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2016 (1) TMI 411 - AT - Income TaxAddition as agricultural income - Held that:- No doubt, there cannot be a surmise that it was not probable for an assessee to retain cash withdrawn from bank account, without utilizing the same. However, here the explanation for the same was not withdrawal from the bank, but earnings from agricultural income. It is difficult to believe that a person who was having a bank account would have kept as much as 18 lakhs in cash in her / his house without banking. In such circumstances, we are of the opinion that AO was justified in considering ₹ 5 lakhs as saving from agricultural income that could have been kept by the assessee. In our opinion, lower authorities were justified in making an addition of ₹ 13 lakh - Decided against assessee Addition on withdrawal from a cash credit account with bank - Held that:- No man with reasonable prudence would have taken an interest bearing loan and kept it with him / her as cash without utilising for a period of one year. Therefore, preponderance of probability is that the amount of ₹ 2.98 lakhs withdrawn by the assessee in August and September 2005 would have been used by her for some other purposes. This cannot be considered as a surmise, for a simple reason that assessee had to pay interest on the cash credit account. In such a situation, we are of the opinion that lower authorities were justified in not accepting the withdrawal from the cash credit account, more than one year back, as a source for investment in the property. Case of Meena Nagaraj Naik (supra) of coordinate bench would not come to the aid of assessee since the drawings were from the cash credit account and not a savings account. Accordingly we are of the opinion that lower authorities were justified in making an addition - Decided against assessee Undisclosed loan - Held that:- claim of creditors that they did not have any bank account, since the village they lived viz., Huilgol / Kelur had no bank account cannot be accepted, when there were banks available within a reasonable periphery. It is against the principle of preponderance of probability that huge sums of money would have been kept in cash by them, over a number of years and loaned to the assessee in one go. Assessee might have been able to prove the credit worthiness of the parties and identity of the creditors. However in our opinion genuineness of the transaction has not been proved by the assessee. In such a situation, we are of the opinion that lower authorities were justified in disbelieving the version of loan of ₹ 8 lakhs from Veeranna Sajjanar. Coming to the loan of ₹ 5 lakhs alleged to have been taken from Shivanna, the said transaction was also claimed to be in cash. No doubt here also, the village accountant had certified the holding of the concerned Shivanna to be about 30 acres. As mentioned by us, Shivanna was also a resident of Huilgol village. To believe that he had saved and kept a sum of ₹ 5 lakhs in cash at his residence over various years and loaned it in cash to the assessee is difficult to believe. It is not a surmise but against the principle of preponderance of probability . Just because the creditor had produced evidence in the nature of agricultural holding or income of ₹ 4.5 lakhs per year would not be sufficient to come to a conclusion that they had funds with them to give a loan to the assesee in cash. Here also, in our opinion, genuineness of the loan has not been proved by the assessee. Coming to the loan of ₹ 5 lakhs claimed to have been taken from Allasab, we find that the contentions were very similar to that of the loan claimed to have been taken from Shivappa. Transactions were claimed to have been in cash. There is no evidence for sale of agricultural produce. Money claimed to have been accumulated was never banked. Claim that there was no banking facility in Huilgol was only a camouflage since admittedly there was a bank facility in Gadag which was only ten kms away. In this case also assessee has not been able to establish the genuineness of loan. Coming to the loan of ₹ 5 lakhs taken from Devappa, situation is almost the very same. Claim is that loan was taken in cash and the creditor had saved the money out of agricultural income over various years. In our opinion, genuineness of the transaction has not been proved here also. However, addition of ₹ 7 lakhs loan being loan received from Kanakadasa Shikshana Samithi is not warranted and such addition is deleted. - Decided partly in favour of assessee.
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