TaxTMI 
TaxTMI 
2013 (10) TMI 154
X X X X Extracts X X X X
X X X X Extracts X X X X
....x Act, 1961 on the ground that assessee has failed to discharge the onus of proving the source of source or origin of the cash credits? (2) Whether, on the facts and circumstances of the case, the Tribunal is justified in law in applying against the assessee the fact of not satisfying the authorities as to the source from which the depositors derived the money while confirming the addition as unexplained cash credit under Section 68 of the Income Tax Act, 1961? 2. The issue pertains to a sum of Rs. 13 lakhs treated as cash credit under section 68 of the Income Tax Act, 1961 by the Assessing Officer. Such assessment was confirmed by the CIT(Appeals) as well as by the Tribunal. 3. During the course of assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ows, amongst other transactions, a deposit of Rs. 3 lakhs on 29.6.2006 by cheque. The loan was given to the Assessee by cheque on 4.7.2006. It cannot therefore be said that unexplained cash was deposited in the account of Shri Hasmukh R. Mehta before giving the said loan to the Assessee. The next depositor was Shri Jimit M. Mehta, his bank account showed a deposit of Rs.1,50,000/- in cash on 24.3.2005. On the very next day, he issued a cheque of Rs.1,50,000/- to the assessee. Prior to the said deposit, his balance was only Rs. 2,056.20 with no major credits. The extract of his cash book shows no cash balance prior to depositing such cash into his bank account. Next was Smt. Kokilaben M. Mehta; a loan of Rs. 1,50,000/- was showed in her name....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fore depositing cash of Rs 1 lakh on 15.1.2005 and giving the said sum as a loan to the assessee on 18.1.2005. Smt. Sushilaben R. Sanghvi had a balance of Rs. 550.05 before cash of Rs. 1,50,000 was deposited in her account and a cheque of the said sum issued to the assessee on 18.1.2005. Smt. Taraben A. Mehta had a balance of Rs. 2,557.35 as on 9.11.2004. On 24.1.2005, i.e. more than two months later, with no transaction in between, sums of Rs. 3000 and four installments of Rs.49,000 each were deposited in cash in her bank account on 24.1.2005 creating the necessary fund for giving the loan of Rs.2 lakhs the very next day i.e. 25.1.2005. 6.1 The aforesaid facts clearly show that the availability of funds in the h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Officer was not competent to enquire into the source of source of the loans yet, the Courts have also held that the creditworthiness of the depositors/lenders have to be necessarily established. Though this is clearly a contradictory and dichotomous situation yet, the necessity of enquiries regarding the creditworthiness of the alleged depositors cannot simply be wished away. In the case of the assessee, such enquiries have clearly revealed that, apart from Shri Hasmukh R. Mehta, the remaining seven alleged depositors simply did not have the funds available to give the loans to the assessee. The funds were available by surreptitious means which was not explainable. Given such facts and circumstances of the case, I hold that of the unexpla....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the creditors. He contended that while examining the question of addition under section 68 of the Act, assessee cannot be expected to establish source of the source. In this context, he placed heavy reliance on the following decisions : (1) Commissioner of Income-tax v. Jay Dee Securities and Finance Ltd. reported in (2013) 350 ITR 220(All). (2) Nemi Chand Kothari v. Commissioner of Income-tax and another reported in 264 ITR 254. (3) S. Hastimal v. Commissioner of Income-tax Madras reported in 49 ITR 273. 6.1 Counsel further submitted that assessee had not only established the identity of the depositors, had received the amount through cheque. Genuinenes....