TaxTMI 
TaxTMI 
2019 (9) TMI 1061
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.... the bank account is used for making payment to the creditors from whom goods were purchased and there is no outstanding creditor at the year end (iv) not considering the fact that assessee has furnished the confirmation of the parties and also the identity proof of some of these parties and therefore, only because these parties could not be produced is no ground for treating the cash deposit in the bank account as unexplained. 2. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be allowed to the assessee." 2. The assessee is an individual and proprietor of M/s Sunmangal and M/s Mukta Arts. The assessee was engaged in the business of trading in fabrics during the year under consideration. The assessee filed his return of income on 04.10.2010 declaring total income of Rs. 1,39,500/-. Subsequently the Assessing Officer received information from Investigation Wing, Unit-3 Kolkata on 02.03.2015 that the assessee has deposited cash of Rs. 8,62,66,333/- in his saving bank account. In pursuant to the said information along with the bank account statement of the assessee the AO has conducted enquiry to verify the source of the deposit and f....
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....pplication money and therefore, cannot be applied to the case of the assessee where the deposit in the bank account has been made out of the sale proceeds. Alternatively, the ld. AR has submitted that when there are withdrawals from the bank account then the addition if any could have been restricted only to the pick cash deposit. 4. On the other hand, the ld. DR has submitted that the parties from whom the assessee has claimed to have purchased the fabrics were not found at the given address. Even the assessee has not produced any documents to substantiate the transaction of purchase and sale. The AO has conducted the due enquiry by issuing commission to Addl. Joint DIT(Investigation), Kolkata and after receiving the report it was found that the alleged persons were not in existence as not found at the given address. The ld. DR has further submitted that the assessee claimed that these persons have filed confirmation in response to notice U/s 133(6) of the Act however, the alleged confirmations are contradictory as the letter dated 08.02.2017 is signed by a different person claimed as director of the company whereas his ledger statement at page 13 and 14 of the paper book is sig....
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....tyle of two proprietorship concerns M/s Sunmangal and M/s Mukta Arts only during the year under consideration. Neither any such business was done by the assessee in past nor any such activity is carried out in future. Thus only during the year consideration the assessee has claimed to have done the business of trading in fabric. The assessee claimed that this business was done at Kolkata under these two proprietorship concerns however, in the books of account there is nothing as fixed assets of the assessee and only the rent of Rs. 10,000/- in case of each proprietorship concerns has been claimed. The assessee claimed to have achieved turnover of more than Rs. 13 crores during the year under consideration. It is pertinent to note that the assessee has commenced these business activities during the year itself and closed the same during the year itself. During this short period the assessee has achieved the turnover of more than Rs. 13 crores that too the entire of sale claimed in cash without having any details or particulars of the persons to whom the sale was made. The assessee has not produced a single document of sale having any detail or particulars of the purchaser. This magn....
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....nt order and the appellant's submission. So far as the issue of cash credit is concerned, various court judgments have settled the parameters and the scope of onus to be discharged by the assessee. In this regard, Supreme Court in CIT v. Lovely Exports Pvt. Ltd.(supra), has held that the initial burden is upon the assessee to explain the nature and source of the share application money and in order to discharge this onus, the assessee should prove (a) the identity of shareholder; (b) genuineness of the transaction; and (c) creditworthiness of shareholders. It was further observed that for discharging the above burden, the assessee must file some documents or produce the shareholder to prove his identity. In the case of subscriber being a company details in the form of registered address or PAN identity, etc. would suffice. The genuineness of the transaction may be demonstrated by showing that the assessee had, in fact, received money from the applicant shareholder and that it had come not from the coffers of the assessee but from that of the applicant shareholder. As to the creditworthiness or financial strength of the subscriber, the proof could include banks statements of the....