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2005 (9) TMI 556

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..... relevant facts briefly stated are that the assessee had filed return of income for assessment year 1993-94 declaring income of Rs. 33,100. The assessee derives income from share in firms, namely M/s A.K. Co., Nayyar Cloth Palace and Nayyar Radios. The assessee is also a proprietor of M/s Anjali Wines, Ludhiana. There was a search at the residential and business premises of the assessee on 6-3-1995. Subsequent to the search, notice under section 148 served upon the assessee. The assessee did not furnish any return in response to the notice under section 148. The Assessing Officer had issued a questionnaire on 11-8-2000. At the time of search on 6-3-1995, a large number of acknowledgements of returns of income in original were seized from t .....

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..... Officer considered this explanation as not satisfactory. The Assessing Officer has pointed out that the income of the creditors for the financial year 1992-93 is in the range of Rs. 21,500 and Rs. 23,700 out of which a loan of Rs. 12,000 has been given to M/s Ashok Nayyar Co. on 31-3-1992 and on the very next day a sum of Rs. 10,000 has further been given to the assessee. According to the Assessing Officer, the financial capacity of the creditors is not established. The affidavits of the creditors and the acknowledgements of the creditors filed before the Assessing Officer were not considered sufficient for discharging the onus in regard to cash credits by the assessee. The Assessing Officer accordingly added a sum of Rs. 3,80,000 as unex .....

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..... inguishable on facts and inapplicable to the facts for the year under appeal. In the case of Nayyar Hire Purchases (P.) Ltd. ( supra ), the Tribunal found that addition of Rs. 4,67,300 made in the original assessment was set aside by the CIT(A) for giving reasonable opportunity to the assessee for production of the creditors. It was further found that in respect of 25 creditors, the source of deposit with the assessee has been explained with reference to the amounts deposited by the creditors with M/s Ashok Nayyar Co. and the deposit with the assessee of Rs. 10,000 in that case was from the withdrawals made from the said company. Therefore, in the case of Nayyar Hire Purchases (P.) Ltd. ( supra ), the addition in respect of 25 credito .....

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..... redit have got to be distinguished. Moreover, the surrounding circumstances and preponderance of probabilities are also to be taken into consideration in judging the evidence adduced by the assessee. It is well established principle of law that in the case of cash credits, it is the duty of the assessee to establish the identity of the creditor, capacity of the creditor to advance the loan and genuineness of the credit. The mere fact that confirmation has been filed or even affidavits have been filed or the money has been received by cheque is not enough to discharge the onus. These principles of law have been laid down in the following cases: ( i ) CIT v. Nivedan Vanijya Niyojan Ltd. [2003] 263 ITR 623 1 (Cal.); ( ii ) Rajshre .....

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