs. 10,000 in the Name of Shri Chattar Singh: The AO and CIT(A) doubted the capacity of Shri Chattar Singh, who earned Rs. 1,500 per month, to advance Rs. 10,000. However, the Tribunal noted that Shri Chattar Singh was an income-tax assessee and had provided an affidavit confirming the loan. The Tribunal concluded that the assessee had proved the genuineness and capacity of the depositor, and thus, the addition of Rs. 10,000 was deleted. Cash Credit of Rs. 20,000 in the Name of Shri Gagan Preet Singh: The AO and CIT(A) questioned the genuineness of the gift claimed to be received by Shri Gagan Preet Singh from Smt. Mandeep Kaur. However, the Tribunal found that the assessee had provided sufficient evidence, including affidavits from both Shri Satinder Pal Singh and Smt. Mandeep Kaur, and a bank statement showing the withdrawal. The Tribunal held that the assessee had proved the identity, capacity, and genuineness of the transaction, and thus, the addition of Rs. 20,000 was deleted. Cash Credit of Rs. 20,000 in the Name of Shri Harnam Singh: The AO and CIT(A) doubted the genuineness of the gift claimed to be received by Shri Harnam Singh from Shri Gurmeet Singh. However, the Tribunal found that the assessee had provided sufficient evidence, including affidavits from both Shri Harnam Singh and Shri Gurmeet Singh, and a bank statement showing the withdrawal. The Tribunal held that the assessee had proved the identity, capacity, and genuineness of the transaction, and thus, the addition of Rs. 20,000 was deleted. 2. Addition of Rs. 35,000 on Account of Creditors Without Issuing Summons Under s. 131 This ground of appeal was not pressed before the Tribunal and was dismissed as not pressed. Conclusion: The appeal was allowed partly, with the Tribunal deleting the additions of Rs. 90,000 on account of cash credits, as the assessee successfully proved the identity, capacity, and genuineness of the transactions. The ground regarding the addition of Rs. 35,000 was dismissed as not pressed.
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