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TMI Blog2007 (6) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- to the income of the assessee whereas such addition could have been made only in the hands of the depositors or could be treated as sale proceeds in the assessee s hands in the year of completion of the project ? In R.A. No. 172 1. Whether, on the facts and in the circumstances of the case, the tribunal was right in law in holding that the amount of received by the assessee from the banks FDRs was business income and not income from other sources ? 2. Whether, on the facts and in the circumstances of the case the Tribunal was right in law in holding that the amount of ₹ 30,000/- was received by the assessee as loan from Sh. Gulam Mohd. Dar was a genuine case credit ? Brief facts of the case are that the assessee is engaged in the business of real estate. He used to purchase land, raise construction thereon and sell the property to different persons. For the assessment year 1989-90 the assessee had received a sum of ₹ 65,000/- from one Anil Kapur and ₹ 1,90,000/- from Smt. Shanta Kapur, mother of Anil Kapur. According to the assessee these amounts were received as advance for sale of property. The Assessing Officer did not accept the version of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t he had advanced ₹ 30,000/- as loan to the assessee. The Tribunal inspected the accounts and found that the money had been repaid in the month of August, 1989 and the receipts obtained from the creditor were seen and the contention of the assessee that the amount was a loan was upheld. This finding of the Tribunal is also under challenge in the Reference. We have heard Mr. M.M.Khanna, learned Senior Advocate, appearing on behalf of the assessee and Ms. Vandana Kuthiala, learned counsel appearing for the Revenue. As far as the questions raised in assessee s reference are concerned, we are of the view that the learned Tribunal rightly came to the conclusion that the amount of ₹ 65,000/- advanced by Anil Kapur and ₹ 1,90,000/- advanced by Smt. Shanta Kapur were not advances towards property. On behalf of the assessee it has been argued that the aforesaid sums of ₹ 65,000/- and ₹ 1,90,000/- were received from Anil Kapur and Smt. Shanta Kapur He submits that this version is supported by the statement of Anil Kapur and affidavit of Smt. Shanta Kapur. It would be worthwhile to note that both the amounts are said to be advanced on the same day, i.e. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the son of the partner of the firm had been unable to give satisfactory explanation regarding source of ₹ 5,00,000/-, it could not be held that this money belonged to the firm. The Apex Court also held that it was for the department to prove that the amount belonged to the firm. Mr. Khanna has also placed reliance on 87 ITR 370 Commissioner of Income Tax, Bihar and Orissa Vs. S.P.Jain wherein again the Apex Court has laid down that it is for the department to satisfactorily establish that the assessee was the real owner of the funds and the person in whose name the funds are shown is not the real owner thereof. The Supreme Court held that the department must not only show that the person who has purportedly advanced the funds has not shown any source of funds, but must also show that these funds were of the assessee. In (1976) 103 ITR 344, Sarogi Credit Corporation Vs. Commissioner of Income-Tax, Bihar, again the Apex Court held that if there is credit entry in the books of the assessee and it is not in the name of the close family member or relation, but in the name of an independent party, the assessee is only required to give the identity of that party to the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, after rejecting the books of account of the assessee as unreliable. After giving our careful consideration to all the judgments cited before us, we are of the considered view that the law as laid down by the Apex Court is that the assessee must disclose to the income tax authorities the source from where he/she received the funds and must give full particulars to identify the person who had advanced him the said funds. In case such particulars are given and the said person appears before the income tax authorities and states that he/she has in fact advanced the amount to the assessee, then the burden will shift upon the Revenue to establish that the amounts belong to the assessee and not to the persons who have allegedly advanced the cash credit. However, the manner in which such burden is to be discharged by the assessee will depend upon the facts and circumstances of each case. In the present case we are clearly of the view that the version put forwarded by the assessee that he had received these amounts of ₹ 65,000/- and ₹ 1,90,000/- from Anil Kapur and Smt. Shanta Kapur as advances for purchase of property is totally false and not supported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar in question interest in the sum of ₹ 1,17,444/- thereon. On the security of the amount so deposited, the assessee took a loan from the bank and paid in respect of the loan, interest to the bank in the sum of ₹ 90,410/-. The assessee claimed that he could be taxed only on the differential amount of ₹ 27,034/-. His contention was rejected by the Income Tax Officer and in first appeal. The Tribunal took the contrary view, and out of its judgment the questions quoted above were referred to the High Court. The High Court answered the questions as indicated above on the basis that the situation was one of mutuality. 3-4. x x x x x x x x x x x x x x x x x x x x 5. It was not disputed , as it could not be, that if the assessee had taken a loan from another bank and paid interest thereon his real income would not diminish to the extent thereof. The only question then is: does it make any difference that he took the loan from the same bank in which he had placed the fixed deposit ? There is no difference in the eye of the law. The interest that the assessee received from the bankw as income in his hands. It could stand diminished only if there was a provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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