TMI Blog2003 (9) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... am Swaroop Dass Radha Kishan and cash in hand. The assessee had opened stock invest account with the banks and stock invest certificates were being used while applying for the shares in his name or when required by other family members or friends or known persons. It has been the assessee s stand that stock invests certificates were given to such persons for purpose of applying for shares and on allotment, the payments used to be made by those persons. To generate funds for investment, loans were taken by the assessee and these were credited in the books of M/s Ram Swaroop Dass Radha Kishan. Confirmations of the loans taken and loans advanced along with interest thereon were filed during the course of assessment proceedings. 3. The first ground of appeal is against the action of CIT(A) in deleting the addition of Rs. 2,36,274 made on account of amount receivable from M/s Ashok Co. against sale of shares. 4. Shri A.P. Agarwal, Departmental Representative, appeared for the Department. He relied on the order of the AO. 5. Shri N.K. Jain, advocate, appeared for the assessee. The learned authorised representative has explained that the assessee had invested Rs. 2,08,250 in 11,90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased during the relevant accounting period during the course of assessment proceedings. The following fixed deposits were claimed by the assessee in his reply to have been purchased out of funds of M/s Ram, Swaroop Dass Radha Kishan: (1) State Bank ofPatiala Rs. 1,50,000 (not recorded in balance sheet) 28-8-1993 (2) Bank ofIndia Rs. 1,50,000 (no withdrawal in books on this date) 27-7-1993 (3) Bank ofIndia Rs. 1,00,000 (no withdrawal in books on this date) 22-10-1993 (4) Bank ofIndia Rs. 40,000 (Not recorded in books) 24-2-1994 Rs. 4,24,000 9. The AO pointed out that the books of account of M/s Ram Swaroop Radha Kishan did not contain any mention of these FDs nor were any of these amounts debited to the account of the assessee in any other account. According to him these FDs had been purchased out of unaccounted money. He added back the investment to the income of the assessee as investment out of undisclosed income. The Departmental Representative relied on the AO s order. 10. The arguments by the authorised repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the correct facts as reflected in the books of account. It is now settled that source of origin need not to be proved. The Explanation with respect to availability of cash-on-hand would also have to be accepted in view of the ratio laid down in S.R. Venkata Ratanam vs. CIT (1981) 127 ITR 807 (Kar). The impugned addition of Rs. 4,24,000 is deleted. The order of CIT(A) is confirmed and the Department s appeal is dismissed on the second ground. 12. The third ground of the Department s appeal is against the action of CIT(A) in deleting the addition of Rs. 29,880 on account of commission on consignment sold. 13. The assessee had shown consignment sale of Rs. 1,12,94,264 during the relevant accounting period. The sale had been effected by the assessee in respect to various raw material used in manufacture of soap. As per details of commission received, commission had been earned from several concerns spread all over the country. According to the AO most of the sales was to the sister-concern only. The assessee had not maintained any account in respect to consignment transactions. No books of account or consignment agreement for the relevant period had been found from any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. The relevant columns for household expenses in the net wealth statement had also been left blank. Keeping in view the size of the family and standard of living, monthly expenditure of the family was worked out at Rs. 10,000 per month, totalling Rs. 1,20,000 for the entire year. This was added to the income of the assessee. The Departmental Representative relied on the order of the AO. 18. The learned authorised representative has explained that the wife of the assessee had withdrawn Rs. 33,600 for household expenses out of her capital which is duly reflected in her return of income. The assessee was not incurring any expenditure towards rent, since teetotaller; he was residing in his own house. It is submitted that the family is pure vegetarian and teetotaller having the ordinary standard of living with orthodox ideas. None of the children is school or college going. The learned authorised representative has drawn attention to the fact that no costly household items were found during the search. According to the learned authorised representative the AO had no evidence before him to estimate the household expenses at an exorbitant figure of Rs. 10,000 per month. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. All these shares have been owned up as his own by assessee. (c) Entries in various seized documents mention their names along with names of family members of assessee. Deposits, withdrawals, receipts from sale of shares are routinely entered by assessee along with similar data of family members. In view of above findings these persons are treated as Benami of assessee whose names are used by assessee to introduce capital in business. This conclusion is not diluted by finding that these are regular assessee with ITO, Bhiwani. Examination of returns of income and balance sheet indicates that returns are being filed specifically for maintaining an independent status. No tax has been paid by these persons and capital has been gradually built up. Balance sheet of these persons reveals large loans to various members of family of assessee. There are also numerous loans taken but squared up during relevant accounting period which do not find any mention in any book or even in the recur of income. These loans, which would be utterly invisible in financial statement of affairs, have made funds available to assessee or his family members for investment in shares. All these transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re allotted the same were delivered to these persons who owned and possessed them and also effected the sales thereto with proceeds being credited to their own accounts. No material has been brought on record to establish that the assessee at any stage had handled or owned the shares in his own account. It is settled law that the apparent is real and the burden is on the person who alleges that the apparent is not the real. The order of CIT(A) is confirmed and the appeal of the Department is dismissed on the fifth ground. 26. The sixth ground of the Department s appeal is against the action of CIT(A) in deleting the disallowance of Rs. 13,620 made under s. 40A(3) of the IT Act. 27. As per document No. 1, p. 28, seized from M/s Mittal Industrial Corporation, the assessee had paid an amount of Rs. 13,630 to a transporter in cash for goods delivered. Backside of p. 29 of this document showed that the assessee had tried to camouflage this payment by splitting it into two parts each below Rs. 10,000. The AO pointed out that it was unrealistic to expect a transporter to collect his payment through a driver on two different dates. The AO held that the entire amount of Rs. 13,620 had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has submitted that the assessee was to receive Rs. 20,000 from Shri Ashok Kumar which was given during the period 1992-93. Further, interest amounting to Rs. 3,600 had become due on this amount upto18th March, 1994, on which date a cheque No. 0048443 for Rs. 23,600 was issued by the person to repay the loan. This loan was repaid after withdrawing the amount credited with M/s Ram Swaroop Dass Radha Kishan by account-payee cheque No. 1737068. The learned authorised representative has urged that the source of repayment of loan is duly proved and there is no question of treating the same as unexplained income of the assessee. 33. We are in agreement with the order of CIT(A) in deleting the impugned addition made by the AO. The Department s appeal is dismissed on the seventh ground. 34. The eighth ground of the Department s appeal is against the action of the CIT(A) in deleting the addition of Rs. 82,060 on account of income from the estate of late Smt. Ralia Devi, deceased mother of the assessee. 35. Before the AO the assessee filed another return of income in his status as legal heir of late Smt. Ralia Devi. A photocopy of the will was filed during assessment proceedings. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
