TaxTMI 
TaxTMI 
2018 (1) TMI 992
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....position of cash in bank was out of funds belonging to appellant. 4. That the addition to the income of appellant cannot be made merely on the basis of suspicion or surmise, the A.O has to bring on record cogent material to tax such income and discharge his onus. 5. That the learned CIT(A) has erred in law and on facts in confirming an addition of Rs. 4,00,000/- u/s 68 on account of unexplained loan. 6. That the learned CIT(A) has erred in making addition of Rs. 4,00,000/- as unexplained loan irrespective of the fact that the appellant had submitted the required confirmation of the lender. 7. That the learned CIT(A) has erred in law and on facts in confirming an addition of Rs. 51,760/- on account of undisclosed interest income." 3. Briefly stated facts as culled out from the records are that the assessee is an individual earning income from salary and interest. Return of income filed on 31.07.2010 declaring total income of Rs. 7,12,490/- and agriculture income of Rs. 3,60,000/-. Case selected for scrutiny through CASS. Notices u/s 143(2) and 142(1) of the Act were duly served upon the assessee. The Ld. A.O on the basis of AIR information obse....
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....t of addition and therefore is general in nature. 9. Ground No. 2, 3 & 4 challenges the addition confirmed u/s 69 on account of undisclosed investments. We find that the Ld.CIT(A) adjudicated this issue and partly allowed the assessee's ground by duly giving credit to the agricultural income, income earned during the year by the assessee and his wife as well as opening cash in hand observing as follows; "(iii) I have carefully considered the facts of the case, submission of the appellant and observation of the A.O in the assessment order. It may be pertinent to mention here that the appellant is in the Chairman of Chitragupta Shiksha Prasar Samiti, which is running R.D. Memorial Group of College. In the months of June and July, normally admissions to such educational institutions take place. The appellant had given advance/loan to Chitragupta Shiksha Prasar Samiti on 18.06.2009 of Rs. 10,00,000/- and on 28.07.2009 of Rs. 9,00,000/-. The appellant had made cash deposits in his bank account of Rs. 1,50,000/- on 17.06.2009 and of Rs. 19,65,000/- on 20.07.2009. The appellant's main contention regarding source of cash was that he and his wife had opening cash balance of Rs. ....
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....ri Rajesh Singh were met out of Shri Rajesh Singh's own resources and, therefore, there was no cogent reason for the appellant to claim that he had made withdrawals for any emergency need of treatment of his brother. It is also noticed that the appellant even had claimed to have received loan from Shri Rajesh Singh Chauhan. Further the amounts were not withdrawn in one go but a different intervals. Therefore, the submission that the amounts in cash were withdrawn out of his bank account for any emergency need of handling medical expenses for his brother is not probable and, thus, unacceptable. However, considering the totality of facts and circumstances of the case and taking a very lenient view, the A.O had accepted a sum of Rs. 2,00,000/- as opening balance available with the appellant and his wife for the purposes of deposit in his saving bank account, which was fair and reasonable. Therefore, no interference is warranted in the findings of the A.O with respect to availability of opening cash balance of Rs. 2,00,000/-. The second issue involved is regarding cash received out of agricultural income. The appellant had furnished evidence to show that he had agricultural la....
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.... In view of the above, the total availability of cash with the appellant, which could be utilized for making cash deposits in the bank account, works out as under: (i) Opening cash balance : Rs. 2,00,000/- (ii) Out of agricultural income : Rs. 1,80,000/- (iii) Income of appellant and his wife after deducting expenses : Rs. 4,46,630/- (iv) Total : Rs. 8,26,630/- Therefore, considering the facts of the case, there was an availability of cash of Rs. 8,26,630/- for depositing in the saving bank account. Hence, the appellant failed to furnish satisfactory explanation regarding the source of balance amount of cash deposits in the bank account of Rs. 12,88,370/- (Rs.21,15,000/- - Rs. 8,26,630/-). Therefore, the A.O is directed to make addition of Rs. 12,88,370/- on account of unexplained investment in cash deposits in bank account u/s 69 of the Act. In the result, the appellant gets a relief of Rs. 3,56,630/- (Rs.16,45,000 - Rs. 12,88,370) in this ground. 10. From the perusal of the above findings of Ld.CIT(A) except for the opening cash balance, we do not want to interfere with the other findings of Ld. CIT(A). He has allowed opening cash ....
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....burden of proving that the loans in question were genuine. In another case of CIT Vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal), it was held that mere furnishing of particulars is not enough. Mere payment by account payee cheque is not sacrosanct nor it make a non genuine transaction genuine. In the case of CIT Vs.K Mahim (1995) 213 ITR820 (Ker.), it was held that where apart from confirmatory letter, there was no material to establish the capacity of alleged creditors to advance the amounts in question to the assessee, the tribunal was justified in sustaining addition made in respect of such cash credits. In the case of Bharti Pvt. Ltd. Vs. CIT (1978) 111 ITR 951 (Cal.), where in respect of certain loans in its account, the assessee produced confirmatory letters from the creditors but the ITO's notices to summon the creditors came back unserved, it was held that the assessee had failed to prove the identity of the creditor and creditworthiness of the creditor and, therefore, the additions of the amount of loans as income from undisclosed sources was justified. Therefore, where an assessee has furnished only confirmation letter or furnished PAN Number, or simply contende....
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....he assessee had furnished her statement of affairs, additions of unexplained gifts can be made u/s 68 or u/s 69 of the Act. The Head notes of the case are as under:- "Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 2001-02 - Assessee claimed that during previous year she had received certain gifts from five perons - Assessing Officer verified genuineness of gifts and held that gifts in question were not genuine - Assessing Officer, therefore, treated amount of gift as undisclosed income of assessee under section 68 and added said amount to income of assessee - Assessee challenged addition made under section 68 on ground that since she was not maintaining any books of account, no addition could be made under section 68 - Whether since assessee had furnished her sdtatement of affairs which can be prepared only on basis of books of account, addition could be made under section 68 as well as under section 69 - Held, yes - Whether since assessee failed to produce donors of gifts, assessee had failed to prove creditworthiness of donors and genuineness of gifts and, therefore, addition made to income of assessee under section 68 in respect of those gifts w....