TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 646
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....ed partial relief to the assessee. Aggrieved by the order of Ld. CIT(A), assessee and Revenue are now in appeal before us. 3. The grounds raised by the Revenue in ITA No. 49/RPR/2016 reads as under : 1. "Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 43,00,000/- made by the AO on account of unexplained cash credit u/s.68 of the Income Tax Act, 1961 ?" 2. "The Ld. CIT(A) has erred in confirming a sum of Rs. 7,49,090/- out of total cash deposits of Rs. 43,00,000/- made by the assessee during the financial year under consideration." 3. "The Ld. CIT(A) has erred in ignoring the provisions of section 68 of the Income Tax Act, 1961 which is a deeming provision and, therefore, in absence of primary evidence for explanation of nature and source, the total amount ought to have been confirmed by the Ld. CIT(A)." 4. "The Order of the Ld. CIT (A) is erroneous both in law and on facts?" 5. "Any other ground that may be adduced at the time of hearing?" On the other hand the grounds raised by the assessee in ITA No. 51/PUN/2016 reads as under : "1. That on the facts and on the circumstances of the case Ld. CIT(A)....
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.... are comprising of investments returns made by the Karta from credible sources wherein the details of parties and transactions with them have been explained by highlighting the sources and bank details that were made available to the AO. I also notice there are no significant liabilities that are being discharged which would have had the effect of eroding the balances and rendering the figures shown by the appellant disputable and not genuine. I therefore agree that the opening balance in the cash flow statement prepared by the Id. AO is not in doubt which will be taken for working out the cash deposits in the bank account. Although I am in agreement with the counsel with respect to the opening balance in the cash flow statement I am not inclined to accept the explanation with respect to the genuineness of cash deposits in the bank account as the appellant has not been able to reconcile and relate the cash deposits in the bank account from time to time satisfactorily. In the absence of satisfactory explanation various Courts have supported the view that the additions on account of unexplained cash deposits in the bank account is justified where the genuineness and sources of cash d....
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....low this ground of appeal. Thus, the grounds of appeal No. 1 is allowed. 11. Ground No. 2 is with respect to addition of Rs. 10,75,000/-. 12. During the course of assessment proceedings it was noticed by Assessing Officer that the assessee had received Rs. 10,75,000/- from Mr. M.C. Jain as gift. The Assessing Officer was of the view that Mr. M. C. Jain was not a member of HUF and provisions of section 56(2)(v) are applicable and he accordingly made its addition u/s.56(2)(v). Aggrieved by the order of Assessing Officer, the assessee carried the matter before the CIT(A), who upheld the order of Assessing Officer by observing as under : "1.6 Coming to the second ground of appeal the counsel submitted that the addition made on account of unsecured loan of Rs. 10,75,000/- from Mr. M C Jain through cheque is unjustified and may kindly be deleted. I have considered the grounds of appeal and the submissions made by the Id. Counsel and heard the Id. assessing officer. During the assessment stage it was submitted by the appellant that Rs. 10,75,000/- was a gift received from Mr. M C Jain through cheque in the bank account of Mr. Bhupendra Kumar Jain (HUF). Confirmations from Shri M C Jai....
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....r gifts and for loans. In the case of loans the courts have invariably held that the identity creditworthiness and genuineness of such loans must be established beyond reasonable doubt. Similarly for gifts the court have emphasised the genuineness of the transactions which is of paramount importance. In the instant case it is noticed that the genuineness of the transaction has not been clearly established by the appellant. Though bank statements and confirmations have been filed by the appellant it is important to note that the Hon'ble Andhra Pradesh High Court held in 221 Taxman 143(AP) that mere filing of bank statement is not enough to establish the genuineness of the transaction. In the case of Pradeep Kumar Loyalka reported in 63 ITD 87 (Patna) it was held that the sources of gifts or occasion to make gift are important parameters and hence the claim of the assessee that the gifts were from relatives supported by affidavits and I T Returns would not lend colour of genuineness to the transaction. The Hon'ble Court emphasised the importance of evidences of creditworthiness and where such evidences were scanty or negligible or did not inspire any confidence or was against....