1982 (2) TMI 138 - AT - Income Tax

Summary

Issues:
1. Addition of credits in the name of two individuals - Sarvashri Jang Bahadur Sharma and Anand Kumar Bijjan.
2. Failure to prove the identity and capacity of the creditors.
3. Disbelief of transactions and additions made by the assessing officer.
4. Arguments regarding the genuineness of the transactions.
5. Reliance on assessment orders and lack of evidence before the assessing officer.
6. Partial allowance of the appeal.

Analysis:
1. The assessing officer added Rs. 10,000 and Rs. 5,000 as income from other sources based on credits in the names of Sarvashri Jang Bahadur Sharma and Anand Kumar Bijjan. Shri Sharma confirmed the transaction but was doubted due to recent marriages in the family. Shri Bijjan was not produced, leading to the additions.

2. The AAC upheld the additions, noting the failure to prove the identity and capacity of the creditors. The genuineness of the transactions was questioned, especially after finding that Shri Sharma had no funds post-marriages and had taken loans.

3. The appeal presented accounts and assessment orders to establish the credibility of Shri Sharma and Shri Bijjan. It was argued that Shri Sharma's capacity was proven through his salary and subsequent partnership with the assessee. The counsel contended that the AAC erred in confirming the addition of Rs. 5,000.

4. The Tribunal deleted the addition of Rs. 10,000, citing the confirmation of the transaction by Shri Sharma and his subsequent partnership with the assessee. However, the credit in the name of Shri Bijjan remained unexplained, leading to the confirmation of the addition of Rs. 5,000 by the AAC.

5. The reliance on assessment orders of Shri Bijjan was questioned as they were filed later and not presented before the assessing officer or the AAC. The lack of evidence at earlier stages justified the confirmation of the addition by the AAC.

6. Ultimately, the appeal was partially allowed, with the addition of Rs. 10,000 being deleted based on the genuineness of the transaction with Shri Sharma, while the addition of Rs. 5,000 in the name of Shri Bijjan was confirmed due to lack of evidence and explanations.