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2013 (10) TMI 757 - ITAT COCHINDisallowance of Rs. 100000 out of Rs. 200000 of cash balance as opening balance – Held that:- Taxpayer has purchased land admeasuring 83 cents for Rs.5 lakhs and constructed a building by investing Rs.3,61,915 - The taxpayer is in the business of purchase and sale of scrap. Therefore, maintaining proper bills and vouchers for purchase and sale of scrap may be a little difficult - The taxpayer is doing business from the year 1992 and has shown an opening cash balance of Rs.2 lakhs for the year 2000 – He invested Rs. 5 lakhs for purchase of land and investment of Rs.3,61,915 in construction of house property. These facts show that the taxpayer is earning sizeable income in the course of his business activity – No reason to disallow any part of the amount shown as opening cash balance in the cash flow statement filed before the assessing officer – Decided in favor of Assessee. Addition of 50000 as household expenses – Held that:- The very fact that the taxpayer has not incurred any expenditure separately shows that he was under the care and custody of someone else. When the taxpayer claims that he was under the care and custody of parents and brothers, it is natural that in a joint family system the elder brother or parents would incur the expenditure. Therefore, this Tribunal is of the considered opinion that addition of Rs.50,000 towards household expenses may not be warranted in the facts and circumstances of the case – Decided in favor of Assessee. Addition of loan amount taken from the private persons – Taxpayer has filed confirmation letters from the creditors – Held that:- Relying upon the judgment in the case of P Mohanakala [2007 (5) TMI 192 - SUPREME Court], it has been held that before dismissing the confirmation letters from the creditors, proper investigation needs to be done regarding the creditors s.a. the paying capacity of the creditors regarding loan amounts etc. – Decided in favor of Assessee.
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