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TMI Blog2016 (4) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... on on account of gifts and commission paid - Held that:- The assessee was not provided an opportunity to cross examine the statement of Shri Kripa Shankar which is not in conformity with principles of natural justice. In view thereof, grounds relating to addition of ₹ 2,00,000/- and ₹ 1,000/- are set aside. Addition u/s 68 - Held that:- There was no reason for reopening of assessment in this behalf. The assessee has submitted confirmations along with names, address and PAN numbers of the creditors. In my considered view the assessee has discharged its initial onus to explain the cash credits relying on cases of CIT vs. Heeralal Chagan Lal (2002 (1) TMI 19 - RAJASTHAN High Court ). Addition under section 41(1) - Held that:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the fact that sources of the same has been duly explained by the assessee, thus the consequent addition sustained by ld. CIT ()A) deserves to be deleted. (ii) ₹ 4,73,000/- u/s 68 of the Income Tax Act, 1961 on account of unsecured loan taken by the assessee without properly appreciating the evidence adduced before him. Thus the addition of ₹ 4,73,000/- confirmed u/s 68 of Income Tax Act, 1961 deserve to be deleted in toto. (iii) ₹ 1,03,000/- on account of sundry creditors when the assessee has filed complete details evidence in respect of transaction with them, thus the consequent addition sustained by ld. CIT (A) deserves to be deleted. (iv) ₹ 75,367/- on account of interest paid by the assessee with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s escaped assessment before issuing the notice u/s 148. 3.1. On merit, it is contended that all the gifts were duly supported with evidence in the form of Gift Deeds and confirmation from the donors. The gifts in question were of small amount, all the particulars about donors were duly submitted with the AO. The lower authorities were of the view that the source of donors was not properly explained which was beyond control of the assessee in asmuch as she cannot ask the donor to demonstrate that he had the capacity to make such gifts. The ld. Counsel for the assessee contended that opportunity of cross examination was not given. 4. Apropos addition of ₹ 1,000/- on allegation of commission paid for arranging bogus gifts, it is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be made unless there is sufficient material to disprove the genuineness. CIT vs. Heeralal Chagan Lal, 257 ITR 281 (Raj.) Balbir Sing Tomar (Dr.) vs. ACIT (Raj.HC) 20 TW 546. 2. No addition of cash credit can be made simply on the basis of presumption in the absence of any contrary evidence. Sheon Narain Moharilal vs. ACIT 24 TW 318 (ITAT, Jaipur) 3. Establishing the identity of the creditor, proving the genuineness of the transaction and the source of the credit appearing in the books of creditor is sufficient to discharge the onus for explaining the genuineness of the cash credit. Sideway Investment Pvt. Ltd. vs. DCIT, 24 TW 146 (ITAT Jaipur) 4. Whether filing of confirmations and disclosure of the amounts of advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the liability in question still continues in the books of account. In these circumstances it cannot be held that the liability of the assessee has ceased u/s 41(1) on notional basis. Therefore, the addition may be deleted. 7. Apropos the amount of ₹ 75,367/-, the AO has disallowed the interest only on the reason that income from shares has not been shown which was caused by the fact that the assessee has entered into share trading. Therefore, the interest amount has been disallowed on assumption and hypothecation. 7.1. The ld. D/R has supported the orders of the lower authorities. 8. I have heard the rival contentions and perused the material available on record. The proceedings u/s 147 were initiated after recording nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. 11. Apropos addition of ₹ 1,03,000/- under section 41(1), the liability in question remains outstanding in the books of the assessee merely because the postal notice came back unserved. It cannot reach an inference that assessee s liability has shifted in terms of section 41(1). In view thereof, the addition made is deleted. 12. Apropos remaining ground of disallowance of interest, it has not been disputed that assessee has income from shares and also trading of clothes. The interest has been paid on earlier liabilities during the course of business. Merely because there was a lull in the business which cannot be assumed that the payment of interest is not in the course of business. Therefore, the same is allowable under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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