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TMI Blog1984 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... loans to parties. The ITO was not satisfied with the reasonings advanced by the assessee and since the addition was over Rs. 1 lakh, he made a draft order under section 144B of the Income-tax Act, 1961 ('the Act'). 3. The IAC considered the objections of the assessee filed against the draft order. The IAC in his directions to the ITO, observed thus : In the declaration made on 19-1-1978 tendering the high denomination notes, the reasons stated are 'Business contingency, requirements, particularly for the company in which I am one of the managing directors'. Against the column--when and from what source did the bank notes come into possession--the assessee had stated 'In course of business transactions during the past years'. The assessee, by way of explanation, submitted that on 13-1-1978 he received from Tulshan Enterprises Rs. 1,25,000, which included 102 notes of Rs. 1,000 each. This cash was withdrawn specially for depositing in the Navrang Cine Centre (P.) Ltd., in which he is a managing director. Before the amount could be deposited, Rs. 1,000 notes were demonetised and he had to deposit the same with the banks on 19-1-1978. In support of his statement, he had filed copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the firm was carrying on the sarafi/finance business and submitted all the statements and supporting documents as were filed before the IAC. 9. The Commissioner (Appeals) observed that no light is thrown by the appellant on the question of the amounts stated to have been withdrawn from the partnership firm on 13-1-1978, not being deposited with Navrang Cine Centre (P.) Ltd. in which the appellant has a business interest. As regards the actual source for the receipt of high denomination notes, no positive proof is produced and the appellant's own statement cannot be said to be fully consistent with the appellant's own statement contained at the declaration stage. There was no material evidence produced at the hearing to reach a positive conclusion that the fact mentioned in the assessment order as also the directions of the IAC under section 144B, were wrong or not related to actual facts. He, therefore, dismissed the appeal filed before him by the assessee. 10. Aggrieved, the assessee has come up in appeal before us. 11. Mr. V.H. Patil, the learned representative of the assessee, brought to our attention the following facts : 1. Tulshan Enterprises is a firm in which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration, against the column 'source', it had been mentioned as, 'in the course of business transactions during the past years'. The reason for holding the high denomination notes was mentioned as 'Business contingency, requirements particularly of the company in which I am a managing director'. There is no reference to the moneys having been withdrawn from the partnership firm. [Emphasis supplied] 13.2 The second statement is on 23-9-1980 at the time of survey under section 133A. The submission was that Rs. 1,25,000 was withdrawn from the firm Tulshan Enterprises on 13-1-1978 for giving loan to Navrang Cine Centre (P.) Ltd. The amount so withdrawn contained 102 notes of Rs. 1,000 each. As a support of this statement, an undated certificate from the firm's (in which the assessee is a partner) office at Bangalore was filed. 13.3 The certificate on which much reliance has been placed, is from the firm in which the assessee is a partner. This certificate does not even bear a date. The certificate has been issued by a partner who is sitting in Bangalore, whereas the assessee is the partner-in-charge of office at Bombay. This certificate is a very general certificate which states "Ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. On 13-1-1978, the assessee states that he withdrew Rs. 1,25,000 from the firm. The assessee's statement on 23-9-1980 as well as the certificate of the firm which is undated mentioned that it is not possible to correlate exactly the receipt of high denomination notes with a particular entry. The obvious conclusion, therefore, is that the 102 high denomination notes could not have come from the opening balance of the firm which is just Rs. 25,727. It is also not the assessee's case that the high denomination notes were received from Darshan Distributors (P.) Ltd. If that was the case of the assessee, then the assessee would have obtained a certificate from Darshan Distributors (P.) Ltd., stating that they had paid cash in high denomination notes. The fact that the assessee was a partner in the firm, Tulshan Enterprises, cannot be ignored and the onus clearly lies on him to explain these entries in the firm's book with cogent evidence, which he had failed to do in the present case especially, when his case is being ceased on the firm's, book. Instead of presenting the cogent evidence, he makes a statement and supports this statement with another certificate from the firm itself. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession. The department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof" 18. The other cases relied upon by the assessee also go to indicate that it is for the assessee to establish and explain that the high denomination notes could have come from out of the cash balance of the firm and it must also be established that the firm was in possession of cash and the high denomination notes could have come from out of the cash balance of the firm. 19. We have already clearly observed in the earlier paragraphs that the assessee has not been able to establish with cogent and unimpeachable evidence that the firm was in possession of sufficient cash balance and that the 102 high denomination notes could have come out of the firm's coffers. We have already observed that on 13-1-1978, the firm received in cash Rs. 1 lakh from Darshan Distributors (P.) Ltd. The assessee has not produced any confirmation or certificate from the said party to support its case because as on 1-1-1978, the opening cash balance was only Rs. 25,727. We have examined ..... 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