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TMI Blog2012 (10) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... respective orders of CIT(A)-III, Hyderabad for the assessment years 2007-08 and 2008-09. Since identical issues are involved in both these appeals, they were heard together and therefore a common order is passed. ITA NO. 1075/Hyd/2011 in the case of G. Venkat Rao 2. The assessee is an individual deriving income from partnership firms NVM Sitharamanjaneya Constructions and SVK Sri Sitharamanjaneya Constructions. There was a search and seizure operation u/s 132 of the Act, in the case of D. Nagarjuna Rao and in the case of partnership firms in which the assessee is a partner. The Assessing Officer issued notice u/s 153C of the Act, in response to which the assessee filed the return of income on 12/01/2009 admitting an income of Rs. 6,36,690/- after claiming deduction under Chapter VI A of the Act, which included the interest from partnership firm by way of salary and interest on capital, profit admitted on his own business activity and other interest incomes derived. The Assessing Officer completed the assessment u/s 143(3) on 30/12/2009 and determined the total income at Rs. 40,25,045/-, making the following additions: 1) Loan amounts received aggregating to Rs. 24,27,365/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 1,60,365/- to the assessee form out of his retirement benefits through cheque No. 368321. The said person has got the source and also confirmed the fact of advancing the amount. 4.4 G. Premchand: Shri G. Premchand is the son of Sri G. Mohan Rao. Sri Premchand is an NRI staying in USA and he maintained an NRE account in India. The said amount is transferred from his NRE account to the joint account of Smt. Kshma Devi and Sri Mohan Rao. They maintained bank account with Oriental Bank of Commerce, Chandanagar Branch. They received the amount from the NRE account of Sri G. Premchand and paid the same to the assessee through cheques. A copy of the bank account is submitted. It can be seen from the bank account available upto 26/11/2007 that an amount of Rs. 16,50,000/- was transferred and the balance amount of Rs. 2,17,000/- was transferred through cheque No. 012902. Copies of the bank account and the letter of confirmation are submitted for perusal before us. 4.5. Ch. Tulasi Srinivas: He filed letter of confirmation mentioning that he advanced Rs. 2 lakhs to the assessee. He mentioned that he is in private service for more than 10 years and the loan is given from out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the addition of Rs. 3,54,655/- and the addition of Rs. 6,06,332/- to the file of the Assessing Officer to determine the correct amount of interest received by the assessee from partnership firms. Accordingly, ground Nos. 4 5 are allowed for statistical purposes. 9. The last ground of appeal i.e. ground No. 6 is with respect to the confirmation of the levy of interest u/s 234A, 234B and 234C by the CIT(A) made by the Assessing Officer. Since charging of interest under the said sections are consequential in nature, the Assessing Officer is directed accordingly. 10. Ground No. 1 is general in nature. Ground No. 2 is regarding initiating proceedings by issue of notice u/s 153C of the Act, has not pressed by the learned counsel for the assessee, therefore, the same is dismissed as not pressed. 11. In the result, appeal of the assessee is partly allowed for statistical purposes. ITA No. 1076/Hyd/11 in the case of G. Madhava Ra 12. Briefly the facts of the case are that the assessee is a partner in the firms of M/s NVM Seetharamanjaneya Constructions and M/s SVK Constructions. There was a search and Seizure action u/s 132 of the Act in the case of the above two firms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the record as well as gone through the orders of the authorities below. In the case of credits in the name of third parties, the assessee must prove identity of the creditor, capacity of the creditor to advance money and genuineness of the transaction. In this case, the assessee has not produced the books of account of the creditor to establish that the creditor has the necessary source to advance the amount to the assessee. In the case of Shankar Industries Vs. CIT,114 ITR 689, the Hon ble Calcutta High Court held that it is necessary for the assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof includes proof of the identity of his creditor, the capacity of such creditor to advance the money and, lastly, the genuineness of the transaction. These things must be proved prima facie by the assessee and only after the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the department. Where the assessee establishes only the identity of the creditor and nothing more, the cash credits can be treated as income of the assessee from undisclosed sources. In the case of Prakash Textil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank account on 16/03/2007. She also stated in the confirmation letter that as she was not having taxable income, she did not file her return of income. 19. We have heard the arguments of both the parties and perused the record as well as gone through the orders of the authorities below. From the details submitted, we find that Smt. Kalavathi is running a tailor shop along with her husband in BHEL township. Though her net receipt is less than the taxable income and she has been never assessed to tax, she had accumulated savings, out of which, she had advanced loan to the assessee. Hence, we delete the addition of Rs. 1,00,000/- made u/s 68 of the Act. 20. Ground No. 4 is regarding charging of interest u/s 234B and 234C. Charging of interest under the said sections are consequential in nature, therefore, the Assessing Officer is directed accordingly. 21. Ground No. 1 is general in nature. Ground No. 2 regarding initiating proceedings by issue of notice u/s 153C has not pressed by the learned counsel before us, therefore, the same is dismissed as not pressed. 22. In the result, appeal of the assessee is partly allowed. 23. To sum up, ITA No. 1075/Hyd/11 is partly allowed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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