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TMI Blog2008 (4) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... e. the origin of the origin was upon the assessee and whether the same can be used against the assessee? 3. Whether the finding of the Tribunal that credits in question were non-genuine stands vitiated being based on mere whims, assumption, conjectures and surmises and not on any relevant or cogent evidence or material? 2. Necessary facts are, that AO issued notice under Section 143(2). In response thereto, cash book and ledger were produced, which were examined on test check basis. So far as present controversy is concerned, it was found, that various amounts were credited in the books of account, in the names of various persons. On dates of hearing, assessee was asked to produce doubtful creditors. The assessee produced most of them, whose statements were recorded on oath. Two lady creditors, being Geeta Bai and Smt. Khama Bai were not produced, but their affidavits were filed, then they were also required to be produced. The learned AO held, that 10 entries totalling to Rs. 2,40,000, being principal amount, and Rs. 7,781 being interest, were required to be added, and were accordingly added to the income of the assessee, invoking the provisions of Section 68 of the IT Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, available in the account, in itself is a proof of ingenuity of the transactions in questions, therefore, the additions were confirmed. 4. Assailing the impugned judgment, it is contended by the learned Counsel for the assessee, that once the assessee furnishes explanation, and establishes identity of a person in whose name entry stands, and even when that person is examined, who owns that entry, and confirms the advance, at that the matter ends, and it is not contemplated by Section 68, that assessee should still further satisfy the creditworthiness of the lender i.e. to establish, source of the source, much less to prove in negative about want of genuineness, and since the learned Tribunal has confirmed the additions, only because, in view of the Tribunal, the assessee has failed to establish source of the source, the order proceeds on basically a wrong approach, and is vitiated. Reliance has been placed on the judgment of this Court, in Late Mangilal Agarwal through LRs Vs. Asstt. CIT, reported in 208 CTR 159, and Mehta Parik & Company Vs. CIT, reported in 30 ITR 181 (S.C), and also placed reliance on another judgment of Hon'ble Supreme Court, in Omar Salay Mohamed Sait V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the asst. yr. 1988-89, it was found, that so far as finding that money and valuables owned by the assessee are concerned, the burden is clearly on the Revenue, because it is only on reaching such finding, the opinion can be given about the source of its acquisition. Then, regarding explanation, it was considered, that the logic adopted by the authorities below, that the ornaments are not proved by the three persons as belonging to them, though it was admitted by each of them, that the attributed gold ornaments and primary gold, derived from such ornaments, belonged to them respectively, which belonged to the assessee, was found to be suffering from legal lacuna. It was held, that the finding cannot be considered to be a finding of fact, as it was found to be vitiated, not only by a wrong view of burden, in appreciating the evidence, but having no nexus between the finding about failure of the three persons to prove the ownership of the gold ornaments, which they admitted to have delivered to the respective goldsmiths through the assessee, for the purposes of making new ornaments. Then Daulat Ram's case (supra) was also considered, and it was held, that on the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine, it should not have upheld the order of the CIT(A), and should have set it aside with the direction to allow such amounts, for which the assessee has been able to prove satisfactorily, by giving opportunity of explaining the investment. It was noticed, that the Tribunal itself doubted about the correctness of its own conclusions, thus, this judgment is no authority for the proposition, that source of the source is required to be established by the assessee. Then, so far as judgment in Kishorilal's case (supra) is concerned, six requirements noticed by this Court read as under: (i) that there is no distinction between the cash credit entry existing in the books of the firm where it is of a partner or of a third party. (ii) that the burden to prove the identity, capacity and genuineness has to be on the assessee. (iii) if the cash credit is not satisfactorily explained the ITO is Justified to treat it as income from "undisclosed sources". (iv) the firm has to establish that the amount was actually given by the lender. (v) the genuineness and regularity in the maintenance of the account have to be taken into consideration by the taxing authorities. (vi) if the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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