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TMI Blog2010 (1) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... n – Held that:- merit in the submission of the learned DR that the gift of Rs.1 lakh is against human probability, Supreme Court in the case of Sumati Dayal (1995 - TMI - 5469 - SUPREME Court) squarely applicable to the facts of the present case, no infirmity in the order of the CIT(A) in confirming the addition of Rs.1,00,000 made by the Assessing Officer u/s. 68 of the I.T. Act and the same is accordingly upheld. This ground by the assessee is, therefore, dismissed. - I.T.A. No. 564/Mum/2008, I.T.A. No. 707/Mum/2008, - - - Dated:- 21-1-2010 - D. Manmohan, R.K. Panda, JJ. I.P. Rathi for the Appellant Vandana Sagar for the Respondent ORDER R.K. Panda:- 1. These are cross appeals, the first one filed by the assessee and the second one filed by the Revenue and are directed against the order dated 20.11.2007 of the CIT(A)- XIX, Mumbai relating to assessment year 2004-05. For the sake of convenience, both the appeals were heard together and are being disposed off by this common order. 2. The revised grounds of appeal No. 1 by the assessee and the grounds of appeal No. 1(1) by the Revenue are as under:- Assessee's ground of appeal:- 1(a) The learned Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification of the bills of purchase from M/s. Kirti Trading Co., the Assessing Officer observed some of the bills were actually issued in the name of M/s. Runwala Developer Pvt. Ltd. but the corresponding entries were made in the purchase register of the assessee. On being questioned by the Assessing Officer, the assessee vide its submissions dated 26.12.2006 submitted that this is a minor amount and they intentionally did not account the bills. Since the purchase and payment were made by M/s. Runwala Developer Pvt. Ltd., the Assessing Officer held that the assessee could not have entered the purchase in his books. d) The Assessing Officer further observed that the assessee was unable to reconcile the difference between the sundry debtors and the sale. e) Further the Assessing Officer observed that the assessee failed to produce the details of work-in-progress, accounting of work-in-progress, value-wise and quantity wise work-in-progress. Similarly the assessee did not file any details regarding the specific date of bills received, mode of transport, truck No., lorry No., etc. f) Similarly the assessee has not offered the advance received during the year for taxation. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,212 and that is a clerical error. He submitted that the assessee has admitted this mistake and had requested the Assessing Officer to add the difference to the total income of the assessee. However, the accounts cannot be rejected for this mistake. As regards the bill of M/s. Rashmi Plywood, he submitted the goods were received on approval memo and the same were not received till the end of the assessment year. As regards the bill of M/s. Kirti Trading Co., he submitted that the bills could not be reversed due to oversight. As regards the difference of Rs.1,12,511 relating to M/s. Maersk India Pvt. Ltd., he submitted that the discrepancy was due to discount allowed and accounted in books by journal voucher. As regards the production of delivery challan in respect of purchase, he submitted that delivery challans were attached to them and payments were made by account payee cheques. As regards the estimation of GP margin it was submitted that during the A.Y. 2001-02 and 2002-03 the GP rate was higher on account of relatively lower turnover. However, as the volume of turnover goes up the rate of GP falls down. Referring to the order passed u/s. 143(3) for the A.Y. 2005-06, he submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific addition should have been made on account of discrepancy in the invoice and the book results should not have been disturbed. Accordingly, we hold that the CIT(A) was justified in upholding the action of the Assessing Officer as regards the rejection of the book result is concerned. However, considering the totality of the facts of the case, we are of the concerned opinion that adoption of 10% GP rate as against 10.19% held by the CIT(A), in our opinion, will meet the ends of justice. We hold and direct accordingly. The ground raised by the Revenue is dismissed and the ground raised by the assessee is partly allowed. 11. Grounds of appeal No. 2 by the assessee reads as under:- 2. The learned Commissioner of Income-tax has further erred in confirming the addition of Rs.1,00,000 to the total income of the appellant on account of gift being considered as unexplained cash credit though the donor has confirmed the transaction. 12. Facts of the case, in brief, are that the assessee has shown to have received gift of Rs. 1 lakh from his subcontractor Shri Gaurishankar Mistri. To verify the genuineness of the gift the Assessing Officer recorded the statement of Shri Mistry u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. It is by now the settled law that for accepting a gift as genuine the onus is always on the assessee to prove to the satisfaction of the Assessing Officer regarding the identity and creditworthiness of the donor and the genuineness of the transaction. In the instant case the Assessing Officer has recorded the statement of the donor who himself has stated that his average income is only Rs.2 to 2.3 lakhs out of which he sends an amount of Rs.5000/- p.m. to his family members, Rs.1500 to Rs.2000/- p.m. to his parents apart from Rs.4000 per month for his house rent and Rs.2000 to Rs.3000 for his personal expenses. Further the donor also stated to have incurred expenses of Rs.4000 per month towards his mobile phone. We further find from the records of assessment produced before us by the learned DR that there is immediate cash deposit of Rs.1 lakh before making the gift of Rs. 1 lakh to the assessee. It is also a fact that the donor does not have any immovable property nor any valuable movable property. Therefore, we find merit in the submission of the learned DR that the gift of Rs.1 lakh is against human probability. The various decisions relied on by the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter hearing both the sides, we find the Assessing Officer observed from the bank statement of the savings bank account 2154 maintained by the assessee with Bank of Baroda, Bandra (E) branch, Mumbai that the assessee has deposited an amount of Rs.10,40,000 on 23rd March, 2004 which has been transferred to his current account maintained in the name of M/s. Dhamu Furniture on the same day. On being questioned by the Assessing Officer, it was submitted by the assessee that he has neither taken any loan other than that mentioned in the audited accounts nor taken any gift from anybody other than Rs. 1 lakh declared by him. The Assessing Officer recorded the statement of the assessee who stated that all his receipts of business income are through account payee cheques only. He has also noted the reply of the assessee who stated that he does not know the source of deposit of Rs.10,40,000. Not being satisfied with the explanations given by the assessee, the Assessing Officer held that the deposit of Rs.10,40,000 is nothing but unexplained cash credit within the meaning of section 68 of the Act. He accordingly made an addition of Rs.10,40,000 u/s. 68 of the Act. 19. In appeal the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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