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TMI Blog2016 (5) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... eting the addition of Rs. 9,960/- being commission received on sale of cement. 4) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 82,582/- being reimbursement of Freight Bills not shown as income during the accounting year. 5) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 1,50,000/- being security deposit with M/s Shiva Cement Ltd not shown in the Balance Sheet under Undisclosed investment. 6) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 10,87,817/- being unrecorded purchase and sale of cement. 7) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 1,60,816/- being Carriage Inward expenses on account of Undisclosed purchases. 8) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 1,62,608/- being Proportionate GP on undisclosed sale. 9) That the Ld. CIT(A) erred in fact and in law in deleting the addition of Rs. 14,60,312/- being debit entry not shown in the books of account." 2. The facts in brief are that Krishna Trading is a partnership firm and engaged in the business of trading of asbestos, cement etc. Assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned transactions as payments/ receipts to/ from the appellant's firm. Accordingly the CIT (A) has disregarded the additions made by the A.O of Rs. 60 Lakhs as unexplained cash u/s 68 because it has duly verified and explained by the assessee. The ld. CIT(A) relied on the statement of Suman Trading Co. furnished by the assessee in support of his claim where the transactions of Rs. 60 lakhs was duly recorded in the books of accounts. Now, Revenue is in Appeal before us. 3. The ld. DR vehemently relied on the order of AO whereas Ld. AR relied on the order of Ld. CIT(A). The ld. AR has submitted index which is running pages 1 to 44. We have heard the rival contention of both the parties and perused the materials available on record. It was observed that disallowance of Rs. 60 lakhs was on account of unexplained cash credit u/s 68. But the assessee has produced and explained the cash book of sister concern Suman Trading Co where the transactions with the assessee has been duly recorded and matched with the cash book. The ld. DR failed to bring anything contrary to the findings of ld. CIT(A). So we do not find any reason to say that Rs. 60 lakhs is unexplained cash. So we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hases amounting to Rs. 10,87,817=71 in respect of which the company has sent the details of the bills along with the copy of bills, challans which are enclosed as per annexure-A by the Shiva Cement Ltd., therefore, you are asked to explain why the amount of Rs. 10,87,817=71 will not be added to the total income of the assessee-firm u/s 69B and at the same time proportionate carriage inward u/s. 69C. further you are requested to explain why a sum calculated thereon at GP rate disclosed by you should not be taken and included in your taxable income as deemed profit. Apart from the above the Shiva Cement Ltd has sent statement of confirmation made by Authorized Representative of the assesseefirm as on 4/9/03 along with assessee-firms authorization letter for finalization of accounts." SCL made the account of the assessee debited on various dates for the different transactions for a total amount of Rs. 14,60,312.00 as per the details recorded on page 12 of the AO order but no such transaction was reflected in the assessee books of accounts. The AO accordingly made the addition of the above amounts as discovered from the discrepancies with the accounts of the SCL. Hence the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount as on 04.9.2003 was said to have been confirmed by them. The statement of account shows that there was a debit balance of Rs. 59,405/- as on 04.9.03 whereas the letter dated 29.11.03 refers to a credit balance of Rs. 2,40,999/- as on the said date. The letter refers to the minute of the meeting dated 4.9.2003 and states that there was mistake in the account as the debit notes for Rs. 25,000/- and Rs. 60,000/- were reversed twice in the said account and the correct credit balance should, therefore, be read only as Rs. 1,55,999/-. The letter further states as per the request of the appellant firm that Shiva Cement Ltd was remitting the balance through a cheque for Rs. 55,999/- and the remaining amount Rs. 1 lakh by selling cement of the equivalent value to the appellant. It, however, appears that instead of the proposed sale of cement, Shiva Cement remitted Rs. 30,000 each by cheques as intimated in its other two letters dated 28.02.2006 and 10.3.2006 which also refer to the aforesaid minutes of the meeting dated 4.9.2003. 4.8 It is thus seen that initially Shiva Cements Ltd demanded on 13.3.03 a sum of Rs. 2,45,049/- payable by the appellant firm. This debit balance wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier are income of the assessee. It is seen that the addition made of Rs. 14,63,312/- on account of various debits (details given on page 12 of the assessment order). Shiva Cement Ltd furnished copies of debit notes and transfer vouchers which are not found acknowledged by the appellant. As regards the addition of Rs. 10,87,818/- on account of unrecorded sales Shiva Cement Ltd has furnished the copies 12 sale bills pertaining to the period from 11.12.02 to 27.12.02 along with copies of the delivery challans. It is seen that none of the sale bills or the delivery challans has been acknowledged by the appellant firm. The addition made of Rs. 1,50,000/- as unexplained investment has been made in spite of the fact that payment in this regard was made from the bank account which is disclosed and Shiva Cement Ltd confirmed that the amount was adjusted against a sale bill in the month of march. Under the circumstances no question arises for the amount appearing as an asset in the balance sheet. The addition made on account of bank commission are also based on the credit entries made in the account of the appellant which have not been established to be genuine. The addition made of Rs. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of AO unilateral. It is beyond doubt that the discrepancies were observed but the question arises whether these discrepancies amount to the undisclosed income of the assessee. The ld. DR has also not brought on record anything contrary to the findings of the ld. CIT(A). We find pertinent to refer the decision of the Hon'ble Supreme Court at this juncture in the case of ([1965] 56 ITR (Sh. N.)31.) where it was held as under : "By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed an income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of proving that it is not taxable, because it falls within an exemption provided by the Act, lies upon the assessee. Where the case of the assessee is that a receipt did not fall within the taxing provision, the source of the receipt is disclosed by the se and there is no dispute about the truth of that disclosure, the income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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