TaxTMI 
TaxTMI 
2014 (2) TMI 1272
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....ance Division and Bank Pass book before the A.O. to substantiate claim that Rs. 1,40,00,000/- was given to Sh. Ajay Kumar." 2. In ITA No.62(Asr)/2012, the revenue has raised following grounds of appeal: 1. Whether on the facts and circumstances of the case, the variation in the copies of Capital Account of Sh. Ajay Kumar partner as produced in the Court and copies of account filed with the Income Tax Department is immaterial. 2. Whether on the facts and circumstances of the case, the assessee was right without producing books of accounts of M/s. Ajay Electronics, Finance Division and Bank Pass book before the A.O. to substantiate claim that Rs. 1,40,00,000/- was given to Sh. Ajay Kumar." 3. First of all, we take up appeal of the Revenue in ITA No. 60(Asr)/2012. The brief facts of the case are that the assessee derives income from house property at Rs. 100643/-, income in the hands of minor son, Master Amit as well as taxable receipts under the head 'Business Income" being remuneration and interest from two firms namely Ajay T.V. Centre, Gurdaspur and Ajay Electronics Pathankot. Subsequently, on receipt of information by way of complaint from two residents of two residents of....
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....me. In view of the variation in the assessee's copy of capital account appearing in the books of Ajay Electronics as furnished before the Trial Court vis-à-vis as furnished with the return of income, which has been made part of his re-asstt. order, the AO has made an addition of Rs. 1,70,00,000/- u/s 68 treating it assessee's own undisclosed income from unexplained sources. 4. The Ld. CIT(A) deleted the addition for the reasons mentioned in his order. 5. During the course of appellate proceedings before the Ld. CIT(A), the ld. counsel for the assessee filed written submissions which are available in para 5 at pages 5 to 9 of CIT(A)'s order. 6. As regards the legal ground, the Ld. CIT(A) vide para 8 at pages 10 to 15 rejected the legal ground of the assessee and confirmed the action of the A.O. with regard to the reopening of assessment proceedings u/s 147 read with section 151 of the Act. 7. There is no appeal of the assessee before us and therefore, the issue of reopening of assessment has attained finality. 8. The Ld. DR relied upon the order of the A.O. 9. The Ld. counsel for the assessee, on the other hand, relied upon the submissions made before the ld. CIT(A) and....
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....e assessee has all along been contending that he was conducting the transaction for and on behalf of the firms. Even concluding lines of para 5 of the AO's assessment order stating therein from the above facts, it appears that Sh. Ajay Kumar and the two partnership firms i.e. Ajay TV Centre, Gurdaspur (Rs.5,00,000/-) and M/s. Ajay Electronics, Pathankot (Rs.1,70,00,000/-. The assessee has claimed that he is not maintaining personal books of account. Therefore, in the absence of books, no credit can be given to the application of section 68 of the Act. Further, the assessee has produced Sh.Surinder Mahajan Partner of M/s. Ajay Electronics, Pathankot, who has confirmed payment of Rs. 1,70,00,000/- to the assessee. Moreover, the Finance Division is working since 1997-98 and it is duty appearing in the list of creditors . Interest paid by the Finance Division is duly reflected and debited in the P & L account and duly allowed by the AO. Moreover, asstt. For the A.Y. 1998-99 and 2001-02 have been completed u/s 143(3). It is not the case of the AO that funds of the firm were clandestinely were used to siphon out funds of the firm. As the funds were invested from the books of account, the....
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....) Capital account (2) Imprest A/c from M/s. Ajay Electronics is enclosed herewith. Sir, money received is debited in imprest a/c and since the saem was not used by Sh. Ajay Mahajan for the purpose it was collected/taken from firm M/s. Ajay Electronics was returned back to them and as such the Imprest a/c. was squared up. Sir, since this entry was squared up in Imprest a/c itself such the same was not made part of capital account filed with you. In capital a/c, the entry of permanent nature were recorded except this Imprest account. Sir, no adverse inference should be drawn since Sh. Ajay Mahajan is an regular assessee and his source, M/s. Ajay Electroncis , Pathankot is also regular assessee with your circle... The A/R of the assessee has placed on record the following judgments in support of his contentions that if the creditor has confirmed on oath that he advanced the amounts to the assessee, the burden immediately shifts on the AO to show as to why it must be held that credit represented the income of the assessee from suppressed sources unless it is proved that the creditor is only a name-lender. In order to arrive at such a conclusion, even the AO has to be in possession of ....
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....ts on to the department to show as to why the assessee's case could not be accepted and as to why it must be held that the entry tough purporting to be in the name of a third part, still represented the income of the assessee from a suppressed source- Further, tribunal having accepted the genuineness of cash credits in part, the other part of the Tribunal's findings was without evidence." The same issue has also been confirmed by the Hon'ble Madhya Pradesh high Court in the case of CIT vs. Metachem Industries, cited at 245 ITR 160 (2000): "So far as the responsibility of the assessee is concerned, it is satisfactorily discharged. Whether that person is an income-tax payer or not or from where he has brought this money is not the responsibility of the firm. The moment the firm gives a satisfactory explanation and produces the person who has deposited the amount, then the burden of the firm is discharged and in that case that credit entry cannot be treated to be the income of the firm for the purposes of Income- tax." 13. Further the heavy reliance can be placed on the decision dated 19.10.2001 in ITA No.592(Asr)/1994 for the A.Y. 1992-93 in the case of the ACIT, Circle, Jammu vs....