TaxTMI 
TaxTMI 
2015 (12) TMI 558
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....2. Vide its ground number 2, assessee is aggrieved that a credit of Rs. 3,00,000/- in the name of Shri. Govinda Reddy was disallowed by the AO and such disallowance was confirmed by the CIT (A). 03. Facts apropos are that assessee, a seller of second hand vehicles, had filed return of income declaring income of Rs. 3,51,250/-. During the course of assessment proceedings, assessee was required to produce books of account, details regarding closing stock, confirmation for creditors and details of construction of house. As per the AO assessee's AR had appeared before him 15.10.2007 and produced these details. However, the AO also observed that assessee could not furnish confirmation for a sum of Rs. 3 lakhs shown as payable to one Shri. Govin....
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....ing to him, the balance was only a carry forward of earlier balance and addition ought not have been made during the impugned assessment year. 06. Per contra, Ld. DR strongly supported the orders of authorities below and submitted that assessee could not prove the credit. As per the Ld. DR when assessee failed to give any evidence regarding the genuineness of the credit, a cessation of liability could be presumed. In his opinion, the addition fell within the ambit of Section.41(1) of the Act. Reliance was placed on the decision of coordinate bench of Mumbai Tribunal in Income-tax Department v.Shailesh D. Shah [ ITA.7012/Mum/2010, dt.11.12.2013]. 07. We have perused the orders and heard the rival contentions. What we find is that a....
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.... as a liability. Explanation of the assessee was that the said amount was received from one Shri. Mohammed Sarshad for lease of a residential building owned by the assessee, located in HSR Layout, Bangalore. As per the assessee, this amount was received from Shri. Mohammed Sarshad, by way of cheque nos.349851 for Rs. 5,50,000/- and No.349853 for Rs. 1,50,000/-, both of which were dated 26.03.2005. As per the assessee, balance sum of Rs. 50,000/- was received in cash on the very same day. AO on examination of books of account produced by the assessee was of the opinion that sum of Rs. 7,50,000/- was not reflected therein. As per the assessee the cheques issued by the party were bearer cheques and cash was directly drawn from the bank. AO was....
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....26.03.2005 could not be believed as a source for Rs. 7,50,000/- shown in the statement of affairs as on 31.03.2005 and 31.03.2006 for the reason that one of the cheques given by Shri. Mohammed Sarshad was due for payment only in F. Y. 2005-06. 12. We have perused the orders and heard the rival contentions. In support of the 'house lease amount' of Rs. 7,50,000/- shown by the assessee in its statement of affairs as on 31.03.2006 as a liability, assessee is relying on an agreement of lease dt.26.03.2005. Para 3 of the lease agreement is reproduced hereunder : "3. DEPOSIT OF LEASE AMOUNT The LESSEE has paid the amount of Rs. 7,50,000/- (Seven Lakhs Fifty Thousand only) as follows : 1) Rs. 5,50,000/- (Rupees Five Lakhs Fifty thousand only....