TaxTMI 
TaxTMI 
2015 (6) TMI 938
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....hese appeals, the relevant assessment years are 1996-1997 to 2000-2001, and in I.T.A.149/14 the assessee is challenging the additions made on three counts. First one is deposit of Rs. 3,00,000/- in the bank account of one Sri.Francis Joseph, the brother-in-law of the assessee. The second one is the unexplained credit of Rs. 5,60,000/- in the capital account of the firm Hotel Mayura of which the assessee is a partner and the third one is relating to a loan of Rs. 4,00,000/- taken by the assessee from one Mr.George Joseph. 3. In so far as the addition of deposit of Rs. 3,00,000/- in the bank account of Mr.Francis Joseph is concerned, facts show that Sri.Francis Joseph is the brother-in-law of the assessee. Sri.Francis Joseph had given a stat....
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....e and according to him, the addition made was perfectly legal. 5. We have considered the rival submissions made. It is true that as held in the judgment in P.S.Abdul Majeed v. Agricultural Income Tax and Sales Tax Officer and others [209 ITR 821] when the Department is proceeding against an assessee on the basis of the statement of a third party, it is necessary that the Department should make available that third party for cross examination and the burden to prove the allegation is also on the Department. However, in so far as this case is concerned, though the proceedings were originated on the basis of the statement of Sri.Francis Joseph, after collecting the details and records from the Bank, all such details were put to the assessee f....
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.... cross examination. 7. In so far as the judgment of the Apex Court in Commissioner of Income Tax v. K.Chinnathamban [292 ITR 682] (SC), relied on by the counsel for the assessee is concerned, it is true that the principle laid down in the judgment is that when proceedings are initiated based on the bank deposit, it is for the depositor to explain the same. However, that logic cannot be imported into the facts of this case for the simple reason that the assessee himself has admitted of having operated the bank account, though allegedly on behalf of the account holder. In such a case, it is for the assessee who has operated the account to offer the explanation and prove his case and not the deposit holder. 8. However, the contention of the ....
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....f Rs. 5,60,000/- in the name of the assessee in the capital account of the firm Hotel Mariya, of which he is a partner. Though this addition was confirmed by the Appellate Commissioner and the Tribunal, contention raised by the counsel for the appellant is that when Rs. 5,60,000/- was shown to the credit of the assessee in the accounts of the firm, it is for the firm to explain such a credit and the assessee cannot be called upon to explain the same. In support of this contention, he placed reliance of a judgment in Commissioner of Income Tax v. Shiv Shakti Timbers [229 ITR 505]. However,as rightly contended by the learned Standing Counsel for the Department, Rs. 5,60,000/- was shown as the deposit made by the assessee in the capital accoun....
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....maining part was from his personal savings. Despite this claim made, he did not produce any evidence to substantiate it. Further, as rightly indicated by the Tribunal, it is too improbable and against human nature that a person who has borrowed money on interest, would lend it without levying interest on the same. Therefore, we are unable to accept the case of the counsel that the explanation of Sri.George Joseph should have been accepted as the proof of source of the amount advanced and that the addition should not have made. 15. It is true that Section 68 talks about books of accounts and it is also true that in so far as this case is concerned, the assessee was not maintaining books of accounts. It is on this basis that the counsel cont....