TaxTMI 
TaxTMI 
1993 (3) TMI 148
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....cheme. One of the seized material from the residence of the assessee is a Cool Foam Diary of 1973 in which entries were found in assessee's own handwriting. Although the diary is for the year 1973, entries have been made for the year 1981 onwards. But they are not seriatim entries, nor in a chronological order. We are concerned in these appeals before us with regard to a particular sheet of paper which is as follows: N/Acted (Rs.) 25.1.1984 A.M. 5,00,000 21.11.1984 K.S.P. 1,25,000 19.12.1984 K.C. Markose 80,000 21.12.1984 Sea Pearl Kutty Moosa 1,50,000 24.8.1981 K.K.B. 1,00,000 2.3.1983 Rash 3,11,380 Tranvancore Investments (P.S. Sathyan) FDR One bus M.P.C. 40,000 -do- -do- 40,000 -do- -do- 50,000 The entry against 2nd March, 1983 is not clear whether it refers to 'Rash' or Rasheed' or 'R. Ramesh Kumar'. The Asstt. Director of Inspection (IW), Cochin, examined the assessee on 12th Aug., 1985 with regard to the above entries in the diary and the questions and replies thereto are as follows: "N. Acted means not accounted. The above advances/deposits are not accounted in the books of accounts where I am a partner. 1. AM stands for A. Moosa who is a....
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....es of our firm. Q.6. Have you given this amount to Ramesh Kumar or have you received this amount from him. A. I have received it from Ramesh Kumar. Q.7. Have you received it for interest? A. On 12 per cent interest. Q.8. When you have returned this amount? A. On various occasions. I don't remember exactly. Q.9. What is Ramesh Kumar's business? A. He is a glass merchant at Tripunithura. Q.10. Why you have told Asstt. Director of Inspection that Rush means Rasheed? A. I have told Asstt. Director of Inspection that I don't remember exactly and said I think stands for Rasheed. Thus, in the initial statement the assessee referred to the impugned entry as referring to Rasheed. In the subsequent statement he referred to the amount as having come from Ramesh Kumar. He had also explained in his letter dt. 30th Dec., 1986 addressed to the ITO that "in this connection I may submit that I have filed my IT returns for the asst. yr. 1983-84 on 31st March, 1986 in which I have returned 'income from other source' Rs. 3,25,000. In the course of my disposition before your goodself I have stated that I have returned an income of Rs. 3,25,000 under the head 'other sources' and th....
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....penses of the children, household expenses and the peak of the bank deposits in the names of the assessee and others. As regards the sum of Rs. 3,11,380 it was contended that it was not a loan given by the assessee but rather a deposit received by him and as he was not in a position to prove the source, he had taken this amount into account while finalising the figure of Rs. 3,25,000. Further, it was contended that the ITO in arriving at the peak credit with regard to the bank deposits in the name of the assessee, his wife and children, erred in individually working out the peak credit in each of such accounts and if all the deposits standing in the name of the assessee, his wife and children are lumped together and peak is worked out, it would come to Rs. 1,06,000 as against Rs. 1,58,400 determined by the ITO. The CIT(A) on a consideration of the submissions made before him and the materials on "record, held that the assessee had been maintaining all along that the amount of Rs. 3,11,380 represented deposits received by him and that the ITO has not brought on record any clinching evidence to prove his contention that the said amount represented advance given by the assessee to som....
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.... such of those items which represented advances and such of those items which represented deposits. From the statement it is seen that the assessee had explained the term 'Rash' as "I think stands for Rasheed" who was a subscriber to our chitties". From this the Department has gained the impression that the transaction is a deposit. This is confirmed in the letter of the ITO dt. 15th Dec., 1986 that "that you have deposed before the Asstt. Director of Inspection, Ernakulam, that "Rash" represents Rasheed and the amount of Rs. 3,11,380 is a deposit for a loan from this person on the date noted against the amount. However, when your sworn statement has been recorded by me you have changed the earlier version and stated that "Rash" represents A. Ramesh Kumar, Ushas, Kadvanthara and the amount is a deposit received from the person". From the above, it is evident that the Department itself has understood the. transaction only in the nature of a deposit received by the assessee, but not as an advance given by the assessee. This has also been the plea of the assessee in his further deposition dt. 20th June, 1986. There is also force in the contention of Sri R. Srinivasan, the learned char....