1985 (1) TMI 78

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..... of the same and, therefore, the cross-objection shall be considered along with the appeal. The other grounds raised in the cross-objection namely the ground Nos. 3 4 have not been pressed by the assessee and as such, the cross-objection survives only to the extent of appeal by the department regarding the said Rs. 18,000. 2. The relevant facts are these. The assessee had maintained three sets of accounts. In Tendu leaves set of account also would of Patti set, Rs. 18,000 and Rs. 10,000 were credited in the capital account on 12th May, 1976 and 22nd Nov., 1976. The assessee was called upon to explain the source of receipt of the said amount. Out of Rs. 18,000 credited on 12th May, 1976, the assessee, according to ITO, furnished satisfac .....

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..... explanation of the assessee was obviously an afterthought, inasmuch as neither names of Krishna Kumar Tewari and Munim appeared as creditors in the account books and the balance-sheet of the assessee nor the said Rs. 18,000 was ever shown as liability. Further in the wealth-tax return, of that year, the assessee did not show the said amount as debt. The ld. counsel of the assessee, on the other hand, contended that the wealth-tax return was revised on 19th Feb., 1980 and the debt was shown in the subsequent asst. yrs. 1979-80 and 1980-81. According to him, Krishna Kumar Tewari was present before the ITO but as not examined by the ITO. 5. After having given our anxious consideration to the rival contentions of the parties, we find that th .....

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..... ty to advance a loan of Rs. 8,000. But the ld. AAC lost sight of the requirement of law that for establishing cash credit not only identity and credit-worthiness of the creditor should be established but genuineness of the transaction should also be established. A creditor may be a man of means but the transaction itself may not be genuine. The ITO rightly stated in the assessment order that he wanted Shri Krishna Kumar Tewari for verification of genuineness of the alleged advance. The advance under the circumstances, could not be genuine, when neither name of Shri Krishna Kumar Tewari was disclosed in the account books of the assessee nor was shown as a debt in the balance-sheet and in the WT return. 7. In view of our discussion, of the .....

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