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TMI Blog1990 (6) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... were partners. The assessee gave loan of Rs. 20,000 to each of Smt. Bilkishbai and Smt. Jubedabai on the same dates and of the same accounts as detailed below: Rs. 5,000 on 3rd Sept., 1980 Rs. 5,000 on 6th Sept., 1980 Rs. 5,000 on 17th Sept., 1980 Rs. 5,000 on 2nd Oct., 1980 The said amounts were deposited in the names of these two ladies with the firm M/s Malwa Lime & Stone Mart, possibly as their capital contribution. The said loan of Rs. 20,000 by each of the two ladies was repaid to the assessee on 7th Nov., 1980. The question arose before the ITO as to the source of getting Rs. 20,000 by each of the two ladies on 7th Nov., 1980. Yet there was a credit of Rs. 3,000 on 28th July, 1980 in the account of Smt. Jubedabai which was repaid by the assessee of Smt. Jubedabai on 23rd Aug., 1980. The ITO required the assessee to explain the said cash credit of Rs. 3,000 in the name of Smt. Jubedabai. There was debit balance of Rs. 5,000 in the account of Smt. Hussainabai. Smt. Hussainabai paid off that amount to the assessee on 7th April, 1980. The ITO required the assessee to establish the source of Rs. 5,000 which Smt. Hussainabai had paid. 3. It was explained by the assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not prove nexus between the credits of Rs. 20,000 and Rs. 23,000 in the names of Smt. Bilkishbai and Smt. Jubedabai and the withdrawals made by them from their non-resident (external) accounts. As to the credit of Rs. 5,000 in the name of Hussainabai the CIT(A) endorsed the order of the IAC holding that the assessee could not establish creditworthiness of Rs. 5,000 of Smt. Hussainabai. 5. Now it is contended by the learned counsel for the assessee that affidavits and the statements of Smt. Bilkishbai and Smt. Jubedabai supported by the withdrawals from the non-resident (external) accounts were unjustifiably rejected by the tax authorities below. According to him, the tax authorities below became too technical in appreciating the evidence on record inasmuch as that they expected the payments by these two ladies to the assessee by cheque only or within a period of few days only from the dates of withdrawal from the bank. It is also his contention that payments by the two ladies were made to the assessee according to their convenience and the situation then obtaining. Further, it is contended by him that it was mere suspicion that the amounts withdrawn by the two ladies from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in brief is that the assessee failed to prove creditworthiness and genuineness of the transactions. As to the credit in the name of Smt. Hussainabai, it is contended by him that she was not produced for cross-examination before the ITO and the IAC and the assessee failed to establish her creditworthiness and so also the genuineness of the transaction. In support he placed reliance upon the following : (i) Nanak Chandra Laxman Das vs. CIT (1982) 28 CTR (All) 280 : (1983) 140 ITR 151 (All) (ii) Krishna Industrial Corpn. (P) Ltd. vs. CIT (1979) 119 ITR 656 (All) (iii) CIT vs. Biju Patnaik (1986) 58 CTR (SC) 65 : (1986) 160 ITR 674 (SC) (iv) Gumani Ram Shri Ram vs. CIT (1975) 98 ITR 337 (P&H) (v) Sat Parkash Ram Naranjan vs. CIT 1975 CTR (P&H) 27 : (1975) 100 ITR 130 (P&H). 7. I have minutely considered the respective submissions of the parties. At the outset it may be stated that the above credits in the names of three ladies have been misapprehended by the tax authorities below as cash credits. Sec. 68 of the IT Act, 1961 reads as under : "68. Cash Credits.--Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of Rs. 3,000. 9. Even if it is assumed that the entire amount of Rs. 48,000 was in the shape of cash credits, several withdrawals made by Smt. Bilkishbai and Smt. Jubedabai from their NR(E) accounts explain their creditworthiness. The tax authorities below have not doubted the identity of all the three ladies. They have equally not doubted the NR(E) accounts held by Smt. Bilkishbai and Smt. Jubedabai jointly with their respective husbands. Thus, there is prima facie evidence of these two ladies having creditworthiness to the extent of Rs. 20,000 and Rs. 23,000, respectively. The onus probandi which lay on the assessee to establish identity and creditworthiness of the creditors and genuineness of the transactions has been thus discharged by the assessee. In this connection, following excerpt from CIT vs. Sahibganj Electric Cables Pvt. Ltd. (1978) 115 ITR 408 (Cal) (414) needs attention: "On behalf of the Revenue it was contended that the assessee has not discharged the onus. In considering this contention, it may be relevant to remind ourselves of the observations of Lord Hansworth M.R. in the case of Stone vs. Eastbourne R.D. Council (1987) 1 Ch 367 at page 397 as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Jubedabai do explain her creditworthiness of Rs. 3,000. Thus, I find that the assessee fully established creditworthiness and genuineness of the transactions regarding credits of Rs. 20,000 and Rs. 23,000 in the accounts of Smt. Bilkihsbai and Smt. Jubedabai. 11. Coming to the cash credits in the name of Smt. Hussainabai I find that the explanation of the assessee has been distorted by the ITO. The explanation of the assessee was simple, namely, that husband of Smt. Hussainabai was a partner in the firm and she had given Rs. 5,000 to the assessee out of her capital. Such explanation of the assessee was construed by the ITO to mean that husband of Smt. Hussainabai had withdrawn Rs. 5,000 from the firm. He went to the extent of tracing the account of Smt. Hussainabai and her husband in that firm and found that there was no withdrawal of Rs. 5,000 by any of them from the said firm. It was never the contention of the assessee that Rs. 5,000 were withdrawn either by Smt. Hussainabai or by her husband from that firm. The IAC and so also the CIT(A) took the facts in the same light as were construed by the ITO. Obviously they have fallen into error. No doubt, the assessee should have p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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