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2010 (10) TMI 905 - ITAT GAUHATIUndisclosed income - Third member appointment - difference between the ld' JM and the ld' AM - Addition u/s 68 - Unexplained cash credits u/s 68 - genuineness of the gift not proved - Id. J.M. deleted the addition made u/s 68 while ld. A.M. as opinied that the additions in question have been correctly made by the Assessing Officer and rightly confirmed by the ld. CIT(A) - Whether the lower authorities were justified in considering the amount claimed to have been received as gift by the respective assessees as their income from undisclosed sources? - HELD THAT:- Admittedly, the assessee maintains no books of account and that is why the Assessing Officer in his assessment order has also written against the method of account as ‘No A/cs’. It is an established position that existence of books of account maintained by the assessee is a condition precedent for addition under section 68. In the case of the assessee, no such books having been maintained, there is no legal scope to intervene provisions of section 68 and as such, in my opinion, the ld. J.M. has rightly deleted the addition made on such premise. For arriving at the conclusion that the gift was not genuine and the same was undisclosed income of the assessee, the department ought to have brought on record evidence for such specific finding. Here in this case the department could not bring on record any evidence except alleging on presumption and suspicion that the gifts were bogus and represented assessee’s undisclosed income. In these circumstances, this observation of the department, which was acceded to by the ld. A.M., without any conclusive material cannot lead to the inference that the amount was not gift but undisclosed income of the assessee. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of Bedi & Co. (P.) Ltd. [1998 (2) TMI 2 - SUPREME COURT] and decision of Currency Investment Co. Ltd. [1999 (6) TMI 12 - CALCUTTA HIGH COURT] wherein it has been held that when the assessee has disclosed the identity of the parties from whom it purchased shares and to whom it sold the shares, genuineness of the transaction cannot be denied merely because the assessee could not produce the brokers through whom the share were sold. One of the reasons the ld. A.M. took for endorsing the action of the revenue authorities was that summons issued were not complied and neither the parties appeared for examination before the Assessing Officer, nor were they produced by the assessee. The ITAT, Gauhati Bench in the case of India Tyre House [2001 (6) TMI 178 - ITAT GAUHATI] has held that the assessee cannot be asked to do something which is beyond its control; assessee has got no legal power to enforce the attendance of his creditors before the Assessing Officer and as such addition on the ground that he had not produced creditors cannot be sustained. Assessee has furnished the copies of Acknowledgement of IT returns for assessment year 2002-03 of all the donors along with challans evidencing payments of tax, computation of income, balance sheet, declaration confirming the gift, etc., in support of her getting the gifts from the respective donors, which are already on record - It is also not disputed that all the donors have filed their returns of income for assessment year 2002-03 and paid taxes accordingly. It is stated at the bar by the learned counsel for the assessee that no proceedings in regard to these returns have been initiated by the department and, therefore, the same are to be considered as accepted in terms of section 143(1) Thus the lower authorities were not justified in stating that the gifts were undisclosed income of the assessee, which was acceded to by ld. A.M. Third member as concurred with the proposed order of ld. J.M. on the common question referred to him. In view of the above, as per majority view, the appeals of the assessees on the issue referred to the ld. Third Member stand allowed
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