Sri P Srinivasa Rao, Kakinada v. The ITO, Ward-2., Kakinada

ITA 306/VIZ/2007 | 2004-2005
Pronouncement Date: 22-10-2010 | Result: Dismissed

Appeal Details

RSA Number 30625314 RSA 2007
Assessee PAN AIXPP2923L
Bench Visakhapatnam
Appeal Number ITA 306/VIZ/2007
Duration Of Justice 3 year(s) 4 month(s) 10 day(s)
Appellant Sri P Srinivasa Rao, Kakinada
Respondent The ITO, Ward-2., Kakinada
Appeal Type Income Tax Appeal
Pronouncement Date 22-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 22-10-2010
Date Of Final Hearing 05-10-2010
Next Hearing Date 05-10-2010
Assessment Year 2004-2005
Appeal Filed On 11-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 306 /VIZAG/ 20 07 ASSESSMENT YEAR : 2004 - 05 P. SRINIVASA RAO KAKINADA ITO WARD - 2 KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO. AIXPP 2923L ITA NO.311/VIZAG/2007 ASSESSMENT YEAR : 2004 - 05 ITO WARD - 2 KAKINADA P. SRINIVASA RAO KAKINADA (APPELLANT) VS. (RESPONDENT) ITA NO. 307 /VIZAG/2007 ASSESSMENT YEAR : 2004 - 05 N. JHANSI LAKSHMI KAKINADA ITO WARD - 2 KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO.ADPPN 6721M ITA NO.3 36/ VIZAG/2007 ASSESSMENT YEAR : 2004 - 05 ITO WARD - 2 KAKINADA N. JHANSI LAKSHMI KAKINADA (APPELLANT) VS. (RESPONDENT) APPELL ANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI J. SIRI KUMAR DR ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER : - THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEES AS WELL AS THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE CIT(A). SINCE COMMON ISSUE S ARE INVOLVED IN THESE APPEALS WE HEARD THEM TOGETHER AND PREFER TO ADJUDICATE THEM THROUGH THIS CONSOLIDATED ORDER. IN THESE CASES ASSESSEES 2 ARE HUSBAND AND WIFE AND A SUBSTANTIAL AMOUNT OF CASH CREDITS WERE INTRODUCED IN THEIR HANDS. WE HOWEVER PRE FER TO ADJUDICATE THESE CASES ONE AFTER THE OTHER. ITA NOS.306 OF 2007 AND 311 OF 2007: 2. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE ASSAILING THE ORDER OF THE CIT(A). THE FACTS IN BRIEF RELEVANT TO THE IMPUGNED ISSUES BO RNE OUT FROM THE RECORD ARE THAT THE ASSESSEE SHRI P. SRINIVASA RAO HAS SHOWN UNSECURED LOAN OF RS.15 LAKHS FROM HIS WIFE AND LIABILITIES IN RESPECT OF UNDER MENTIONED PERSONS: NAME & ADDRESS OF THE CREDITOR RELATIONSHIP WITH THE ASSESSEE BALANCE AS ON 1. 4.2003 TOTAL CREDITED / BORROWED DURING THE YEAR AMOUNT REPAID BALANCE AS ON 31.3.2004 SHRI NARAHARISETTI RAJENDRA BABU S/O N. LAKSHMIPATHI RAO YERNAGUDEM VILLAGE DEVARAPALLI (M) W.G. DIST. FATHER - IN - LAW 1000000 1600000 2000000 600000 SHRI NARAHAR ISETTI GANDHI S/O N. LAKSHMIPATHI RAO YERNAGUDEM VILLAGE DEVERAPALLI (M) W.G. DIST. BROTHER OF FATHER - IN - LAW NIL 800000 NIL 800000 SHRI ANGINA SATYANARAYANA S/O A. SUBBARAO BROTHER - IN - LAW (SISTERS HUSBAND) NIL 600000 NIL 600000 3. THE ENTIRE AMOUNT WAS INTRODUCED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN CASH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH CREDITS. A.O. HAS ALSO CONDUCTED ENQUIRIES AND INVESTIGATION DIRECTLY AND THROUGH ISSUE OF COMMISSION TO THE ITO TADEPALLIGUDEM . THE REPORT RECEIVED FROM THE ASSESSING OFFICER TADEPALLIGUDEM WAS CONFRONTED TO THE ASSESSEES. IT WAS STATED BEFORE THE A.O. THAT ALL THESE CASH CREDITORS ARE 3 RELATED TO THE ASSESSEES AND THEY WERE MEN OF MEANS HAVING SUBSTANTIAL AGRICULTURAL LAND AND HAVE ADVANCED THE AFORESAID AMOUNTS TO THE ASSESSEE IN CASH OUT OF THEIR ACCUMULATED AGRICULTURAL INCOME OVER THE YEARS. THE ASSESSEE HAS ALSO FILED AFFIDAVITS OF THE CREDITORS CONFIRMING THE ADVANCEMENTS OF THE AFORESAID LOAN WITHOUT ANY INTEREST. IN T HESE AFFIDAVITS IT WAS ALSO STATED BY THE CREDITORS THAT THEY WERE HOLDING SUBSTANTIAL AGRICULTURAL LAND AND THE ADVANCES WERE GIVEN OUT OF ACCUMULATED AGRICULTURAL INCOME. 4. THE ASSESSING OFFICER EXAMINED THE AFFIDAVITS AND THE EVIDENCE RELATING TO T HE INDIVIDUAL CASH CREDITORS AND CAME TO THE CONCLUSION THAT THOUGH THESE CASH CREDITORS HAD BANK ACCOUNTS BUT THE ALLEGED AGRICULTURAL INCOME WAS NEVER DEPOSITED IN THE BANK ACCOUNTS. THEREFORE THE STORY PUT FORTH BY THE ASSESSEE THAT THE ADVANCES IN C ASH WERE GIVEN TO THE ASSESSEE OUT OF ACCUMULATED AGRICULTURAL INCOME IN UNBELIEVABLE FALSE AND DEVOID OF MERITS. HE ACCORDINGLY MADE THE ADDITION OF RS.20 LAKHS AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 5. WITH REGARD TO THE UNSECURED LOAN OF RS .15 LAKHS FROM HIS WIFE IT WAS ACCEPTED BY THE A.O. BUT IN THE CASE OF WIFE THE SOURCE OF RS.15 LAKHS WHICH WAS GIVEN AS LOAN TO HER HUSBAND WAS EXAMINED AND WHEN THE ASSESSEE WAS FAILED TO EXPLAIN THE SOURCE OF INVESTMENT THIS AMOUNT WAS ADDED U/S 69 OF THE ACT IN THE HANDS OF THE WIFE SMT. N. JHANSI LAKSHMI. 6. BESIDES THE A.O. HAS ALSO NOTICED THAT DURING THE IMPUGNED ASSESSMENT YEAR A SUBSTANTIAL AMOUNT OF CASH WAS DEPOSITED IN THE ACCOUNT WITH THE UTI BANK STANDING IN THE NAME OF M/S. SIRI SEC URITIES KAKINADA OWNED BY THE ASSESSEE. THIS ACCOUNT WAS NEVER DISCLOSED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS . I T WAS SURFACED DURING THE COURSE OF INQUIRY WITH REGARD TO THE SOURCE OF FUNDS OF RS.11 LAKHS INVESTED IN PURCHASE OF ONE VACANT SITE WIT H REGARD TO WHICH DISCLOSURE WAS MADE FIRST TIME BEFORE THE A.O. DURING THE COURSE OF HIS STATEMENT RECORDED ON 20/9/2006. FROM PERUSAL OF THIS BANK STATEMENT THE A.O. HAS NOTICED THAT THERE WAS CASH DEPOSITS OF RS.20 19 000/ - DURING THE IMPUGNED ASSESSM ENT YEAR. THE 4 ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE SAID DEPOSITS OF RS.20 19 000/ - MADE ON VARIOUS DATES SHOULD NOT BE TREATED AS UNEXPLAINED MONEY AS THE ASSESSEE DID NOT DISCLOSE THE AFORESAID ACCOUNT IN THE BOOKS OF ACCOUNT AND BE DEEMED TO B E THE INCOME U/S 69(A) OF THE I.T. ACT. IN RESPONSE TO THE SHOW CAUSE NOTICE IT WAS STATED BY THE ASSESSEE THAT HE HAS RECEIVED THE SAID AMOUNT AT DIFFERENT POINT OF TIME. SOME AMOUNT WAS RECEIVED AS A GIFT AND SOME WAS AS REFUND OF ADVANCES GIVEN FOR P URCHASE OF AGRICULTURAL LAND. THE A.O. HAS EXAMINED IN DETAIL IN THE ASSESSMENT ORDER EACH AND EVERY EXPLANATION OF THE ASSESSEES BUT WAS NOT CONVINCED WITH IT AND HE FINALLY CONCLUDED THAT THE ASSESSEE DOES NOT HAVE ANY SOURCE TO EXPLAIN THE DEPOSITS TO THE TUNE OF RS.20.19 LAKHS IN HIS BANK ACCOUNT AND THE SAID AMOUNT IS ACCORDINGLY DEEMED TO BE THE UNEXPLAINED MONEY U/S 69(A) OF THE I.T. ACT. 7. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND EXPLAINED THE SOURCE OF DEPOSITS BY FILING THE AFF IDAVITS OF THE CREDITORS. THE CIT(A) RE - EXAMINED THE ISSUE ON BOTH COUNTS. BEING CONVINCED WITH THE EXPLANATIONS GIVEN WITH REGARD TO THE SOURCE OF CREDIT OF RS.20 LAKHS INTRODUCED IN THE NAME OF N. RAJENDRA BABU N. GANDHI AND A. SATYANARAYANA THE CIT (A) DELETED THE ADDITIONS AFTER HAVING OBSERVED THAT THE CREDITORS ARE CLOSE RELATIVES OF THE ASSESSEES AS SUCH THEIR IDENTITY GENUINENESS OF TRANSACTIONS AND THEIR CREDITWORTHINESS SHOULD NOT BE DOUBTED. WHILE DELETING THE ADDITIONS CIT(A) HAS ACCEPTE D THE EXPLANATIONS OF THE CREDITORS THAT THIS LOAN WAS GIVEN TO THE ASSESSEE OUT OF THEIR AGRICULTURAL INCOME ACCUMULATED OVER THE YEARS. 8. AGGRIEVED WITH THESE FINDINGS THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL A SSAILING THE ORDER OF C IT(A) THAT CIT(A) OUGHT TO HAVE UPHOLD THE ADDITIONS OF RS.20 LAKHS TOWARDS UNEXPLAINED CREDITS AS THE 3 CREDITORS HAVE FAILED TO FURNISH EVIDENCE REGARDING THEIR POSSESSING HUGE CASH BALANCE WITH THEM IN ONWARD LENDING TO THE ASSESSEE. 9. THE ANOTHER AD DITION OF RS.20.19 LAKHS WAS ALSO EXAMINED BY THE CIT(A) IN THE LIGHT OF EXPLANATIONS FURNISHED BY THE ASSESSEES AND HE WAS 5 PARTLY CONVINCED WITH THE EXPLANATION OF THE ASSESSEES THAT OUT OF RS.20.19 LAKHS RS.7.5 LAKHS WAS FINANCED BY HIS FATHER SHRI P. S IRIMALU IN CASH AND RS.4 LAKHS RECEIVED BY THE ASSESSEE AS ADVANCE FROM SHRI K. SRINIVAS FOR PURCHASE OF AGRICULTURAL LAND. HE ACCORDINGLY RESTRICTED THE ADDITION TO RS.8 69 000/ - . THIS ORDER OF THE CIT(A) WAS ASSAILED BY THE REVENUE AS WELL AS THE ASSES SEE THROUGH THEIR RESPECTIVE APPEALS. THE REVENUE HAS ONLY CHALLENGED THE DELETION OF RS.7.5 LAKHS RELATING TO THE FUND RECEIVED BY THE ASSESSEE FROM HIS FATHER. THE OTHER AMOUNT OF RS.4 LAKHS RECEIVED BY THE ASSESSEE AS AN ADVANCE FOR THE SALE OF HIS AG RICULTURAL LAND WAS NOT QUESTIONED BY THE REVENUE. WE THEREFORE CONFINE OURSELVES TO ADJUDICATE THE ISSUE RELATING TO DELETION OF RS.7 50 000/ - ONLY IN REVENUES APPEAL AND IN THE ASSESSEE S APPEAL THE ADDITION OF RS.8 69 000/ - CONFIRMED BY THE CIT(A). 10 . DURING THE COURSE OF HEARING OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSEE BESIDES REITERATING ITS CONTENTIONS AS RAISED BEFORE THE CIT(A) HAS SUBMITTED THAT THE REVENUE HAS ADOPTED A DOUBLE STANDARD WHILE EXAMINING THE ISSUE OF CASH CREDIT IN THE H ANDS OF THE ASSESSEES. THE AMOUNT RECEIVED BY THE ASSESSEE FROM HIS FATHER - IN - LAW BROTHER - IN - LAW WERE CONSIDERED TO BE THE UNEXPLAINED CASH CREDIT WHEREAS UNSECURED LOAN RECEIVED FROM HIS WIFE OF RS.15 LAKHS WAS CONSIDERED TO BE THE GENUINE. BUT THE CA PACITY TO ADVANCE THIS LOAN WAS EXAMINED BY THE A.O. IN THE CASE OF WIFE OF THE ASSESSEES AND HE ACCORDINGLY MADE AN ADDITION THERE - O F U/S 69 AS UNEXPLAINED INVESTMENT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE A.O. SHOULD HAVE EXAMINED THE AMOUNT OF CASH CREDITS IN THE HANDS OF FATHER - IN - LAW AND BROTHER - IN - LAW AS DONE IN THE CASE OF WIFE AND IF HE WAS NOT SATISFIED WITH THE CAPACITY TO ADVANCE THE LOAN TO THE ASSESSEE THE SAME CAN BE ADDED U/S 69 OF THE I.T. ACT. BUT ONCE THE CASH CRED ITORS CAME FORWARD AND FILED THE AFFIDAVITS STATING THEREIN THEIR CREDITWORTHINESS AND ACCEPTING THE ADVANCEMENT OF LOAN THE GENUINENESS OF CASH CREDIT SHOULD HAVE BEEN ACCEPTED BY THE A.O. IF HE HAS ANY DOUBT REGARDING THE CREDITWORTHINESS OF THE CASH C REDITORS IT COULD HAVE BEEN EXAMINED IN THEIR RESPECTIVE HANDS AND IF THE ASSESSING OFFICER WAS NOT SATISFIED WITH THEIR CREDITWORTHINESS OR THE CAPACITY TO ADVANCE A LOAN THE SAME COULD HAVE BEEN 6 ADDED IN THE HANDS OF RESPECTIVE CREDITORS U/S 69 OF THE ACT AS DONE IN THE CASE OF WIFE OF THE ASSESSEE. 11 . THE LD. COUNSEL FOR THE ASSESS EE HOWEVER SUBMITTED THAT IN EARLIER YEAR ASSESSEE HAS TAKEN A LOAN OF RS.10 LAKHS FROM HIS FATHER - IN - LAW SHRI N. RAJENDRA BABU AND THE SAME WAS ACCEPTED BY THE REVENUE. DURING THE RELEVANT ASSESSMENT YEAR ASSESSEE TOOK ONLY RS.6 LAKHS WHICH SHOULD NOT HAVE BEEN DOUBTED IN THE LIGHT OF AFFIDAVITS FURNISHED BY HIM IN WHICH HE HAS FURNISHED THE DETAILS OF AGRICULTURAL HOLDINGS AND THE YEARLY INCOME EARNED BY HIM. IN THE C ASE OF SHRI N. GANDHI BROTHER OF FATHER - IN - LAW OF THE ASSESSEE FROM WHOM A CASH CREDIT OF RS.8 LAKHS WAS INTRODUCED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEES IT WAS CONTENDED THAT THE SAID CASH CREDITOR HAS FILED THE AFFIDAVIT BEFORE THE A.O. CONFIRMING THE ADVANCEMENT OF LOAN THE DETAILS OF AGRICULTURAL HOLDINGS AND THE YEARLY INCOME SHOWING HIS CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. SIMILAR WAS THE POSITION WITH RESPECT TO THE LOAN OF RS.6 LAKHS RECEIVED FROM SHRI A. SATYANARAYANA BROTHER - IN - LAW OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT SHRI N. RAJENDRA BABU ALSO RECEIVED SUBSTANTIAL AMOUNT FROM THE DEBTORS TO WHOM ADVANCE S WERE GIVEN IN EARLIER YEARS BESIDES THE AGRICULTURAL INCOME. ONCE THE ASSESSEE H AS FURNISHED ALL THE INFORMATION WITH REGARD TO THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF TRANSACTIONS HE HAS DISCHARGED ITS ONUS PRIMARILY LAY UPON IT AND THE ONUS SHIFTS UPON THE REVENUE AND IF THE A.O. WAS NOT CONVINCED WITH THE EXPLANAT IONS OF THE ASSESSEE HE SHOULD HAVE BROUGHT SOME EVIDENCE ON RECORD TO FALSIFY THE EVIDENCE PLACED BY THE ASSESSEE IN SUPPORT OF HIS CONTENTIONS. THE CIT(A) HAS RIGHTLY APPRECIATED THE EVIDENCE PLACED BEFORE THE A.O. AND HAS DELETED THE ADDITIONS. 12 . S O FAR AS DEPOSITS IN THE BANK OF RS.20.19 LAKHS IN CASH ARE CONCERNED THE ASSESSEE HAS FURNISHED THE DETAILS BEFORE THE A.O. FROM WHOM AND HOW HE OBTAINED THE CASH FOR DEPOSITING IT IN THE BANK IN ORDER TO PURCHASE THE AGRICULTURAL LAND. RS.7.5 LAKHS WAS RECEIVED FROM HIS FATHER AND RS.4 LAKHS WAS RECEIVED FROM SH. K. SRINIVAS AS ADVANCE FOR PURCHASE OF AGRICULTURAL LAND FROM THE ASSESSEES. WHILE MAKING AN ADDITION THE ASSESSING OFFICER HAS NOT 7 GIVEN ANY CREDIT OF RS.3.5 LAKHS WITHDRAWN ON 15.11.2003 WH ICH HE HAS PROPERLY EXPLAINED DURING THE COURSE OF HIS EXAMINATION BY THE A.O. HE HAS ALSO EXPLAINED THAT HE HAS ALSO RECEIVED VARIOUS GIFTS TIME TO TIME WHICH WAS DEPOSITED IN THE BANK. THE CIT(A) HAS ACCEPTED ONLY THE DEPOSIT OF RS.11.5 LAKHS AND MADE THE ADDITION OF THE BALANCE AMOUNT WITHOUT VERIFYING THE EXPLANATIONS FURNISHED BY THE ASSESSEES. 13 . THE LD. D.R. STRONGLY REFUTED THE CONTENTION OF THE ASSESSEE WITH THE SUBMISSION THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS FOUND TO HAVE INTRODUCED A SUM OF RS.20 LAKHS DURING THE IMPUGNED ASSESSMENT YEAR FROM HIS CLOSE RELATIVES I.E. RS.6 LAKHS FROM SHRI N. RAJENDRA BABU FATHER - IN - LAW OF THE ASSESSEE RS.8 LAKHS FROM SHRI N. GANDHI BROTHER OF FATHER - IN - LAW OF THE ASSESSEE AND RS. 6 LAKHS FROM SHRI A. SATYANARAYANA BROTHER - IN - LAW OF THE ASSESSEE. THE ENTIRE AMOUNT WAS RECEIVED IN CASH. IT WAS STATED THAT THE AMOUNT WAS ADVANCED BY THESE CASH CREDITORS OU T OF THEIR PERSONAL SAVINGS/AGRICULTURAL INCOME ACCUMULATED OVER A PASSAGE OF YEARS. BUT ON ENQUIRY IT WAS NOTICED THAT ALL THESE CASH CREDITORS WERE HAVING THE IR BANK ACCOUNTS IN WHICH A PALTRY AMOUNT WAS DEPOSITED AND WITHDRAWN. NO TRANSACTIONS OF HEAVY AMOUNT WAS FOUND IN THE BANK ACCOUNTS OF THE SE CREDITORS . THE LD. D.R. FU RTHER CONTENDED THAT IT IS HIGHLY IMPROBABLE THAT A PERSON WOULD KEEP SUBSTANTIAL AMOUNT OF CASH AT HOME YEAR AFTER YEAR WITH AN INTENTION TO ADVANCE THE SAME TO HIS RELATIVE DURING THE IMPUGNED ASSESSMENT YEAR. THESE CASH CREDITS WERE RECEIVED FROM THE C LOSE RELATIVES OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE ONUS UPON THE ASSESSEE IS MORE HEAVIER TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE A.O. HAS MINUTELY EXAMINED THE EXPLANATIONS FURNISHED BY THE ASSESSEES AND HAS RIGHTLY MADE THE ADDITI ON OF THE SAME U/S 68 OF THE ACT. THOUGH THESE CASH CREDITORS WERE CLAIMED TO HAVE GOOD AGRICULTURAL HOLDINGS BUT THE ONUS IS UPON THE CASH CREDITORS OR THE ASSESSEE TO BRING SOME EVIDENCE ON RECORD THAT THIS MUCH SALE PROCEEDS WERE RECEIVED FROM THE SALE OF AGRICULTURAL PRODUCTS WHICH WERE KEPT AT HOME YEAR AFTER YEAR FOR ITS ADVANCEMENT TO THE ASSESSEES. THE LD. D.R. FURTHER CONTENDED THAT WHEN THERE IS NO DIRECT EVIDENCE AVAILABLE THE HUMAN PROBABILITY IS THE MAJOR FACTOR WHICH CAN BE SEEN WHILE DETER MINING THE VERACITY OF THE EXPLANATIONS OF THE ASSESSEES. NO 8 PRUDENT OR ORDINARY MEN WOULD KEEP A SUBSTANTIAL AMOUNT AT HOME THOUGH HAVING A BANK ACCOUNT WITHOUT ANY REASONS. 13 .1 THE CIT(A) WAS SWAYED WITH THE ARGUMENTS OF THE ASSESSEE THAT THE CREDITOR S HAVE EXPLAINED THE SOURCE OF FUNDS THEREFORE NO ADDITION CAN BE MADE U/S 68 OF THE ACT. IT HAS BEEN REPEATEDLY HELD BY THE VARIOUS HIGH COURTS THAT MERE EXPLANATION IS NOT SUFFICIENT IT SHOULD BE RATHER PLAUSIBLE AND ACCEPTABLE. MERE ADMISSION OF THE CASH CREDITORS WHO HAPPEN TO BE THE CLOSE RELATIVES OF THE ASSESSEES THAT THEY HAVE ADVANCED A LOAN TO THE ASSESSEE CANNOT BE ACCEPTED TO EXONERATE THE ASSESSEE FROM ALL LEGAL OBLIGATIONS. THE ONUS IS UPON HIM TO PROVE THE GENUINENESS OF THE TRANSACTION S AND THE CREDITWORTHINESS OF THE CREDITORS. BOTH THESE FACTORS ARE MISSING IN THE INSTANT CASE. THEREFORE THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITIONS. 1 4 . SO FAR AS ADDITION OF RS.20.19 LAKHS IS CONCERNED THIS CASH AMOUNT WAS DEPOSITED ON DI FFERENT DATES IN THE BANK ACCOUNT OF THE FIRM IN THE NAME OF M/S. SIRI SECURITIES IN UTI BANK KAKINADA EXCLUSIVELY OWNED BY THE ASSESSEES. THIS BANK ACCOUNT WAS NEVER DISCLOSED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. THIS BANK ACCOUNT WAS SURFACED WH EN THE ASSESSING OFFICER HAS MADE AN INVESTIGATION OF A STATEMENT RECORDED ON 20.9.2006 BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN WHICH THE ASSESSEE HAS DECLARED FOR THE FIRST TIME THAT HE HAD PURCHASED ONE VACANT SITE OF 666 SQ.YDS. AT KA KINADA ON 15.11.2003 FOR A CONSIDERATION OF RS.11 LAKHS WHICH WAS PAID PARTLY BY WAY OF CASH AND BALANCE BY DEMAND DRAFT AT THE TIME OF REGISTRATION. A SUBSTANTIAL AMOUNT WAS DEPOSITED ON DIFFERENT DATES IN THIS BANK ACCOUNT BY THE ASSESSEES. WHEN THE AS SESSEE WAS ASKED ABOUT THE SOURCE OF THE DEPOSITS IT WAS CONTENDED THAT RS.7.5 LAKHS WAS RECEIVED FROM HIS FATHER AS A GIFT . W HEN THE SOURCE OF THIS FUND WITH HIS FATHER WAS ASKED IT WAS STATED THAT IT WAS OUT OF THE AGRICULTURAL INCOME OF CURRENT YEAR AND ACCUMULATED AGRICULTURAL INCOME OF EARLIER YEARS AND ALSO LOAN FROM BANK OF BARODA. WITH REGARD TO THE OTHER DEPOSITS ALSO THE ASSESSEE COULD NOT FURNISH THE SATISFACTORY EXPLANATIONS BEFORE THE A.O. AND HE HAS RIGHTLY MADE THE ADDITION OF THE ENTIRE DEPOSITS OF RS.20.19 LAKHS. THE CIT HOWEVER 9 GRANTED A RELIEF OF RS.11 50 000/ - COMPRISING OF RS.7.50 LAKHS RECEIVED FROM HIS FATHER AND RS.4 LAKHS RECEIVED FROM SHRI K. SRINIVAS AS ADVANCE AGAINST THE SALE OF HIS AGRICULTURAL LAND. THE BALANCE AMOUNT OF RS.8.69 LAKHS WAS CONFIRMED BY THE CIT(A). IN THIS REGARD A RELIANCE WAS PLACED UPON THE ORDER OF THE CIT(A). WITH REGARD TO RS.7.50 LAKHS THE LD. D.R. HAS SUBMITTED THAT THE FATHER OF THE ASSESSEE COULD NOT FURNISH A VALID EXPLANATIONS AS TO WHY HE K EPT THE ENTIRE AMOUNT AT HOME WHEREAS HE WAS HAVING A BANK ACCOUNT AT A NEARBY PLACE. HIS BANK ACCOUNT WAS ALSO CLEARLY DEPICTS THAT NO MAJOR TRANSACTIONS WERE UNDERTAKEN IN THE BANK ACCOUNT. 1 5 . HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PER USAL OF THE ORDER OF THE AUTHORITIES BELOW AND DOCUMENTS PLACED BEFORE US WE FIND THAT A SUBSTANTIAL AMOUNT OF CASH WAS RECEIVED BY THE ASSESSEE FROM HIS CLOSE RELATIVES B ESIDES A DEPOSIT OF CONSIDERABLE AMOUNT IN THE BANK ACCOUNT WHICH WAS NOT DISCLOSED TO THE REVENUE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS INTRODUCED THE CASH CREDIT OF RS.20 LAKHS IN THE NAME OF CLOSE RELATIVES I.E. RS.6 LAKHS FROM HIS FATHER - IN - LAW SHRI N. RAJENDRA BABU RS.8 LAKH S FROM BROTHER OF HIS FATHER - IN - LAW SHRI N. GANDHI AND RS. 6 LAKHS FROM SHRI A. SATYANARAYANA BROTHER - IN - LAW. THE ASSESSING OFFICER HAS ISSUED THE COMMISSION TO ITO WARD - 1 TADEPALLIGUDEM TO ENQUIRE ABOUT THE CREDITWORTHINESS OF THESE CREDITORS AND CAPA CITY TO LEND SUCH A HUGE AMOUNT IN CASH. THE CONCERNED ITO MADE AN ENQUIRY AND NOTICED THAT ALL THESE CREDITORS WERE HAVING THEIR BANK ACCOUNT WITH THE BANK OF BARODA YERNAGUDEM. BUT THERE WAS NO TRANSACTIONS OF ANY SUBSTANTIAL AMOUNT IN THEIR BANK ACCO UNTS. THE BANK ACCOUNT SHOWS THAT THERE WAS A DEPOSIT OF PALTRY AMOUNT IN THE ACCOUNTS AT DIFFERENT POINT OF T IME THOUGH THE AFFIDAVITS OF ALL THESE CREDITORS WERE FILED TO ESTABLISH THAT THESE CREDITORS OWN SUBSTANTIAL AGRICULTURAL HOLDINGS AND THEY WE RE EARNING GOOD AGRICULTURAL INCOME YEAR AFTER YEAR. THEIR CASH FLOW STATEMENTS SHOWING THE ACCUMULATION OF FUNDS OUT OF AGRICULTURAL INCOMES WERE ALSO FILED BUT IT IS VERY STRANGE TO NOTE THAT IN EVERY YEAR SUBSTANTIAL AMOUNT WAS SHOWN AS CASH IN HAND B UT IT WAS NOT KEPT IN THE BANK ACCOUNT THOUGH THE CREDITORS HAVE THEIR BANK ACCOUNTS. A SPECIFIC QUERY WAS RAISED DURING THE COURSE OF HEARING TO FURNISH THE REASONS AS TO WHY THE SO CALLED CASH CREDITORS HAVE 10 KEPT SUCH A HUGE AMOUNT OF CASH AT HOME DESPI TE HAVING BANK ACCOUNTS IN WHICH PALTRY AMOUNT WAS DEPOSITED AT DIFFERENT POINT OF TIME. BUT NO SATISFACTORY EXPLANATION WAS FURNISHED. IT HAS REPEATEDLY HELD BY THE APEX COURT AND VARIOUS HIGH COURTS THAT THE PRIMARY ONUS LAY UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS. THOUGH THE ASSESSEE HAS CLAIMED THAT HE HAS RECEIVED THE SUBSTANTIAL AMOUNT OF RS.20 LAKHS IN CASH FROM THE AFORESAID 3 CREDITORS BUT THERE IS NO DOCUMENTARY EVIDENCE TO PROVE THES E FACTS. IN THE LIGHT OF THESE FACTS THE GENUINENESS OF TRANSACTIONS CANNOT OUTRIGHTLY BE ACCEPTED. TO ASCERTAIN THE GENUINENESS OF THE TRANSACTIONS IN SUCH CIRCUMSTANCES THE HUMAN PROBABILITIES ARE TO BE SEEN. 16. A COMMON OR A PRUDENT MAN WOULD NO T KEEP SUCH A HUGE AMOUNT AT HOME OVER A PERIOD OF YEARS THAT TOO TO ADVANCE THIS AMOUNT AT ONE POINT OF TIME TO ONE OF HIS RELATIVES WITHOUT ANY INTEREST . IN CASE OF AN AGRICULTURIST THEY ARE NOT REQUIRED TO INCUR A HUGE EXPENDITURE AT ANY POINT OF TIM E. WHENEVER THE AGRICULTURAL PRODUCES ARE SOLD THE SALE PROCEEDS EITHER TO BE UTILIZED TOWARDS THEIR DOMESTIC NEEDS OR TO BE KEPT IN ITS BANK ACCOUNT. IT IS TOTALLY IMPROBABLE THAT AN AGRICULTURIST WOULD KEEP THE SALE PROCEEDS AT HOME WITHOUT ANTICIPATI NG ITS USE IN NEAR FUTURE. FROM THE CASH FLOW STATEMENTS OF ALL THESE CREDITORS IT IS NOTICED THAT SINCE THE FINANCIAL YEAR 1998 - 99 TO 2003 - 04 A HUGE CASH BALANCE WAS SHOWN AND THAT TOO WAS KEPT AT THEIR HOME. IN THE CASE OF N. RAJENDRA BABU THE CLOSI NG CASH BALANCE WAS SHOWN FOR THE FINANCIAL YEAR 1998 - 99 AS RS.10.11 LAKHS WHICH WAS GRADUALLY INCREASED IN EVERY YEAR AND WAS ACCUMULATED UPTO RS.19.3 LAKHS IN FINANCIAL YEAR 2003 - 04 AFTER GIVING ADVANCES TO THE ASSESSEE AND HIS WIFE. THE CLOSING BALANCE SHOWN IN 1998 - 99 WAS RS.10.11 LAKHS WHICH WAS RAISED TO RS.15.87 LAKHS IN 1999 - 2000 AND IN 2000 - 01 IT WENT UP TO RS.23.78 LAKHS. AGAIN IN 2000 - 01 THE CLOSING BALANCE WAS FURTHER INCREASED TO RS.33.77 LAKHS AND IT WAS RAISED TO RS.40.39 LAKHS IN FINANCIA L YEAR 2002 - 03. IT IS SURPRISED TO NOTE THAT THIS CREDITOR WAS KEEPING A HUGE AMOUNT OF RS.40.39 LAKHS AT HOME AT THE END OF THE FINANCIAL YEAR 2002 - 03 WHERE AS HE WAS MAINTAINING A REGULAR BANK ACCOUNT. SIMILAR WAS THE POSITION IN THE CASE OF SHRI N. G ANDHI AND SHRI A. SATYANARAYANA. THE PROJECTION GIVEN BY THE ASSESSEE IN THE CASE OF N. 11 GANDHI IS THAT AT THE END OF 1998 - 99 THE CLOSING BALANCE IN CASH WAS RS.8.67 LAKHS WHICH WAS INCREASED TO RS.15.52 LAKHS AT THE END OF 1999 - 2000. IT WAS FURTHER INCR EASED TO RS.23.77 LAKHS AT THE END OF 2000 - 01 AND AGAIN INCREASED TO RS.32.02 LAKHS AT THE END OF 2001 - 02. THE INCREASE IN CASH FLOW DID NOT STOP THERE. IT WAS FURTHER INCREASED TO RS.42.07 LAKHS AT THE END OF THE FINANCIAL YEAR 2002 - 03 AND FINALLY IN 20 03 - 04 IT REACHED UPTO RS.41.92 LAKHS AFTER MAKING A DISBURSEMENT OF LOAN TO THE ASSESSEE OF RS.8 LAKHS. IN THE CASE OF A. SATYANARAYANA T HE CASH CLOSING BALANCE AT THE END OF 1998 - 99 WAS SHOWN AS RS.1.10 LAKHS WAS RAISED TO RS. 3 . 2 0 LAKHS AT THE END OF 1 999 - 2000 AND IT WAS FURTHER INCREASED TO RS.5.64 LAKHS AT THE END OF 2000 - 01. THIS CASH IN HAND FURTHER INCREASED TO RS.7.96 LAKHS IN THE FINANCIAL YEAR 2001 - 02 AND IT WAS FURTHER INCREASED TO RS.10.76 LAKHS AT THE END OF THE FINANCIAL YEAR 2002 - 03 AND FI NALLY AT THE END OF 2003 - 04 IT WAS RS.7.38 LAKHS AFTER MAKING ADVANCES OF RS.6 LAKHS TO THE ASSESSEE. FROM A CAREFUL PERUSAL OF TH ESE CASH FLOW CHART S OF DIFFERENT CASH CREDITORS WE ARE AT A LOSS TO UNDERSTAND HOW AN AGRICULTURIST CAN KEEP SUCH A HUGE AMOUNT IN CASH AT HOME YEAR AFTER YEAR DESPITE HAVING A REGULAR BANK ACCOUNT. IF THE FACTS ARE VIEWED IN THE LIGHT OF THESE FACTS ONLY ONE INFERENCE CAN BE DRAWN THAT THESE CREDITORS HAVE NOT ADVANCED ANYTHING TO THE ASSESSEES AND ASSESSEE HAS ONLY INTRO DUCED HIS OWN MONEY IN THE NAME OF THESE CREDITORS. WE HAVE ALSO EXAMINED THE ORDER OF THE CIT(A) WHO HAS ACCEPTED THIS CLAIM OF THE ASSESSEES ONLY FOR THE SIMPLE REASON THAT THE CREDITORS HAVE ACCEPTED THE ADVANCEMENT OF LOAN TO THE ASSESSEES. THIS CANN OT BE ONLY CRITERIA FOR ACCEPTING THIS CASH CREDIT IN THE HANDS OF THE ASSESSEES. THE AUTHORITIES CONCERNED ARE REQUIRED TO EXAMINE THE GENUINENESS OF THE TRANSACTIONS I.E. WHETHER SUCH TRANSACTIONS EVER TOOK PLACE. HAD IT BEEN A CASE OF CASH CREDIT INT RODUCED THROUGH CHEQUE ONE CAN UNDERSTAND THAT THE CREDIT WAS INTRODUCED THROUGH THE BANKING CHANNELS AND IT SHOULD NOT BE DOUBTED. BUT WHEN THE CREDITS ARE INTRODUCED IN CASH AND THERE IS NO EVIDENCE ON RECORD TO ESTABLISH THAT THIS LOAN WAS EVER ADVANC ED TO THE ASSESSEE G ENUINENESS OF THE TRANSACTIONS SHOULD PROPERLY BE EXAMINED IN THE LIGHT OF SURROUNDING CIRCUMSTANCES AND ALSO BE TESTED ON A TOUCHSTONE OF HUMAN PROBABILITIES AND ALSO THE FINANCIAL POSITION OF THE CREDITORS. WE THEREFORE OF THE CONSI DERED VIEW THAT SINCE THESE CREDITS DO NOT STAND ON TOUCHSTONE OF HUMAN 12 PROBABILITIES THE A.O. HAS RIGHTLY TREATED THE M TO BE THE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD AND RESTORE THAT OF THE A.O. 17. SO FAR AS THE NEXT ISSUE RELATING TO THE CASH DEPOSIT OF RS.20.19 LAKHS IS CONCERNED WE FIND THAT THIS AMOUNT WAS FOUND DEPOSITED IN THE UTI BANK STANDING IN THE NAME OF M/S. SIRI SECURITIES KAKINADA EXCLUSIVELY OWNED BY THE ASSESSEE. TH IS BANK ACCOUNT WAS NEVER DISCLOSED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. IT WAS SURFACED DURING THE COURSE OF ENQUIRY MADE WITH RESPECT TO THE STATEMENT OF THE ASSESSEE RECORDED ON 20.9.2006 DURING THE COURSE OF ASSESSMENT PROCEEDINGS DECLARING FOR T HE FIRST TIME THAT HE HAS PURCHASED ONE VACANT SITE OF 666 SQ.YDS. AT KAKINADA TN 16.11.2003 FOR A CONSIDERATION OF RS.11 LAKHS WHICH WAS PAID PARTLY BY CASH AND BALANCE BY DEMAND DRAFTS AT THE TIME OF REGISTRATION. FROM A PERUSAL OF THE BANK STATEMENTS IT WAS NOTED BY THE A.O. THAT A CASH OF RS.20.19 LAKHS WAS DEPOSITED BETWEEN 26.8.2003 TO 10.2.2004. OUT OF THESE DEPOSITS ASSESSEE HAS PREPARED A DRAFT OF RS.6 68 334/ - FOR THE PURCHASE OF PLOT AND WITHDRAWN A CASH OF RS.3 50 000/ - AND RS.20 000/ - ON 15 .11.2003 AND 19.11.2003. THE PREPARATION OF DRAFT AND WITHDRAWAL OF CASH OF RS.3 50 000/ - STRENGTHEN THE CASE OF THE DEPARTMENT THAT THE PLOT WAS PURCHASED FOR RS.11 LAKHS. NOW THE QUESTION ARISE ABOUT THIS CASH DEPOSITS IN THE BANK ACCOUNT. ASSESSEE WA S ASKED TO EXPLAIN THE SOURCE OF DEPOSITS AND IN RESPONSE THERETO IT WAS STATED BY THE ASSESSEE THAT HE HAS RECEIVED RS.7.5 LAKHS FROM HIS FATHER TO PURCHASE THE SITE AND FOR ITS CONSTRUCTION. IT WAS ALSO STATED THAT THE SUM OF RS.4 LAKHS WAS ALSO RECEIVE D BY THE ASSESSEE FROM SHRI K. SRINIVAS AS AN ADVANCE FOR THE SALE OF THE AGRICULTURAL LAND. THIS EXPLANATION WAS ACCEPTED BY THE CIT(A) AND REVENUE IS NOT IN APPEAL BEFORE US. WE THEREFORE DO NOT WISH TO COMMENT UPON THE VERACITY OF THIS RECEIPT AND DEP OSIT OF RS.4 LAKHS. WITH RESPECT TO THE BALANCE AMOUNT IT WAS DEPOSITED OUT OF THE GIFTS RECEIVED BY HIM AND OTHER SAVINGS. WITH RESPECT TO THE AMOUNT OF RS.7.5 LAKHS RECEIVED FROM HIS FATHER IT WAS STATED THAT THIS AMOUNT WAS GIVEN BY HIM IN CASH OUT OF THE AGRICULTURAL INCOME ACCUMULATED OVER A PERIOD OF YEARS AND ALSO FROM LOAN TAKEN FROM BANK OF BARODA YERNAGUDEM. THE FATHER OF THE ASSESSEE WAS ALSO HAVING A BANK ACCOUNT IN BANK OF BARODA YERNAGUDEM IN WHICH 13 DEPOSITS AND WITHDRAWALS ARE MADE. SI NCE HE WAS HAVING A REGULAR BANK ACCOUNT WE ARE UNABLE TO UNDERSTAND AS TO WHY HE KEPT THE HUGE AMOUNT OF CASH OF RS.7.5 LAKHS AT HOME. THE ACCUMULATION OF AGRICULTURAL INCOME AT HOME BY AN AGRICULTURIST HAS ALREADY BEEN EXAMINED BY US IN THE FOREGOING P ARAS AND WE ARE OF THE VIEW THAT NO AGRICULTURIST WOULD KEEP SUCH A HUGE AMOUNT AT HIS HOME OUT OF ITS AGRICULTURAL INCOME. WHATEVER INCOME IS EARNED IT WAS EITHER UTILIZED OR KEPT IN THEIR BANK ACCOUNTS. ONLY A SMALL AMOUNT CAN BE KEPT AT THEIR HOME TO MEET THEIR REGULAR DOMESTIC NEED. FOR THE SAME REASONS WE DO NOT ACCEPT THE EXPLANATIONS OF THE ASSESSEE THAT HE HAS RECEIVED RS. 7.5 LAKHS FROM HIS FATHER FOR ITS DEPOSIT IN CASH IN THE BANK. THE CIT(A) HAS ACCEPTED THIS CLAIM OF THE ASSESSEES ONLY FO R THE SIMPLE REASON THAT IT WAS RECEIVED FROM HIS FATHER WITHOUT VERIFYING THE NATURE OF THE TRANSACTIONS AND THE HUMAN PROBABILITY. WE THEREFORE DO NOT AGREE WITH THIS FINDINGS OF THE CIT(A) AND WE SET ASIDE HIS ORDER IN THIS REGARD AND RESTORE THAT OF THE A.O. 18. WITH REGARD TO OTHER DEPOSITS OF RS.8 LAKHS IN CASH ON 10.2.2004 THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED DURING THE COURSE OF HEARING THAT OUT OF THE EARLIER RECEIPT OF RS. 20 LAKHS FROM HIS CLOSE RELATIVES THIS AMOUNT WAS DEPOSITE D AND HE CLAIMED THE TELESCOPING. THIS CONTENTION CANNOT BE OUTRIGHTLY ACCEPTED BECAUSE NO SUPPORTING EVIDENCE IS PLACED BEFORE US. MOREOVER THIS ARGUMENT WAS NEVER RAISED BEFORE THE LOWER AUTHORITIES. SINCE NO EVIDENCE WAS PLACED ABOUT THE SOURCE OF D EPOSIT OF RS.8 LAKHS WE ARE OF THE VIEW THAT THE A.O. HAS RIGHTLY TREATED THIS AMOUNT TO BE AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE. WITH REGARD TO THE OTHER DEPOSITS IN CASH IT WAS CONTENDED THAT IT WAS OUT OF THE GIFT RECEIVED BY THE A SSESSEES OR ITS PERSONAL SAVINGS OR FROM OTHER SOURCES BUT NO EVIDENCE WAS PLACED BEFORE US. IN THE ABSENCE OF ANY EVIDENCE WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEES. WE THEREFORE CONFIRM THE ORDER OF THE CIT(A) IN THIS REGARD. ACCORDING LY THE ADDITION UNDER THIS HEAD IS RESTRICTED TO RS.16 19 000/ - . 14 ITA NO.307 & 336 OF 2007: 1 9 . THESE ARE THE CROSS APPEALS PREFERRED BY THE ASSESSEE I.E. SMT. N. JHANSI LAKSHMI W/O P. SRINIVASA RAO AND THE REVENUE AGAINST THE ORDER OF THE CIT(A). AS DISCUSSED IN EARLIER APPEALS THAT THE ASSESSEE HAS GIVEN A LOAN OF RS.15 LAKHS IN CASH TO HER HUSBAND DURING THE IMPUGNED ASSESSMENT YEAR WHICH WAS ACCEPTED BY THE REVENUE IN THE H ANDS OF HER HUSBAND BUT ITS SOU RCE WAS EXAMINED BY THE A.O. IN THE HANDS OF THE ASSESSEE ; WIFE OF P. SRINIVASA RAO . THOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED THAT THE A.O. SHOULD NOT BE ALLOWED TO BLOW HOT AND COLD IN THE SAME BREATHE AS IN THE CASE OF OTHER CREDITORS A.O. DID NOT ACCEPT THE GENUINENESS OF THE CREDITS A ND TREATED THEM TO BE UNEXPLAINED CASH CREDIT BUT IN THE CASE OF WIFE HE ACCEPTED THE CLAIM OF CASH CREDIT BUT EXAMINED THE AVAILABILITY OF THE FUNDS IN THE HANDS OF THE WIFE. THE A.O. SHOULD HAVE FOLLOWED THE SAME PRINCIPLE WHILE ADJUDICATING THE ENTIRE ISSUE OF ALL CASH CREDITS. IN THIS ARGUMENT WE DO NOT FIND MUCH FORCE BECAUSE IT IS FOR THE REVENUE TO DECIDE IN WHOSE HANDS THEY WANT TO EXAMINE THE AVAILABILITY OF THE FUNDS. HUSBAND AND WIFE ARE NOT STRANGERS TO EACH OTHER AND THAT IS WHY THE A.O. H AS DECIDED TO EXAMINE THE AVAILABILITY OF THE FUNDS IN THE HANDS OF THE WIFE INSTEAD OF HER HUSBAND. WE THEREFORE DO NOT FIND ANY IRREGULARITY IN TH IS ASSESSMENT. WE ACCORDINGLY PROCEED TO ADJUDICATE THE ISSUE OF ADDITION OF RS.15 LAKHS U/S 69 OF THE A CT AS UNEXPLAINED INVESTMENT. 20 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS STATED BY THE ASSESSEE THAT THIS SUM OF RS.15 LAKHS WAS GIVEN TO HER HUSBAND OUT OF THE ACCUMULATED AGRICULTURAL INCOME BELONGING TO HER WHICH WAS KEPT WITH HER FATHER S HRI N. RAJENDRA BABU WHO WAS LOOKING AFTER THE AGRICULTURAL LANDS OF THE ASSESSEE. IN THIS REGARD THE ENQUIRIES WERE GOT CONDUCTED ON COMMISSION BY ITO WARD - 1 TADEPALLIGUDEM BEFORE WHOM N. RAJENDRA BABU STATED THAT HE WAS LOOKING AFTER THE LANDS OF HIS DAUGHTER FROM WHICH NET INCOME OF ABOUT RS.4 LAKHS P.A IS GENERATED. SUBSEQUENTLY AN AFFIDAVIT WAS ALSO FILED STATING THEREIN THAT AGRICULTURAL INCOME OF HIS DAUGHTER WOULD BE RS.5.77 LAKHS. NO EVIDENCE IN SUPPORT OF THIS INFORMATION WAS FURNISHED. THE A.O. FURTHER ESTIMATED THE INCOME FROM THIS AGRICULTURAL LAND AT THE RATE OF 15 RS.15 000/ - PER ACRE PER ANNUM. HE ACCORDINGLY CALCULATED THE AVAILABILITY OF ACCUMULATED AGRICULTURAL INCOME AT RS.9.57 LAKHS OF WHICH DETAILS ARE GIVEN HEREUNDER: NET AG RICULTURAL INCOME @ RS.15 000/ - PER ACRE PER ANNUM EXTENT OF LAND AVAILABLE FROM FY 1999 - 2000 2000 - 01 2001 - 02 2002 - 03 2004 - 05 6.20 ACRES 23.8. 19 99 RS.45000 (CULTIVATED FOR YEARS) RS.93000 RS.93000 RS.93000 RS.93000 8 ACRES 7.2.2000 -- RS.120000 RS.12000 0 RS.120000 RS.120000 8 ACRES 24.11.2003 -- -- -- -- RS.60000 (50% OF RS.120000) TOTAL FROM 0.45 LAKHS 2.13 LAKHS 2.13 LAKHS 2.13 LAKHS 2.73 LAKHS AC 22.20 = 9.57 LAKHS 21 . THE A.O. HAS FURTHER OBSERVED THAT AT THE BEST ASSESSEE MIGHT BE IN PO SSESSION OF SUM OF RS.6.84 LAKHS AS ON 1.4.2003. SINCE THE ASSESSEE HAS ALREADY GIVEN SOME LOAN TO HER HUSBAND DURING THE FINANCIAL YEAR 2002 - 03 (THOUGH FULL DETAILS ARE NOT AVAILABLE) WITH AN OUTSTANDING BALANCE OF RS.5 LAKHS AS ON 31.3.2003 IT IS PRESU MED THAT WHATEVER FUNDS WERE AVAILABLE WITH HER FROM THE ACCUMULATED AGRICULTURAL INCOME THE SAME WERE EX H AUSTED IN ADVANCING LOANS TO HER HUSBAND BEFORE 1.4.2003 . THAT IS TO SAY SHE HAS HARDLY ANY CASH BALANCE LEFT WITH HER TO SUBSTANTIATE HER CLAIM TH AT SHE HAD ADVANCED RS.15 LAKHS IN JULY 2003 AND NOVEMBER 2003 IN THREE PHASES TO HER HUSBAND. NO EVIDENCE WAS PLACED ON BEHALF OF THE ASSESSEE IN SUPPORT OF H ER CONTENTION THAT THIS ENTIRE AMOUNT WAS RETAINED BY HER FATHER AND IT WAS GIVEN DURING THE I MPUGNED FINANCIAL YEAR. THE A.O. HAS ALSO EXAMINED THE BANK ACCOUNT OF THE ASSESSEE WITH THE BANK OF BARODA YERNAGUDEM DURING THE FINANCIAL YEAR 2002 - 03 AND 2003 - 04 AND NOTICED THE PALTRY DEPOSITS THEREIN. A.O. ACCORDINGLY MADE AN ADDITION OF RS.15 LAKH S U/S 69 AS UNEXPLAINED INVESTMENT . 16 22. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THAT SHE HAILS FROM THE FAMILY OF A N AGRICULTURIST WHICH OWNED LARGE EXTENT OF CULTIVABLE LAND EXTENDING TO ABOUT 41.20 ACRES IN CLUDING THE LA ND HOLDINGS OF 14.22 ACRES IN THE NAME OF THE ASSESSEES. THE AGRICULTURAL LAND H ELD IN THE NAME OF THE ASSESSEE WERE ENTRUSTED TO HER FATHER FOR CULTIVATION AND SALE PROCEEDS WERE KEPT BY HIM FOR DISBURSAL TO THE APPELLANT AS AND WHEN SHE NEEDS THE FUNDS. IT WAS ALSO STATED THAT AT THE TIME OF HER MARRIAGE SHE WAS GIVEN CASH GIFT OF RS.5 LAKHS AND WAS ALSO PROMISED AND GIVEN POSSESSION OF 8 ACRES LAND AT YERNAGUDEM THAT WAS ACQUIRED IN THE NAME OF HER MOTHER M. SITADEVI WHICH EVENTUALLY WAS DEVOLVED ON HE R AFTER HER MOTHERS DEMISE. IT WAS FURTHER CONTENDED THAT FROM THE YEAR 1999 - 2000 THE ASSESSEE STARTED ADVANCING THE FUNDS AVAILABLE AT HANDS FOR PURCHASE OF AGRICULTURAL LAND FROM 2 FARMERS NAMELY T. VENKATA RAO AND SHRI N. P E DDI NAIDU BUT ON ACCOUNT O F THE DE ALS NOT FALLING THROUGH THE AMOUNT SO ADVANCE D WERE WITHDRAWN IN THE YEAR 2003 - 04 AND UTILIZED FOR ADVANCING TO HER HUSBAND FOR HIS BUSINESS PURPOSE. BESIDES EARNING OF AGRICULTURAL INCOME YEAR AFTER YEAR THE ASSESSEE HAD ALSO OWNED PROFESSIONAL INCOME BY RENDERING COACHING IN MUSIC TO CHILDREN IN HER LOCALITY AND HAD EARNED INCOME AT THE AVERAGE RATE OF ABOUT RS.40 000 - 6 0 000/ - PER YEAR FROM THE YEAR 1998 - 99 TO 2002 - 03. A CASH FLOW STATEMENT FROM 1998 - 99 TO 2002 - 03 WAS FILED REFLECTING THE ACCUM ULATED FUNDS OF RS.34.25 LAKHS IN CASH AS ON 31.3.2004 AGAINST WHICH INVESTMENT HAS BEEN SHOWN TO THE TUNE OF RS.15 50 000/ - OR RS.15 LAKHS TO HER HUSBAND. THE CIT RE - EXAMINED THE ISSUES AND BEING PARTLY CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES E STIMATED THE AGRICULTURAL INCOME AT THE RATE OF RS. 16 000/ - PER ACRE PER ANNUM AND CALCULATED THE ACCUMULATED AGRICULTURAL INCOME AT RS.7 3 1 2 00/ - UPTO 1.4.2003. FOR SUCCEEDING YEAR I.E. FOR 2003 - 04 HE FURTHER ESTIMATED THE AGRICULTURAL INCOME AT RS.2 18 400/ - AND HE HAS ALSO ESTIMATED THE GIFT RECEIVED BY THE ASSESSEE FOR RS.2 LAKHS. HE ACCORDINGLY CALCULATED THE AVAILABILITY OF FUNDS AT RS.11 49 600/ - . OUT OF THIS AMOUNT A LOAN OF RS.5 LAKHS WAS ALREADY GIVEN TO HER HUSBAND BY THE ASSESSEE AS ON 31.3. 2003. THEREFORE THE CIT(A) HAS CONSIDERED THAT THE BALANCE FUND AVAILABLE WITH THE ASSESSEE WAS OF RS.6 49 600/ - . H E ACCORDINGLY GRANTED THIS RELIEF TO THE ASSESSEE AND RESTRICTED THE ADDITIONS TO RS.8 50 400/ - . 17 23. AGAIN ST THIS ORDER OF CIT(A) THE ASSESSEE AS WELL AS REVENUE HAVE PREFERRED THEIR APPEAL S BEFORE US. 24. THE LD. COUNSEL FOR THE ASSESSEE HAS EMPHATICALLY ARGUED THAT HE HAS PLACED ALL RELEVANT EVIDENCE IN SUPPORT OF HIS CONTENTIONS. BUT THE REVENUE AUTHORITIES HAVE NOT PROPERLY APPRE CIATED THE EXPLANATIONS FURNISHED BY THE ASSESSEES. 2 5 . THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED THAT DESPITE HAVING A BANK ACCOUNT THE ASSESSEE HAS ALLOWED HER FATHER TO RETAIN THE AGRICULTURAL INCOME. AS PER CASH FLOW STATEMENT THE ASSESSEE TRIED TO EXPLAIN THAT OVER A PERIOD OF YEARS HUGE AGRICULTURAL INCOME WAS ACCUMULATED AND WAS RETAINED BY HIS FATHER AT HOME THOUGH THE ASSESSEE AND HIS FATHER WERE HAVING THE IR BANK ACCOUNT S . THE LD. D.R. FURTHER CONTENDED THAT THE BANK ACCOUNT OF THE ASSES SEE CLEARLY DEPICTS THAT DURING THE FINANCIAL YEAR 2002 - 03 & 2003 - 04 THE SMALL AMOUNTS WERE DEPOSITED. IN THE LIGHT OF THESE FACTS IT CANNOT BE ACCEPTED THAT ASSESSEE WAS HAVING A HUGE AGRICULTURAL INCOME IN CASH AT THE HOME. SIMILAR WAS THE POSITION W ITH HIS FATHER WHO HAS CLAIMED THAT HE HAS RETAINED HUGE AMOUNT IN CASH OUT OF AGRICULTURAL INCOME AT HOME WHICH WERE GIVEN TO HIS DAUGHTER AND TO HIS SON - IN - LAW DESPITE HAVING A BANK ACCOUNT. ALL THESE ARGUMENTS OF THE ASSESSEE ARE A GAINST THE HUMAN PROB ABILITIES AND AS SUCH IT CANNOT BE ACCEPTED . 26 . HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW WE FIND THAT UPTO 1.4.2003 ASSESSEE HAS ALREADY ADVANCED A SUM OF RS. 5 LAKHS TO HER HUSBAND SHRI P. SRINIVASA RAO AND DURING THE IMPUGNED YEAR AGAIN SHE HAS ADVANCED A SUM OF RS.15 LAKHS IN CASH TO HER HUSBAND. THE SOURCE OF THIS AMOUNT WAS STATED TO BE THE ACCUMULATED AGRICULTURAL INCOME FROM HER LAND R ETAINED BY HER FATHER AT HOME. THE POSSIBILITY O F RETAINING AN AGRICULTURAL INCOME IN CASH AT HOME HAS ALREADY BEEN EXAMINED BY US IN THE FOREGOING APPEALS IN WHICH WE HAVE TAKEN A VIEW THAT AN AGRICULTURIST CANNOT KEEP A HUGE AMOUNT OUT OF HIS AGRICULTURAL INCOME AT HOME YEAR AFTER YEAR. WHATEVER SALE PROCEEDS ARE 18 RECEIVED BY THE AGRICULTURIST IT IS GENERALLY USED FOR HIS DOMESTIC NEEDS AND THE SURPLUS AMOUNT IS TO BE KEPT IN A BANK. NO AGRICULTURIST WOULD KEEP A HUGE AMOUNT IN LAKHS AT HOME YEAR AFTER YEAR FOR ITS ADVANCEMENT TO ITS CLOSE RELATIVES . THEREFORE THE STORY OF THE ASSESSEE THAT HE HAS RECEIVED THIS HUGE AMOUNT IN CASH OUT OF HIS ACCUMULATED AGRICULTURAL INCOME IS NOT ACCEPTED. THE CIT(A) HAS CALCULATED THE ACCUMULATED FUND AFTER APPLYING THE AGRICULTURAL INCOME AT RS.16 000/ - PER ACRE IN THE HANDS OF THE ASSESSEES BUT WE DO NOT AGREE WITH THAT APPROACH OF THE CIT(A) BECAUSE NOBODY WOULD KEEP SUCH A HUGE AMOUNT AT HOME. IT IS ALSO EVIDENT FROM THE ORDER OF REVENUE AUTHORITIES THAT ASSESSEE WAS HAVING A BANK ACCOUNT BUT NOTHING WAS DEPO SITED THEREIN. THE ACTION OF THE ASSESSEES IS AGAINST THE ALL HUMAN PROBABILITIES BECAUSE A PRUDENT OR A COMMON MAN WOULD PREFER TO DEPOSIT ITS SAVINGS IN BANK AND NOT TO KEEP IT AT HOME. WE HAVE ALSO EXAMINED THE OTHER ASPECTS OF ACCUMULATION OF FUNDS I. E. BY WAY OF MUSIC TUITIONS OR GIFTS ETC. BUT IN THE ABSENCE OF EVIDENCE WE ARE UNABLE TO ACCEPT THESE CONTENTIONS. WE HOWEVER AFTER TAKING INTO ACCOUNT ALL RELEVANT FACTORS OF THE VIEW THAT SOME FUNDS MAY BE AVAILABLE WITH THE ASSESSEES. WE ACCORDING LY OF THE VIEW THAT A CREDIT OF RS.1 LAKH AS AN ACCUMULATED FUND WITH THE ASSESSEE CAN BE GIVEN. THEREFORE WE ALLOW THE RELIEF OF RS.1 LAKH AND RESTRICT THE ADDITION OF RS.14 LAKHS. ACCORDINGLY THESE APPEALS ARE DISPOSED OFF . 2 7 . IN THE RESULT ITA NO .306 OF 2007 OF THE ASSESSEE IS DISMISSED ITA NO.311 OF 2007 OF THE REVENUE IS ALLOWED AND ITA NO.336 OF THE REVENUE IS PARTLY ALLOWED AND ITA NO.307 OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22.10 .20 10 SD/ - SD/ - (BR BASKA RAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 22 ND OCTOBER 20 10 19 COPY TO 1 P. SRINIVASA RAO DOOR NO.2 - 7 - 7 VENKAT NAGAR NEAR VENKATESWARA SWAMY TEMPLE KAKINA DA - 533 003 2 SMT. NARAHARA SETTI JHANSI LAKSHMI W/O SRI SRINIVASA RAO DOOR NO.2 - 7 - 7 VENKAT NAGAR NEAR VENKATESWARA SWAMY TEMPLE KAKINADA - 3 3 ITO WARD - 2 KAKINADA 3 THE CI T RAJAHMUNDRY 4 THE CIT (A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM