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TMI Blog2003 (2) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... Chattar Singh (v) Rs. 20,000 (v) Sh. Gagan Preet Singh minor s/o Sh. Satinder Pal Singh (vi) Rs. 20,000 (vi) Sh. Harnam Singh Rs. 90,000 The AO has discussed this issue vide para 7 of the assessment order dt. 25th Jan., 1989. According to him, the assessee failed to prove the above cash credits as required under s. 68 of the Act. 4. In further appeal, the learned CIT(A) confirmed the addition. 5. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. 6. First of all, I discuss the cash credit of Rs. 20,000 appearing in the name of Shri Satinder Pal Singh. According to the AO, Shri Satinder Pal Singh confirmed the credit but failed to disclose the source. Before the AO he has accepted that amount, in question has been received as a gift from Smt. Kuldip Kaur. But he could not give the particulars of Smt. Kuldip Kaur. The AO treated the amount as unexplained. In further appeal, the learned CIT(A) held that neither the source has been proved nor the genuineness of the transaction has been proved. According to her, the AO was right in making the addition of Rs. 20,000 under s. 68 of the Act. 6.1 Shri Sudhir Sehgal, Advocate, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that she had withdrawn a sum of Rs. 20,000 on 21st April, 1987, from the bank and the same amount was given to Shri Satinder Pal Singh. This fact alone shows that there is a merit in this contention of the learned counsel for the assessee that Shri Satinder Pal Singh had deposited amount, which was received by him from Smt. Kuldip Kaur. The AO has rejected the explanation of the assessee on the basis of suspicion that Shri Satinder Pal Singh has not received any gift from Smt. Kuldip Kaur. It is well settled law that suspicion, however, strong, could not take place of evidence or proof. In this case, when the assessee had produced the creditor before the AO for examination and his statement was recorded, therefore, the assessee was not required to prove the source of the source. In my opinion, the assessee has discharged the burden of providing the identity, capacity of the creditor to advance the money and also genuineness of the transaction. Accordingly, I hold that the deposit of Rs. 20,000 in the name of Shri Satinder Pal Singh cannot be treated as unexplained deposit. 7. The next cash credit of Rs. 10,000 is in the name of Shri Nimral Singh. According to the AO Shri Nirma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on 8th Aug., 1987. A perusal of the statement of Shri Nirmal Singh reveals the following facts: (a) That he earns Rs. 1,500 per month from the cloth business. (b) He confirms having made a deposit of Rs. 10,000. (c) That the amount was given by him from his bank account with New Bank of India, Malout. (d) That the deposits in the bank were made out of savings from income of cloth business. The amount of Rs. 25,000 was deposited on different dates. (e) That the amount of Rs. 25,000 was given to the assessee in one instalment. 7.5 At this stage, I may mention here that in his affidavit, Shri Nirmal Singh has stated as under: "Affidavit. I Nirmal Singh s/o s. Nihal Singh resident of Malout do hereby declare on solemn affirmation as under: 1. That I am an income-tax payee in B-Ward, Muktsar and my GIR No. is 704-N. 2. That I am having credit balance of Rs. 25,000 in the firm M/s Supreme Tyres, Malout as on 31st March, 1988. A sum of Rs. 15,000 was lying in this firm in the previous year and a sum of Rs. 10,000 has been deposited on 8th Aug., 1987, through cheque No. 149204 of New Bank of India, Malout. The said amount was given out of my personal saving account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on 8th Aug., 1987. The AO has recorded the statement of Shri Paramjit Singh. It will be worthwhile to reproduce question No. 11 and answer to it in the said statement: "Q. 11. Have you given any loan to anyone. If so, please give the details? A. I have given a loan to Sh. Satinder Singh. Total amount of loan given to him is Rs. 43,000." 8.3 In response to question No. 12, he stated as under: "Q. 12. On which date the amount of Rs. 43,000 was given? A. I do not remember the dates. In the year 1986-87 a sum of Rs. 33,000 was given and another amount of Rs. 10,000 was given during the period 1987-88. I do not remember the date and month when the aforesaid amounts were given." 8.4 In response to question No. 13, he stated as under: "Q. 13 What is the source of Rs. 43,000? A. I have deposits with New Bank of India, Malout. The deposits in the bank account were from the savings of my (Rehri) income. The said loan of Rs. 33,000 and Rs. 10,000 was given though cheque. The cheque was issued in the name of elder son of my aunt (mother's sister)." 8.5 Furthermore, in his affidavit, Shri Paramjit Singh stated as under: Affidavit I Paramjit Singh s/o S. Jaswant Singh resident o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Rs. 30,000 was withdrawn by the assessee through cheque. The CIT(A) further noticed that again on 22nd Aug., 1987, cash amounting to Rs. 10,000 was deposited which was withdrawn on 24th Aug., 1987, by the assessee through cheque for crediting it in its books. The learned CIT(A) opined that cash belonged to the assessee. It was only routed through the bank account of Shri Chattar Singh so that it could be brought into the books of accounts. Accordingly, the addition of Rs. 10,000 was confirmed. 9.1 In support of its claim, the assessee filed the affidavit of Shri Chattar Singh, the contents of the affidavit are reproduced hereunder: "Affidavit I Chattar Singh s/o Ram Saran Dass r/o Malout do hereby declare on solemn affirmation as under: 1. That I am an income-tax payee in B-Ward, Muktsar and my GIR No. is 738-C. 2. That I have deposited a sum of Rs. 10,000 on 24th Aug., 1987, in the firm M/s Supreme Tyres, Malout through cheque No. 832190 of Punjab & Sind Bank, Malout. The said deposit was made out of my personal saving account. 3. That I am having credit-balance of Rs. 20,000 with the firm M/s Supreme Tyre, Malout as on 31st March, 1988. I further confirm that the above s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndeep Kaur maintained with M/s Malout Tyres. However, the CIT(A) noticed that Shri Satinder Pal Singh gave a gift of Rs. 5,000 to Smt. Mandeep Kaur on 2nd June, 1982. As per the entry in the books of M/s Amir Singh Harnam Singh. Thereafter, further profit as well as gift from Sh. Satinder Pal Singh was credited in the succeeding years and the final balance of Rs. 33,249 was credited in her name in the books of M/s Amir Singh Harnam Singh. Again during the asst. yr. 1985-86, Rs. 30,000 was further credited in her name. According to the CIT(A), the afore-mentioned money had originally been claimed as a gift by Shri Satinder Pal Singh and then was received back as a gift in the name of his minor son, Shri Gagan Preet Singh. The learned CIT(A) opined that the money, in fact, belonged to the assessee. She further stated that the AO has rightly taxed the amount under s. 68 of the Act. 10.2 It is true that there was a cash credit of Rs. 20,000 in the name of Shri Gagan Preet Singh minor son of Shri Satinder Pal Singh Shri Satinder Pal Singh being the guaradian of minor son Shri Gagan Preet Singh appeared before the AO and stated vide answer No. 5 as under: "Q. 5 How he has deposited Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Malout. The assessee failed to give any proof in support of this gift and, therefore, the AO treated the sum of Rs. 20,000 as unexplained. At the appellate stage, the learned CIT(A) noticed that in his statement Shri Harnam Singh could not explain the total investment made by him nor he could give the details of deposit with M/s Supreme Tyres. However, it was stated that he has received a sum of Rs. 20,000 as a gift from Shri Gurmeet Singh, who was the son of his father's sister. The learned CIT(A) confirmed the addition in view of the above facts. 11.1 It is apparent from the record that the AO recorded the statement of Shri Harnam Singh on 7th Dec., 1988. In his statement, Shri Harnam Singh admitted that he has deposited a sum of Rs. 20,000 with M/s Supreme Tyres, Malout. As regards the source of deposit, it was stated by him that Shri Gurmeet Singh s/o Shri Ram Saran Dass, resident of Malout gave a gift of Rs. 20,000 through cheque. He further stated in his statement that Shri Gurmeet Singh is the son of his father's sister. He has also stated the following facts in the affidavit dt. 27th Aug., 1988: "Affidavit I Harnam Singh s/o S. Amir Singh resident of Malout do hereb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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