TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 291
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....rom an order dated 30.03.2006 passed by the Assessing Officer u/s 153A r.w.s. 143(3) of the Act pertaining to the assessment year 2003-04. 3. First, we shall take-up the app2e al pertaining to the assessment year 2000-01 wherein the first issue raised is with regard to an addition of Rs. 1,10,000/- sustained by the CIT(A) on account of unexplained gifts. In this regard, brief facts are that the Assessing Officer treated three gifts totaling to Rs. 1,00,000/- received by the assessee from (i) Mrs. Geeta Ratnani - Rs. 25,000/-; (ii) Mr. Deepak Ratnani - Rs. 25,000/-; and, (iii) Mr. Sanjay Ratnani - Rs. 50,000/- as unexplained and added the same to the returned income by invoking section 68 of the Act. Further, the Assessing Officer also added a sum of Rs. 10,000/- i.e. 10% of the gift amount being incurred on purchase of the non-genuine gifts, thereby resulting in a total addition of Rs. 1,10,000/-. The CIT(A) has sustained the action of the Assessing Officer on the ground that the necessary ingredients of section 68 of the Act were not fulfilled by the assessee qua the aforesaid sum. Against the aforesaid action of the CIT(A), assessee is in further appeal before us. 4. At the tim....
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....es were introduced in the guise of gifts. A few transactions of gifts were surrendered by the assessee group as unexplained also. So far as the three gifts in question are concerned, there was no surrender by the assessee. So however, under these circumstances, a heavy onus was cast on the assessee to establish the genuineness of the impugned gifts also. It is for this purpose that the Assessing Officer carried out a verification exercise. It is noted by the Assessing Officer that the letters sent to the donors at the addresses provided by the assessee were returned back with remarks 'not known' and 'no information received'. The assessee was also allowed opportunities by the Assessing Officer to present the donors4. However, the assessee could neither produce the donors and nor provide their correct addresses. Under these circumstances, in our view, the lower authorities have correctly come to a finding that the genuineness of the present gifts has not been established by the assessee. Therefore, the action of the lower authorities in invoking section 68 of the Act and making the impugned addition is hereby affirmed. As a result, on this issue assessee fails. 7. The second additi....
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....ther. 8. Before us, the Ld. Representative for the assessee has submitted that the business carried on by the assessee is subject to a control by the Excise authorities and therefore the figures of sales and stock declared in the records kept for Excise authorities is a reliable indicator of the actual trading activity carried out by the assessee. Therefore, it is not proper for the Assessing Officer to have rejected the book results and estimated the profit on an ad-hoc basis. 9. On the other hand, the Ld. CIT-DR appearing for the Revenue has supported the order of the authorities below for the reasons, which we have already noted in the earlier paras, and are not being repeated here for the sake of brevity. 10. We have carefully considered the rival submissions. In our considered opinion, the Assessing Officer as well as the CIT(A) have succinctly brought out infirmities/discrepancies in the account books maintained by the assessee. Ostensibly, the enquiries during the course of search/survey action clearly pointed out that the trading results declared by the assessee are impaired inasmuch as the sales as well as the stock figures are recorded on estimation and not on actual b....
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....ng of loans to the assessee and therefore the assessee can be said to have discharged the burden cast on him in terms of section 68 of the Act. On the other hand, the Ld. CIT-DR has defended the order of the authorities below by relying on the discussion contained therein. 15. We have carefully considered the rival submissions. Ostensibly, the onus is on the assessee to establish the nature and source of the cash credits appearing in the books of account, having regard to the provisions of section 68 of the Act. In this context, the CIT(A) has reproduced the bank account statements of the creditors to show that cash deposits have been made immediately before issuing Demand Drafts to the assessee for the impugned loans. It is a concurrent finding of fact rendered by the Assessing Officer as well as the CIT(A) that the creditors have not explained the source of such cash deposits. No doubt, the assessee furnished the income-tax particulars, etc. of the said creditors, but their failure to even primafacie explain the source of cash deposits in their bank account coupled with the fact that assessee has been found indulging in introducing unaccounted income by way of cash credits (i.e.....