TaxTMI 
TaxTMI 
TaxTMI 
2011 (8) TMI 1067
X X X X Extracts X X X X
X X X X Extracts X X X X
....as erred in law and on facts in confirming the action of Ld. A.O. in making addition of Rs. 3,10,000/- u/s 68 of the income tax act, 1961. 2. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. A.O. in sustaining addition of Rs. 33,55,000/- on account of alleged unexplained cash deposits in the bank account. 3. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. A.O. in making addition of Rs. 81,401/- as loss in trading and has denied to be set off in subsequent years against speculative profit. 4. In any view of the matter and in any case, additions of Rs. 3,10,000/-, R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l. Learned AR submitted that the identity of all three depositors is proved beyond doubt. Major part of the loan received from these persons have been accepted as genuine. These three persons were also directors of the company. They were having capacity to loan the amount. The creditworthiness of these persons was well established. The transactions were through banking channel and genuine. These transactions have been confirmed by these persons. He further submitted that once the assessee has proved the existence of the creditors and creditworthiness thereof, then no addition is called for. Assessee had fully discharged the onus in respect of credits of these loans entered into the books of account of the assessee. The onus has been dischar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act. He also relied on the decision of Gauhati High Court in the case of Nemi Chand vs, CIT, 264 ITR 254. In that case also, the assessee established the identity of the creditors and the onus was treated as discharged under section 106 of the Evidence Act and the amounts could not be included as his income under section 68 of the Income-tax Act even when the assessee failed to show creditworthiness of the sub-creditors. 5. On the other hand, the learned DR relied on the orders of the authorities below. 6. After hearing both the sides, we hold that the assessee has received fresh loans during the year from three of its Directors, i.e., Shri Shiv Kumar - Rs. 8,25,000/-, Shri Sudhir Kumar - Rs. 7,80,000/- & Shri Madhur Aggarwal - Rs. 8,70,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he creditors account, if not found to be acceptable, then also the addition cannot be made in the hands of the assessee. It may be subjective to the proceedings for inclusion of the amount as income of the depositors from the undisclosed sources or if they are found benami then the real owner can be brought to the tax. In view of these facts, we set aside the orders of the authorities below on this issue. Thus, ground no.1 is allowed. 7. In the ground no.2, the issue is regarding the sustenance of addition of Rs. 33,55,000/- as unexplained cash deposit in the account of the assessee. There was a cash deposits in the two bank accounts held by the assessee with Canara Bank account No.16642 and Indian Overseas Bank account No.1090. The assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ure the clearance of cheques issued. To meet such an eventuality, assessee was holding cash in hand. In view of this, no addition can be made or sustained. The small time gap between the withdrawals and corresponding to cash deposits cannot be made a basis for addition. For this, he relied on the order of ITAT Delhi 'C' Bench in the case of ACIT vs. Baldev Raj Charla & others reported in (2009) 121 TTJ 366. He also relied on the decision of ITAT Delhi 'A' Bench in the case of Anupama Chaudhary vs. ITO in ITA No.4155 (Del.)/2009 for assessment year 2005-06 dated 27.12.2010. 8. On the other hand, the learned DR relied on the orders of the authorities below. 9. We have considered the facts of the case and the relevant case laws relied upon o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore, delete the same. This ground of the assessee is allowed." Assessee has to maintain margins with N.S.E. at short notice and for that ready cash in hand has to be maintained. Since the deposits are from the cash balance available to the assessee in its books of account, therefore, in our considered view, no addition is called for. The addition cannot be made or sustained on the basis that there was time gap between withdrawal and deposits. When cash balance is available in cash book maintained no addition can be made. In view of this factual position, we set aside the orders of the authorities below and allow the ground no.2 of the assessee's appeal. 10. Ground No.5 is against the confirmation of the action of the Assessing Officer i....