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TMI Blog2010 (5) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst discounting of cheques/drafts, the details of which are as under:- Shankardas Desai Rs.4,26,520/- Hari Textiles Rs.1,57,819/- Ganesh Steel Industries Rs.2,56,740/- Rs.8,41,079/- In course of the assessment proceedings the Learned Assessing Officer gave ten opportunities to the appellant to produce evidence in support of the explanation. The appellant neither filed the confirmation from these three parties nor was any evidence furnished to establish their identity. In these circumstances the Assessing Officer added the unexplained sum of ₹ 8,85,001/- (8,41,079 + 43,922) in the computation of income. 4.2. In proceedings before me too the appellant has not filed any confirmations. The identity of these parties by way of their addresses, etc. has also not been established. The additions are therefore, upheld. 4. We have heard the rival submissions and perused the materials available on record. In the instant case the assessee is engaged in the business of discounting of drafts/cheques on commission basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was not in a position to lead the evidences to substantiate his explanation as the evidences were not in the possession of the assessee. In respect of balance amount of ₹ 43,922/- which was found excess during the course of the survey, the Learned Authorised Representative of the assessee admitted that addition to that extent was justified. In the above facts and circumstances, in our considered view, the lower authorities were not justified in making the addition by rejecting the explanation of the assessee without making any attempt to verify the genuineness of the explanation either from the bank or from the three parties directly. In our considered opinion, power under section 133(6) and 131 are made available by the Act with the Income Tax authorities with a view that the same shall be exercised by them to render justice when the situation so warrants. Therefore in our considered opinion, the lower authorities were not justified in confirming the addition without exercising those powers. Therefore, it shall be just and fair and in the interest of justice to set aside the addition of ₹ 8,41,079/- back to the file of the Learned Assessing Officer for prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the absence of any such evidence made available at the assessment or the appellate stage, the addition is upheld. 7. We have heard the rival submissions and perused the materials available on record. The undisputed facts of the case are that cash of ₹ 4,13,500/- was found during the survey at Bhavanivad premises of the assessee. During the course of the survey itself, Shri Arvindbhai I. Shroff Director of the assessee company explained that the said cash belong to him in his individual capacity and was out of maturity proceeds of Fixed deposits, which was fully disclosed in his individual balance sheet. During the course of the assessment proceedings, the Learned Assessing Officer observed that cash of ₹ 9,10,000/- was withdrawn from the personal account of Shri Arvindbhai I. Shroff but the said withdrawal was on 11.09.2000 i..e. 35 days before the date of the survey. According to the Learned Assessing Officer, the assessee could not bring any material to show that the cash found during the survey was out of that cash which was withdrawn 35 days earlier. Therefore, he made the addition of ₹ 4,13,500/- to the income of the assessee by treating it as unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 Ranna Thakkar Co. 3,150 9 Sunu Textile 2,94,500 10 Sunu Textile 2,95,500 11 Mahalaxmi 3,00,000 12 Mahesh 20,000 13 Icone Fab 25,260 14 Sai Textiles 9970 15 Mahalaxmi Enterprise Total 21,40,838 The Learned Assessing Officer asked the appellant to prove the genuineness of these creditors by furnishing confirmation, address and credit worthiness. Eleven opportunities were allowed for this. The evidence asked for was however not supplied. The Learned Assessing Officer has observed in para 6.2 of the assessment order that even complete books of account were not made available by the appellant. The Assessing Officer has discussed the issue of these creditors in details in para 6 of the assessment order. In the absence of satisfactory evidence made available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same as unexplained income of the assessee by invoking the provisions of section 68 of the Act. On appeal, Learned Commissioner of Income Tax(Appeals) deleted the addition of ₹ 35,000/- relating to three parties and confirmed the addition of ₹ 20,90,088/- relating to balance 10 parties. Before us, the sole contention of the Learned Authorised Representative of the assessee was that as the assessee earns commission income @ 12 paisa to 25 paisa per 100 Rupees including bank commission, the lower authorities were not justified in adding ₹ 20,90,088/- as unexplained cash credit. We find no merit in the above argument of the assessee. Section 68 of the Act clearly requires an assessee to establish the nature and source of cash credit to the satisfaction of the Assessing Authority and in absence of which the Learned Assessing Officer has the power to treat the unexplained cash credit as income of the assessee. We find that the assessee has not disputed the fact that ₹ 20,90,088/- which was added by the revenue was not cash credit in his books of account. Further, before the Learned Assessing Officer the assessee explained that because of his nature of business ..... X X X X Extracts X X X X X X X X Extracts X X X X
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