Jhankar Shroffin Pvt. Ltd.,, Surat v. The Income tax Officer,Ward-1(3),, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI N.S.SAINI ACCOUNTANT MEMBER DATE OF HEARING: 05.05.10 DRAFTED ON: 05.05.10 ITA NO.2830/AHD/2004 ASSESSMENT YEAR : 2001-2002 JHANKAR SHROFFIN PVT. LTD. 5/1334-B HARIPURA KALJUG STREET BHAWANIWAD SURAT-395 003. VS. I.T.O. WARD 1(3) AAYKAR BHAVAN OPP. NEW CIVIL HOSPITAL MAJURA GATE SURAT-395 001 PAN/GIR NO. : AAACJ6022G (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI J.P.SHAH A.R. RESPONDENT BY: SHRI C.K.MISHRA SR. D.R. O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I SURA T DATED 14.07.2004. 2. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIO N OF RS.8 85 000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CAS H U/S.69 OF THE ACT. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBSERVED AS UNDER :- - 2 - THE ISSUE HAS BEEN DISCUSSED IN DETAIL IN PARA 4 O F THE ASSESSMENT ORDER. IN COURSE OF SURVEY CASH AMOUNTI NG TO RS.12 70 000/- WAS FOUND AT THE RING ROAD PREMISES OF THE APPELLANT. EVEN AS PER THE APPELLANTS EXPLANATION AT THE TIME OF SURVEY CASH AMOUNTING TO RS.43 922/- REMAINED UNEX PLAINED. A SUM OF RS.841 079/- WAS CLAIMED TO BE PAYABLE AGA INST DISCOUNTING OF CHEQUES/DRAFTS THE DETAILS OF WHICH ARE AS UNDER:- SHANKARDAS DESAI RS.4 26 520/- HARI TEXTILES RS.1 57 819/- GANESH STEEL INDUSTRIES RS. 2 56 740/- RS. 8 41 079/- -------------------- IN COURSE OF THE ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER GAVE TEN OPPORTUNITIES TO THE APPELLANT TO PRODUCE EVIDENCE IN SUPPORT OF THE EXPLANATION. THE APPELLA NT NEITHER FILED THE CONFIRMATION FROM THESE THREE PARTIES NOR WAS ANY EVIDENCE FURNISHED TO ESTABLISH THEIR IDENTITY. IN THESE CIRCUMSTANCES THE ASSESSING OFFICER ADDED THE UNEXP LAINED SUM OF RS.8 85 001/- (8 41 079 + 43 922) IN THE COM PUTATION OF INCOME. 4.2. IN PROCEEDINGS BEFORE ME TOO THE APPELLANT HAS NOT FILED ANY CONFIRMATIONS. THE IDENTITY OF THESE PARTIES BY WAY OF THEIR ADDRESSES ETC. HAS ALSO NOT BEEN ESTABLISHED. THE ADDITIONS ARE THEREFORE UPHELD. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESS EE IS ENGAGED IN THE BUSINESS OF DISCOUNTING OF DRAFTS/CHEQUES ON COMMIS SION BASIS. A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 17.10.2000. DURING THE COURSE OF TH E SURVEY EXCESS CASH OF RS.8 85 001/- WAS FOUND WHICH WAS ADDED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 69 OF THE ACT TREAT ING AS UNEXPLAINED MONEY OF THE ASSESSEE. THE ABOVE ADDITION WAS ALSO CONFIRMED BY THE - 3 - LEARNED COMMISSIONER OF INCOME TAX(APPEALS). WE FIN D THAT THE ASSESSEE ALL ALONG DURING THE COURSE OF THE SURVEY DURING THE ASSESSMENT PROCEEDINGS BEFORE THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS) AND BEFORE US ALSO CONSISTENTLY EXPLAI NED THAT OUT OF RS.8 85 001/- RS.841079/- WAS THE AMOUNT PAYABLE B Y THE ASSESSEE TO THREE PERSONS AGAINST CHEQUE DISCOUNTIN G WHICH WAS THOUGH SHOWN AS PAYMENT IN HIS CASH BOOK AS THE MON EY WAS TAKEN OUT OF CASH BOX BUT IT WAS NOT ACTUALLY HANDED OVER . WE FIND THAT THE LOWER AUTHORITIES HAVE NOT DISPUTED THE CONTENTION OF THE ASSESSEE TO THE EFFECT THAT ON THE DATE OF THE SURVEY PAYMENTS OF RS.8 41 079/- TO THREE DIFFERENT PERSONS WERE ENTERED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HOWEVER THE LEARNED ASSESSING OFFICER HA S NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE HIS EXPLANATION BY FILING CONFIRMA TIONS FROM THE SAID PARTIES. THE LEARNED ASSESSING OFFICER ALSO OPINED THAT IDENTITIES OF SAID THREE PARTIES WERE NOT ESTABLISHED BEFORE HIM AND THE SAID THREE PARTIES WERE NOT PRODUCED BEFORE HIM FOR HIS EXAMIN ATION. ON THE OTHER HAND THE LEARNED AUTHORISED REPRESENTATIVE O F THE ASSESSEE POINTED OUT THAT THE ASSESSEE VIDE ITS LETTER DATED 26.02.2004 (PAGES 63-64 OF THE PAPER BOOK) FILED BEFORE THE LEARNED A SSESSING OFFICER HAS REQUIRED THE LEARNED ASSESSING OFFICER TO VERIF Y THE FACT OF DEPOSIT OF CHEQUES FROM THE BANK DIRECTLY AS THE BA NK WAS NOT GIVING COPY OF CHEQUES TO THE ASSESSEE AND HE HAS NO LEGAL AUTHORITY TO COMPEL THE BANK TO GIVE COPY OF CHEQUES OR DRAFT AN D ALSO REQUESTED THE LEARNED ASSESSING OFFICER TO EXERCISE POWERS AV AILABLE WITH HIM UNDER THE ACT TO VERIFY THE STATEMENT OF THE ASSESS EE. HE ALSO POINTED OUT THAT INSPITE OF THIS REQUEST BY THE ASSESSEE T HE LEARNED ASSESSING OFFICER HAS NOT EXERCISED ANY POWER AVAILABLE WITH HIM TO VERIFY THE - 4 - GENUINENESS OR OTHERWISE OF THE EXPLANATION OF THE ASSESSEE AND REJECTED THE EXPLANATION OF THE ASSESSEE BY MERELY TAKING THE BENEFIT OF THE SITUATION WHERE THE ASSESSEE WAS NOT IN A PO SITION TO LEAD THE EVIDENCES TO SUBSTANTIATE HIS EXPLANATION AS THE EV IDENCES WERE NOT IN THE POSSESSION OF THE ASSESSEE. IN RESPECT OF BALAN CE AMOUNT OF RS.43 922/- WHICH WAS FOUND EXCESS DURING THE COURS E OF THE SURVEY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESS EE ADMITTED THAT ADDITION TO THAT EXTENT WAS JUSTIFIED. IN THE ABOVE FACTS AND CIRCUMSTANCES IN OUR CONSIDERED VIEW THE LOWER AU THORITIES WERE NOT JUSTIFIED IN MAKING THE ADDITION BY REJECTING THE E XPLANATION OF THE ASSESSEE WITHOUT MAKING ANY ATTEMPT TO VERIFY THE G ENUINENESS OF THE EXPLANATION EITHER FROM THE BANK OR FROM THE THREE PARTIES DIRECTLY. IN OUR CONSIDERED OPINION POWER UNDER SECTION 133(6) AND 131 ARE MADE AVAILABLE BY THE ACT WITH THE INCOME TAX AUTHO RITIES WITH A VIEW THAT THE SAME SHALL BE EXERCISED BY THEM TO RE NDER JUSTICE WHEN THE SITUATION SO WARRANTS. THEREFORE IN OUR CONSIDE RED OPINION THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN CONFIRMING THE ADDITION WITHOUT EXERCISING THOSE POWERS. THEREFORE IT SHALL BE JUS T AND FAIR AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ADDITION OF RS .8 41 079/- BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR PROPER VE RIFICATION OF THE EXPLANATION OF THE ASSESSEE BY EXCISING THE POWER A VAILABLE UNDER THE ACT WITH HIM AND THEREAFTER PASSING THE ORDER AFRES H IN ACCORDANCE WITH THE LAW AND AFTER ALLOWING REASONABLE OPPORTUN ITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY IN RESPECT OF B ALANCE AMOUNT OF RS.43 922/- THE ORDERS OF THE LOWER AUTHORITIES AR E CONFIRMED. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. - 5 - 5. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND ON FACTS IN CONFIRMING TH E ADDITION OF RS.4 13 500/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH U/S.69 OF THE ACT. 6. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBSERVED AS UNDER:- A SUM OF RS.4 13 500/- WAS FOUND AT THE BHAVANIVAD PREMISES OF THE APPELLANT IN COURSE OF SURVEY. IT W AS EXPLAINED BY SHRI ARVINDBHAI I. SHROFF A DIRECTOR OF THE APP ELLANT COMPANY THAT THE SUM IS OUT OF ENCASHMENT OF A FDR HE OWNED IN HIS PERSONAL CAPACITY. IT WAS EXPLAINED BY SHRI ARVINDBHAI THAT THE FDR WAS DULY ACCOUNTED FOR IN H IS PERSONAL BOOKS OF ACCOUNT AND WAS ALSO REFLECTED IN HIS BALANCE SHEET. IN COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE APPELLANT TO ESTABLISH THAT THE C ASH FOUND AT THE TIME OF SURVEY BELONGED TO SHRI ARVINDBHAI. THE APPELLANT PROVIDED EVIDENCE TO SHOW THAT A SUM OF RS.9 10 000 /- WAS WITHDRAWN FROM THE SAVINGS ACCOUNT OF SHRI ARVINDBH AI ON 11.09.2000. THIS WAS 35 DAYS BEFORE THE SURVEY WHIC H WAS UNDERTAKEN ON 17.10.2000. NO EVIDENCE WAS PRODUCED DESPITE SEVERAL OPPORTUNITIES TO ESTABLISH THAT THE CASH F OUND AT THE TIME OF SURVEY WAS OUT OF THIS WITHDRAWAL. THE ASSE SSING OFFICER DID NOT ACCEPT THE APPELLANTS EXPLANATION IN THE ABSENCE OF ANY EVIDENCE LINKING THE TWO. 5.2 THE APPELLANT IS ATTEMPTING TO EXPLAIN THE SUM OF RS.4 13 500/- AS HAVING COME OUT OF A PERSONAL WITH DRAWAL OF RS.9 10 000/- OF A DIRECTOR 35 DAYS AGO. THE EXPLAN ATION CANNOT BE ACCEPTED WITHOUT ADEQUATE EVIDENCE ESTABL ISHING THE LINKAGE BETWEEN THE TWO. THE APPELLANT IS DOING BUS INESS FOR WHICH BOOKS OF ACCOUNTS ARE CLAIMED TO HAVE BEEN MA INTAINED. THE APPELLANT SHOULD BE ABLE TO SHOW HOW WHEN AND TO WHAT EXTENT THE AMOUNT WITHDRAWN FROM BANK WAS TAKEN IN THE BOOKS OF THE COMPANY AND HOW THE AMOUNT IS REFLECTED IN T HE CASH FOUND AT THE TIME OF SURVEY. IN THE ABSENCE OF ANY SUCH EVIDENCE MADE AVAILABLE AT THE ASSESSMENT OR THE AP PELLATE STAGE THE ADDITION IS UPHELD. - 6 - 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CA SE ARE THAT CASH OF RS.4 13 500/- WAS FOUND DURING THE SURVEY AT BHAVAN IVAD PREMISES OF THE ASSESSEE. DURING THE COURSE OF THE SURVEY ITSEL F SHRI ARVINDBHAI I. SHROFF DIRECTOR OF THE ASSESSEE COMPANY EXPLAINED THAT THE SAID CASH BELONG TO HIM IN HIS INDIVIDUAL CAPACITY AND WAS OU T OF MATURITY PROCEEDS OF FIXED DEPOSITS WHICH WAS FULLY DISCLOS ED IN HIS INDIVIDUAL BALANCE SHEET. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER OBSERVED THAT CASH OF RS.9 10 000/- WAS WITHDRAWN FROM THE PERSONAL ACCOU NT OF SHRI ARVINDBHAI I. SHROFF BUT THE SAID WITHDRAWAL WAS ON 11.09.2000 I..E. 35 DAYS BEFORE THE DATE OF THE SURVEY. ACCORDING TO THE LEARNED ASSESSING OFFICER THE ASSESSEE COULD NOT BRING ANY MATERIAL TO SHOW THAT THE CASH FOUND DURING THE SURVEY WAS OUT OF TH AT CASH WHICH WAS WITHDRAWN 35 DAYS EARLIER. THEREFORE HE MADE THE ADDITION OF RS.4 13 500/- TO THE INCOME OF THE ASSESSEE BY TREA TING IT AS UNEXPLAINED CASH OF THE ASSESSEE. THE LEARNED COMMI SSIONER OF INCOME TAX(APPEALS) ALSO CONFIRMED THE ABOVE ACTION OF THE LEARNED ASSESSING OFFICER FOR THE SAME REASONS. WE FIND THA T SHRI ARVINDBHAI I. SHROFF DIRECTOR OF THE ASSESSEE COMPANY DURING T HE COURSE OF SURVEY ITSELF CLAIMED THAT THE CASH OF RS.4 13 500/ - BELONG TO HIM IN HIS INDIVIDUAL CAPACITY. TO ESTABLISH THE SAME THE ASSESSEE ALSO PRODUCED MATERIAL BEFORE THE LEARNED ASSESSING OFFI CER TO SHOW THAT RS.9 10 000/- WAS WITHDRAWN BY SAID SHRI ARVINDBHAI I. SHROFF FROM HIS BANK ACCOUNT ON 11.09.2000. IN OUR CONSIDERED V IEW THE INITIAL ONUS WHICH WAS ON THE ASSESSEE WAS THUS DULY DISCHA RGED BY THE ASSESSEE. NOW IT WAS UPON THE REVENUE TO BRING COGE NT MATERIAL ON - 7 - RECORD TO SHOW THAT WHY THIS RS.4 13 500/- COULD NO T BE AVAILABLE ON 17.10.2000 OUT OF THE CASH WITHDRAWN FROM THE BANK ACCOUNT OF SHRI ARVINDBHAI I. SHROFF OF RS.9 10 000/- ON 11.09.2000 . WE FIND THAT THE REVENUE COULD NOT BRING ANY MATERIAL ON RECORD TO DISCHARGE THE ABOVE BURDEN WHICH WAS ON IT. THUS IN OUR CONSIDE RED OPINION THE ADDITION WAS MADE ON A WRONG FOOTING AND THE LEARNE D COMMISSIONER OF INCOME TAX(APPEALS) WAS NOT JUSTIFI ED IN CONFIRMING THE SAME. WE THEREFORE DELETE THE ADDIT ION OF RS.4 13 500/- AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 8. GROUND NO.4 OF THE APPEAL READS AS UNDER:- 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMI NG THE ADDITION TO THE TUNE OF RS.20 90 088/- ON ACCOU NT OF ALLEGED UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 9. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBSERVED AS UNDER:- 6.1 IN COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND 15 SUNDRY CREDITORS TOTALLI NG TO RS.21 40 858/-. THE DETAILS ARE AS UNDER:- SR. NO. 1 NARENDRAKUMAR 1 09 899 2 SURAJ TEX 250 000 3 AMIT N.THAKKAR & CO. 12 600 4 MANOJ JAIN 99 127 5 JATINBHAI 2000 6 HITESH 6 763 7 SHIVA 5 12 069 8 RANNA THAKKAR & CO. 3 150 9 SUNU TEXTILE 2 94 500 10 SUNU TEXTILE 2 95 500 11 MAHALAXMI 3 00 000 - 8 - 12 MAHESH 20 000 13 ICONE FAB 25 260 14 SAI TEXTILES 9970 15 MAHALAXMI ENTERPRISE TOTAL 21 40 838 THE LEARNED ASSESSING OFFICER ASKED THE APPELLANT T O PROVE THE GENUINENESS OF THESE CREDITORS BY FURNISH ING CONFIRMATION ADDRESS AND CREDIT WORTHINESS. ELEVEN OPPORTUNITIES WERE ALLOWED FOR THIS. THE EVIDENCE A SKED FOR WAS HOWEVER NOT SUPPLIED. THE LEARNED ASSESSING OFFICER HAS OBSERVED IN PARA 6.2 OF THE ASSESSMENT ORDER THAT EVEN COMPLETE BOO KS OF ACCOUNT WERE NOT MADE AVAILABLE BY THE APPELLANT. T HE ASSESSING OFFICER HAS DISCUSSED THE ISSUE OF THESE CREDITORS IN DETAILS IN PARA 6 OF THE ASSESSMENT OR DER. IN THE ABSENCE OF SATISFACTORY EVIDENCE MADE AVAILABLE BY THE APPELLANT IN SUPPORT OF THE GENUINENESS OF THES E CREDITS THE ASSESSING OFFICER DECIDED TO ADD THEM U/S 68 OF THE I.T.ACT. 6.2 IN COURSE OF THE APPELLATE PROCEEDINGS IT HAS BEEN ARGUED THAT THE ASSESSING OFFICER S APPROACH HAS B EEN IMPRACTICAL. REFERENCE TO THE FOLLOWING ENTERIES HA S BEEN MADE IN THIS CONTEXT. AMIT N. THAKKAR & CO. RS. 12 600/- RANNA TAKKAR & CO. RS. 3 150/- IT IS POINTED OUT THAT BOTH OF THESE ARE PROFESSION AL CONCERNS AND THE AMOUNTS REPRESENTS BILLS ISSUED FOR PROFESSIONAL SERVICES. IT IS THUS POINTED OUT THAT THE AMOUNTS REPRESENT BUSINESS CREDITORS AND NOT CASH CREDITORS. THE FOLLOWING EXPLANATIONS HAVE ALSO BEE N MADE: ENTRY NO. NAME AMOUNT EXPLANATION 5 JATINBHAI RS.2 000/- AN ASSESSEE OPERATING ON SU CH A SCALE WILL NOT TAKE A LOAN OF RS.2 000/- 14 SAI TEXTILES RS.9 970/- A PERSON WILL NOT TAKE L OAN OF SUCH AN ODD AMOUNT. - 9 - THE ASSESSING OFFICER HAS PROVIDED AMPLE OPPORTUNITIES TO THE APPELLANT TO HAVE ITS SAY. BEC AUSE THE APPELLANT WAS UNABLE TO EXPLAIN ITS POSITION SATISFACTORILY THE ASSESSING OFFICER DECIDED TO MA KE THE ADDITION. 6.3 I FEEL THAT ADDITIONS IN RESPECT OF THE ITEMS NO.3 5 6 8 AND 13 IN THE LIST OF FIFTEEN COULD BE D ELETED. THESE ITEMS TOTAL UP TO LESS THAN RS.35 000/-. THE REST OF THE ADDITION IS UPHELD. IT MAY BE MENTIONED THAT WHATEVER THE ENTRIES MAY REPRESENT THE ASSESSEE IS REQUIRED TO ESTABLISH THEIR GENUINENESS. IF AN ASSE SSEE CHOOSES NOT TO EXPLAIN THEM DESPITE SEVERAL OPPORTUNITIES THE KIND OF EXPLANATIONS THAT HAVE B EEN MADE HERE DO NOT CARRY MUCH WEIGHT. THE APPEAL IS PARTLY ALLOWED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE LEARNED ASSESSING OFFICER OBSERVED THAT RS.21 25 088/- WAS APPEARING AS CASH CREDIT IN THE BALANCE SHEET OF THE ASSESSEE IN THE NAME OF THE 13 DIFFERENT PARTIE S. THE LEARNED ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE GENUINENESS OF THE CASH CREDIT BY FURNISHING CONFIRMATION ADDRESS AND MATERIAL TO SHOW CREDIT WORTHINESS OF THESE CREDITORS. HOWEVER THE ASSESSEE FAILED TO FURNISH THE DETAILS AS CALLED UPON AND TH EREFORE THE LEARNED ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED I NCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 68 O F THE ACT. ON APPEAL LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION OF RS.35 000/- RELATING TO THREE PARTIES A ND CONFIRMED THE ADDITION OF RS.20 90 088/- RELATING TO BALANCE 10 P ARTIES. BEFORE US THE SOLE CONTENTION OF THE LEARNED AUTHORISED REPRE SENTATIVE OF THE ASSESSEE WAS THAT AS THE ASSESSEE EARNS COMMISSION INCOME @ 12 - 10 - PAISA TO 25 PAISA PER 100 RUPEES INCLUDING BANK COM MISSION THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN ADDING RS.2 0 90 088/- AS UNEXPLAINED CASH CREDIT. WE FIND NO MERIT IN THE A BOVE ARGUMENT OF THE ASSESSEE. SECTION 68 OF THE ACT CLEARLY REQUIRE S AN ASSESSEE TO ESTABLISH THE NATURE AND SOURCE OF CASH CREDIT TO THE SATISFACTION OF THE ASSESSING AUTHORITY AND IN ABSENCE OF WHICH THE LEA RNED ASSESSING OFFICER HAS THE POWER TO TREAT THE UNEXPLAINED CASH CREDIT AS INCOME OF THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS NOT DISPUTED THE FACT THAT RS.20 90 088/- WHICH WAS ADDED BY THE REVENUE WAS NOT CASH CREDIT IN HIS BOOKS OF ACCOUNT. FURTHER BEFORE THE LEARNED ASSESSING OFFICER THE ASSESSEE EXPLAINED THAT BECAUSE OF HIS NATURE OF BUSINESS WHEREIN CHEQUES WERE RECEIVED FROM THE DIFFERENT PA RTIES AND AFTER ENCASHING THE CHEQUES OR DRAFTS THE CASH WAS PAID TO THE PARTIES PROVIDING THE CHEQUES OR DRAFTS THE ASSESSEE WAS N OT REQUIRED TO MAINTAIN THE RECORD OF FULL ADDRESS AND IDENTITY OF THE CHEQUE OR DRAFT PROVIDER. THE ASSESSEE ALSO CONTENDED THAT IN VIEW OF THE LARGE VOLUME OF THE BUSINESS IT WAS ALSO NOT PRACTICALLY POSSIBLE TO MAINTAIN FULL RECORD OF ADDRESSES AND OTHER DETAILS OF THE PARTIES. IN OUR CONSIDERED OPINION SUCH EXPLANATION OF THE ASS ESSEE CANNOT BE ACCEPTED IN VIEW OF THE SPECIFIC PROVISION OF LAW C ONTAINED IN SECTION 68 OF THE ACT. IN OUR CONSIDERED OPINION WHEN THE ASSESSEE CLAIMS TO HAVE RECEIVED CHEQUE OR DRAFT ON CREDIT I.E. CASH I S NOT IMMEDIATELY GIVEN TO THE CHEQUE OR DRAFT PROVIDER THEN THE LAW REQUIRES THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF SUCH CRE DIT BY ESTABLISHING IDENTITY AND GENUINENESS OF THE TRANSACTION. IN THE ABOVE CIRCUMSTANCES WE DO NOT FIND ANY ERROR IN THE ORDE R OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE THI S GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. - 11 - 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS ABOVE. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 14 TH DAY OF MAY 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 14 TH DAY OF MAY 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 05.05.2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 07.05.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 07.05.2010 ------------ ------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 07.05.2010 ----------- -------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 10.05.2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 14.05.2010 ---------- ---------- 7. FILE SENT TO THE BENCH CLERK 14.05.2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------