9911796707
TMI Blog2014 (2) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... running operation, stock in trade of the value of more than Rs.79 lacs and several other fixed asset - thus, the assessee firm and its partner did have access to money - In the face of clear denial by Smt. Reena Aggarwal and absence of any positive evidence with the assessee, the CIT(A) rightly upheld the addition made by the AO as unexplained money received by the assessee – Decided against Assessee. Application of section 36(2)(i) of the Act - Addition made on account of payment – Held that:- The Ld. CIT(A) has passed a well-reasoned order that the claim made by the assessee is not allowable as deduction u/s 36(1)(vii) of the Act since the condition prescribed u/s 36(2)(i) of the Act relating to bad debts is not satisfied in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. has failed to appreciate the facts and law, in sustaining addition of Rs.5 lacs as unexplained receipt. 3. That Ld. CIT(A) has legally erred in law and facts in sustaining the addition of Rs.216331/- on account of payment made to M/s. Mohindra and Mohindra. 4. That the assessee craves the right to alter, add, amend or delete any of the grounds of appeal." 2. The brief facts of the case are that the assessee had shown an advance of Rs.30 lacs in its balance sheet as on 31.03.2006 as received from one Smt. Reema Aggarwal for sale of building by the assessee firm to her. The AO investigated the genuineness of this amount claimed to have been received by the assessee by deputing his Inspector. When the Inspector visited the premise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the AO that it had received a token money of Rs. 5 lacs on 5.3.2006 and a receipt of this amount was given to Smt. Reema Aggarwal, though the same had been denied by Sh.Gyan Aggarwal during cross examination. Smt. Reema Aggarwal submitted in her reply dated 23.12.2008 that no written agreement had been made in relation to the purchase of the property, and that it was orally agreed to purchase the building at the settled price as per registry. The AO noted that the total sale consideration of Rs.87,36,000/- had been admitted by both the parties and the only dispute was about the payment of Rs.5 lacs in cash, which the assessee claimed to have received on 5.3.2006 but the purchaser claimed to have paid on 10.04.2006. As per the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 5 lacs in cash on 10.4.2006. There is no direct evidence with the assessee that it had received the sum of Rs.5 lacs from Smt. Reema Aggarwal on or before 31.3.2006. It claims to have been issued a receipt of this amount on 5.3.2006 but the receipt is admittedly not signed by the buyer. The assessee's case is built on presumption i.e. that the first payment was usually in cash that receipt had been accepted by Smt. Reema Aggarwal to be issued against cheque but not against the cash etc. The Ld. CIT(A) was not satisfied that these presumptions can assist the appellant in the discharge of the onus cash upon it. Whether or not the sum of Rs. 5 lacs was paid by Smt. Reema Aggarwal on 5.3.2006 or on 10.4.2006, the facts remains that a credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney invested in an asset. In the cited case the assessee was a young lady, who could not explain satisfactorily her source of investment in land, because of which it was held that the investment could not be considered as income of the assessee. It is seen that the facts in case of the assessee are quite different from that of CIT vs. P.K. Noorjahan (supra), in asmuch as the assessee was running a business for a long time. Even though it had suffered losses, it had a running operation, stock in trade of the value of more than Rs.79 lacs and several other fixed assets. Its partners had introduced capital of more than Rs.55 lacs in the firm in the relevant previous year and had withdrawn Rs.33 lacs, showing addition to their capital account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the rejoinder of the assessee, the ld. CIT(A) confirmed the action of the A.O. vide para 3.4 of his order. 9. We have considered the written submissions made by the ld. counsel and arguments made by the ld. DR, who has relied upon the orders of both the authorities below. The Ld. CIT(A) has passed a well reasoned order that the claim made by the assessee is not allowable as deduction u/s 36(1)(vii) of the Act since the condition prescribed u/s 36(2)(i) of the Act relating to bad debts is not satisfied in respect of the excess payment. The debt due to be paid by the assessee to M/s. Mahindra Mahindra Ltd; was lesser than the amount actually paid by the assessee. The excess amount was, thus, never taken into account in computing incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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