9911796707
TMI Blog2021 (10) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which is hereby directed. It shall be open for him to question the assessee, or even, where so considered, the concerned creditor/s, and/or seek further evidence in validation of the document/s (balance-sheet, income statement, etc.) submitted, which, where belonging to the creditors, would need to be signed by them. He shall make an objective and fair assessment of the different variables impinging on the cash availability, and decide in accordance with law per a speaking order after affording a reasonable opportunity to the assessee to present his case before him. Another aspect of the matter that needs to be before parting clarified is that the Revenue has not disallowed the interest allowed by the assessee on the impugned credits, stated to be loans thereto, and which in fact follows in consequence of the same being, or ought to be the case where it is, deemed as the assessee's income. Though inconsistent, that would not by itself render the assessee's case as proved, which will have to be adjudged on its merits. Why, regarding so would make the Revenue's case a non-starter, and allowing the assessee the benefit of what is essentially a fallacy on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g-end of the year, availability of cash, i.e., from the income/s realized/realizable in cash during the year, cannot be doubted and, in fact, has not been adversely commented upon by the Revenue authorities, who have in fact allowed the credits (and the interest thereon) for both the earlier and the succeeding year (PB pgs. 6, 8). There is as such nothing to doubt the genuineness of the loans, which the Revenue finds suspect only for the reason that cash to that extent stands deposited by the creditors in their respective bank accounts just prior to the issue of cheque to the assessee (PB pgs. 14, 19). 2.2. The Revenue's case is that there is no built-up of savings in, or otherwise any transfer of funds to, the bank account of the two creditors. Further, there is nothing to show that the assessee's return for the preceding or the succeeding year was subject to verification under the scrutiny procedure, for it to draw any mileage therefrom. Each credit is to be separately explained as to its nature and source, on the parameters of identity - of which there is though no doubt in the instant case, capacity (of the creditor) and genuineness (of the credit transaction), with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is thus a negative cash generation of ₹ 22,060 during the year. The shortfall in cash as well as the cash deposit of ₹ 4 lacs in his bank account, as indeed the closing cash-in-hand (reported at ₹ 2,81,346), is thus presumably from the opening cash-in-hand, i.e., as on 31.03.2011, which is thus impliedly at ₹ 7.03 lacs. This is indeed surprising, particularly considering a negative cash generation during the year, which may be so for the preceding year/s as well. Then there is the question as to why would one maintain such a high cash balance, a very risky proposition, apart from loosing on the opportunity cost of funds. The question as to the source of cash with the creditor (for being deposited in bank), in any case, continues to remain unexplained; with there being nothing on record to even suggest the same. It may be clarified that stating it to be the cash-in-hand carried forward from an earlier year, as inferred, is neither here nor there inasmuch as it does not specify the source of the said cash, unless of course the capital as at the beginning of the year is proved, including the extent to which it is held in cash. It may be that cash stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st time. Needless to add, both the Revenue authorities have not discussed this document in their respective orders. This becomes relevant as it is this document that 'explains', at least from the assessee's standpoint, the source of the credit, being the cash available with the creditors and, further, as forming part of their capital, i.e., of the cash with the creditor being accounted for and disclosed, making it irrelevant as to whether the transfer of funds by him/her to the assessee is by way of transfer of bank funds or essentially cash (routed through bank), meeting thus the main objection of the Revenue. In fine, even as the said document does not clarify the exact source of the cash with the creditors that stood deposited in their bank accounts for being transferred to the assessee; rather, gives rise to further questions for being answered (as, for example, the reason for an unusually large cash, not deposited in bank, i.e., other than for being transferred to the assessee; the basis of the opening cash-in-hand inasmuch as it is this that stands ostensibly deposited in bank, etc.), it does (and it is in fact only this document that so does) indicate, even as ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'not legible', reading as under: '1-4. ....5. Explain the source of cash deposit of ₹ 1,50,000/- in the bank account of Shilpa Devi and of cash deposits in the account of Giriraj Rathi just before giving unsecured loans. Furnish cash flow statements of the lenders. 6. ..... Next date of hearing fixed on 15/2/2015.' It thus stands clarified that the date of the assessment order is not '13.2.2015'. Further, and more importantly, i.e., in the context of the case, it (the order sheet entry), requires the assessee to explain the source of cash with the lenders, i.e., at the time of giving the loan and, further, to furnish their cash flow statements. This is precisely what stands stated in the preceding part of this order, i.e., upon an examination of the said document, furnished on 15/2/2015 in response to the said requisition. How could under circumstances it be said that the assessee had furnished all that was required of him by the AO? True, where the document furnished explained a credit - cash available to the required extent in the instant case, there is a prima facie discharge of the onus on the assessee, and it is for the AO to, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's income. Though inconsistent, that would not by itself render the assessee's case as proved, which will have to be adjudged on its merits. Why, regarding so would make the Revenue's case a non-starter, and allowing the assessee the benefit of what is essentially a fallacy on the part of the Revenue, which ought to have been addressed by the first appellate authority inasmuch as it is, as afore-said, inconsistent with the impugned credits being regarded by it as the assessee's income. Why, for that matter, even the said interest having been returned by them, may have been assessed as the creditor's income for the relevant year. That, again, though would not by itself absolve the assessee from discharging the burden of proof on it. Reference in this context, on which aspect of the matter case law is legion, may be made to decisions as Radhey Shyam Tibrewal v. CIT [1984] 145 ITR 186 (SC); Jamnaprasad Kanhaiyalal v. CIT [1981] 130 ITR 244 (SC). I decide accordingly. 5. The only other issue in this appeal is qua an addition for ₹ 60,000 toward low house-hold withdrawals. The AO effected the same finding the disclosed withdrawal of ₹ 76,000 as inad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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