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TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1244
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....s under: Sl. No. Name of the persons Amount of Credit (Amt. in Rs.) 1. Mr. Arogyasamy F/o. the assessee 250,000 2. Sri G.K. Ganesan 200,000 3. Deva Senathipathi (Rent Advance) 250,000 4. Ms. K.Mallika 100,000 5. Ms. Jena Godwin H/o. the assessee 200,000 6. Ms. Pratima 200,000 7. Sri. Ramachandran 200,000 8. Sri. Senthilkumar 100,000 9. Mr. Judith 100,000 10. Mr. Robin 100,000 11. Sri. Subramani 700,000 TOTAL CREDITS 24,00,000 The assessee explained it to be unsecured loans as well as advances from customers, received in cash. However, he did not furnish any evidence qua any of these loans and advances, except the rent advance of Rs. 2.50 lakhs (Sr. No.3), toward which a copy of the lease agreement dated 01.5.2006 (entered into between the assessee and the said payer-advancer) was adduced. Accepting the same, the balance Rs. 21.50 lacs was regarded as unexplained cash credit and deemed as the income, assessing it at Rs. 24,55,580/- as against the returned income of Rs. 3,05,580 (vide return of income filed on 11/10/2007/copy on record). In appeal, there was no response by the assessee despite being afforded several opportunities, const....
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....ous year.' The same has been explained by the Hon'ble Apex Court per a series of decisions, from some of which we may quote as under: Sumati Dayal v. CIT [1995] 214 ITR 801 (SC) 'In all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assessee. But, in view of s. 68 of the Income-tax Act, 1961, where any sum is found credited in the books of the assessee for any previous year the same may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut the said evidence, it can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably.' (See pp. ....
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....the assessee to take the plea that, even if the explanation is not acceptable, the material and attending circumstances available on record do not justify the sum found credited in the books being treated as a receipt of income nature.' Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC) 'It is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Income-tax Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income.' The law in the matter is thus well settled, and the primary onus to prove a credit, explaining the nature and source thereof satisfactorily is on the assessee. Further, as explained, the same is on the parameters of identity, capacity and genuineness, by leading relevant materials, is on the assessee. It is only thereupon that the assessee can be said to have discharged the burden of proof on it, which then shifts to the AO/assessing authority. Further, the decision as to whether the....
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.... was also asked to file any invoices raised by the appellant in the name of Shri G.K. Ganesan. The appellant could not furnish any details apart from the confirmation letter. In view of this the addition made by the-Assessing Officer is CONFIRMED.' C. Shri Subramanian (Rs. 7 Lakhs) 'It is regarding the addition made by the Assessing Officer for a sum of Rs. 7 lakhs on account of unexplained credits received from Shri Subramaniam. The Assessing Officer in the assessment order stated that the appellant has not filed any confirmation letter except filing copy of the agreement dated 07.09.2006. According to the Assessing Officer the agreement does not show any particulars regarding advance made, date of advance and also mode of advance. During the course of appellate proceedings, the appellant filed the agreement dated 07.09.2006 wherein some payment details were recorded. Surprisingly these payment details were not available when the same agreement was filed before the Assessing Officer. As seen from the scribbling on the agreement the payments were received in 2006 and 2007. The appellant could not furnish any further evidence for the amount of Rs. 7 Lakhs. The Authorized Repre....
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....d before me. How, then, could the same be reversed or even modified, i.e., unless the same are shown to be imbued with some infirmity? There is nothing on record toward establishing the creditworthiness of the creditors and/or genuineness of the impugned credits. Mere furnishing of a confirmation letter by a creditor, as it again well settled, does not prove the credit; the same would at best only establish the identity of the creditors, i.e., given that the Revenue has not required the assessee to prove the signatures on the confirmation letters, so that the same may be regarded as accepted. There is, as afore-said, no whisper of the capacity or genuineness of the loans or advances. Where claimed as advances against work done, the assessee has, despite being required to, which the Revenue is in fact not obliged to call for, furnish any evidence toward the work done for the concerned creditors nor of the invoices raised on them during the relevant year or even subsequently, which would normally follow as a matter of course. The assessee failed to furnish the bank pass-book even in the case of his father, who was found to be in receipt of a monthly pension of Rs. 7800/- only. Why, h....
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....0000 13. Subramanian 700000 14. Rajpal homes 300 That is to say, the assessee has nowhere explained the said difference in-asmuch as it is only the sum actually credited in its accounts that need to be explained. No doubt, the ledger accounts of the relevant creditors are on record, and which are in agreement with the breakup of the loans as provided subsequently, but then it is only the assessee who can explain as to how its balance sheet, which purports to reflect its state of its affairs as at the year-end per its accounts, discloses a separate and different set of figures, including their profiling. In this regard, it is notable that all the loans/advances are received in cash, without as much as a cash receipt being issued, so the assessee could, at any time, change a creditor, or the amount ascribed to him, to suit himself. The Revenue is equally to blame for not questioning the assessee in this respect, which clearly undermines, nay, castigates, the assessee's case, who only could explain the said differences. Another anomaly observed is that the assessee's stand before the Tribunal is of being unaware of the appellate proceedings before the first appellate authority ....