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TMI Blog1996 (10) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... od of maintaining accounts was not dependable. In view of this, an addition of Rs. 10,000 was made as additional profit. The CIT(A) examined the cash book and other records in great detail. After examining the records in detail, the CIT(A) came to the conclusion that there was an unexplained difference in the cash book to the tune of Rs. 1,43,531. After giving credit to Rs. 10,000 in respect of the addition made by the AO, the CIT(A) enhanced the income by an addition of Rs. 1,33,531. 3. At the outset, the learned counsel for the assessee sought to explain the system of maintaining the accounts. It was stated that two cash books were maintained, one at the cinema and the other at the residence of the partner. In the cash book at the cinema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deciding as to whether the additions made are justifiable or not. The CIT(A) issued a notice dt.14th May, 1987for enhancement. In this notice, specific attention was drawn to certain points as regards the discrepancies in the cash book at residence, which as per assessee's own admission was a pakki rokar of the assessee. The gist of the points raised by the CIT(A) is as follows: (a) that balances in the cash book were not struck from2nd April, 1982to17th April, 1982 (b) on certain dates, negative cash balances were reflected in the cash book. The assessee's response to this notice is dt.10th Aug., 1987. As regards the first issue, it was explained by the assessee that the cash book maintained at the residence was written by partner Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal difference of Rs. 1,43,531 stands explained. The other major amount which forms part of the difference of Rs. 1,43,531 relates to five entries of Rs. 15,000 each in respect of five persons aggregating to Rs. 75,000. These entries were duly entered on16th Oct., 1982in the cash book at the cinema hall. However, through oversight, they were not transferred to the cash book at the residence. If the reconciliation which was explained to the CIT(A) is examined, then there remains hardly any doubt about the genuineness of these entries as well as the explanation thereto. We find these entries duly recorded at p. 160 of the cinema cash book. The observations of the CIT(A) with regard to these entries is quite vague and incomprehensible at vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and while dealing with the issue relating to the difference in cash balances above, we have considered those entries to be genuine. The allegation of the lower authorities that the assessee was maintaining huge cash balances is not borne out of any facts, and even if it were to be so, it was quite a subjective matter which generally should be left to the wisdom of the businessman. Thus, we delete the addition of Rs. 17,758. 9. The last ground in the appeal is regarding the disallowance in respect of certain cash payments exceeding Rs. 2,500 each made under s. 40A(3) in respect of 11 items as mentioned in the ground. The AO had made an addition of Rs. 97,500 in respect of 16 items. Out of the 11 items taken in the ground aggregating to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot Sales (1983) 200 ITR 490 (Del). Further, in respect of items mentioned at Sl. Nos. 2, 5, 12 and 13, it was claimed that the payments were either on Sundays or public holidays and hence they clearly fell within the exception carved out by r. 6DD(j). The learned Departmental Representative drawing our attention to the order of the CIT(A) stated that in most of the payments genuineness was also doubted and as the payments were in contravention of specific statutory provision, the same were rightly disallowed by the CIT(A). 10. We have gone through the order of the CIT(A) in detail. In respect of item No. 1, no reason whatsoever, leave aside exceptional circumstances, has been given for making payment in cash. Payments mentioned at Sl. Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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