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TMI Blog2009 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... xtend loans to the extent claimed by the assessee. The Assessing Officer further noted that the assessee had also transferred Rs. 1,10,000 from the account of Mrs. Sobhagya Devi Rajpura to the account of ( i ) Mrs. Urmila Devi at Rs. 10,000; ( ii ) Shri Krishan Kumar at Rs. 50,000; and ( iii ) Shri Inderjeet Rajpura at Rs. 50,000. The Assessing Officer further noted that all the entries in respect of the cash creditors have been made by the assessee as per his requirement of the cash on day-to-day basis. The Assessing Officer after applying peak cash shortage method, i.e., after taking into account peak cash shortage in cash book after accounting entries relating to unsecured loans worked out peak cash shortage to Rs. 10,36,000. Accordingly, the Assessing Officer required the assessee to prove the creditworthiness and genuineness of creditors. Since the assessee had not established the genuineness of transaction and creditworthiness of the persons he added the amount of Rs. 10,36,000 under section 68 of the Act as unexplained cash credits. 3. On appeal, the ld. CIT(A) upheld the stand taken by the Assessing Officer on the ground that the burden to prove the identity of the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge cash in his house and, hence, creditworthiness of creditors and genuineness of transactions are not proved. Therefore, ld. CIT(A) is justified in confirming the order of Assessing Officer. 5. We have heard both the parties and gone through the material available on record. We have also perused the revenue records indicating the land-holding and crops grown thereon. As per the Jamabandi, the lands are owned jointly by these persons. Some of the lands are owned jointly by seven persons and some by four and certain lands individually. However, as per the statement recorded by the Assessing Officer and affidavits filed, it is seen that Shri Krishan Kumar son of Shri Sant Lal owns 25 acres of agricultural land. Shri Inderjeet Rajpura also owns 25 acres of agricultural land in the same village. Smt. Urmila Devi Yadav owns 7 acres of land. Since the lands are owned jointly actual area on which a particular crop was raised by a particular person has not been identified. For example, as per revenue records, the agricultural land falling in Khewat No. 25/22 Khatauni No. 31, the landholding is 56 Kanal 2 Marla and is owned by seven persons equally. As per Khasra-Girdawari which g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land held by them. Moreover, there are two more aspects to this which have to be taken into account in respect of any agriculturist. Firstly, the agriculturist cannot sell his entire production as he has to retain wheat for his own consumption. He will sell for his other needs like clothes and households. Other than this he has to incur expenditure on tilling, seeds, fertilizers, weeding out, watering and harvesting. The cost of production in case of wheat is not less than 30 per cent of the production. Similar is the case in respect of Bajra though the input will be slightly lower as the crop is dependent on monsoon conditions. Taking into account the input and the personal needs, the agriculturist will not be able to sell his entire production. It is also a fact that the surplus production available for sale would depend upon his needs. Even if it is estimated that the cost of input is 25 per cent of the production and similar amount is needed for the household maintenance, etc., the agriculturist cannot sell more than 50 per cent of the agriculture produce. If that is the case, the bajra not more than 50 quintals could have been sold by all the seven shareholders. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue related to proceeding under section 263 of the Act and, hence, distinguishable on facts. 6. The next issue for consideration relates to confirming the addition of Rs. 47,508 on account of electricity charges, Rs. 13,820 on account of advertisement expenses and Rs. 37,359 on account of mail expenses. The facts of the case stated in brief relating to this ground of appeal are that the assessee had made payment of electricity bill for Rs. 57,394 for the period 10-3-2003 to 10-4-2003. The bill included sundry charges of Rs. 27,729. On a query raised by the Assessing Officer, it was submitted by the assessee that the claim of expenses has been taken on payment basis and since the payment was made in this year and, hence, same was claimed. However, this contention of the assessee was turned down on the ground that assessee was following mercantile system of accounting and, therefore, could not claim expenses on cash basis. As such, sundry charges amounting to Rs. 27,729 and 2/3rd of the balance being the electricity bill for the previous year, i.e., Rs. 19,777 was disallowed by treating the prior period expenses. Accordingly, the Assessing Officer made disallowance of Rs. 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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