AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 458
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....on of Rs. 30,44,387/- made by the Assessing Officer on account of unexplained investment in land, residential flat & shop, etc.; 4. During the relevant year under consideration that the assessee had made an investment of Rs. 12,35,000/- for the purchase of Flat at Buro Shivtola, Kolkata and Rs. 18,44,000/- for purchase of Shop Room at Kolkata and Rs. 3,75,000/- for the purchase of land. In the course of assessment proceedings, the AO called upon the Assessee to explain the source of investment made. 5. In his explanation, the assessee explained that for the purchase of Shop Room at Armenian Street, Kolkata, he has paid Rs. 11,39,850/- from the bank account no.... 2073 of Sudhi Bastralaya of Axis Bank, Burdwan and Rs. 7,00,000/- from the bank account no.. ...2097 of Sudhi Textile (Prop. Bubai Kar, wife of the assessee). Regarding investment made in purchase of Flat at Buro Shibtola Main Road, Behala, he stated that the Flat is in the joint name of Bireswar kar and his wife Bubai Kar for which, Rs. 6,10,367/- was paid from the bank a/c no. 2073 of Axis Bank of Sudhi Bastralaya ( proprietor is Bireswar Kar himself) and Rs. 1,00,000/- was paid from the a/c no.2097 of Axis Bank of Su....
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....er. In this register entry of cash inflow-outflow and transaction made in bank are mixed together. According to the AO the cash book availability of cash was not ascertainable. According to him, on various occasion, it has been found that cash has been deposited in cash book in the name of the assessee, such as on 7th December, 2007 an amount of Rs. 2,00,000/- and on 15th December, 2007 amount of Rs. 4,00,000/- has been shown as receipt from Bireswar Kar and this has been subsequently shown to have been returned to him. The AO found that this clearly means that the assessee did not maintain his cash book properly and he used to make a dummy entry for introduction of his out of books cash into his books of account to mitigate the shortage of cash in his books of account. The AO, therefore, concluded that the assessee did not have sufficient fund to withdraw from proprietorship business concern Sudhi Bastralaya and he has used his own undisclosed money to invest in Flat, Shop room and Land by giving it a colour of withdrawal from Bank account of his own business concern and the business concern of his wife. The assessee had shown withdrawal for flat of Rs. 18,65,237/- and for Land of....
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.... liquid money. In view of this, the entire addition of Rs. 30,44,387/- being properly explained, should be deleted. The Axis Bank account of the business of M/s. Sudhi Bastralaya, M/s. Sudhi Textiles, ICICI loan accounts, full set of accounts of M/s. Sudhi Bastralaya along with personal capital account, of the assessee and Balance Sheet, I.T papers, bank statements, capital accounts of the assessee's wife, Smt. Bubai Kar showing the transactions are being enclosed. The details of payment towards the cost of the properties are also being submitted. 9. The ld. CIT-A on consideration of the above submissions held as follows:- Page 5-7 of the ld.CIT(A)'s order. " ... ... I do not see why this should be so. There is no mention in the AO's order that datewise transactions have not been maintained in the cash book. If these are maintained, then, whether these transactions are in cash or through bank I do not see why calculating the availability of cash on any given day should be a problem. Secondly, the AO has also mentioned that on occasions the appellant is seen to have deposited cash which subsequently has also been returned to him. The AO has come to the conclusion here that cash b....
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....ddition made by the AO Rs. 8,00,000/- is seen to have been invested by the appellant's wife and cannot suffer addition in the hands of the appellant. The AO is also seen to have noted that the appellant had taken a loan from M/s. ICICI Bank, but in his conclusion he appears to have added the loan amount also as unexplained investment. No discussion is available in the assessment order regarding the investment in land which is seen to be of Rs. 3,75,000/-. I do not see how an addition towards unexplained investment can be made without any discussion. It also needs to be mentioned that the amount of capital in a particular business can only be a pointer but cannot be the only yardstick for judging whether withdrawals in excess of such capital can be made. Under the circumstances, I find that the withdrawals made by the appellant from his business for making the investment are well supported by his sources which are explained. In view of that, the addition made is directed to be deleted. " 10. Aggrieved by such order of the ld.CIT-A, the revenue raised ground no.1 before us. We have heard the rival submissions. The ld.DR relied on the order of the AO and ld. Counsel for the assessee....
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....ved being failed to prove the creditworthiness of the donors from the party of the assessee. 13. The assessee had shown to have taken Gift of Rs. 2,15,000/- from his relatives and gift of Rs. 2,36,516/- from his wife Bubai kar during the relevant year. The AO called upon the assessee to furnish the name and other details of the relatives from who gift was received. In response to this, the assessee submitted that gift of Rs. 25,000/- was received from Bhakti Binod Sinha (Brother in law of the assessee), Rs. 70,000/- from Sushil Kar (Uncle), Rs. 25,000/- from Sima Das (Sister), Rs. 25,000/- from Swapan Das (Brother in law), Rs. 70,000/- from Mamata Kar (Mother) and Rs. 2,36,516/- from his wife Bubai Kar. Regarding their source he submitted that gift were given from all of them from their personal savings and inherited money. All the gift were given by cheque except the gift by Bubai Kar through book adjustment. 14. According to the AO, the onus to prove the identity of the person making the gift, the capacity of the donor to donate money and the genuineness of the transaction prima facie lie on the assessee. But the assessee did not produce anything regarding any person from whic....
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....about 2/3 years back and the accumulated savings and the sale proceeds of the shop were kept by them. Sri Sushil Kar becoming old and invalid have gradually made gifts of his savings to the sons of his late brother. (iii) Smt. Seema Das sister of the appellant had given a sum ofRs. 25,000/- as gift to his brother. The amount was given from her personal bank account out of own savings for the last 30/35 years as a married lady. (iv)Sri Swapan Das, the brother-in-law of the appellant had made a gift of Rs. 25,000/-out of his personal savings account of Post Office out of savings from agricultural income. (v) Smt. Mamata Kar, the mother of the appellant had made a gift of Rs. 70,000/- to the appellant during the year out of the savings of her husband Late Gopal Kar through her bank account. She being a lady widow of about 80 years, practically bedridden and have made gift to her all savings to sons. (vi) Smt. Bubai Kar The wife of the assessee had a running account with the assessee, the statement of which was submitted at the time of assessment. Since, Smt. Bubai Kar is a businessman, this is reflected in her personal capital account which is being submitted. The statement of ac....
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....gift from Swapan kr. Das, is confirmed because his relation with the appellant does not come within the definition of relative as Explanation to Proviso to Section 56(1(iv) of the I.T Act. The AO will also verify the relation of Shri Bhakti Binod Sinha with the appellant. If the relation is covered by the aforementioned Explanation to Proviso to Section 56(1)(iv) the appellant will get consequential relief. The additions made in respect of other gifts are directed to be deleted. This ground of appeal is partly allowed." 17. Aggrieved by such order of the ld. CIT-A, the revenue raised ground no.2. In the Cross Objection the assessee has challenged the action of the ld.CIT-A in sustaining the addition made in respect of gifts received from Sri Swapan Kumar Das. 18. We have heard the rival submissions. The ld.DR relied on the order of the AO and the ld. Counsel for the assessee relied on the order of the ld.CIT(A) in so far as the ground of appeal No.2 of the revenue is concerned and relied on the submissions made before CIT(A) in so far as it relates to Gr.o.2 raised in the C.O. 19. As far as Gr.No.2 raised by the revenue is concerned, it is seen from the Record that the AO himse....
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....e payment has been shown to be paid in cash on different dates at an amount of Rs. 20,000/- per instance or less spread over the entire F.Y 2008-09. The genuineness of cash payment can not be relied upon. As the notice sent to them has not been served and the assessee failed to prove the payment made in subsequent year with any documentary evidence. Hence, the amount of Rs. 2,82,618/- shown as liability payable is treated as bogus and added to the income of the assessee. 23. Before the ld.CIT-A the assessee submitted that the addition made by the Learned Income Tax Officer is totally unjustified as being made purely on surmises. The purchase bills are there to prove the purchases and the payment shown in ledger account and of the relevant entries of the cash book is a documentary evidence that the payments have been made. Besides, the sellers having insisted on cash payment on his visit to Burdwan every time has put his note on the back of the purchase bill which is a valid receipt. Moreover, the payments have been made in the succeeding year and not in the year under appeal. 24. The ld. CIT-A after considering the above deleted the addition by observing as under:- "It appears f....
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....rjee and I.T Return of Tarakeswar Kar for the A.Y 2008-09 and submitted that Smt. Aparna Banerjee and Swapan Das are not assessed to income tax. To verify the veracity of the transaction notice u/s. 133(6) of the I.T Act was issued to Aparna Banerjee, Swapan Das by the AO. 29. After considering the reply sent by them the AO held that their creditworthiness is not proved due to the following facts:- Aparna Banerjee: i. She has deposited cash of Rs. 3,00,000/- on 03.04.2008 in her UCO Bank, Raniganj account and advanced the same money of Rs. 3,00,000/- to Sudhi Bastralaya on 15.04.2008. No other major transaction prior to this has been made in this account apart from this transaction. If this transaction is excluded then the pick balance in the account was of Rs. 26,996/-, which is due to the credit of Rs. 26,248/- deposited as closure proceeds of some account. ii. She herself has admitted that she is a house wife and she has no business activity. iii. She did not explain the source of cash deposited in her bank account. Swapan Kr. Das: i. He has deposited cash of Rs. 2,00,000/- on 25.03.3008 in his AXIS Bank, Burdwan account no. 148010100141444 and advanced the same money of....
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..... 68 of the I.T Act, 1961. 30. Before CIT(A), the Assessee submitted that the appellant during the year under appeal appeal received a loan of Rs. 3,00,000 and Rs. 2,00000 from Smt. Aparna Banerjee and Sri Swapan Kumar Das respectively. Both these loan creditors has confirmed the transactions and also submitted their source of such loan. Both are having permanent Account number and the transactions have been made through banks, the copies of which was submitted at the time of assessment . Smt. Banerjee had received the money from her husband who is a bank employee and Sri Swapan Kumar Das being Assistant Headmaster of a school, had given the money out of savings from his own income from salary and agricultural income. The three High Court decision referred in support of these additions have decided that a case of such credit/deposit three cardinal points to be taken into account viz. (i) the' identity of the parties (ii) genuinity of transaction (iii) creditworthiness. Here, in both the credits, the identity of the parties, the genuinity of the transaction and creditworthiness of the parties have been amply proved by submitting relevant bank statements and proof of income. The ....