2012 (9) TMI 994

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....ax Rules. 3. The brief facts of the case are that assessee is an individual. He is running proprietorship concern namely M/s Hotel Karlo Kastle & Hotel Silver Shine. He has filed his return of income on 28.10.2007, declaring total income at ₹ 66,310/-. The case of the assessee was selected for scrutiny assessment and a notice u/s 143(2) dated 29.09.2008 was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the Assessing Officer that assessee has taken unsecured loan of ₹ 1.0 lac from Hotel India International and ₹ 8,17,952/- from Sh. Bhupinder Singh. He further noticed that assessee has introduced capital of ₹ 7,30,000/- in its capital account in the books of Hotel Silver Shine vide o....

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.... well as the creditworthiness of the creditor is on the assessee, in case of cash credits in its books of accounts. In the present case, the assessee has not established the genuineness of transactions and creditworthiness of Hotel India International (loan of ₹ 1.0 lacs) and Bhupinder Singh (loan of ₹ 8,17,952/-), from whom it has taken loans during the FY 2006-07. Further, the assessee has not explained the source of addition of ₹ 7,30,000/- in its capital account in Hotel Silver Shine in the FY 2006-07. 3.6. Subject to discussion above, the amount/loan of ₹ 9,17,952/- from Hotel India International and Bhupinder Singh, credited by the assessee in its books of Hotel Silver Shine in the FY 2006-07 and amount of &#....

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.... appeal proceedings. Hence his order deserves to be set aside. 7. On the other hand, Ld. Counsel for the assessee pointed out that even if, the copy of income tax return called for the Ld. CIT(A) is excluded from the record then also there is no material with the Assessing Officer for rebutting the evidence produced by the assessee during the assessment proceedings. 8. We have duly considered the rival consideration and gone through the record carefully. The Assessing Officer has made additions u/s 68 of the Income Tax on the ground that assessee failed to explain the source of credit appeared in the accounts. Section 68 of the Income Tax Act, 1961 contemplates that where any sum is found credited in the books of assessee maintained for a....