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TMI Blog2012 (9) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... sit of Rs.12,00,592/- and cheque deposits/ECS clearing of Rs.11,09,979/- aggregating to Rs.23,10,571/- in the North Kanara Bank. Similarly, there was cash deposit of Rs.2,90,775/- and cheque/ECS clearing of Rs.20,80,129/- aggregating to Rs.23,70,904/- in the Bharat Co-operative Bank. There were thus total deposits of Rs.46,81,475/- in the two bank accounts, whereas the assessee had only gross income of Rs.1,45,686/- from wedding cards sales, consultancy charges of Rs.4,32,352/-, dividend income of Rs.1,28,191/- and interest income of Rs.11,253/- aggregating to Rs.7,17,478/-. The AO, therefore asked the assessee to explain the source of deposits. However, as per AO, the assessee could not give satisfactory explanation with documentary evidence. He, therefore made addition of Rs.46,81,475/- to the total income under section 68 of the Act. 3. In appeal the assessee furnished the details of deposits in the two bank accounts as under :- S.No. Particulars Bharat Co-op. NKGSB Total(in Rs.) 1. Cash deposit 316,850.00 1,302,700.00 1,619,550.00 2. Suresh Rathi Sec. P. Ltd. 624,719.00 336,243.77 960,962.77 3. Kedia Shares Shridhar Biyani 895,971.00 - 895,971.00 4. Loan 67,000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was cash withdrawal of Rs.5,000/- on 24.3.2006 and thereafter there was cash deposit of Rs.39,750/- in that bank account and cash expenditure of Rs.32,615/-. Thus on 24.3.2006 there was total cash withdrawal from the two accounts of Rs.3,04,500/- and deposits were of Rs.39,750/- and Rs.32,675/-. Thus as on 31.3.2006, there was cash balance of Rs.2,32,075/- (304500 - 39750 -32675). Further, as per cash book there was cash in hand of Rs.23,302/- as on 31.3.2006. Thus, total cash in hand as on 31.3.2006 was Rs. 2,55,377/-. 3.4 The AO, therefore, in the remand report determined the unexplained cash of Rs.463,343/- as per detailed computation given below :- 1. Cash withdrawal form Bharat Co-op. Bank 715800 2. Cash withdrawal from NKGSB 354650 3. Consultancy charges 432352 4. Sales of wedding cards (table B) 145686 less Sale of cards in cheque (table A) 79152 66534 Sub total 15,69,336 Less: 1. Cash expenses (discussed above) 1,57,752 2. Cash in hand (discussed above) 2,55,377 4,13,129 Cash available for the assessee to deposit in banks 11,56,207 Unexplained cash (1619550 - 1156207) 4,63,343 3.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the year should have been Rs.1,75,000/- but the balance reflected in the closing balance was only Rs.55,000/- 4. CIT(A) after considering the remand report of the AO agreed that source of cash of Rs.463,343/- was not explained and accordingly confirmed the addition. CIT(A) also confirmed the amount of Rs.8,95,971/- claimed to be received from Kedia Shares & Stock Brokers Ltd. in the absence of contract note, demat account etc. In regard to loans from Shridhar Biyani, Nitin Bhattad and Manoj Saboo CIT(A) observed that these were employees and relatives of assessee but assessee could not furnish evidence of their credit worthiness and genuineness of transactions by giving P.A. numbers. etc. It was also observed by him that mere filing of confirmation was not enough. He, therefore, confirmed the addition on account of loan. As regards the capital gain from sale of shares through Suresh Rathi Securities Pvt. Ltd. CIT(A) observed that the assessee had shown short term capital gain of Rs.1,48,175/- and Rs.39,67,160/- as long term capital gain. CIT(A) observed that long term capital gain could not be assessed as business income as holding period was more that one year. He accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osits in the bank accounts which have been reproduced in para-3 of this order. The deposits of Rs.9,60,962.77 and Rs.8,91,971/- are on account of share transaction with Suresh Rathi Securities Pvt. Ltd. and Kedia Shares respectively. After detailed examination during the assessment proceedings, the AO has given a finding that there was total receipt of Rs.4,21,53,343.94 from Suresh Rathi Securities out of which a sum of Rs.1,48,175/- was shown by assessee as short term capital gain and Rs.39,67,160/- as long term capital gain. Since the assessee had not given details and evidence regarding date of purchase, purchase price etc., and also taking note of the fact that the assessee had entered into voluminous transactions in large numbers of scrips, the AO treated capital gain as business income. CIT(A) has accepted the claim of long term capital gain which has been challenged by the department. Similarly in respect of receipt of Rs.8,91,971/- from Kedia Shares, no details and evidence had been submitted by the assessee regarding nature of receopt except copy of ledger account and therefore, source of these receipt has not been accepted by the AO and CIT(A). The case of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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