TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 287
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....e order of assessment dated 04.11.2009 for A.Y. 2007-08, the assessee preferred an appeal before the CIT(A)-18, Mumbai. The learned CIT(A) disposed off the appeal vide the impugned order dated 27.11.2013 allowing the assessee partial relief; by deleting the addition of unexplained cash credit of Rs. 83,000/- shown as gift, but upheld the addition of Rs. 14,31,647/- on account of unexplained cash credits under section 68 of the act on account of deposits in the assessee's bank accounts. 3. Aggrieved by the order of the CIT(A)-18, Mumbai dated 27.11.2013 for A.Y. 2007-08, the assessee has preferred this appeal raising the following grounds: - "1) On the facts and in the circumstances of the case the learned CIT(A) erred in law as well on facts by confirming the addition of Rs. 14,31,647/- for unexplained Cash Credit for deposits made by your appellant in the bank account for the year. 2) The Learned CIT (A) was highly unjustified in not considering the re- deposit of withdrawals from the bank account amounting to Rs. 7,55,269/- which is included in the total addition of Rs. 14,31,642/- as unexplained Cash Credit u/s 68. 3) The Learned CIT (A) was highly unjustified in not co....
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....ained cash credit, which was the payment the assessee received on account of sale of room for Rs. 4,25,000/- by his father and for which relevant document was filed. 5.2.1 The learned D.R. vehemently supported the finding in the orders of the authorities below. According to the learned D.R., in the course of assessment proceedings the Assessing Officer (AO) noticed that the assessee had made cash deposits in his bank accounts in Abhuday Co-op Bank and SBI amounting to Rs. 13,58,850/- and deposits by cheque amounting to Rs. 7,16,492/- (viz. total deposits Rs. 20,75,342/-) and required the explanation of the assessee as to the source of these deposits. From the explanation put forth by the assessee, the AO noticed that as per the cash book, the assessee claimed cash loans were received from Shri Gaffar Khan (Rs. 2,00,000/-), Shri Sagar Patel (Rs. 2,70,000/-), Shri Sheru Khan (Rs. 1,40,000/-) and cash loan plus gift of Rs. 3,12,000/- from Shri Niharo Pal, but observed that no material evidence was brought on record to establish the identity of the parties, their creditworthiness and the genuineness of the transactions. After factually analysing the material on record in detail, the A....
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....ne of Rs. 20,75,342/-. The assessee has shown business receipts of Rs. 6,14,293/- and income from other sources are shown at Rs. 27,000/- and bank interest at Rs. 2,402/-. The A.O. has called for the source of these deposits in the bank accounts. In response to the show- cause notice, the AR has submitted that the deposits were made out of the cash book and bank book maintained for the year. The A.O. has observed that in the cash book, the assessee has shown cash loans received from three persons i.e. Shri Gaffar Khan (Rs. 2,00,000/-), Shri Sagar Patel (Rs. 2,70,000/-) and Shri Sheru Khan (Rs. 1,40,000/-) and a cash loan as well as gift from Shri Niharo Pal (Rs. 3,12,000/-). But no other details to prove the identity, creditworthiness and genuineness of transaction was submitted. Further, the A.O. has analysed the debit and credit entries shown in the bank account and discussed at page 2 & 3 of the assessment order in great detail. After discussing the factual position of debit & credit entries, the A.O. has held that the amount of credit in the bank accounts of the assessee amounting to Rs. 14,31,647/- is remained unexplained, therefore, it was treated as unexplained cash credit u....
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....o debit first and then he use to get the payment. In fact my client was rotating the same fund from time to time for all the transactions which was treated as Cash Credit by the learned Assessing Officer. My client use to give Pay Order and then he use to receive the payment in cash either on the same day or after few days and it is not the reverse case. If cash is taken first and then repaid then it is to be treated as Cash Credit. It was not the case of first depositing the cash in the I bank and then issuing the Pay Order. There was sufficient balance in the bank account and then Pay orders were issued in the name of the parties. Moreover, my client is not required to maintain any books of account and his case falls under the provisions of Section 44AD which was not done and instead it was treated as Cash Credit and addition was made accordingly. Seeing the nature of business no addition should have been made as Cash Credit as the provisions of Section 68 does not attract as my client has not accepted any deposit rather he has first given the money and then he has collected the same. This fact can also be verified from the statement of account which is enclosed herewith for y....
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....r compliance on 04.07.2013. However, there was no compliance from any one till date. The notice sent to Shri Sagar Patel returned back by the postal authorities remark that 'Refused'. The other two persons namely; Shri Niharo Pal and Shri Gaff-ar Khan neither attended on the appointment date nor filed any written reply to the aforesaid notice u/s 133(6). With regard to the loan transaction of Shri Sheru Khan is concerned the assessees vide his submissions dated 17.09.2012 stated that the business is very dull at present therefore, Shri Sheru Khan has already left India and accordingly the assessee could not furnish any details about him. Since the present address has not been provided during the remand proceedings, therefore, no enquiry could be carried out about the transaction of Rs. 1 lakh from Sheru Khan. In the light of the above factual position the undersigned could not verify neither the genuineness of the transaction nor the creditworthiness of the lender of the loan shown by the assessee." Copy of this remand report was also given to the assessee. In response to this, the appellant has submitted its reply which is reproduced as above. From the perusal of the....