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TMI Blog2017 (7) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... is sans any specifics nor supported by any material or contemporaneous evidence. Rather, the explanation itself raises some questions, viz. qua the particulars of the property; the documents evidencing the transaction, binding the parties to the contract; was the transaction jointly with the mother and why, as it appears, the entire of it in cash, etc. Then, again, what is the basis to say that the amount stands received back on 30.04.2008, which could not again be without evidence? Why did the mother not deposit the money in her bank account or, alternatively, why was the amount not paid back to her but deposited in the assessee’s account? Again, is the explanation consistent with the assessee and his mother’s balance-sheet as on 31.03.2009; the cash statement rendered being, surprisingly, only up to 04.10.2008, and not up to the end of the year? How has the sum received from the mother been reflected in the assessee’s and her mother’s balance sheet as on 31.03.2009, i.e., as a gift or loan? In fact, it could also be that the assessee had financed the advance by the mother for the purchase and, accordingly, stands received by him, either from the mother or from the seller dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated); the person/s with whom it was; agreement, etc., was not regarded as satisfactory. Further, the cash flow statement submitted by the assessee bore cash receipt of Rs. . 60 lacs in two installments of Rs. . 30 lacs each, on 30.04.2008. The assessee was questioned in its respect. This amount was again stated to be paid as advance for purchase of a property, i.e., by the assessee and his mother, at Rs. . 30 lacs each, which was received back as such during the year (on 30.04.2008). Being equally un-evidenced, the same was thus deemed as the assessee s income u/s. 69/69A of the Act. In appeal, the ld. CIT(A) was moved by the fact that both the assessee and his mother, being regular assessees, had disclosed the advance of Rs. . 30 lacs in their respective balance sheets as on 31.03.2008, filed along with return of income for AY 2008- 09. That being so, no further explanation was, in his view, required . The cash received on 30.04.2008 was only in the nature of collection of a debt arising in an earlier year, and the assessee could not be construed as claiming a credit u/s. 68 of the Act. This, which sums up the assessee s case, found favour with the ld. CIT(A), so that, aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account) under law is despite the entries in the assessee s accounts. In its words: This section requires the assessee to prove the transactions resulting in a cash credit in his books of account. That would mean that the assessee has to establish the identity of the creditor, the capacity or the financial ability of the creditor to advance the amount and the genuineness of the transaction in spite of entries to that effect in the account books. If the assessee does not offer any explanation about the nature and source of the cash credits or the explanation offered is not satisfactory, then the cash credit may be charged to income-tax as the income of the assessee of that previous year. In considering the scope of this section, particularly in cases where book entries are found, the Supreme Court in Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR I (SC), pointed out that the taxing authorities are not precluded from treating the amounts of the credit entries as income from undisclosed sources simply because the entries appeared in the books of a business whose income had been computed by the authorities. To similar effect is the decision in Jayaveerapandia Nadar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was not justified in coming to the conclusion that the hundi loans were genuine, directing the deletion thereof as well as the allowance of the interest stated to have been paid on the borrowals. The assessee therefore stating that it (cash) was available with him earlier is by itself neither here nor there. We say so as this would by itself neither prove the source (of cash) nor shift its assessment (as income) to an earlier year in-asmuch as law deems it to be the income of the year in which it stands found, i.e., on 04.10.2008, on it s deposit in the assessee s bank account. That is, assuming it as available even earlier, so that it has only changed form over time, it is only the form in which it manifests during the relevant year which is required to be satisfactorily explained by the assessee. The ld. CIT(A) has clearly misdirected himself in the matter. 3.2 On facts, the assessee, who appears to be a man of modest means, is to exhibit the build-up cash with him up to the date/s it was given to a party/s toward purchase of property, which remains unspecified. This could be from his savings which again would only be from his earnings, or earnings, and may towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... singly, only up to 04.10.2008, and not up to the end of the year? How has the sum received from the mother been reflected in the assessee s and her mother s balance sheet as on 31.03.2009, i.e., as a gift or loan? In fact, it could also be that the assessee had financed the advance by the mother for the purchase and, accordingly, stands received by him, either from the mother or from the seller directly, in which case the assessee shall have to establish the source with him for the entire Rs. .60 lacs. Further, where there is a prima facie proof of the assessee having been paid by his mother, it is the capacity of the mother that shall have to be demonstrated to satisfactorily explain the source of deposit as being a loan (or gift) from the mother. Again, also relevant in the matter would be the information of whether any the property was purchased during the year, either by the assessee or his mother or both. 4. In view of the foregoing, it is only considered proper to allow the assessee, in the interest of justice, even as observed during hearing, an opportunity to state his case in the matter. The same is accordingly restored back to the file of the AO to enable the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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