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2024 (3) TMI 248
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....n of amount received and repaired by account payee cheque which was stated in affidavit and also admitted in the statement given by the creditors in view of judgment of Rajasthan High Court in case of 20 Tax World page 142. 4. With due respect, the case on which the lower authority relies has a different fact not identical to the ASSESSEE as such no adverse inference can be made BY avoiding the binding nature judgment of the Hon'ble Supreme Court or/and Rajasthan High Court 5. Without rejection of books of account no addition can be made in view of judgment of the Supreme Court of 76 ITR Page 719. 6. That A.O. should not have made the addition and CITA should not sustain the addition because the assessee discharge the burden casted upon him by the statue. 7. The addition is illegal in the light of judgment of Lalchand Bohra vs Income Tax Officer 189 Taxman 141 Rajasthan High Court Capacity of creditor is not a matter FOLLOWING S.C.. "So far as capacity of the lender is concerned, in our view, on the face of the judgment of Hon'ble Supreme Court, in Daulat Ram's case (supra), and other judgments, capacity of the lender to advance money....
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....ed the material facts on record and grounds of appeal raised by the appellant. 6.2 In this regard, it is pertinent to note the decision of the Hon'ble Supreme Court in the case of B. N. Bhattacharjee and Another (118 ITR 461) wherein it has been held that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal for non-prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, the Hon'ble High Court of Bombay has referred to the observations of Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarkadas AIR 1958 MP 260 wherein it was observed:- "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses..." 6.3 There is a we....
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.... so. 6.5 On the basis of material available on records, it is seen that the AO has made the impugned addition relying on decisions given in the following cases: 1. Mangilal Jain Vs ITO (Mad) 315 ITR 105 2. CIT Vs. Precision Finance P.Ltd (cal) 208 ITR 465. Wherein the conclusion from the above cases is as follows" Assessee failed to prove the genuineness of the credit- Mere proof of identity of the creditor or that transaction was by cheque, is not sufficient- Addition u/s 68 upheld" In addition to above, reference has also been made to the decision given by the Honorable High Court, Rajastan in case of Kamal Motors Vs. CIT(2003) 131 Taxmann 155(Raj), wherein decision was given as In order to allow cash credit, apart from identification of creditor, assessee is required to prove that the creditor is a person of means". Further, reference has also been made to the decision given by the Honorable High Court, Calcutta in case of C. Kant & CO. Vs. CIT [1980] 126 ITR 63 (cal), wherein decision was given as " In case of cash credit entry it is necessary for the assessee to prove not only the identity of the creditors but also to prove....
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....SO RECEIVED BACK BY BANK CHANNEL. The assessee SUBMITTED AN AFFIDAVIT IN SUPPORT OF STATEMENT ALSO IN REPLY WHICH IS AT PAGE 2 OF THE PAPER BOOK. The assessing officer directed the assessee so as to produce the creditor. The assessee following the direction produces the creditors. The creditor appeared; in the course of the assessment proceeding came forward with all evidence so as to prove the genuineness of the credit by way of bank channel the statement of creditor is at PAGE 3 OF THE PAPER BOOK. I further want to submit that the assessee successfully discharged his burden by filing affidavit in support of notice given by AO as and when he produced creditor so as to verify the correctness. As soon as the creditor is produced and that the creditor has admitted the advancement of the amount the burden of the assessee deemed to be shifted. The creditor explained and also accepted the advance of money. The condition of advancement is fulfilled. IN VIEW OF ABOVE SUBMISSION OF AFFIDAVIT AND PRODUCING FOR STATEMENT YOUR HONOR WILL OBSERVE THAT THE ASSESSEE DISCHARGE HIS BURDEN AND ON US HAS BEEN SHIFTED ON THE DEPARTMENT. In case of this creditor the assessing officer....
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....ase of the assessee none of the above condition is fulfill. As regards ground no 2, The Commissioner of Income Tax you should not have sustained the addition of amount received and repaired by account payee cheque which was stated in affidavit and also admitted in the statement given by the creditors in view of judgment of Rajasthan High Court in case of 20 Tax World page 142 . The addition sustained by the CIT(A) is illegal. Your kind attention is invited towards the judgment of Hon'ble Rajasthan High Court delivered in the case - 219 ITR page 571, 31 Tax World page 67 is at page 2-4 of the Case law paper book.. Hon'ble Rajasthan High Court observed in the clear words that addition cannot be made where the creditor appeared and accepted advancement of the credit. The head not is being reproduced here under: Income -cash -credit-burden of proof-Identity of creditors D and V has been established and they have confirmed the credits by making statements on oath- This also satisfies the requirement of discharge of burden on the part of the assessee to prove the genuineness of the transactions- CAPACITY OF THE LENDER TO ADVANCE MONEY TO THE ASSESSEE W....
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..... 6.2. In case of CIT vs. Maharaja Shree Umaid Mills Ltd. (1991) 96 CTR (Raj) 72 : (1991) 192 ITR 565 (Raj), the Hon'ble Rajasthan High Court has held that the Tribunal was justified in holding that since books of accounts had not been rejected, the mere fact that there had been a fall in the G.P. rate would not lead to the inference that the expenditure had been inflated. 6.3. In case of CIT vs. Padamchand Ram Gopal (1970) 76 ITR 719 (SC), the Hon'ble Supreme Court has held that no addition is justified if the books of accounts are not rejected. 6.4. We have also seen the other case law relied upon by the learned authorised representative and we find that the book results cannot be ignored if the books of accounts are not rejected or any defect were not pointed out by the AO. Therefore, we do not see any infirmity in the order of the CIT(A). On the reasons given by CIT (A) and on the reasons given here by us, the order of the CIT (A) is confirmed here by us. The judgment of Hon'ble Supreme Court reported in 76 ITR Page 719 held that without rejection of the books of account no addition whatsoever can be made. The relevant portion is bei....
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....ave affirmed in their examination that they had advanced money to the assessee from their own respective bank accounts. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then, in our view, such an addition cannot be sustained and has been rightly deleted by both the two appellate authorities. There is no clinching evidence in the present case nor the AO has been able to prove that the money actually belonged to none but the assessee himself. The action of the AO appears to be based on mere suspicion. The above judgment is applicable in toto. As regards ground no 6, the addition is illegal in the light of judgment of Lalchand Bohra vs Income Tax Officer 189 Taxman 141 Rajasthan High Court Capacity of creditor is not a matter FOLLOWING S.C.." So far as capacity of the lender is concerned, in our view, on the face of the judgment of Hon'ble Supreme Court, in Daulat Ram's case (supra), and other judgments, capacity of the lender to advance money to the assessee, was not a matter which could be required of the assessee to be established,'' ....
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....ave discharged the onus of explaining the cash credit as soon as creditor is produced before the AO and the creditor has also satisfactorily explained the source thereof - Held Yes Further held that affidavit/statement of creditor has to be believed unless the AO refutes the same. 2-4 Without rejection of books no addition can be made 3. Income-tax Officer V/s Mewar Textile Mill (ITAT, JPR) reported in 64 TTJ page 502 6.2. On the above observations, the Hon'ble High Court has allowed the appeal of the assessee. In case of CIT vs. Maharaja Shree Umaid Mills Ltd. (1991) 96 CTR (Raj) 72 : (1991) 192 ITR 565 (Raj), the Hon'ble Rajasthan High Court has held that the Tribunal was justified in holding that since books of accounts had not been rejected, the mere fact that there had been a fall in the G.P. rate would not lead to the inference that the expenditure had been inflated. In case of CIT vs. Padamchand Ram Gopal (1970) 76 ITR 719 (SC), the Hon'ble Supreme Court has held that no addition is justified if the books of accounts are not rejected. We have also seen the other case law relied upon by the learned authorized representative and we find that the book....
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....f Statement of creditor Shri Mangal Chand 3 4 Copy of PAN card of Mangal Chand 4 7. The ld. AR of the assessee in addition briefly submitted that the assessee has discharged the initial burden casted upon the assessee and the assessee has produced the Shri Mangal Chand, he has accepted the fact that he has granted loan to the assessee, his statement was recorded by the ld. AO. The assessee has also filed an affidavit dated 25.04.2019 when the said Shri Mangal Chand has confirmed to have given the loan to the assessee on 30.03.2017 and the said money have been given back to him on 06.04.2017. This affidavit has not been challenged by the ld. AO or that of the ld. CIT(A). Thus, the assessee has provided PAN as an identity proof, genuineness of the transaction is already proved by way of affidavit wherein the money given and received back both have been confirmed proves that the short term loan was genuine transaction. So, far as the capacity of Shri Mangal Chand he has already confirmed his source of income being the sale proceeds of the sarbat ( cold drink ) produced by him. ....