Hanuman Prasad Sharma, Ahmedabad v. The ACIT.,Circle-1,, Bhavnagar

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND D. C. AGRAWAL AM) ITA NO.4000/AHD/2008 A. Y: 2005-06 HANUMAN PRASAD SHARMA PROP. GUJARAT SHIP SCRAP CORPORATION 102 RAJ COMPLEX SANSKAR MANDAL TALAJA ROAD BHAVNAGAR PA NO. AMZPS 8424P VS THE A. C. I. T. CIRCLE-1 AAYAKAR BHAVAN NAKUBAUG BHAVNAGAR (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. R. POPAT AR RESPONDENT BY SHRI M. C. PANDIT DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST DIFFERENT ORDERS OF THE CIT(A)-XX AHMEDABA D DATED 18-08-2008 FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GR OUNDS: THE LEARNED CIT(A) ERRED IN- 1. CONFIRMING THE ACTION OF THE AO IN MAKING AN ADD ITION OF RS.2 39 989/- TREATING THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 2. CONFIRMING THE ACTION OF THE AO IN MAKING AN ADD ITION OF RS.87 000/- TREATING THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF T4HE ACT. 3. CONFIRMING THE ACTION OF THE AO IN MAKING ADDITI ON OF RS.4 80 000/- TREATING THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 2 3. ON GROUND NO.1 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.2 39 989/- MADE U/S 68 OF THE IT ACT. THE AO ON VERIFICATION OF THE ASSESSEES CAPITAL ACCOUNT FOUND THAT THE ASSESSEE HAS SHOWN CAPITAL INTRODUCTION OF RS.10 04 239/- BY WAY OF GIFT AND R S.20 00 000/- BY TRANSFER. EXPLANATION OF THE ASSESSEE WAS CALLED FO R. THE ASSESSEE PRECISELY EXPLAINED THAT ON ACCOUNT OF DEATH OF HIS FATHER HE HAS INHERITED AGRICULTURAL PROPERTIES AND ALSO EARNED A GRICULTURAL INCOME. ULTIMATELY THE ASSESSEE WAS DIRECTED TO EXPLAIN TH E ENTRIES IN A SUM OF RS.2 39 989/- CONSISTING OF RS.47 000/- RS.48 000/ - RS.1 00 000/- RS.21 291/- AND RS.23 698/-. IT WAS EXPLAINED THAT THE ABOVE ENTRIES ARE OUT OF SALE OF CROPS FROM AGRICULTURAL LAND AT HISS AR. THE ASSESSEE INHERITED AGRICULTURAL PROPERTIES ON THE DEATH OF H IS FATHER ON 08-09-2003 AND HIS SHARE WAS GIVEN TO THE ASSESSEE. RS.1 00 000/- WAS BROUGHT BY DEMAND DRAFT ON 20 TH MARCH 2005. THE AO HOWEVER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND IT WAS N OTICED THAT THOUGH THE AMOUNT IS SENT THROUGH DEMAND DRAFT BY MOTHER OF TH E ASSESSEE FROM HISSAR AN AFFIDAVIT OF MOTHER OF THE ASSESSEE SMT. SONA DEVI IS ALSO FILED WHICH REVEALED THAT TRANSFER OF RS.47 000/- ON 25- 02-2005 RS.48 000/- ON 28-02-2005 AND RS.1 00 000/- ON 28-03-2005 THROU GH DEMAND DRAFT BUT NO EVIDENCE IS FILED IN SUPPORT OF THE SAME. N O RECORD OF EARNING OF AGRICULTURAL INCOME IS FILED. NO ENTRIES ARE FOUND TO HAVE RECORDED IN THE HUF. NO PERSONAL ACCOUNT OF THE ASSESSEE IS FILED. NO AGRICULTURAL INCOME IS SHOWN IN THE RETURN OF INCOME. THEREFORE EXPLAN ATION OF THE ASSESSEE WAS REJECTED AND ADDITION OF RS.2 39 989/- WAS MAD E TREATING IT TO BE UNEXPLAINED CREDIT U/S 68 OF THE ACT. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED CIT(A). SAME SUBMISSIONS WERE MADE BEFO RE THE LEARNED CIT(A). THE LEARNED CIT(A) ALSO CONFIRMED THE ADDIT ION. 4. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE WAS HOLDING FERTILE LAND AT HISSAR HARYANA WHICH HE HAS INHERI TED FROM HIS FATHER ON ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 3 HIS DEATH ON 08-09-2003. THE LAND WAS CULTIVATED A ND THE ASSESSEE GOT TH4E SHARE OUT OF THE AGRICULTURAL INCOME WHICH IS GIVEN BY HIS MOTHER AND AFFIDAVIT OF HIS MOTHER WAS ALSO FILED IN SUPPO RT OF THE SAME ALONG WITH COPY OF THE BANK ACCOUNT CONFIRMING GIVING OF THE ABOVE AMOUNT TO THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IT WAS INCOME OF THE HUF WHICH WAS WRONGLY TAKEN IN TH E ACCOUNT OF THE ASSESSEE BY MISTAKE. HE HAS ALSO SUBMITTED THAT DUE TO MISTAKE OF THE ACCOUNTANT INSTEAD OF CREDITING THE SAID AMOUNT IN THE HUF ACCOUNT IT WAS ADDED IN THE PROPRIETORSHIP CONCERN OF THE ASSE SSEE. HE HAS ULTIMATELY ARGUED THAT IT WAS AGRICULTURAL INCOME O F THE ASSESSEE WHICH WAS RIGHTLY CREDITED IN HIS ACCOUNT AS CAPITAL INTR ODUCTION AND THAT ALL EVIDENCES OF AGRICULTURE HOLDINGS EARNING OF AGRIC ULTURAL INCOME WERE FILED BEFORE THE AUTHORITIES BELOW ALONG WITH AFFID AVIT OF MOTHER OF THE ASSESSEE AND HER BANK ACCOUNT. HE HAS SUBMITTED THA T THE AO INITIALLY WANTED TO HAVE EXPLANATION OF THE ASSESSEE REGARDIN G TRANSFER OF RS.20 00 000/- AND GIFT OF RS.10 00 000/- WHICH WAS ALSO EXPLAINED FROM THE SAME SOURCE ON WHICH NO ADVERSE INFERENCE HAS B EEN DRAWN BY THE AO. THEREFORE ON THE ABOVE SMALL AMOUNT NO ADDITIO N SHOULD HAVE BEEN MADE BY THE AUTHORITIES BELOW. ON THE OTHER HAND T HE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMIT TED THAT THE ASSESSEE HAS FAILED TO PROVE THE AGRICULTURAL INCOME AND SOU RCE OF DEPOSIT OF RS.2 39 989/- IN HIS ACCOUNT AS CAPITAL INTRODUCTIO N. THEREFORE THE ADDITION IS JUSTIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. THE ASSESSEE EXPLAINED THAT HE HAS BROUG HT RS.2 39 989/- OUT OF HIS AGRICULTURAL INCOME. IT WAS EXPLAINED THAT A GRICULTURAL LAND WAS ACQUIRED BY HIM AFTER THE DEATH OF HIS FATHER ON 08 -09-2003. IT WAS ALSO CLAIMED THAT AS AND WHEN HIS MOTHER SOLD HIS CROPS DEMAND DRAFT - CASH ORDER WAS OBTAINED AND SALE PROCEED WAS SENT T O HIM. COPY OF THE BANK ACCOUNT OF THE MOTHER OF THE ASSESSEE AND HER AFFIDAVIT IS ALSO FILED. ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 4 THE AFFIDAVIT OF MOTHER OF THE ASSESSEE SHOWS THAT 3 DEMAND DRAFTS WERE PREPARED OUT OF HER BANK ACCOUNT IN A SUM OF RS.47 000/- ON 25-02- 2005 RS.48 000/- ON 28-02-2005 AND RS.1 00 000/- O N 28-03-2005. COPY OF BANK ACCOUNT IS ALSO FILED WHICH REVEALS TH AT ON THE DATE OF PREPARING THE DEMAND DRAFT IN FAVOUR OF THE ASSESSE E CASH WAS DEPOSITED SIMULTANEOUSLY. NO EXPLANATION IS GIVEN ABOUT THE D EPOSIT OF THE CASH IN THE BANK ACCOUNT OF MOTHER OF THE ASSESSEE ON THE S AME DAY WHEN DEMAND DRAFT WAS OBTAINED IN THE NAME OF THE ASSESS EE. IN THE ABSENCE OF ANY EVIDENCE THE EXPLANATION OF THE ASSESSEE CA NNOT BE BELIEVED. FOR REST OF THE AMOUNT THE ASSESSEE HAS NOT FILED ANY EVIDENCE BEFORE THE AUTHORITIES BELOW AS WELL AS IN THE PAPER BOOK FILE D BEFORE US. THE ASSESSEE INITIALLY TAKEN A CONTRARY STAND THAT IT W AS AGRICULTURAL INCOME OF THE HUF WHICH WAS WRONGLY TAKEN IN HIS PROPRIETO RSHIP ACCOUNT BUT LATER ON SUBMISSION IS CHANGED AND IT WAS SUBMITTED THAT IT WAS INCOME OF THE ASSESSEE WHICH WAS RIGHTLY CREDITED IN HIS P ERSONAL ACCOUNT. NO EVIDENCE OF EARNING OF AGRICULTURE INCOME OR SOURCE OF THE INCOME IS FILED. THE AFFIDAVIT OF MOTHER OF THE ASSESSEE AND BANK AC COUNT AS NOTED ABOVE DOES NOT INSPIRE ANY CONFIDENCE TO PROVE THAT THESE WERE GENUINE ENTRIES IN HER BANK ACCOUNT. CONSIDERING THE FACTS AND CIRC UMSTANCES NOTED ABOVE IT IS DIFFICULT TO BELIEVE THAT THE ASSESSEE RECEIVED ANY GENUINE SHARE OF AGRICULTURAL INCOME FROM HIS MOTHER. THE A UTHORITIES BELOW HAVE ALSO SPECIFICALLY NOTED THAT NO AGRICULTURAL INCOME IS SHOWN IN THE RETURN OF INCOME AND THAT SIGNATURE IN THE AFFIDAVIT ALSO DIFFERS. NO BOOKS OF ACCOUNT OF HUF DEPICTING ENTRIES OF AGRICULTURAL IN COME ARE FILED. CONSIDERING THE FACTS AND CIRCUMSTANCES NOTED ABOVE AND PARTICULARLY THAT THE ASSESSEE HAS FAILED TO EXPLAIN CASH DEPOSI TED ON THE SAME DAY IN THE BANK ACCOUNT OF THE MOTHER OF THE ASSESSEE ON T HE DATE WHEN DEMAND DRAFT WAS ISSUED WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE FINDINGS OF THE AUTHORITIES BELOW. THE ASS ESSEE HAS THUS FAILED TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.2 39 989/- IN H IS CAPITAL ACCOUNT. THEREFORE IT WAS RIGHTLY TREATED AS UNDISCLOSED IN COME/CREDIT OF THE ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 5 ASSESSEE IN THE BOOKS OF ACCOUNT. WE ACCORDINGLY C ONFIRM THE FINDINGS OF THE AUTHORITIES BELOW AND DISMISS THIS GROUND OF AP PEAL OF THE ASSESSEE. 6. ON GROUND NO.2 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.87 000/- TREATING THE SAME AS UNEXPLAINED CASH C REDIT U/S 68 OF THE IT ACT. THE AO ON VERIFICATION OF THE CAPITAL ACCOU NT FOUND ENTRY OF RS.87 000/- WHICH WAS EXPLAINED AS TRANSFER FROM PE RSONAL S/B ACCOUNT NO.905 WHICH IS STATED TO BE AMOUNT OF SALE OF SHAR ES OF PUNJAB NATIONAL BANK. THE AO HAS ALSO NOTED THAT NO SUCH TRANSACTIO N HAS BEEN SHOWN IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CO NSIDERATION. THE AO THEREFORE NOTED THAT SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY TRANSACTION SHOULD NOT BE CONSIDERED TO BE UNAC COUNTED TRANSACTION FOR THE ASSESSMENT YEAR UNDER APPEAL AND THE SALE P ROCEEDS SHOWN BE NOT TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE SUBMITTED THAT ITS SALE PROCEEDS ON SHARES OF PUNJA B NATIONAL BANK WHICH IS TRANSFERRED FROM PERSONAL ACCOUNT. THE PRO OF OF THE SAME IS ALSO FILED. IT WAS EXPLAINED THAT ASSESSEE MADE INVESTME NT IN A SUM OF RS.15 500/- FOR PURCHASE OF SHARES OF PUNJAB NATION AL BANK ON 28 TH MARCH 2002. IT WOULD SHOW THAT THE ASSESSEE PURCHA SED SHARES ON 28 TH MARCH 2002 WHICH WERE SOLD FOR RS.85 466/- ON 8 TH JUNE 2004 AND CHEQUES WAS GIVEN BY KAHAN SECURITIES ON 12 TH JUNE 2004 AND THE CHEQUE WAS CREDITED IN HIS PERSONAL ACCOUNT NO.905 WITH PUNJAB NATIONAL BANK FROM WHERE THE AMOUNT WAS WITHDRAWN. THE ASSESSEE ADDED RS.2 000/- AS CASH AND MADE THE ENTRY ON 25 TH FEBRUARY 2005. CONFIRMATION LETTER TO THAT EXTENT WAS ALSO FILED. THE AO HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE THE S AME PURCHASE OF THE SHARES IS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE REFORE SALE PROCEEDS OF THE SHARES FOR RS.85 466/- WAS CONSIDERED AS UNE XPLAINED AND ADDITION WAS ACCORDINGLY MADE. THE ADDITION WAS CH ALLENGED BEFORE THE LEARNED CIT(A) AND THE ASSESSEE REITERATED THE SAME SUBMISSIONS BEFORE THE LEARNED CIT(A). BUT THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 6 OF THE ASSESSEE BECAUSE THE SALE TRANSACTION OF THE SHARES WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THAT WITHDRAWA L MADE ON 15 TH JUNE 2004 AND DEPOSIT OF RS.87 000/- COULD NOT BE CO-REL ATED WITH THE WITHDRAWAL. ADDITION WAS ACCORDINGLY CONFIRMED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T SINCE LONG TERM CAPITAL GAIN ARISING OUT OF THIS TRANSACTION HAS ES CAPED FROM BEING OFFERED FOR TAXATION THE SAME MAY BE ADDED WHILE PA SSING OF THE ORDER BUT THE ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT IS NOT JUSTIFIED. HE HAS REFERRED TO PB -23 24 AND 25 IN SUPPORT OF HIS CON TENTION. ON THE OTHER HAND THE LEARNED DR SUPPORTED THE ORDERS OF THE AU THORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION OF R S.87 000/- ON THIS ISSUE. THE ASSESSEE EXPLAINED THE SOURCE OF RS.85 466/- BE ING THE SALE PROCEEDS FROM SALE OF SHARES OF PUNJAB NATIONAL BANK. PB-23 IS THE CHEQUES DATED 28-03-2002 THROUGH WHICH THE ASSESSEE INVESTED RS.1 5 500/- IN THE SHARES OF PUNJAB NATIONAL BANK THROUGH THE IPO OF T HIS BANK. THE SHARES WERE HELD BY THE ASSESSEE AS LONG TERM CAPITAL GAIN AND LATER ON THE SAME WERE SOLD ON 08-06-2004 FOR A SUM OF RS.85 466/-. I T IS SUPPORTED BY THE TRANSACTION STATEMENT PB -24 AND STATEMENT OF ACCOU NT OF M/S. KAHAN SECURITIES AND NSE. THE ABOVE DOCUMENTS CLEARLY SHO W THAT THE ASSESSEE PURCHASED SHARES OF PUNJAB NATIONAL BANK IN THE EAR LIER YEAR AND SOLD THE SAME IN THE ASSESSMENT YEAR IN QUESTION. THE AS SESSEE EXPLAINED THAT THE RECEIPT WAS TRANSFERRED IN THE BANK ACCOUN T OF THE ASSESSEE. IT IS THEREFORE CLAIMED THAT EVEN IF THE ASSESSEE HA S NOT DECLARED THE TRANSACTION OF PURCHASE OF SHARES IN EARLIER YEAR B UT THE RECEIPT OF RS.85 466/- IN THE ASSESSMENT YEAR UNDER CONSIDERAT ION CANNOT BE TREATED AS UNEXPLAINED RECEIPT. THE RECEIPT IS EXPL AINED THROUGH THE SALE ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 7 OF THE SHARES. IT MAY ALSO BE POSSIBLE THAT THE ASS ESSEE HAS NOT SHOWN TRANSACTION OF CAPITAL GAIN IN THE BOOKS OF ACCOUNT OR IN THE RETURN BUT FOR THAT MATTER THE AO COULD TAKE UP THE MATTER SEP ARATELY FOR TH8E PURPOSE OF CONSIDERING IT TO BE A LONG TERM CAPITAL GAIN. THE LEARNED CIT(A) ALSO NOTED THAT THE WITHDRAWAL OF RS.85 000/ - FROM THE BANK ACCOUNT OF THE ASSESSEE WAS MADE ON 15-06-2004 AND THE AMOUNT WAS DEPOSITED OF RS.87 000/- LATER ON WHICH IS NOT CO-R ELATED WITH THE WITHDRAWAL OF THE CASH. THE ASSESSEE EXPLAINED THAT RS.85 000/- WAS KEPT IN HAND AND RS.2 000/- WAS ADDED FROM POCKET A ND RS.87 000/- WAS CREDITED ON 25-02-2005 IN THE PERSONAL BANK ACC OUNT NO. 905 OF THE ASSESSEE AND FROM WHERE AGAIN CHEQUES WAS GIVEN TO GUJARAT SHIP SCRAP CORPORATION OF RS.87 000/- BEING THE PROPRIETARY CO NCERN OF THE ASSESSEE. THERE IS NOTHING ON RECORD TO SHOW THAT T HE AMOUNT WITHDRAWN BY THE ASSESSEE IN A SUM OF RS.85 000/- WAS UTILIZE D BY THE ASSESSEE IN; ANY OTHER MANNER THAN THE ONE WHICH WAS EXPLAINED B Y THE ASSESSEE. THE ONUS WOULD THEREFORE LIE ON THE REVENUE TO SHO W THAT THE EXPLANATION OFFERED BY THE ASSESSEE SHOULD NOT BE A CCEPTED. IN THE ABSENCE OF ANY ADVERSE MATERIAL AGAINST THE ASSESSE E THE CONTENTION OF THE ASSESSEE THAT CASH WITHDRAWN OF RS.85 000/- WAS AVAILABLE WITH THE ASSESSEE CANNOT BE DISPUTED BY THE AO. HONBLE PUNJ AB AND HARYANA HIGH COURT IN THE CASE OF SHIV CHARAN DASS VS CIT 1 26 ITR 263 (P & H) HELD THAT THAT SINCE BOTH THE DAUGHTERS HAD ATTAINED MAJORITY AT THE TIME WHEN THE MONEY WAS DEPOSITED IN THEIR NAME S THE AMOUNT OF RS.20 000 WAS NOT FOUND MENTIONED IN THE BOOKS OF THE ASSESSEE NOR THE SAME WAS FOUND TO HAVE BEEN DEPOSI TED IN THE ACCOUNTS OF THE ASSESSEE OR THAT OF THE HUF AND THE RE WAS NOTHING IN THE RECORD TO SHOW THAT THE AMOUNT WAS UTILIZED BY THE ASSESSEE OR THE HUF IN ANY OTHER MANNER THAN THE ONE WHICH W AS REPRESENTED BY THE ASSESSEE THE ONUS LAY ON THE DE PARTMENT TO SHOW THAT THE EXPLANATION OFFERED BY THE ASSESSEE S HOULD NOT BE ACCEPTED. FURTHER IF THE ASSESSEES EXPLANATION TH AT THE AMOUNT ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 8 REPRESENTED THE SAME AMOUNT AS DISCLOSED UNDER T4HE VOLUNTARY DISCLOSURE SCHEME WAS NOT ACCEPTED THE PRESUMPTION THAT THE AMOUNT WAS FROM UNDISCLOSED SOURCES COULD BE RAISED ONLY AGAINST THE MINOR DAUGHTERS OF THE ASSESSEE AND NOT AGAINST THE ASSESSEE HIMSELF. THEREFORE IT COULD NOT BE SAID THAT THE A MOUNT WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. CONSIDERING THE FACTS AND CIRCUMSTANCES NOTED ABOVE WE ARE OF THE VIEW THAT THE DEPOSIT OF RS.87 000/- IN THE PERSONAL ACCOUNT OF THE ASSES SEE CANNOT BE TREATED AS UNEXPLAINED CREDIT. WE ACCORDINGLY SET ASIDE TH E ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.87 000/-. HOWEVER THE AO IS AT LIBERTY TO TAKE UP THE MATTER OF LONG TERM CAPITAL GAIN AGAINST THE ASSESSEE IN RESPECT OF THE SAME TRANSACTION IF SO ADVISED IN ACCORDANCE WITH LAW. WITH THE ABOVE OBSERVATIONS THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. ON GROUND NO.3 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.4 80 000/- BEING UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT. THE ASSESSEE WAS FOUND TO HAVE ACCEPTED UNSECURED LOANS FROM VARIOUS PARTIES. ON VERIFICATION OF THE SAME IT WAS FOUND THAT THE ASSESSEE HAD SHOWN TO HAVE ACCEPTED UNSECURED LOANS OF RS.4 80 0 00/- FROM SHRI BIRBALRAM. IN SUPPORT THEREOF THE ASSESSEE FILED SU BMISSIONS AND EVIDENCE OF AGRICULTURAL LAND IN THE NAME OF HIS FA THER SHRI RAMKUMAR SHARMA AND THAT THEY OWNED TRACTOR FOR CULTIVATION. AFFIDAVIT OF THE CREDITOR WAS ALSO FILED COPY OF WHICH IS ALSO FILED AT PAGE 34 OF THE PAPER BOOK. ACCORDING TO THE AFFIDAVIT OF THE CREDITORS T HE SUM OF RS.4 80 000/- WAS GIVEN TO THE ASSESSEE AS LOAN ON 6 DATES STARTI NG FROM 12-03-2005 TO 31-03-2005 THROUGH CHEQUES OF PUNJAB NATIONAL BANK. IT IS ALSO CLARIFIED IN THE AFFIDAVIT THAT THE ASSESSEE IS RELATIVES AND THE AMOUNT IS RECEIVED BACK THROUGH ACCOUNT PAYEE CHEQUES ON 20-04-2005 AN D 27-04- 2005 OF HDFC BANK. DOCUMENTS OF HOLDING OF AGRICULT URAL LAND BY HIS FATHER COPY OF ELECTION CARD TELEPHONE BILL AND R ECEIPTS OF MARKET ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 9 COMMITTEE SHOWING AGRICULTURAL PRODUCE SOLD BY THE CREDITOR ARE FILED. THE AO HOWEVER NOTED THAT THE CREDITOR HAS NO SOU RCE FOR GIVING OF LOAN TO THE ASSESSEE. THE AGRICULTURAL LAND TRACTOR ETC . ARE FOUND TO BE BELONGING TO HIS FATHER SHRI RAMKUMAR SHARMA. HE HA S ALSO NOT FURNISHED COPY OF THE BANK ACCOUNT. THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE FILED THE ABOVE EVIDENCES AND ALS O FILED AFFIDAVIT OF SHRI RAMKUMAR SHARMA FATHER OF THE CREDITOR. THE AO HOW EVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE IT WA S ADMITTED FACT THAT THE CREDITOR DID NOT HAVE ANY LANDHOLDING IN HIS NA ME AND NO SOURCE OF HIS INCOME IS FILED. SINCE NO COPY OF THE BANK ACCO UNT IS ALSO FILED THEREFORE CREDITWORTHINESS OF THE CREDITOR CANNOT BE ESTABLISHED. ADDITION OF RS.4 80 000/- WAS ACCORDINGLY MADE. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED CIT(A). SAME SUBMISSI ONS WERE REITERATED AND IT WAS EXPLAINED THAT THE CREDITOR HAS AGRICULT URAL INCOME AND AFFIDAVIT OF FATHER OF THE CREDITOR IS ALSO FILED I N WHICH IT WAS CONFIRMED THAT THE CREDITOR WAS LOOKING AFTER THE AFFAIRS OF AGRICULTURAL LAND AND EARNED INCOME. IT WAS THEREFORE SUBMITTED THAT SI NCE LOANS WERE GIVEN THROUGH CHEQUES AND ALSO REPAID THROUGH CHEQUES AND CREDITOR HAS CONFIRMED THE TRANSACTION IN THE AFFIDAVIT THEREFO RE ADDITION IS UNJUSTIFIED. THE LEARNED CIT(A) HOWEVER CONFIRMED THE ADDITION. THE LEARNED CIT(A) FOUND THAT THE CREDITOR IS NOT ASSES SED TO TAX AND IS NOT HOLDING ANY AGRICULTURAL LAND IN HIS NAME THEREFOR E HIS SOURCE OF INCOME IS NOT PROVED. GENUINENESS OF THE TRANSACTIO N IS ALSO NOT PROVED. THE AGRICULTURAL LAND IS IN THE NAME OF FATHER OF T HE CREDITOR WHO HAS 3 SONS. THEREFORE ACCUMULATION OF FUNDS AND SAVINGS WITH THE CREDITOR IS NOT PROVED. THEREFORE ADDITION OF RS.4 80 000/- RE MAINED UNEXPLAINED. THE ADDITION WAS ACCORDINGLY CONFIRMED AND THE APPE AL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED ON THIS ISSUE. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO THE ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 10 AFFIDAVIT OF THE CREDITOR HIS FATHER DOCUMENTS OF LANDHOLDING BY FATHER OF THE CREDITOR TRACTOR TELEPHONE BILL AND RECEIPTS OF MARKET COMMITTEE AND SUBMITTED THAT ASSESSEE HAS PROVED IDENTITY OF THE CREDITOR AND HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . HE HAS SUBMITTED THAT LOAN WAS GIVEN THROUGH BANKING CHANNEL AND WAS ALSO REPAID BY THE ASSESSEE THROUGH BANKING CHANNEL WITHIN SHORT PERIO D. THEREFORE ADDITION IS CLEARLY UNJUSTIFIED. HE HAS RELIED UPON THE DECISION IN THE CASE OF ROHINI BUILDERS AS WAS RELIED UPON BEFORE THE LE ARNED CIT(A) AND IN THE CASE OF CIT VS ORISSA CORPORATION AND THE DECIS ION ON SHARE APPLICATION MONEY IN THE CASE OF LOVELY EXPORTS PVT . LTD. HE HAS THEREFORE SUBMITTED THAT THE ADDITION IS UNJUSTIFI ED AND SHOULD BE DELETED. ON THE OTHER HAND LEARNED DR SUBMITTED THAT THE AS SESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITOR SHRI BIRBALRAM AND THAT GENUINENESS OF THE TRANSACTION IS ALSO NOT PROVED BECAUSE COPY OF HIS BANK ACCOUNT WAS ALSO NOT FILED. THE LEARNED DR SUBMITTED THAT M ERELY BECAUSE TRANSACTION IS ROUTED THROUGH BANKING CHANNEL IS NO T SACROSANCT TO PROVE THE GENUINENESS IN THE MATTER. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD AND WE DO NOT FIND ANY MERIT IN T HE APPEAL OF THE ASSESSEE ON THIS ISSUE. IT IS ADMITTED FACT THAT THOUGH THE ASSESSEE FILED AFFIDAVIT OF SHRI BIRBALRAM THE CREDITOR BEFORE THE AO ALONG WITH CO PIES OF LANDHOLDING TRACTOR ETC. IT IS A FACT THAT THE CREDITOR WAS NO T HOLDING ANY LAND TRACTOR AND ANY OTHER ITEMS TO PROVE HIS SOURCE OF INCOME. IT WAS CLAIMED THAT HE WAS EARNING INCOME OUT OF THE LAND OWNED BY HIS FAT HER. HOWEVER NO SPECIFIC EVIDENCE IS FILED ABOUT HIS ACCUMULATION O F ANY AGRICULTURAL INCOME INDEPENDENTLY. THE AFFIDAVIT OF SHRI RAMKUMA R SHARMA FATHER OF THE CREDITOR IS ALSO FILED (PB -43) IN WHICH HE HAS CLAIMED TO HAVE GIVEN LOAN OF RS.4 80 000/- TO THE ASSESSEE THUS THERE I S CONTRADICTION IN THE AFFIDAVIT OF THE CREDITOR AND HIS FATHER. THE AO SP ECIFICALLY NOTED THAT EVEN IF TRANSACTION IS ROUTED THROUGH BANK ACCOUNT BUT THE ASSESSEE HAS ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 11 NOT FURNISHED COPY OF BANK ACCOUNT OF THE CREDITOR. IN THE PAPER BOOK ALSO THE ASSESSEE HAS NOT FILED COPY OF THE BANK AC COUNT OF THE CREDITOR. AS NOTED ON GROUND NO.1 THERE WAS A DEPOSIT OF CAS H ON THE DATE OF ISSUE OF DEMAND DRAFT IN FAVOUR OF THE ASSESSEE THEREFOR E THERE MAY BE T4HE SAME FACTS IN THE CASE OF THIS CREDITOR BIRBALRAM I N WHICH HUGE CASH MIGHT HAVE DEPOSITED IN THE BANK ACCOUNT BEFORE ISS UE OF CHEQUES. DUE TO THE ABOVE APPREHENSION IN HIS MIND HE DID NOT F ILE COPY OF THE BANK ACCOUNT OF THE CREDITOR BECAUSE THE ASSESSEE MAY NO T BE ABLE TO EXPLAIN THE DEPOSIT IN HIS ACCOUNT. SINCE THE CREDITOR WAS HAVING NO EVIDENCE OF SOURCE OF HIS INCOME AND THAT COPY OF THE BANK ACCO UNT IS ALSO NOT FILED THEREFORE THE ASSESSEE HAS FAILED TO FILE SUFFICIE NT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. FOR PROVING GENUINE CREDIT THE ASSESSEE SHALL HAVE TO FILE SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE NOT ONLY THE IDENTITY OF THE CREDITOR BUT ALSO TO PROVE HIS CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION IN THE MATTER. CONSIDERING THE ABOVE DISCUSSIONS IT IS CL EAR THAT THE ASSESSEE HAS FAILED TO FILE SUFFICIENT EVIDENCE TO PROVE CRE DITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THEREFORE THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR TH E ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. AS A RESULT THE ADDITION ON ACCOUNT OF CASH CREDIT REMAINED UNEXPLAINED. WE CONFIRM THE FI NDINGS OF THE AUTHORITIES BELOW AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 12. AS A RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-042010. SD/- SD/- (D.C.AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 09- 04-2010 LAKSHMIKANT/- ITA NOS. 4000/AHD/2008 HANUMAN PRASAD SHARMA 12 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD