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TMI Blog2016 (9) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/- and that he had no debtors. Therefore, availability of cash with the Assessee does not appear to be in doubt. The correlation between the cash book and the deposit in the bank account has also been accepted by the CIT(A). The source of funds in so far as it relates to the Assessee’s wife has also been given but the same was neither examined nor rejected by the AO. Therefore the conclusion that the Assessee invested the entire funds including the share of the Assessee’s wife was rightly held by the CIT(a) to be incorrect. The fact that the Assessee had taken a loan from M/s. ICICI Bank, is clear from the evidence on record but in his conclusion the AO did not give credit to this loan as funds explained by the Assessee. The above findings of the CIT(A) have not been shown before us to be incorrect based on material available on record. In the given circumstances, we are of the view that the addition made by the AO was rightly deleted by the CIT(a) - Decided in favour of assessee. Addition on account of gift received - failure to prove the creditworthiness of the donors from the party of the assessee - Held that:- As seen from the Record that the AO himself has admitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For The Assessee : Shri U. Dasgupta, Advocate ORDER Per Shri S.S. Viswanethra Ravi :- This appeal and cross objection filed by the revenue and assessee are directed against the order of Commissioner of Income Tax (Appeals)- Durgapur dated 04.02.2013 for the assessment year 2008-09. The Assessee has also filed a Cross-objection against the very same order of the CIT(A). 2. There is a delay of 05 days in filing the appeal by Revenue, for which the condonation petition has been filed explaining the reason for delay in filing as owing to administrative delay. After perusing the same and hearing both the parties, we condone the delay in filing the appeal by the revenue. 3. Ground no.1 raised by the revenue reads as follows:- That, the ld. CIT(A), Asansol has erred in law and on facts by deleting the addition of ₹ 30,44,387/- made by the Assessing Officer on account of unexplained investment in land, residential flat shop, etc.; 4. During the relevant year under consideration that the assessee had made an investment of ₹ 12,35,000/- for the purchase of Flat at Buro Shivtola, Kolkata and ₹ 18,44,000/- for purchase of Shop Room at Kolka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account. According to the AO, a person cannot withdraw capital of ₹ 30,28,626/-, when he has the capital of ₹ 6,28,353/- only. The AO found that in the circumstances was of the view that the assessee does not have any cash credit account for running his business. A person cannot run his business that too with a turnover of ₹ 2,67,54,866/- without having any capital. The assessee did not have any sundry debtors in his books. 7. On verification of the bank account of Sudhi Bastralaya, the AO found that all the deposits were made in cash. On almost every instance, just before paying money for purchase of flat and shop huge amount of cash has been deposited in the bank account. To verify the availability of cash with Sudhi Bastralaya, the AO called upon the assessee to produce cash book for the relevant year. In response to this, the assessee produced cash book, which was manually maintained in a register. In this register entry of cash inflow-outflow and transaction made in bank are mixed together. According to the AO the cash book availability of cash was not ascertainable. According to him, on various occasion, it has been found that cash has been depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- was paid from the Axis Bank account of M/s. Sudhi Textiles of Smt. Bubai Kar. c. Land at Raina for ₹ 3,75,000/- was shown in the personal capital account of the assessee out of withdrawals from the business of the assessee. All these investments have been made from the bank accounts of the assessee and his wife and also from bank loan and from withdrawals from his business which have been properly reflected in the books of the assessee. The books maintained are correct and truly reflected in transaction. Every receipts and disbursement made during the year are correctly entered and are properly explained. The Learned Assessing Officer has failed to appreciate the fact that total capital in a business cannot be any yardstick of the investment made especially when the purchase are made wholly on credit. Further more in a retail business of cotton and textile goods when almost the entire sales are made in cash and where the annual turnover is more than 2 crores, there can be no shortage of liquid money. In view of this, the entire addition of ₹ 30,44,387/- being properly explained, should be deleted. The Axis Bank account of the business of M/s. Sudhi Bastralay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness where the sales are invariably in cash, a fact which the AO himself has attested too. Moreover, I find from an examination of the bank account that the cash has been deposited at regular intervals and not only before making the investments in question. To sum up, I do not agree with the AO s view that the appellant s cash availability as on a particular day was not ascertainable from his cash book. I also find that availability of cash with the appellant was not a problem given the nature of his business. It is seen from the assessment order that the appellant had submitted before the AO details regarding the investment made by his wife. However, no examination of such submission by the AO is available on record. The total addition is seen to have been made as if the appellant had invested the entire amount. The appellant s wife is seen to be separately assessed to tax. Under the circumstances, I do not see how her investments can draw adverse inference in the hands of the appellant. Thus, out of the total addition made by the AO ₹ 8,00,000/- is seen to have been invested by the appellant s wife and cannot suffer addition in the hands of the appellant. The AO is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted by the CIT(A). The source of funds in so far as it relates to the Assessee s wife has also been given but the same was neither examined nor rejected by the AO. Therefore the conclusion that the Assessee invested the entire funds including the share of the Assessee s wife was rightly held by the CIT(a) to be incorrect. The fact that the Assessee had taken a loan from M/s. ICICI Bank, is clear from the evidence on record but in his conclusion the AO did not give credit to this loan as funds explained by the Assessee. The above findings of the CIT(A) have not been shown before us to be incorrect based on material available on record. In the given circumstances, we are of the view that the addition made by the AO was rightly deleted by the CIT(a). Consequently, Gr.No.1 raised by the Revenue is dismissed. 12. Ground no.2 raised by the Revenue reads as follows: That, the ld. CIT(A), Asansol has erred in law and on facts by deleting the addition of ₹ 4,51,516/- disallowed by the Assessing Officer on account of gift received being failed to prove the creditworthiness of the donors from the party of the assessee. 13. The assessee had shown to have taken Gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y distress. One more interesting thing is that almost all the gift has been received by the assessee in the fag end of the financial year. Since, the assessee failed to prove all the three basic conditions to have been taken as gift by the assessee amounting to ₹ 4,51,516/- was disallowed and added to the income of the assessee. 15. Before the CIT-A the assessee submitted as under:- The disallowance of gifts by the Learned Income Tax Officer is wrong unjust in view of the following reasons:- (i) Gift by Sri Bhakti Binod Sinha Sri Sinha is a retired employee and has at present running a PCO Booth, made the gift by making bank draft out of withdrawal from savings account of United Commercial Bank, Raniganj where his transactions are fully reflected which is being submitted. (ii) Sri Sushil Kar Sri Sushil Kar is a bachelor of about 78 years and is staying at Raniganj alongwith the mother of the assessee and other members of the family. Sri Sushil Kar jointly carried on a big sweetmeat shop for about 50 years at Asansol Court jointly with Late Gopal Kar, the father of the assessee which they sold about 2/3 years back and the accumulated savings and the sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors, their full address, their P.A Nos. And assessment records where there are such assessment made. The gifts made through A/c payee cheques/drafts from the bank accounts of the accounts of the donors. Hence the gifts should be fully allowed. 16. The ld. CIT-A on consideration of the above submissions held as follows:- ... ...The AO is himself seen to admit that the appellant has submitted the name of the donor, the amount of gift and the mode of transaction which, admittedly, is through cheque. In my opinion, the AO has missed the point that the onus has shifted onto him once these basic details have been submitted by the appellant. He is not seen to have conducted any enquiries on these issues. Without an enquiry, the action of the AO bases itself on surmises and cannot be held to be correct. Besides, no adverse comments are seen to have been made by the AO on any of the details submitted. I also find these amounts to be meagre and cannot be said to be beyond the means of the donors given their relationship with the appellant. Under the circumstances, I cannot uphold the AO s action in this regard. However, addition in respect of the gift from Swapan kr. Das, is confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also be a relative. Therefore, the brother-in-law would also be relative and the sum in question, therefore, cannot be treated as income. Ground no.2 raised in the CO accordingly is allowed. 21. Ground no.3 That, the ld. CIT(A), Asansol has erred in law and on facts by deleting the additions of ₹ 2,82,618/- disallowed by the Assessing Officer on account of liabilities for failing to substantiate the same. 22. Facts of this issue are that the assessee had shown amount of ₹ 2,82,618/- payable to Amit Traders. Notice u/s. 133(6) was issued to him by the AO. Notice sent to Amit Traders was returned unserved with postal remark Insufficient Address . The assessee was asked to produce the evidence of transaction made with Amit Traders and evidence of payment of outstanding balance in subsequent years.In response to this the assessee produced purchase bills of the above party. The AO found that purchase of ₹ 2,82,618/- was made during the relevant year. But the entire payment has been shown as outstanding as on 31.03.2008. As an evidence of repayment of outstanding balance, the assessee submitted the ledger copy of next financial year. In which the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not genuine. On the other hand, the payment to the above said party by the assessee in the subsequent year by cash and the availability of cash to make payment were satisfactorily explained by the assessee. In these circumstances, we find no reason to interfere with the finding of the ld.CIT-A. Accordingly, ground no.3 of the revenue s appeal is dismissed. CO. 106/Kol/2013 (by the assessee) 27. Ground no.1 raised by the Assessee in the C.O. reads thus: For the Learned Assessing Officer was not justified in making an addition of ₹ 5,00,000/- to the total income of the respondent being genuine loans advanced by the loan creditors and that the Learned Commissioner of Income Tax (Appeals) has also erred in confirming the same. 28. Brief facts of this case that the return of income for the A.Y under consideration was filed manually on 31-03-2009 declaring total income of ₹ 6,88,737/-. However, the case was selected for scrutiny by issuance of statutory notices. The assessee has taken loan from Aparna Banerjee and Swapan kr. Das of ₹ 3,00,000/- and ₹ 2,00,000/- respectively during the relevant year. Before the AO the assessee filed the copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l settled in the cases of CIT Vs. Biju Patnaik (SC) 160 ITR 674, Roshan De Hatti Vs. CIT (SC) 107 ITR 938 and Shankar Industries Vs. CIT (Cal) 114 ITR 689 and in many other cases by different courts of law of India that in order the discharge the onus, the assessee must prove the followings:- i) The identity of the creditor, ii) The capacity of the creditor to advance money, and iii) The genuineness of the transaction. There mere furnishing of particulars or the mere fact of payment by an account payee cheque, or the mere submission of confirmatory letter by the creditor is, by itself, not enough to shift onus on the department. The person who advanced the loan has herself not explained the source of her income and the assessee also could not establish her creditworthiness to advance money, which is the basic requirement to prove the transaction genuine. Thus, the entire transaction is coloured to give it a garb of a loan to enable the assessee to introduce his own undisclosed income in its books of account by this camouflaged transaction. The transaction is devoid of merit and lacks soundness of the creditworthiness of the lender. Hence, in the light of the above facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- in the income should be deleted. The confirmation certificates, the relevant bank statements, income statement of the parties and affidavit made by both of them substantiating the transactions are being submitted. (Ref. Deputy Commissioner of income Tax Vs. Rohini Builders- 256 LT.R.- 360(2003); CIT Vs. P.K Noorjahan 237 ITR 570(1999) (SC) CIT Vs. Orissa Corporation (P) Ltd 159 ITR 78, CIT Vs. Doulatram Rawatmal 87 ITR 249 and recent decisions of Gujrat High Court in the case of CIT Vs. Ujala Dyeing and Printing Mills (P) Ltd 328 ITR 437(Guj), CIT Vs. Micro Melt (P) Ltd 327 ITR 70(Guj.) 31. The ld.CIT-A however, did not accept the plea of the assessee for following reasons:- Before me, the appellant s case is that the identity of the loan creditor has been established and the transactions have been made through bank. Therefore, the genuinity of the transactions are not in question. I do not agree with the appellant s view. No evidence regarding the creditworthiness of the alleged loan creditors have been furnished. I find the appellant s contention regarding the genuinity of the bank transactions to be specious. Cash has been deposited only a few days before issue of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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