TaxTMI 
TaxTMI 
2017 (4) TMI 241
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....ugust, 2010. The assessee was engaged in the business of diamond cutting, majuri work and diamond brokerage. It was noticed that there was a delay of 29 days in filing of this appeal by the assessee. In this connection the assessee has filed affidavit requesting for condoning the delay in filing the appeal because of serious illness and time taken in the appointment of the authorized representative .We consider that the above circumstances of delay in filing the appeal appeared to be bona fide, therefore, we condone the delay of 29 days in filing this appeal by the assessee. Both the grounds of appeal are interconnected and these are decided together as under. 4. Brief facts of the case are that during the course of assessing proceedings, the assessing officer noticed as per AIR information that assessee had deposited cash of Rs. 17,42,300/- in the saving bank account maintained with ICICI bank. During the course of assessing proceedings at the initial stage the assessee had denied to have bank account with ICICI bank. The assessee stated he was having two bank accounts with Saraswat Co-operative Bank. On further questioning about any other bank account, he revealed that he was ....
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....a brought capital of Rs. 4,10,000 and Shri Virjibhai C. Gajera brought capital of Rs. 8,54,000/- respectively. Out of the total cash deposit of Rs. 19,37,590/- he has explained that cash deposit of Rs. 12,64000/- has come from the two members of AOP AYUSHI investment. The assessing officer examined these two persons regarding their claim of generating income from agricultural activities and found that except copies of 7/12 of agricultural land, they have not produced any other evidence like nature of agricultural land, evidences of agricultural income generated from agricultural activities, copy of bills of sale for agriculture products etc. Therefore, the assessing officer held that assessee could not prove and explained the cash credit of Rs. 19,37,590/- in the ICICI bank a/c which was added to the total income of the assessee as unexplained cash credit. 6. Aggrieved against the impugned order of the assessing officer the assessee preferred appeal before Ld. CIT(A).The Ld. CIT(A) had sustained the addition by observing as under:- "6.1 I have considered the assessment order as well as the submissions of the appellant. The Grounds of appeal- Ground No. 1 pertains to the....
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....n several names does not prove that the capacity to make huge cash deposits of these two persons. These two person were also not able to produce any evidence to show the availability of such huge amount of cash available with them for making cash deposits. The conduct of Shri Virijbahi C Shah, of denial of any knowledge regarding AOP, in the statement on oath recorded u/s 131 of IT Act shows that the transactions are not genuine and it is a make believe story. Another fact which proves that the whole submission is an afterthought, is the Clause 3 of the Deed of AOP of Ayushi Investment dated 31.03.2008, wherein it is mentioned that bank account no.058401500739 in ICICI bank in name of appellant will be used for business by AOP. Interestingly, the bank account opening form shows that the said bank account in ICICI Bank was opened on 12.05.2008 i.e 44 days after the signing of the AOB Deed which shows that AOP deed was ante-dated/back dated to show the source of cash deposits in the bank accounts. 6.2.2 The affidavits have been filed by the appellant in support of the cash deposits. But mere filing of affidavits does not prove that the submissions made by the person swearing....
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....al or basis. An, analysis of the peak credit concept will clarify that the appellant's claim is not valid. The concept of peak, credit holds that sometimes, an assessee may conduct his unaccounted transactions through one or more bank accounts or may record such transactions in a Vague manner in one or more books. The deposits in such bank accounts may reflect. * Unaccounted sales. ; * Unaccounted cash introduced. : * Unaccounted loan received from other. * Unaccounted loans returned by others. * Unaccounted sale proceeds of investments such as shares, properties. 6.2.7 Details may not be available to segregate the deposits into the above heads and quantity the total amount under each of the above heads. Estimating the profit as a percentage of the total of the deposits would be incorrect. In such cases, working out the peak credits (receipts) or the debits (Payment) may give an indication of the total unaccounted money in the possession of the assessee which may be assessed as his income. 6.2.8 But the peak credit statements can be prepared only if records for the receipt and payment of money for the entire account....
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.... of Indian Evidence Act, 1872 deals with bur den of proof. Section 102 of the Evidence Act provides that the burden of proof lies on that party who would fail if no evidence at all were given on either side. Thus if an assessee claims that money or bullion found in his possession at the time of the search or survey does not belong to him but someone else the onus is on him to establish it because the ordinary presumption is that he is the owner as the money etc. was found in his possession. Similarly, in all cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the assessee claims exemption, the burden is on the assessee to prove it to be exempt. Same is the position in case of allowances, deductions, or claims of loss, etc. Similarly, where there is a statutory rebuttable presumption against the assessee, as in case of cash credits etc., u/s 68 or unexplained investment u/s 69, the initial burden of proof is on the assessee to show that the cash credit is genuine or the investment is not unexplained. The AO should, therefore always examine as to who has to discharge the burden of ....
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....arent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required-to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. "CIT v. Durga Prasad More [1971] 82 ITR 540, at pp. 545, 547 (SC). 6.4 On the basis of the facts and circumstances, it is evident that the appellant has failed to discharge the burden of proof regarding the cash deposits in the Bank account. In absence of any evidence and failure to produce any evidence to substantiate h....
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.... Shri Virjibhai C. Gajera have produced only the copies of 7/12 of agricultural land before the assessing officer and failed to furnish any concrete evidences of earning agricultural income and also failed to prove that cash was deposited by them in the above mentioned bank account of the assessee. We have also perused the copies of statement recorded u/s 131 of these two persons in which they have revealed their ignorance about nature of business of the AOP and purpose for which the cash was given by them to the assessee. 8.1 We have also perused the copy of deed of the AOP available in the paper book and noticed that the agreement of AOP was made on the hundred rupees non- judicial stamp paper and nowhere date of stamp paper was indicated, the signing parties also had nowhere mentioned the date of signatures on this deed. We have further noticed that in the copy of the AOP deed it was mentioned that it was cratered on 31st of March 2008 and at serial number 3 of this deed it was stated that bank account number 058015739 in the ICICI bank will be used for its business purposes. In this connection we have gone through the copy of bank statement filed in the paper book subm....