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TaxTMI 
TaxTMI 
TaxTMI 
2010 (4) TMI 1138
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....een that the appellant discharged the onus by providing detailed addresses, confirmation letters having invested the amounts and proved the genuineness of the investment and, therefore, ought to have deleted the addition made by the Assessing Officer." 3. Learned counsel for the assessee submitted that the assessment year under consideration, viz. 2005-06 was the first year of business of the assessee and the capital was introduced by the partners in the beginning of the relevant accounting period. In the circumstances, he submitted that the ratio of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Bharat Engineering and Construction Company (83 ITR 187)(SC) applies to the case of the assessee. He submitted that in this case, Hon'ble Supreme Court has held that a construction company takes time to earn profit and it could not have earned a huge profit within a few days of commencement of its business, and therefore, it was reasonable to assume that the cash credit entries represent capital receipts though for one reason or the other, assessee has not come out with the true story as regards the source of the receipt. The learned counsel for the assesse....
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.... Court pertains to the period covered by the 1922 Act, and under S.68 of the Income-tax Act, 1961, even in a case, where an amount is credited in the very first day of the accounting year and the explanation offered by the assessee is not accepted, such amount may be assessed as income of the assessee of the accounting year for which the books are maintained. This decision of the Hon'ble Calcutta High Court in Ashok Timber Industries (Supra) was followed by the Madhya Pradesh High Court in the case of Banshider Agarwal Panna (Supra). Admittedly, case of the assessee is covered by the 1961 Act and accordingly, provisions of S.68 of the Income-tax Act, 1961 are clearly applicable to the case of the assessee. In this view of the matter, we are unable to accept the legal plea raised by the learned counsel for the assessee. Accordingly, we reject the same. 6. As for the plea urged by the learned counsel for the assessee that assessee is entitled to some credit for the additional income offered by it for assessment through the revised income filed with the Department, we find that this plea of the assessee is devoid of merit. Assessee has applied flat rate of net profit to its gross....
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....(A). We do so accordingly. 8. As for the next item of addition of ₹ 1,20,000 sustained by the CIT(A) in respect of the capital introduced by B. Srinivasa Rao, learned counsel for the assessee submitted that Srinivasa Rao was an employee in a private concern and was also having agricultural income. He submitted that no addition is called for in respect of credit entry in the account of this partner. Learned Departmental Representative opposed the submission of the learned counsel for the assessee and submitted that the assessee could not prove the creditworthiness of Srinivasa Rao with any documentary evidence. He submitted that Srinivasa Rao is not even an income-tax assessee, and as such the addition sustained by the CIT(A) in respect of credit in the account of Srinivasa Rao should be upheld. On careful consideration of the rival submissions, we find that Srinivasa Rao was doing private job works and was also doing agriculture at his native place taking land on lease. We find that no credit for the agricultural income of Srinivasa Rao was given by the revenue authorities, though the contention of the assessee in this behalf is not disputed. In these facts of the case, we f....
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.... by Venkanna for the past several years, or for the amount of ₹ 72,000 which was invested by borrowing from friends. The Learned Departmental Representative has opposed the submissions of the assessee and submitted that the explanation of the assessee has no supporting evidence and this partner is not even an income-tax assessee, and as such his credit-worthiness is not at all proved with any documentary evidence. On careful consideration of the rival submissions with regard to the capital introduced by this partner, we find that this partner, Venkanna, has confirmed that he was an agriculturist, deriving agricultural income for the last several years from the land taken by him on lease at his native place. We find that no credit for his savings out of agricultural income was allowed by the lower authorities, though no adverse finding has been given by them against the agricultural income claimed by this partner. We find that this partner has also claimed to have invested ₹ 72,000, after borrowing the said amount from his friends. Credit for this amount was also not allowed by the Assessing Officer, though the claim of the assessee with regard to the borrowal was not di....