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TMI Blog2007 (1) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished by the appellant, explaining the cash credits of persons named in question No. 1, for the reasons are perverse by ignoring the objective material available to the assessee? 3. Whether in the facts and circumstances of the case, the additions made by the Assessing Officer, on account of the aforesaid cash credits while relying upon the statement of persons examined at the back of appellant and without giving him any opportunity to cross-examine them and sustained by the Tribunal, are justified in law?" 2. The substratum of the facts appear from the questions. 3. If we go into details which relates to additions made in the income returned by the assessee for assessment year 1993-94 in respect of cash credits found in the names of Smt. Ramkanwari Devi, Smt. Santosh Sharma, Sh. Dinesh Sharma and Sh. Atul Kumar Patel totalling Rs. 3, 15, 000, the assessee had filed affidavits from all the four creditors before the Assessing Officer. In the affidavits the deponents have owned deposits made by them. All the depositors are assessed to tax. Thus, existence of depositors as real persons is not in dispute. Each one has owned to have deposited the respective sums found in the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... She is assessed to tax. She has lent sum of Rs. 1,20,000, she admitted to have opened the bank account and admits that while money was deposited the assessee had accompanied from the bank and that money was earned by savings from tuitions and commissions. The said money earlier was given to other parties and was deposited in the bank account after taking back from those parties. She further stated that she also does stitching work. On the occasion of her own marriage, she received Rs. 5,000 to 6,000 rupees and annually she gets about two thousand to three thousand as gifts from her parents' house. She further accepted that she had deposited Rs. 60,000 also with M/s. Merta Oil Mills (P.) Ltd., on which she did not get any interest. Her husband Sh. Dinesh Sharma, manages her affairs and he keeps all details. 7. However, likewise in the case of Ramkanwari, these facts were not noticed by the Assessing Officer but only truncated portions about the statement of the lady pleading ignorance about details, have only been considered. 8. All the money have been received by the assessee through account payee cheques or account payee pay orders. In other words the existence of each of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs' deposit flew from the assessee. In the absence of any such link, additions of cash credits found in the books of account of the assessee cannot be considered to be unexplained income of the assessee, where existence of depositors of such credits is established and such deposits/advance/loan is owned by such existing person. On such proof the assessee's onus is discharged. 12. Somewhat like question arose in CIT v. Daulatram Rawatmull [1973] 87 ITR 349, before Supreme Court. In that case partner of the assessee firm, had obtained a fixed deposit receipt of Rs. 5,00,000 issued by the Central Bank, Jamnagar branch against the like sum tendered at Calcutta Branch. The said receipt along with letters of guarantee and letter of continuity about overdraft facility were obtained by the firm. After the partner's death the fixed deposit receipt of B was adjusted by the overdraft of the respondent firm. The receipt of fixed deposit of Rs. 5,00,000 was treated as undisclosed sources because the explanation furnished by B about the source wherefrom he could have obtained a fixed deposit of Rs. 5,00,000 on the date of which the receipt was found to be false. Addition was made for Rs. 5,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft facility to the respondent firm." 15. The aforesaid principle was applied by this Court in Late Mangilal Agarwal through LRs v. Asstt. CIT [D.B. IT Appeal No. 9 of 2001, dated 18-10-2006]. It was a case about the primary gold found in possession of A in which he explained that primary gold found in his possession was belonging to certain other persons who had deposited with him old ornaments for remaking them. The said ornaments were melted and primary gold was delivered to petitioner by respective goldsmiths for further processing. The Assessing Officer relying upon section 69 A has made additions of value of such bullion in the income of assessee by rejecting his explanation by resorting to section 69 A which reads as under:- "69 A. Unexplained Money, etc.-Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery, or other valuable article, or the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of them was not accepted as satisfactory by the Assessing Officer. On such premise value of the primary gold found in possession of the assessee during the search of the customs was added in the income of the assessee as income from undisclosed sources. 19. This Court held by the parity of reasonings which prevailed in Daulat Ram Rawatmull's case (supra ) that it can well be said that merely because the explanation furnished by Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal, about the purpose for which the gold ornaments were delivered for making new ornaments and that the ornaments were belonging to their family was found to be not acceptable, could not have provided any nexus for drawing inference therefrom that the primary gold and gold ornaments belonged to the assessee. 20. This principle is fully applicable to the present case. The fact that the explanation furnished by the aforementioned four creditors about the sources wherefrom they acquired the money was not acceptable by the revenue could not provide necessary nexus for drawing inference that the amount admitted to be deposited by these four persons belonged to the assessee. The assessee having di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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