Late Pachandass Mohnot Rep By L H Shri M K Mohnot Chennai v. Acit Chennai

A Smc In The Income Tax Appellate Tribunal A Smc Bench Chennai Before Shri Chandra Poojari Accountant Member I T A Nos 1586 1587 1588 1589 Mds 2016 Assessment Years 1977 78 1982 83 1983 84 1984 85 Shri Late Pachandass Mohnot Rep By L H Shri M K Mohnot 38 College Road Nungambakkam Chennai Vs The Acit Central Circle 1 2 Chennai Pan Aajpm 8961 D Appellant Respondent Appellant By Mr D Anand Advocate Respondent By Mr B Sagadevan Jcit D R Date Of Hearing 23 11 2017 Date Of Pronouncement 20 12 2017 O R D E R Per Chandra Poojari Accountant Member These Four Appeals Of The Assessee Are Directed Aga Inst The Different Order Of The Commissioner Of Income Tax Appeals 4 Chennai In Ita No 232 2013 14 A Y 1977 78 Cit A 4 Dated 21 0 3 2016 Ita No 211 2013 14 A Y 1982 83 Cit A 4 Dated 21 03 201 6 Ita Ita Nos 1586 To 1589 Mds 2016 2 No 372 2013 14 A Y 1983 84 Cit A 4 Dated 21 03 201 6 Ita No 217 2013 14 A Y 1984 85 Cit A 4 Dated 21 03 201 6 Pertaining To Assessment Years 1977 78 1982 83 1983 84 1984 8 5 Respectively Since The Assessee Is Common In All These Four App Eals These Appeals Are Clubbed Together Heard Together Disposed Off By T His Common Order For The Sake Of Convenience Now We Take Up Ita No 1586 Mds 2016 2 The Main Grievance Of The Assessee In This Appeal Is With Regard To Sustaining The Addition Of 40 000 As Unexplained Investment In M S Emkay Credit Corporation 3 1 The Brief Facts Of The Case Are That The Asses See Is Engaged In The Business Of Money Lending Whose Business And Residen Tial Premises Were Searched On 26 11 1983 And 24 01 1984 Subsequently There Was A Search Conducted By The Cbi In His Premises The Ass Essee Maintained The Regular Books Of Accounts Of Business Upto The Asse Ssment Year 1976 77 Afterwards The Assessee Discontinued Maintaining Th E Books Of Accounts For His Business From 01 04 1976 The Enquiries Subs Equent To The Search Revealed That The Assessee Was A Partner In A Firm N Amed As M S Emkay Credit Corporation During The Year Ending On 31 03 1997 The Assessee Ita Nos 1586 To 1589 Mds 2016 3 Had Invested An Amount Of 40 000 In This Firm Which Was Not Shown In The Return Of Income 3 2 The Original Assessment Completed On 10 11 1980 Was Reopened U S 147 A Of The Act During The Re Assessment Pr Oceedings The Assessee Was Asked To Explain The Source Of 40 000 Claimed To Have Been Invested By Him In M S Emkay Credit Corporatio N As Capital During The Assessment Year Under Consideration From The R E Assessment Order U S 144 R W S 147 Of The Act Dated 25 03 1987 It Is Revealed That In Spite Of The Repeated Reminders And Opportunities Provide D To The Assessee No Such Information Was Furnished By Them Which Could Ha Ve Substantiated The Genuineness Of Sources Of This Investment Unde R These Circumstances The Ld Assessing Officer Finalized The Re Assessme Nt Order Taking The Investment Of 40 000 As Unexplained Investment Aggrieved By Th E Order Of Ld Assessing Officer The Assessee Carrie D The Appeal Before The Ld Cit A 3 3 Before The Ld Cit A The Assessee Seems To H Ave Produced Trial Balance As On 31 03 1977 Which Reflected The Amount Of Investment Of 40 000 In M S Emkay Credit Corporation Further The Assessee Produced The Capital Statements Of Earlier Years Fr Om Which The Funds For Ita Nos 1586 To 1589 Mds 2016 4 Investment Had Emanated Accordingly The Ld Cit A Directed The Ao To Verify The Genuineness Of The Documents Trial Balan Ce Etc Produced Before Ld Cit A And After Considering The Same To Give Necessary Credit In Pursuance Of The Directions Of The Ld Cit A The Ao Verified The Relevant Records During The Revision Proceedings It Was Revealed That No Such Investment Was Shown In The Statement And Trial Balance Submitted By The Assessee Along With The Return Of Income Ac Cording To Ld Assessing Officer The Assessee Had Showed Only The Capital The Capital Account As On 31 03 1977 In Which He Had Reflected The Amount Of Opening Balance At 40 544 And The Closing Balance At 41 144 There Was No Withdrawal Made In The Capital Account For The Purpose Of Investment In M S Emkay Credit Corporation The Only Withdrawal Shown By The Assessee Was Towards The Cash Gift Made To B Ijal Shah Trust Accordingly The Ao Confirmed The Addition Made In The Original Assessment Order Aggrieved By The Order Of The Ld Assessing Officer The Assessee Again Preferred An Appeal Before The Ld Ci T A 3 4 In The Second Round The Ld Cit A Called For A Remand Report From The Ao The Ao Wrote A Letter Dt 10 10 2002 To The Assessee The Relevant Paras Of The Letter Are Reproduced As Unde R Ita Nos 1586 To 1589 Mds 2016 5 You Have Submitted That The Ao Who Passed The Order Was Very Irresponsible In Stating That The Assessee Had Not Withdrawn Any Amount From Capital Account To Invest In M S Emkay Credit C Orporation In This Background You Are Requested To File The Copies Of Capital Account That You Have Filed Before The Ld Assessing Officer For My Perusal Not Only That It Was Found That In The Trial Balance As On 3 1 03 1977 Which Was Filed With The Original Return The Payment To M S Emkay Credit Corporation Was Not Found Whereas The Same Was Find Ing A Place In The Trial Balance Filed Before The Cit A You May Give Satisfactory Classification In This Regard 3 5 In This Regard The Ld Assessing Officer Subm Itted A Letter Dated 06 11 2002 Is Reproduced As Under Kind Attention Of The Cit A Is Invited To The Abov E Referred Subject The Cit A Has Directed The Ao To Prepare A Remand Repo Rt After Analyzing The Assessees Written Submissions And Sought Several Clarifications By Writing A Letter To The Assessee On 10 10 2002 Th E Letter Was Also Served On The Assessee Till Date Neither The Assessee No R The Representative Appeared Either Before Me Or The Ao To Clarify The Issues Raised In His Written Submissions In These Circumstances I Am To State That The Cit A Has To Uphold The Additions And Disallowance Made I N The Assessment Against Which Assessee Filed The Appeal As It Seems That The Assessee Has No Material To Support His Submissions That Is Why He Did Not Bother To Appear Ita Nos 1586 To 1589 Mds 2016 6 3 6 Ld Cit A Observed That On Perusal Of The Appea L File It Is Revealed That The Assessee Had Not Complied With The Above Le Tter Of Ao According To Ld Cit A The Ao Was Right In Holding The Said In Vestment As Unexplained Ld Cit A Observed That There Is A Let Ter Dated 30 09 1994 Addressed To Dcit A From The Ld A R As Per This Le Tter The Ld A R Had Furnished A Copyof The Trial Balances And Capital A Ccount For Assessment Year 1974 75 1975 76 And 1976 77 There Is No Tri Al Balance Furnished For Relevant To Assessment Year 1977 78 The Ld A R Had Furnished Only A Copy Of The Capital Account For This Relevant Asses Sment Year The Relevant Capital Account For Assessment Year 1977 78 Begins With The Following Undertaking Given By The Assessee I Am Doing Money Lending Business I Have Not Main Tained The Books Of Accounts Properly I Estimate My Income As Under 3 7 According To Ld Cit A From The Perusal Of Abo Ve Statement Of The Appellant It Is Evident That The Assessee Has Not Maintained Any Books Of Accounts Which Automatically Reveals That There Cann Ot Be Any Trial Balance Without The Books Of Accounts The Income Ha S Been Declared On Estimation Basis Only In The Capital Account Ther E Is Opening Balance At 40 544 And Income For The Year At 8 200 Against This The Assessee Ita Nos 1586 To 1589 Mds 2016 7 Has Shown The Withdrawal At 6 000 Towards Cash Gift To M S Bijal Shah Trust And Drawings At 1 600 The Remaining Capital Of 41 144 Has Been Carried Forward To The Next Financial Year Hen Ce The Ld Cit A Observed That There Is No Such Capital Investment O F 40 000 In M S Emkay Credit Corporation During The Assessment Year Under Consideration Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Tribunal 4 I Have Heard Both The Parties And Perused The M Aterial On Record The Assessee In Spite Of Several Opportunities Give N By The Department Failed To Prove The Source Of Investment Of 40 000 In M S Emkay Credit Corporation It Was Stated That It Is Withdrawn From The Capital Account However The Assessee Is Not Able To Substantiate An Y Withdrawal By Way Of Cash Or Cheque To Invest In M S Emkay Credit Cor Poration Being So In The Absence Of Any Evidence For Source Of Investmen T In M S Emkay Credit Corporation I Have Constrained To Sustain The Addi Tion Of 40 000 Hence The Grounds Raised By The Assessee In Ita No 1586 Mds 2016 Stand Dismissed Now We Take Up Ita No 1587 Mds 2016 14 The Assessee Raised The Following Grounds For Ad Judication Ita Nos 1586 To 1589 Mds 2016 8 1 The Order Of The Learned Commissioner Of Income Appeals 4 Chennai Is Wrong Illegal And Is Opposed To Law And Facts O F The Case 2 The Learned Commissioner Of Income Tax Appeals 4 Ought To Have Seen That The Appellant Had Produced Necessary Docu Mentary Evidence To Prove The Receipt Of Gift From Sri Lala Chand An D Mrs Agarwal And Ought To Have Accepted The Gifts As Geniuine The L Earned Cit A Erred In Drawing Adverse Inference Since The Appellant Wa S Unable To Produce The Donors Especially After A Period Of 20 Years 3 The Learned Commissioner Of Income Tax Appeals 4 Erred In Treating The Loan Of 2 50 000 Taken By The Appellant From M S Hem Investment Under The Head Unexplained Cash Credit The Learned Cit A Ought To Have Seen That The Appellant Has Produced Confirmation Letter From The Creditor And The Said Creditor Is Also Ass Essed To Tax Thus The Appellant Has Discharged His Responsibilities Cast Under Section 68 Of The Income Tax Act 4 The Learned Commissioner Of Income Tax Appeals 4 Erred In Treating The Loan Of 60 000 Taken By The Appellant From Sri Daulat Ram Under The Head Unexplained Cash Credit The Learned Cit A Ought To Have Seen That The Appellant Has Produced Confirmation L Etter From The Creditor And The Said Creditor Is Also Assessed To Tax Thus The Appellant Has Discharged His Responsibilities Cast Under Sect Ion 68 Of The Income Tax Act 14 1 At The Time Of Hearing The Ld A R Made An E Ndorsement As Follows Ita Nos 1586 To 1589 Mds 2016 9 Since The Assessee Is Unable To Produce The Right Address Of Sri Daulat Ram Hence We Are Withdrawing Ground No 4 Accordingly Ground No 4 Is Dismissed As Not Presse D 15 With Regard To Gift Of 5 000 Received From Shri Lalchand And 10 000 From Mrs Maya Agarwal The Facts Of The Ca Se Are That 15 1 The Assessee Failed To Produce The Creditors Donors For Examination Before The Ao It Was Very Clear From The Manner An D Conduct In Which The Assessee Was Responding To The Queries Raised By The Ao That The Assessee Was Not Having Sufficient Evidence To Prove The Genuineness Of These Transactions Nor Was He In A Position To Produ Ce The Parties Accordingly The Ld Assessing Officer Completed Th E Assessment U S 143 3 Of The Act On 29 03 1985 After Making Ce Rtain Additions Aggrieved Thease Carried The Appeal Before The Ld Cit A On Appeal Ld Cit A Confirmed The Action Of Ld Assessing Offi Cer Against The Order Of Ld Cit A The Assessee Was In Appeal Before Tr Ibunal The Tribunal Passed An Order On 31 12 1991 By Which The Assessmen T Order Was Set Ita Nos 1586 To 1589 Mds 2016 10 Aside With Certain Directions Accordingly The Re A Ssessment Proceedings Were Initiated And The Assessee Was Completed As Unde R 15 2 Cash Gift In The Name Of Sri Lalchand The Amount Of Rs 5 000 Was Credited To The Assessees Capital Account On 01 03 82 As Representing Cash Gift Received From Shri Lalchand In Support O F This Gift A Photostat Copy Of The Gift Deed Memorandum Of Declaration Of Gift Stated To Have Been Executed By Shri Lal Chand On 03 03 82 Was Fu Rnished By The Assessee Here Also The Authenticity Of The Alleged Gift Deed Was Not Proved As Per The Photostat Copy Of The Aforesaid Gift Deed Shri Lalchand Was Assessed To Income Tax The Verification Revealed That There Was No Such Assessee In The Name Of Shri Lalchand In 1 City Circie Vil 6 Under G L No 8820 L The Assessee Was Specifically Re Quested To State Whether Shri Laichand Was In Anyway Related To Him And If So The Exact Relation Ship May Be Furnished This Information Was Not Furnished By The Assessee 15 3 Cash Gifts The Amount Of Rs 10 000 Was Credited To The Assesseees Capital Account On 1 3 82 As Representi Ng Cash Gifts Received From Mrs Maya Agarwal In Support Of The Aforesaid Cash Gift Of Rs Ita Nos 1586 To 1589 Mds 2016 11 10 000 The Assessee Had Furnished A Photostat Co Py Of The Gift Deed Memorandum Of Declaration Of Gift Stated To Have Been Executed By Mrs Maya Agarwal On 1 3 82 The Photostat Copy Of T He Gift Deed Furnished By The Assessee Along With The Letter Dt 4 3 85 Of Mohnot Co Received By The Ac On 8 3 85 Showed That The Gift Deed Adverted To Was Executed By Mrs Maya Agarwal On 1 3 82 But The Rel Evant Stamp Paper Of The Value Of Rs 51 On Which The Gift Deed Was Written Was Found To Have Been Purchased From The Stamp Vendor On 3 3 82 Only When The Stamp Paper On Which The Gift Deeds Written Was Purcha Sed Only On 3 3 82 It Was Unacceptable That The Gift Deed Could Have Been Executed On 1 3 82 The Original Of The Gift Deed Claimed To Have Been Executed By Mrs Maya Agarwal Was Not Produced For Perusal Altho Ugh The Assessee Was Specifically Requested To Produce The Same The Information As To Whether The Alleged Donor Mrs Maya Agarwal Was In Any Way Related To The Assessee And If So The Exact Relationship Was Not Furnished By The Assessee In Spite Of Repeated Requests Made By The Ao Further The Photostat Copy Of The Aforesaid Gift Deed Revealed That The Witnesses Had Not Signed The Deed Although Space Was Clearly Prov Ided For The Signatures Of Two Witnesses Evidently The Assessee Had Deliberately Withheld This Information For The Reasons Best Known To Him That Apart Ita Nos 1586 To 1589 Mds 2016 12 The Income Tax Records Of Mrs Maya Agarwal Did Not Indicate That She Was Financially Such A Well Off Person To Have Given The Cash Gift Of Rs 10 000 To The Assessee If As Claimed By The Ass Essee Mrs Maya Agarwal Had Given The Cash Gift Of Rs 10 000 She S Hould Have Furnished Her Return Of Gift To The Concerned Gift Tax Office R But She Did Not Appear To Have Filed Any Gift Tax Return 15 4 As Regards The Gift Shown To Have Been Receiv Ed From Mrs Maya Agarwal The Assesseees Representative In His Letter Dt 21 9 93 Stated That This Was A Mistake Which Could Have Occu Rred At The Hands Of Stamp Vendor Or It May Be Due To Some Clerical Erro R From Their Office The Assessee Did Not Furnish Any Details About The Gift Shown To Have Been Received From Sri Lalchand Neither Additional Inf Ormation Nor Any Evidence Was Produced In Support Of These Gifts Eve N Though He Was Specifically Asked For By The Ao Nor Did The Asses See Produce The Parties Before The Ao In Spite Of The Several Opportunities Provided To Him As Per The Decision Reported In 190 Itr 203 The Assessee S Hould Produce The Donors If Called For By The Ao And The Burden Was On The Assessee To Prove The Genuineness And Creditworthiness Of These Donors But The Assessee Failed To Discharge The Onus Cast Upon Him In These Circumstances It Was Held By The Ao That The Amount Of Gifts Shown To Ita Nos 1586 To 1589 Mds 2016 13 Have Been Received From Mrs Maya Agarwal And Sri La Lchand Was Assessees Income From Undisclosed Sources Which Was Added Back To His Income 16 I Have Heard Both The Parties And Perused The Material On Record The Assessee Is Not Able To Explain This Cash Gift A Nd The Gift Was Received By Cash It Is The Duty Of The Assessee To Prove T He Identity Capacity Of The Donors And Also Genuineness Of The Transactions Since The Assessee Has Failed To Prove The Genuineness Of The Creditor S The Addition Is Sustained By Placing Reliance In The Judgement Of A Pex Court In The Case Of Cit Vs P Mohanakala In 2007 291 Itr 278 Sc Wher Ein Held That The Findings Of The Assessing Officer The Commiss Ioner Appeals And The Tribunal Were Based On The Material On Record A Nd Not On Any Conjectures And Surmises That The Money Came By Wa Y Of Bank Cheques And Was Paid Through The Process Of Banking Transaction Was Not By Itself Of Any Consequence Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed Ita Nos 1586 To 1589 Mds 2016 14 17 The Next Ground Is Treating The Loan Of 2 50 000 Taken By M S Hem Investment Which Was Added To The Income Of Assessee With The Following Reasons 17 1 In The Assessees Books For The Year Ending On 31 03 82 There Was A Credit Of Rs 2 50 000 On 25 04 81 In The Name O F M S Hem Investments Of Which The Assessees Daughter In Law Smt Hema Mohnot Was Said To Be The Proprietor According To The Asse Ssees Combined Cash Book And Ledger Pertaining To The Period 1 04 81 To 31 3 82 Impound On 8 3 85 And Kept In The Office Custody The Aforesa Id Credit Of Rs 2 50 000 Represented The Cash Loan Received From M S Hem In Vestments No 16 Ramanan Road Madras The Assessee Did Not Let In An Y Evidence To Prove The Veracity Of This Credit The Manner In Which The Alleged Cash Loan Transaction Was Entered In The Books Of Smt Hema Mo Hnot Appeared To Be Suspicious Neither The Assessee Nor Did His Dau Ghter In Law Smt Hema Mohnot Let In Any Evidence To Prove The Verac Ity Of That Transaction The Cash Book And Ledger In The Case O F The Assessee As Well As In The Case Of Smt Hema Mohnot Which Was Impound Ed By The Ao On 8 3 85 Appeared To Have Been Written Up At A Stretc H For The Occasion To Suit The Convenience And Purposes Of These Two Asses Sees These Records Ita Nos 1586 To 1589 Mds 2016 15 Did Not Appear To Be Authentic And Contemporaneous Record Of The Transaction In Any Case The Entries In The Cash B Ooks Of The Assessee And His Daughter In Law Pertaining To The Relevant Perio D Did Not Appear To Have Been Made Pari Passu With The Transaction As A Nd When They Took Place No Details Were Furnished About This Transa Ction Till The Finalization Of The Assessment Proceeding It Was Simply Stated T Hat The Creditors Confirmation Letters Were Filed It May Be Mentioned That Mrs Hema Mohnot Could Not Explain Satisfactorily The Loans G Ifts Shown To Have Been Received Furing The Relevant Period For Giving An A Dvance To M S Premier Investmerns Whereas M S Premier Investments Which Wa S Claimed To Be Proprietary Concern Of The Assessee Sri Pachandass Mohnot Utilized This Amount For Advancing Loan To Mukesh Seth As Per The Separate Trial Balance Of M S Premier Investments The Transaction Was Not Explained Duly With Necessary Evidence Under These Circumstan Ces The Ld Assessing Officer Made The Addition As Unexplained Investment Of Assessee Aggrieved By The Order Of Ld Assessing O Fficer The Assessee Carried The Appeal Before The Ld Cit A On Appeal The Ld Cit A Observed That Since Either The Assessee Or M S Hem Investment Had Failed To Prove The Genuineness Of This Transaction The L D Assessing Officer Was Right In Holding This Amount As Unexplained And Und Isclosed Income Of Ita Nos 1586 To 1589 Mds 2016 16 Assessee Itself Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Tribunal 18 I Have Heard Both The Parties And Perused The Material On Record As Discussed Earlier Para The Assessee Failed To P Rove The Identity Of The Party Capacity Of The Party And Also Genuineness Of The Transactions Since The Assessee Has Failed To Prove The Genuinen Ess Of The Creditors The Addition Is Sustained By Placing Reliance In Th E Judgement Of Apex Court In The Case Of Cit Vs P Mohanakala In 2007 291 Itr 278 Sc Wherein Held That The Findings Of The Assessing Officer The Commiss Ioner Appeals And The Tribunal Were Based On The Material On Record A Nd Not On Any Conjectures And Surmises That The Money Came By Wa Y Of Bank Cheques And Was Paid Through The Process Of Banking Transaction Was Not By Itself Of Any Consequence Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed 18 1 In The Result All The Grounds Raised By The Assessee In Ita No 1587 Mds 2016 Stand Dismissed Ita Nos 1586 To 1589 Mds 2016 17 Now We Take Up Ita No 1588 Mds 2016 19 The First Issue In This Appeal Is Treating The Loans Of 10 000 Taken By The Assessee From Sri Daulat Ram And Smt Urvasi Mainghi Under The Head Unexplained Cash Credit Which Were Added To The Income Of Assessee 20 The Facts Of The Case Are That During The Relev Ant Accounting Year Of The Assessment Year 1983 84 The Following Credits A Ppeared In The Books Of Accounts Shri Daulat Ram Rs 10 000 20 08 1982 Smt Urvasi Manghi Rs 10 000 13 08 1982 The Ld Assessing Officer Asked The Assessee To Furn Ish The Loan Confirmation Letters Etc And Other Particulars Vi De Letter Dated 24 02 1986 As The Assessee Did Not Furnish The R Equisite Details As Required U S 68 Of The Act The Loans Were Added Ba Ck To The Income Of Assessee By Ld Assessing Officer Aggrieved By The Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A On Appeal The Ld Cit A Confirmed The Action Of The Ld Asses Sing Officer Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Us Ita Nos 1586 To 1589 Mds 2016 18 21 I Have Heard Both The Parties And Perused The Material On Record In This Case Also The Assessee Has Not Placed Any Evidence To Prove The Identity Capacity Of The Donors And Also Genuinen Ess Of The Transactions Since The Assessee Has Failed To Prove The Genuinen Ess Of The Creditors The Addition Is Sustained By Placing Reliance In Th E Judgement Of Apex Court In The Case Of Cit Vs P Mohanakala In 2007 291 Itr 278 Sc Wherein Held That The Findings Of The Assessing Officer The Commiss Ioner Appeals And The Tribunal Were Based On The Material On Record A Nd Not On Any Conjectures And Surmises That The Money Came By Wa Y Of Bank Cheques And Was Paid Through The Process Of Banking Transaction Was Not By Itself Of Any Consequence Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed 22 The Next Issued Raised In This Appeal Is With Re Gard To Sustaining Of 5 000 As Bogus Gift 23 The Facts Of The Case Are That The Assessee Had Shown An Amount Of 5 000 Received As Gift The Confirmation Letter O F Donor Furnished Bythe Assessee To The Ao Did Not Give The Complete Addres S Of The Donor Which Simply Mentioned As Residing At Saidapet Madras Th E Verification Ita Nos 1586 To 1589 Mds 2016 19 Revealed That There Was No Such Assessee Was Existing In The File Of The I T O City Circie Iv 4 Under G L No 4796 G Acco Rdingly This Addition Was Made By The Ld Assessing Officer Aggrieved By The Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A On Appeal The Ld Cit A Endorsed The View Of The Ld Assessing Officer Against The Order Of Ld Cit A Now The Assessee I S In Appeal Before Tribunal 24 I Have Heard Both The Parties And Perused The Material On Record On This Count Also The Assessee Failed To Discharg E The Onus Cast Upon Him To Prove The Genuineness Of The Donor And Also The Genuineness Of His Credit Worthiness As Discussed In Earlier Para Since The Assessee Has Failed To Prove The Genuineness Of The Creditors T He Addition Is Sustained By Placing Reliance In The Judgement Of Apex Court In The Case Of Cit Vs P Mohanakala In 2007 291 Itr 278 Sc Wherein Hel D That The Findings Of The Assessing Officer The Commiss Ioner Appeals And The Tribunal Were Based On The Material On Record A Nd Not On Any Conjectures And Surmises That The Money Came By Wa Y Of Bank Cheques And Was Paid Through The Process Of Banking Transaction Was Not By Itself Of Any Consequence Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed Ita Nos 1586 To 1589 Mds 2016 20 25 The Second Issue In This Appeal Is With Regard To Confirming Undisclosed Investment Of 50 000 25 1 The Facts Of The Case Are That From The Perusal Of The Books Of Accounts It Was Noticed By The Ao That The Assessee Was Receiving Interest Income From Mr Bhawarlal And Mr Arumugha Nadar Howe Ver The Corresponding Investment On Which Interest Was Being Reflected In The Books Of Accounts Was Not Disclosed In The Books Of Accounts The Assessee Was Allowed To Inspect The Seized Books Of A Ccounts And Other Documents From The Perusal Of The Books Of Account S Seized By The Cbi Relating To The Assessment Year Under Consideration It Was Noticed That There Was An Amount Of 50 000 Shown As Opening Balance Debit Due From Prema Vaswani The Assessee Did Not Give Any Exp Lanation About This Debit Entry The Amount Shown In The Previous Assess Ment Year 1982 83 As Sundry Debtors Was A Different From Is To Be Re Ceived From Prema Vaswani The Amount Shown In The Books Relating To Th E Assessment Year 1983 84 Seized By The Cbi The Details Of Sundry De Btors Reflecting In The Books Of Accounts Of The Assessee For The Previous Assessment And 1982 83 Were Not Substantiated Hence The Ao Has Made A N Addition Of Ita Nos 1586 To 1589 Mds 2016 21 50 000 As Unexplained Investment Aggrieved By The Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A On Appeal Ld Cit A Observed That In Spite Of A Num Ber Of Opportunities Of Being Heard Provided To The Assessee The Assess Ee Failed To Reconcile The Difference And Accordingly Failed To Discharge The Onus Cast Upon Him Therefore Ld Cit A Came To A Conclusion That The A O Was Right In Treating This Amount Of 50 000 As Unaccounted Investment The Action Of The Ao Is Confirmed Against The Order Of Ld Ci T A Now The Assessee Is In Appeal Before Tribunal 26 I Have Heard Both The Parties And Perused The Material On Record The Assessee In Spite Of Several Opportunities Give N By The Department Failed To Prove The Source Of Investment Of 50 000 It Was Stated That The Interest Was Received From Mr Bhawarlal And Mr A Rumugha Nadar However The Corresponding Investment On Which Intere St Was Being Reflected In The Books Of Accounts Was Not Disclosed In The Books Of Accounts Ita Nos 1586 To 1589 Mds 2016 22 Being So In The Absence Of Any Evidence For Source Of Investment I Have Constrained To Sustain The Addition Of 50 000 Hence This Ground Raised By The Assessee In Ita No 1588 Mds 2016 Stands Dis Missed 27 The Third Issue Is With Regard To Treating The L Oans Returned By Shri Padam Chand Chowdhary Nataraja Film Distributors A Nd Taj Pictures As Income From Undisclosed Sources 27 1 The Facts Of The Issue Are That There Were Five Accounts Of The Debtors Reflecting In The Books Of Accounts Of The Assessee The Assessee Stated That These Accounts Represented The Repayment Of Loans A Dvanced To Them He Was Asked To Furnish Their Complete Addresses The Ledg Er Accounts And Also Their Income Tax Particulars However No Such Details We Re Furnished But In The Case Of Only Three Persons Namely Mr Premkumar Sheth M R Kanti Bhai And M S Natraj Film Distributors The Assessee Could Furnis H Their Addresses Ln Response To The Summons Issued To These Three Persons The R Eplies Were Received From Mr Premkumar Sheth And Mr Kanti Bhai Sheth Only Claimi Ng That The Relevant Books Of Accounts Were Seized By The Income Tax Departmen T And Hence They Could Not Furnish The Relevant Information The Summons Issue D To M S Natraj Film Distributors Was Received Back Unserved There Were No Addresses And Relevant Ita Nos 1586 To 1589 Mds 2016 23 Information Furnished In Respect Of The Remaining D Ebtors Therefore The Ld Assessing Officer Had Made An Addition Of 50 000 As Unexplained Investment Aggrieved By The Order Of Ld Assessing Officer Th E Assessee Carried The Appeal Before The Ld Cit A 27 2 On Appeal The Ld Cit A Observed That From T He Perusal Of The Facts Of The Case It Is Revealed That The Ao Has Added Back The Entire Amount Of 2 82 000 As Unexplained Credits In The Account Of The Above Mentioned Debtor According To Ld Cit A The Information Fur Nished By Mr Premkumar Sheth And Mr Kanti Bhai Sheth Did Not Deny The Impu Gned Transactions Since The Relevant Books Of Accounts Of These Two Persons Wer E Lying Impounded With The Department The Ao Should Have Verified The Relevant Books Of Accounts Before Coming To Any Conclusion However From The Perusal Of The Assessment Order It Seems That No Such Effort Was Made By The Ao There Fore In The Absence Of Any Cogent Material Documents To Substantiate The Addit Ion Effected By The Ao The Credit Amount Of 1 00 000 Reflected In The Name Of Mr Kanti Bhai S Heth And 1 10 000 Reflected In The Name Of Mr Premkumar She Th Need To Be Deleted The Remaining Addition Of 72 000 Is Confirmed By The Ld Cit A Against The Order Of Ld Cit A Now The Assessee Is In Appea L Before Tribunal 28 I Have Heard Both The Parties And Perused The Material On Record As Discussed By The Ld Cit A The Assessee Has Not Given Details Of The Ita Nos 1586 To 1589 Mds 2016 24 Creditors Hence Having No Option I Sustain The A Ddition Made By Ld Cit A This Ground Raised In This Appeal Is Reje Cted 29 The Last Issue Is With Regard To The Transaction In Bank Of Tanjore Ltd Are Both Debit And Credit Entries And That Th E Assessee Has Explained Each And Every Transaction Further All Transactions Are Made Only Through Account Payee Cheque The Ld Cit A Erred In Adding T He Entire Transaction Of 8 15 Lakhs As Undisclosed Income Of Assessee 29 1 The Facts Of The Case Are That The Assessee Was Maintaining A Bank Account With The Bank Of Thanjavur Having A Total Dep Osits Of 8 17 930 During The Relevant Year Under Consideration It Was Noticed By The Ao That The Transactions Of This Bank Account Were Not Reflected In The Books Of Accounts Of The Assessee On The Basis Of Which T He Return Of Income For The Relevant Year Was Filed The Assessee Was Asked To Reconcile The Transactions As Appearing In The Seized Books Of Ac Counts Viz A Viz The Relevant Bank Account Statement However The Assess Ee Failed To Furnish Any Satisfactory Evidence To Substantiate The Trans Actions Of This Bank Account Accordingly The Ao Added Back The Amount Of 8 15 000 As Ita Nos 1586 To 1589 Mds 2016 25 Undisclosed Income Of The Assessee Aggrieved By T He Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A 29 2 On Appeal The Ld Cit A Observed That From T He Perusal Of The Relevant Facts Of The Case It Is Revealed That The Net Effect Of The Transactions Of This Bank Account Was Not Declared B Y The Assessee In His Relevant Income Tax Return The Assessee Had Only R Eflected The Balance Amount Of The Relevant Bank Account In The Balance Sheet The Assessee Had Failed To Discharge The Onus Cast Upon Him To R Econcile The Transactions Of The Bank Account From The Seized Bo Oks Of Accounts Viz A Viz The Relevant Bank Account Statement Since The Assessee Had Deliberately Evaded The Inclusion Of The Credit Ent Ries Of This Bank Account In His Income Tax Return The A O Was Absolutely Rig Ht In Adding Back The Entire Deposits As Assessees Undisclosed Income H Ence The Ld Cit A Confirmed The Addition Made By Ld Assessing Office R Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Tribu Nal 30 I Have Heard Both The Parties And Perused The Material On Record In The Above Bank Account With M S Bank Of Thanjavur Was Not Disclosed To The Department By The Assessee And Not Explained The Reasons For Deliberately Evading The Inclusion Of The Credit En Tries Of This Bank Account Ita Nos 1586 To 1589 Mds 2016 26 In His Return Of Income The Addition Is Sustained Hence This Ground Is Rejected 30 1 In The Result The Appeal In Ita No 1588 Mds 2016 Is Dismissed Now We Take Up Ita No 1589 Mds 2016 31 Grounds Nos 2 3 Raised By The Assessee As Fol Lows 2 The Ld Cit A 4 Erred In Treating The Loan Of Rs 75 000 And Rs 5 000 Taken By The Appellant From H Sankachand Co And Sri Daulat Ram Mainghi Under The Head Unexplained Cash Credit 3 The Ld Cit A Ought To Have Seen That The Appel Lant Has Produced Confirmation Letter From The Creditor And The Said Creditor Is Also Assessed To Tax Thus The Appellant Has Discharged His Responsib Ilities Cast U S 68 Of The Act Having Accepted The Payment Of Interest The Ld Cit A Ought Not To Have Assessed The Principle Amount As Unexplained C Redits 31 1 At The Time Of Hearing The Ld A R Made An En Dorsement As Follows Since The Assessee Is Unable To Produce The Right Address Of Sri Daulat Ram Hence We Are Withdrawing Ground Nos 2 3 Accordingly Grounds Nos 2 3 Are Dismissed As Not Pressed 32 The Ground No 4 Is With Regard To Treating The G Ift Of 1 00 000 Received By The Assessee From 5 Donors As Bogus 32 1 The Brief Facts Of The Case Are That The Asses See Has Shown A Cash Gift Of 20 000 Each From Five Different Persons Totaling To 1 00 000 During The Original Assessment Proceeding The Asse Ssee Had Failed To Substantiate The Genuineness Of These Gifts And Ac Cordingly This Amount Was Treated As Unexplained Cash Credit By The Ao Du Ring The Fresh Ita Nos 1586 To 1589 Mds 2016 27 Assessment Proceeding The Assessee Was Asked To Fu Rnish The Relevant Particulars To Substantiate The Genuineness Of Thes E Gifts The Assessee Was Also Allowed To Inspect The Seized Documents For Furnishing His Reply It Was Noticed By The Ao From The Cash Book For The Relevant Period Seized By The Cbi That The Transactions Were Not Recorded O N The Said Dates On Which The Assessee Had Stated The Same To Have Been Received The Verification From The Respective Income Tax Offices Revealed That In Many Cases No Such Donors Existed In The Files Of The Ao S Moreover The Assessee Could Furnish Xerox Copies Of Acknowledgeme Nts For Having Filed The Gift Tax Returns In Respect Of Only Four Donors In The Case Of Mr Parasmal Kothari It Was Found From His Reply That H E Had Gifted The Amount To One Mr Ranganathan And Not To The Presen T Assessee Accordingly The Assessee Was Requested By The Ad To Produce The Donors Before Him For Examination A Number Of Opportuniti Es Were Provided To The Assessee In This Regard However The Assessee D Eliberately Avoided Their Attendance Before The Ao In View Of These Fac Ts Of The Case The Ao Treated This Amount Of 1 00 000 As Unexplained Cash Credit Introduced By The Assessee In His Books Of Accounts Aggrieve D By The Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A Ita Nos 1586 To 1589 Mds 2016 28 On Appeal Ld Cit A Observed That The Assessee Had Failed To Discharge The Onus Cast Upon Him To Prove The Genuineness Of These Transactions Hence The Addition Of 1 00 000 Was Confirmed By Ld Cit A Against The Order Of Ld Cit A Now The Assessee Is In Appea L Before Tribunal 32 2 I Have Heard Both The Parties And Perused The Material On Record In This Issue The Assessee Is Not Able To Lead Any Ev Idence Regarding The Identity Of The Parties Capacity Of The Parties An D Genuineness Of The Transactions Since The Assessee Has Failed To Pro Ve The Genuineness Of The Creditors The Addition Is Sustained By Placing Reliance In The Judgement Of Apex Court In The Case Of Cit Vs P Mo Hanakala In 2007 291 Itr 278 Sc Wherein Held That The Findings Of The Assessing Officer The Commiss Ioner Appeals And The Tribunal Were Based On The Material On Record A Nd Not On Any Conjectures And Surmises That The Money Came By Wa Y Of Bank Cheques And Was Paid Through The Process Of Banking Transaction Was Not By Itself Of Any Consequence Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed Ita Nos 1586 To 1589 Mds 2016 29 33 The Ground No 5 Is With Regard To Confirming The Addition Of 4 90 000 Made By The Ld Assessing Officer Under The Pretext That The Appellant Has Introduced His Undisclosed Income In The Guise Of Credits 33 1 The Brief Facts Of The Case Are That The Asses See Was Showing An Amount Of 4 90 000 As Credit Entries In The Ledger Accounts Of Five Different Debtors It Was Stated By The Assessee Tha T These Credits Pertained To The Repayment Of Loans Paid By The Abo Ve Mentioned Debtors The Assessee Was Asked To Furnish The Requisite Detai Ls To Substantiate The Genuineness Of These Transactions However The Asse Ssees Representative Vide His Reply Dated 22nd September 93 Stated That He Was Under No Obligation To File The Confirmation Letters Of Thes E Parties But He Furnished The Addresses Of Four Parties Out Of The Total Five Account Holders Accordingly The Ao Issued Letters And Summons To T Hese Parties For Furnishing The Requisite Details Mr R Srinivasan E Xpressed His Inability To Furnish The Details M S South Eastern Carriers St Ated That They Had No Such Transaction With The Assessee The Letter Issued To M S Natraj Film Distributors Was Received Back Unserved With The Rema Rks Of The Postman That No Such Address Was Available The Assessee Did Not Furnish The Ita Nos 1586 To 1589 Mds 2016 30 Address Of Mrs Prema Vaswani The Verification From Income Tax Office Revealed That No Such Assessee Was Existing As Rega Rds The Transaction With Mr R Srinivasan The Entries Found In The Books Appeared To Be Interpolation Many Of The Credits Shown Were Before 22 11 83 And Not Found In The Books Of Accounts Impounded By The Dep Artment Hence The Ao Added This Amount To The Income Of Assessee Ag Grieved By The Order Of Ld Assessing Officer The Assessee Carried The Appeal Before The Ld Cit A On Appeal The Ld Cit A Observed That T He Ao Was Absolutely Right In Holding This Amount Of 4 90 000 As Unexplained Credit Introduced In The Books Of Accounts Of The Assesses In The Name Of The Different Debtors Accordingly The Ld Cit A Confir Med The Addition Made By The Ld Assessing Officer Against The Order Of Ld Cit A Now The Assessee Is In Appeal Before Us 33 2 I Have Heard Both The Parties And Perused The Material On Record As Discussed Earlier Since The Assessee Has Failed To Prove The Genuineness Of The Creditors The Addition Is Susta Ined By Placing Reliance In The Judgement Of Apex Court In The Case Of Cit Vs P Mohanakala Ita Nos 1586 To 1589 Mds 2016 31 Supra Hence This Ground Of Appeal Raised By The Assessee Stands Dismissed 33 3 In The Result The Appeal In Ita No 1589 Md S 2016 Is Dismissed 34 In The Result All The Appeal Of Assessee For Assessment Year 1977 78 For Assessment Year 1982 83 For Assessment Yea R 1983 84 For Assessment Year 1984 85 Are Dismissed Order Pronounced On 20 Th December 2017 Sd Chandra Poojari Accountant Member Chennai Dated The 20 Th December 2017 K S Sundaram Copy To 1 Appellant 3 Cit A 5 0 1 23 Dr 2 Respondent 4 Cit 6 1 45 6 Gf