TaxTMI 
TaxTMI 
2018 (7) TMI 365
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....turn as filed. According to AO, the assessee shown labour charges of Rs. 10,21, 695/- in trading account and claimed the same as Rs. 1,18,577/- in the P & L account, no justification provided for misc. expenses and no explanation for site expenses. The AO opined that the assessee inflated his business expenses for altogether, the AO held that the assessee failed to offer satisfactory explanation regarding claim of such expenses and as such added an amount of Rs. 1,18,577/- + Rs. 19,371/- + Rs. 1,15,582/- respectively on the above heads totaling to Rs. 2,53,530/- to the total income of assessee. 4. Before the CIT-A the assessee submitted as under:- "The AR submitted that the assessee derived income from the business of timber, contract work and timber sawing and during the year, his turn over from sale of timber was Rs. 1,60,95,557/and contract work of Rs. 11,22,673/. The AR further submitted that the assessee maintained the audited Books of A/c and during the year he claimed Rs. 10,21 ,695/ as labour expenses in his Trading A/c and Rs. 1, 18,577/on account of contract work in his P&L Alc. But the Ld AO did not visualize the labour charges claimed for the busine....
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....e explained that those receipts were on account of Vinayak Industries. But, however, on perusal of computation of total income the AO found that the assessee declared only 10,000/- separately to the account of Vinayak Industries. For non explanation for remaining entries the AO added the entire amount to the total income of assessee. Before the CIT-A, it was contended that the assessee derives his income from timber and contract work business and shown the said amount separately from job work. The CIT-A found not satisfied with the explanation of assessee and confirmed the said addition made by the AO. 9. Before us the ld.AR referred to computation of income to show that the assessee has shown the same separately to the account of Vinayak Industries, which was received from the said party by cheque. 10. On the other hand, the ld. DR relied on the orders of AO & CIT-A. 11. Heard rival submissions and perused the record including the detailed paper book filed by the assessee before us. The fact remains admitted that the assessee is engaged in the business of timber and contract work. The AO also admitted that the said amount was shown to the account of Vinayak Industries. Th....
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....hat the creditors have no regular source of income. They have shown their income from misc, receipts and / or sale of agricultural products. There was no supporting evidence for their business. Thus, it appears that the source of their income were imaginary. They had shown very nominal income and most of the cases, the income was below taxable limit. Although all of them had SB Bank Ales, but without depositing their cash balance in the Bank A/c, they had shown huge cash in hand, whereas, they had very nominal balance in their Bank A/cs throughout the year. It is also found from the Bank Statements of the alleged creditors and/or donor that equal amount of cash was deposited to the Bank on the same date when the amounts were transferred to the Bank A/c of the assessee. Thus, If cannot be said that the creditors had creditworthiness. From all respect, it is held that the assessee had failed to discharge the legal obligation. The Courts held that if the assessee offers an explanation about the cash credit, the AO can ask the assessee to prove his explanation and if the assessee fails to tender evidence or burkes an enquiry, then the Assessing Officer is justified in rejectin....
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....ds. His sister in law, Megha Mantri donated Rs. 50,000/- as gift. He also submits that in the course of assessment proceedings the assessee submitted the loan confirmations, IT returns acknowledgements, statement of income and expenses account, bank statement, bank pass book and PAN Cards of the said parties. The said loan were taken through account payee cheques. He submits that the assessee discharged his duty in proving the identity, creditworthiness and genuineness of transaction before the authorities below. The AO even examined the two loan creditors under oath. Having examined all the details filed by the assessee, the AO held that loan creditors have hypothetical income and undisclosed income is unwarranted. The ld. AR referred to pages 3-40 of the paper book and argued that all the details as produced by way of paper book also filed the same before the AO & CIT-A and prayed to allow ground nos. 3 & 4 of appeal. 18. On the other hand, the ld. DR relied on the orders of the AO & CIT-A. 19. Heard rival submissions and perused the record including the paper book details available on record. It is clear from the record that all the details as sought by the AO by way of qu....