1994 (12) TMI 123 - AT - Income Tax

Summary

Issues Involved:

1. Deletion of the addition of Rs. 78,000 and interest thereon under Section 68.
2. Deletion of interest charged under Sections 215 and 216.

Issue-wise Detailed Analysis:

1. Deletion of the addition of Rs. 78,000 and interest thereon under Section 68:

The Assessing Officer (AO) identified several credits in the assessee's books of account and added them to the income under Section 68 due to lack of satisfactory evidence regarding their genuineness and the creditworthiness of the creditors. The specific credits were:

- Rs. 25,000 from Babulal Gopilal, Mhow.
- Rs. 8,000 each from Maheshkumar Gajanandji Garg and Smt. Nirmalabai Maheshchand Garg.
- Rs. 32,000 from Shri Babulal Agrawal & Smt. Gulabbai Agrawal.
- Rs. 5,000 from Ku. Disha.

The AO issued summons under Section 131, but some came back unserved or the creditors could not provide satisfactory evidence of the source of funds. Consequently, the AO added these amounts to the assessee's income and disallowed corresponding interest.

The assessee appealed to the CIT(A), who deleted the additions and allowed the interest, citing that the assessee had discharged the onus of proving the genuineness of the transactions. The assessee provided confirmation letters, bank details, and tax assessment details of the creditors. The CIT(A) relied on the Patna High Court's decision in Addl. CIT vs. Bahri Bros. (P) Ltd., which held that the assessee had discharged the onus of proving the genuineness of the transaction.

The Revenue appealed to the Tribunal, arguing that the AO was correct in his assessment as the creditors' creditworthiness was not satisfactorily established. The Tribunal, however, upheld the CIT(A)'s decision, stating that the assessee had provided sufficient evidence to prove the identity, creditworthiness, and genuineness of the transactions. The Tribunal noted that the Revenue did not bring any material evidence to prove that the transactions were non-genuine.

2. Deletion of interest charged under Sections 215 and 216:

The AO had directed the charging of interest but did not specify the sections under which the interest was to be charged. The CIT(A) noted this omission and deleted the interest charged under Sections 215 and 216, as there was no specific direction in the assessment order.

The Tribunal upheld the CIT(A)'s decision, as the Revenue could not controvert the finding that there was no specific direction to charge interest under the mentioned sections.

Conclusion:

The Tribunal dismissed the Revenue's appeal, sustaining the CIT(A)'s order that deleted the addition of Rs. 78,000 and interest thereon under Section 68, and also upheld the deletion of interest charged under Sections 215 and 216.