TaxTMI 
TaxTMI 
1978 (6) TMI 100
X X X X Extracts X X X X
X X X X Extracts X X X X
.... filed a return, for the previous year ending 31st day of March, 1971 relevant to the asst. yr. 1971-72, declaring income at Rs. 3,58,117. During the course of assessment proceedings the ITO noticed cash credits of Rs. 5,000 each in the accounts of two employees namely, S/Shri V.S. Malhan and Raj Kumar. These two persons filed affidavits confirming that they had made an advance of Rs. 5,000 each to the assessee. Their statements were recorded on 16th Jan., 1974 and in their statements also they confirmed that they had advanced the aforesaid sum to the assessee. Both of them had said that they had advanced the money from savings which were lying with them at home. No document was executed for the advancement of the loan. No interest was foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave yielded them 10 per cent interest, and during the last five years they could have easily increased the deposits by 50 per cent. The non-credit of any interest to their accounts thus puts the entire matter in doubt. There is a saying that men may lie but circumstances do not. In the present case the non-withdrawal of those deposits and the non-payment of any interest cast a grave cloud on the genuineness of these deposits. Then there are no documents executed about these loans, which Prima facie have been allowed to be barred by time for recovery purpose. The onus of proving the genuineness of these deposits entirely lay upon the assessee under s. 68 of the IT Act, 1961. The matter has to be decided on the preponderance of probability as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts in Jawahar Woollen Textiles Mills vs. CIT Delhi (Central) (2) and CIT, A.P. Anantharam Veerasingaiah & Co. (3). He submitted that as in the case of Jawahar Woollen Textiles Mills (2) the so-called creditors had been examined in this case also and according him the two employees had merely lent there names but the money actually belonged to the assessee. Relying on the judgment in Anasnrthram Veerasingaiah & Co.(3). he submitted that introduction of the assessee's own money in the garb of cash credits was designed to avoid a tax liability. In this connection, he referred to the assessment order wherein interest of Rs. 4452 was disallowed in the names of different parties on the ground that the credits in the account of those parties were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed Departmental Representative were not applicable to the facts of this case. He also submitted that the declaration made under the Finance (No. 2) Act, 1965 could not be used against the assessee. He submitted that the order of the AAC does not call for any interference. 6. We have carefully considered the rival submissions. In our opinion, the order of AAC does not suffer from any legal infirmity. It is common ground that the Explanation to s. 271 (1) (c) is not applicable to this case. If any penalty is held to be exigible, it would be under the main provisions of s. 271(1) (c) and the onus as held in Anwar Ali's(1) case would lie on the Department. Now except rejecting the explanation of the two persons in whose names the credits of ....