9911796707
TMI Blog2012 (7) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act (for short hereinafter referred to as "The Act") on 8.10.2003. Various documents were found during search. In response to the notice under Section 153A of The Act, the returns were furnished for the accounting years 1998-99 to 2003-04. In all the assessment years, except for the accounting year 1998-99, losses were declared by the assessee. In the course of search, certain books of account and papers had been seized. It was observed in the assessment order that as per the seized materials, the assessee had received loans from various partners, some of which have been reflected in the regular books of account. After filing the return, in response to the notice issued under Section 153A of the Act; the assessee enclosed Balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Assessing Authority to substantiate that the credits entered in the kuchha cash book were not the loans from others but the assessee's own money reflected in the shape of credits in the seized books. The Assessing Authority did not discharge the primary onus cast on it and it was wrong on the part of the assessing authority to throw the burden on the assessee to prove the genuineness of the credits. Regarding the additions made on account of increase in expenses, the Appellate Authority confirmed the additions made by the Assessing Authority. Two sets of books were found i.e. audited books and kuchha cash books, it was noticed by the Assessing Authority that in the returns of income filed by the assessee, the expenses claimed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of account and other documents belonged to the assessee and the contents of the said documents are true and correct. If the assessing authority is not prepared to act on that entries, the burden is on him to disprove the correctness of the said entries and till it disproves the correctness of the said entries, no additions can be made under Section 68 of the Act. He also relied upon Section 292(c) of the Act, which reaffirms the said position. 4. Per contra, the learned counsel for the revenue submitted that the assessee has not denied that the kachcha books of account belongs to him and has not denied the entries therein and therefore, the burden is on him to show that the transactions reflected in the said books are genuine. It is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Tribunal was justified in law in holding the inclusion of any sum under Section 68 of the Act in the hands of the assessee? (2) Whether the Tribunal in the facts and circumstances of the case is justified in treating the unsecured loans as genuine and bona fide merely because they are received by cheques without conducting an enquiry with regard to the identify of the payer i.e. creditors, creditworthiness of the said payer and the genuineness of the transaction?" First Substantial question of law 8. The material on record discloses that the loan amounts appeared to have been received by cash during the accounting years 1998-99 to 2004-05,was to the tune of Rs. 5.97 crores. In the body of the judgment, the Tribunal has set out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt maintained by the assessee. Merely because the kachcha books are found during investigation and that the assessee owns the said books and also contends that the entries found therein are true and correct, it is not safe for the authorities to act on such entries. If the assessee wants to have the benefit of the entries in the said books, as he did not produce voluntarily before the authorities and those entries are not reflected in the regular accounts, it is for him to substantiate it by such acceptable evidence as to the correctness of those entries. In fact, he has taken the trouble to examine those creditors who have confirmed those entries. If he had not examined those creditors, in whose name the entries are made, only inference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e direction, the Tribunal has directed the Assessing Authority as under:- "Since the transactions are claimed to be by cheques the question of disallowance does not arise. However, as a matter of caution, the learned Assessing Authority is directed to allow the same after confirming that the transactions are through banking channels." 10. The grievance is that the benefit can be given only for those cheque transactions, which are found to be genuine. Merely because the transactions are through bank channels, the assessee would not be entitled to the benefit. It is true that when a cheque is issued it has to be encashed through bank only. There is no presumption that merely because the payment is made by cheque, it is a genuine transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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