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TMI Blog2014 (11) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.84 lac in the partnership firm. During the course of assessment proceedings of the firm, the AO made certain inquiries about the source of such capital contribution. Unsatisfied with the explanation given on behalf of the assessee, the AO treated the sum of Rs. 30.84 lac as unexplained credit in the hands of the firm for which addition was made on protective basis. The substantive addition of the equal sum was made by the AO in the hands of the present assessee. The ld. CIT(A) got convinced with the explanation tendered by the firm and ordered for the deletion of addition. Consequently, the addition also stood deleted in the hands of the assessee. The Revenue is aggrieved against the deletion of addition. 3. We have heard the rival submissions and perused the relevant material on record. It is observed that the assessee contributed capital of Rs. 30.84 lac in the partnership firm giving explanation about the source of various amounts invested in the firm. The ld. CIT(A) considered some decisions and certain overall principles governing the cash credit additions u/s 68 and ordered for the deletion of additions in a sweeping manner, without testing the facts of each credit on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O for addition. It can be explained with the help of a simple illustration. If the assessee gives a specific explanation about the source of the deposit, being the savings of the payer, then such an explanation is general, unless the assessee proves the existence of such savings with some cogent evidence. If the explanation about the savings is simpliciter and the attending circumstances do not lead to the non-rebuttable presumption of the existence of savings, then the AO may be justified in making addition. If however, the assessee proves the existence of savings with some relevant evidence, then the AO cannot reject such an explanation, unless he points out some fallacy in such specific explanation with some contrary material. Similarly, the mere fact that the amount was received through banking channel, cannot, in itself, prove the genuineness of the source. One cannot create a third person to legalize his black money by routing it through such third person's bank account. In such circumstances, the onus is always on the assessee to prove the source of the amount in the bank account of the payer. If such a source is not proved to the satisfaction of the AO, then the addition so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner, without going into the details of each amount. 6. From the material on record, it is noticed that the assessee's brother Shri Rajender Kumar sold his house on 7.3.2006 for a consideration of Rs. 9.54 lac out of which a sum of Rs. 2.50 lac was claimed ot have been gifted on 15.4.2006. The AO has not disputed the fact about Shri Rajender Kumar selling his house property for the stated consideration. The mere fact that the gift was made after one month and a few days cannot disprove the genuineness of the gift when we consider the facts in totality that it was a brother helping his real brother, who, in turn, was setting up his factory and further the source of the gift is specific and substantiated. We, therefore, approve the view taken by the ld. CIT(A) in deleting this addition. Loan of Rs. 1 lac from Shri Rajender Kumar. 7. Shri Rajender Kumar, the brother of the assessee, apart from the above gift, also advanced a loan of Rs. 1 lac to the assessee by means of account payee cheque. The AO did not accept the genuineness of this loan because the copy of bank account evidenced that it was an overdraft account on 3.8.2006 when the loan was given to the assessee. The ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere. As the amount of Rs. 57,000 was withdrawn from her known sources of income, its redeposit cannot be questioned. Considering the totality of facts and circumstances, we are of the considered opinion that the ld.CIT(A) was justified in deleting this addition. Loan of Rs. 50,000/- from Shri Dushyant Kumar 11. The assessee claimed that Shri Dushyant Kumar advanced an interest free loan f Rs. 50,000/- by cheque on 19.7.2006. On perusal of the bank statement of Shri Dushyant Kumar, it was noticed by the AO that a sum of Rs. 50,000/- was deposited in his bank account on 11.7.2006. It was claimed that the amount of Rs. 50,000/- was received by Shri Dushyant Kumar from his father. The AO did not accept the genuineness of the explanation tendered on behalf of the assessee and made the addition. The ld. CIT(A) deleted this addition. 12. After considering the rival submissions and perusing the relevant material on record, it is observed that the assessee claimed that this amount of Rs. 50,000/- advanced by Shri Dushyant Kumar was received as gift from his father, an agriculturist who gave this amount to his son for advancement of loan to the assessee. There is no evidence worth the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival submissions, we find that the genuineness of the above transaction of receipt of gift from Sh. Ram Kishan Yadav has been held to be not genuine. In this alleged loan transaction again, we are satisfied that there is no merit in the assessee's case. The assessee has made a story of his father raising loan from some other person which was given to the assessee again as a loan. Except for rendering a general and vague contention of the receipt of loan from some third person, there is no reliable evidence to support the transaction of the father raising loan from the third person. We, therefore, approve the action of the AO in making this addition. Loan of Rs. 1.50 lac from Shri Ram Kishan Yadav 17. Again, the assessee showed to have received a further loan of Rs. 1.50 lac from this father, Shri Ram Kishan Yadav. Equal amount was deposited in his bank account which was subsequently given to the assessee by means of cheque. The assessee claimed that Shri Ram Kishan Yadav received this amount for the sale agreement of the agricultural land, which was not substantiated. For the reasons given by the AO, the said amount was added to the assessee's total income. The ld. CIT(A) deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 30.7.2006 from one Shri Rakesh and, in turn, gave the loan to the assessee. The AO was not convinced with the assessee's explanation and, accordingly, made the addition. The ld. CIT(A) deleted the addition. 22. After considering the rival submissions and perusing the relevant record, it is observed that the fact of this loan of Rs. 3 lac from Shri Jagram Yadav are quite close to the alleged loan of Rs. 4 lac claimed to have been received by the assessee from the wife of Shri Jagram Yadav. Here again, a story has been created that Shri Jagram Yadav raised a cash loan from the third person and advanced the same amount as loan to the assessee. There is no reliable evidence to confirm the receipt of loan by Shri Jagram Yadav from the third person. This falsifies the explanation given by the assessee about the genuineness of the loan received from Shri Jagram Yadav. We, therefore, restore the addition made by the AO. Loan of Rs. 3.49 lac from Smt. Kala Devi. 23. The assessee claimed to have received this loan on 7.11.2006 by cheque. On perusal of the bank account of Smt. Kala Devi, it was observed that the cash of Rs. 1.50 lac was deposited in her account on 3.11.2006. She also cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this score as well and order for the confirmation of addition of Rs. 4 lac in the hands of the assessee. Loan of Rs. 80,000/- from Shri Rakesh Kumar. 29. The assessee claimed to have received interest free loan of Rs. 80,000/- from Shri Rakesh Kumar. On perusal of the bank account of this person, it was noticed that a sum of Rs. 25,505/- was deposited in his bank account by cheque apart from a cash deposit of Rs. 44,500/-. The assessee neither filed any confirmation of the loan nor furnished the source of deposit in the account. The addition was made by the AO, which came to be deleted by the ld. CIT(A). 30. Having regard to the facts of the alleged loan from Shri Rakesh Kumar, it is found that the assessee had not even filed confirmation of this loan nor given any source of deposit in the bank account of Shri Rakesh Kumar, out of which a loan of Rs. 80,000/- was claimed to have been advanced to the assessee. We, therefore, order for the confirmation of the addition of Rs. 80,000/-. Loan of Rs. 70,000/- from Shri Rajender Kumar Yadav. 31. The assessee claimed to have received interest free loan of Rs. 70,000/- from Shri Rajender Kumar Yadav. On perusal of the bank account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation about the source of amount in his hands of Shri Kehar Singh, who, had received a loan from Sh. Lala Ram, on the sale of the latter's agricultural land for Rs. 8,84,000/- on 5.6.2006. The AO did not controvert this specific and definite explanation about the source of the amount coming into the hands of the assessee. In our considered opinion, the assessee discharged the primary onus by proving the source of the amount in the hands of Sh. Kehar Singh by means of a definite and specific explanation. Now it was the turn of the AO to reject such explanation with some cogent material, if he was inclined to make addition. Nothing of the sort has been done by him. We, therefore, approve the view taken by the ld. CIT(A) on this issue in deleting the addition. Loan of Rs. 3 lac from Shri Roop Chand. 37. The assessee claimed to have received a loan of Rs. 3 lac who, in turn, claimed to have received a cash loan from one Shri Gori Shankar. The said Sh. Gori Shankar stated to have received loan out of a sum of Rs. 6,50,000 realized by him from the sale of his land on 5.6.2006. The AO made the addition which was deleted in the first appeal. 38. After considering the rival submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No evidence worth the name was produced on record to show the source of amount in the hands of her sister. Under such circumstances, we are of the considered opinion that the addition was wrongly deleted by the ld. CIT(A). We, therefore, restore the same. Loan of Rs. 2.50 lac from Shri Pooran Chand. 43. The assessee claimed to have received a loan of Rs. 2.50 lac from Sh. Pooran Chand. The source of amount in the hands of Shri Pooran Chand was explained to be a further loan of equal sum received by him from one Shri Abhey Singh. The sources of money in the hands of Shri Abhey Singh was stated to be the availability of a sum of Rs. 5 lac in his hands from the sale of land on 3.7.2006. The AO did not accept the genuineness of the loan. The ld. CIT(A) deleted the addition. 44. After considering the rival submissions and perusing the relevant material on record, we find that the assessee gave definite source of the amount in the hands of Shri Pooran Chand, being the amount of loan received from Shri Abhey Singh out of sale of his land on 3.7.2006. The AO did not find any fault with the explanation submitted by further inquiring about the transaction of sale of land in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Yadav claimed to have received a sum of Rs. 5.15 lac as advance for the sale of land, which agreement was subsequently not honoured and the advance was forfeited. Since the specific and substantiated explanation given by the assessee has been whimsically rejected without any reason or rhyme, we are of the considered opinion that the ld. CIT(A) was justified in deleting this addition. We order accordingly. Loan of Rs. 2 lac from Shri Vidyanand. 48. The assessee claimed to have received a loan of Rs. 2 lac through five demand drafts worth Rs. 40,000/- each on 2.1.2007. The source of this amount in the hands of Shri Vidyanand was stated to be receipts from the sale of crop. In the absence of any documentary evidence such as Form No. J etc., the AO refused to accept the certificate of Sarpanch in support of the realization from the sale of crop. He, therefore, made the addition, which came to be deleted in the first appeal. 49. Having heard the rival submissions and perused the relevant material on record, it is observed that Shri Vidyanand deposited a sum of Rs. 2 lac in his bank account around a week before issuing demand drafts to the assessee worth Rs. 2 lac. The only explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- from Shri Raj Kumar 55. The assessee claimed to have arranged interest free loan of Rs. 50,000/- from Shri Raj Kumar, which was received by means of cheque on 25.11.2006. On perusal of the bank account of Shri Raj Kumar, it was noticed by the AO that the Sh. Raj Kumar deposited cash of Rs. 1,60,000/- on 8.10.2006 in his bank account and after depositing this amount, he withdrew the same money from the bank on different dates as tabulated in para 2.1 of the assessment order. Shri Raj Kumar, during the course of his statement recorded by the AO, stated that Rs. 1.60 lac was given by his father for the purposes of repairing the house. Out of the amount so received, he repaid a loan of Rs.Rs.60,000/- to one Shri Narpal by cheque and the balance amount was withdrawn by him for the purposes of repairing the house except Rs. 40,000/-, which was withdrawn by him on 4.11.2006 for advancing a loan to the assessee for Rs. 50,000/- along with certain other cash available with him. Not convinced with the assessee's explanation, the AO made addition which was deleted in the first appeal. 56. After considering the rival submissions and perusing the relevant material on record, it is observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , respectively. On perusal of the bank account of Shri Hem Singh, it was observed by the AO that equal amounts of cash were deposited immediately before the issuance of demand drafts to the assessee. It was claimed that the source of deposit was the sale of crop. The AO was not convinced with the assessee's explanation and made the addition, which was deleted in the first appeal. 60. After considering the rival submissions and perusing the relevant material on record, it is observed that the only explanation given by the assessee for receipt of loan from Shri Hem Singh was the sale of agricultural produce. No direct documentary evidence such as J-Form was produced either before the AO or before us to demonstrate that the crop was, in fact, sold which fetched proceeds which were deposited in his bank account. In the absence of any reliable corroborated explanation, we are of the considered opinion that the ld. CIT(A) was not justified in deleting this addition. The impugned order on this score is overturned and the addition made by the AO is restored. Loan of Rs. 5 lac from Smt. Sunita Yadav. 61. The assessee claimed to have received loan of Rs. 5 lac from Smt. Sunita Yadav, who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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