1980 (4) TMI 138

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..... ount of Rs. 18,000 as the income from other sources. On appeal the AAC dealt with the details of each of the credits. In his order be mentions that he agrees with the inference drawn by the ITO in respect of each credit. In conclusion however, he accepted the assessee's contention that the firm commenced the business only on 14th Aug., 1972 and the deposits were found to have been made within a period of 45 days from the beginning of the year, this being the first year of the business, according to the AAC the borrowings whether believable or not were in the nature of initial introduction of capital. The assessee could not have made the profits covered by these amounts during the short period at the beginning of the year. He deleted the add .....

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..... re seems to be nothing to hold that this creditor was telling a blunt lie. Smt. Tharilik R.Gandhi is resident in Chicago, U.S.A. and has confirmed the fact of depositing a sum of Rs. 2,500. There appears to be no reason why this lady, also not related to the partners of the assessee firm nor under their control, should not be believed with regard to a statement about a small advance of Rs. 2,500. 5. Joytshanaben, the next creditor was examined by the ITO and accepted the advance. She is also not related to the partners. She is in employment regularly drawing a salary. The ITO seems to have been prejudiced against the veracity of her statement for the reason that she kept the amount with her in cash. Surprisingly enough the ITO did not as .....

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..... ates that this person has atleast two grown up children having the facilities of college education. If Rs. 300 per month is not enough for household expenses, one certainly cannot think of sending one not to speak of two, children to schools and colleges out of an income of Rs. 300 per month. Apparently this person must have other resources, which he does not want to disclose. This person is not also related to the partners of the firm or under their control. 7. From the exhaustive details available about the creditors including their statements etc. we see no reason to disbelieve the credits. The additions are not justified though not for the reason stated by the AAC. The departmental appeal is dismissed and the assessee's cross objecti .....

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