2015 (7) TMI 321

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.... A.O. on account of unexplained cash credits in the name of Shri Prafull Patel notwithstanding the fact that the creditworthiness and genuineness of the creditor was not proved by the assessee. (ii) deleting the addition of Rs. 10,85,782/- made by the A.O. on account of disallowance U/s 40A(3) of the I.T. Act, 1961 notwithstanding the fact that assessee violated the provisions of Section 40A(3) of the I.T. Act, 1961." 2. The first ground of revenue's appeal is against deleting the addition of Rs. 9,36,240/- made by the Assessing Officer on account of cash credits. The ld Assessing Officer observed that the assessee filed his return of income on 30/07/2008 declaring total income of Rs. 74,250/-. The case was scrutinized U/s 143(3) of t....

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....essing Officer, the assessee carried the matter before the ld. CIT(A), who had deleted the addition made by the Assessing Officer by observing as under:- "I have duly considered the submissions of the appellant. On perusal of the assessment order, it is seen that the A.O. was of the opinion that the appellant had deposited his own undisclosed cash in the name of Sh. Praful Patel in his books of account. It was alleged that no confirmation was filed in this regard from Sh. Praful Patel. The A.O. held that the appellant had failed to prove the creditworthiness and genuineness of the said creditor. The A.O., therefore, made an addition of Rs. 9,36,240/- to the income of the appellant. On careful consideration of facts, I am inclined to acce....

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....and ignored the entries in the books of account maintained by the appellant without any basis. Further, the A.O. had treated the amount in question as loan whereas the appellant had not shown any loan or liability in his books of account. Therefore, the question of repayment of loan did not arise. Since the loss in the derivative transactions was squared off with the amount received from Sh. Praful Patel, there was no question of claiming the same in the computation of income. Moreover, the appellant had himself credited the amount received from Sh Praful Patel in the ledger account of derivative transactions. Therefore, there was not any onus on him to prove the creditworthiness of the creditor or genuineness of the transaction as alleged ....

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....rivative transaction loss at Rs. 10,14,308/- through the broker namely M/s Mangal Keshav Securities Ltd. The payments and receipts for these transactions were made through ICICI Bank account No. 5075. All the transactions have been recorded in the books of account maintained by the appellant. There was a mutual agreement with Sh Praful Patel that he was to bear all the losses which were incurred in the derivative transaction, which has been received in cash at Rs. 9,36,240/- and balance amount of Rs. 78,068/- had been shown as receivables. Due to this reason, the assessee had not claimed any loss on account of derivative transaction in computation of income. Even it is presumed that the assessee had introduced own cash it has been shown as ....

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....mounts might have paid how unaccounted money. Therefore, he made addition of Rs. 10,85,782/- U/s 40A(3) of the Act. 8. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who had deleted the addition made by the Assessing Officer by observing as under:- "I have duly considered the submissions of the appellant. During the year under reference, the appellant had squared off certain credit balances of the creditors brought forward from the earlier years by transferring the same to the account of other parties having debit balances. The relevant journal entries were passed with the consent of both the creditors and debtors and the appellant did not have any malafide intention to av....