TMI Blog1994 (12) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount . Rs. i. Babulal Gopilal, Mhow. 25,000 ii. Maheshkumar Gajanandji Garg. 8,000 iii. Smt. Nirmalabai Maheshchand Garg. 8,000 iv. Shri Babulal Agrawal Smt. Gulabbai Agrawal. 32,000 v. Ku. Disha. 5,000 4. As regards creditor at (i) above, the AO mentioned that summon under s. 131 came back unserved. The AO required the assessee to produce necessary evidence and/or the legal heir of the creditor to prove the genuineness of the credit. Since no evidence was produced, he added the credit of Rs. 25,000 to the income of the assessee under s. 68 and disallowed interest of Rs. 1,588 thereon. 5. As regards creditors at (ii) and (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said cash deposit was produced, the AO added the same to the income of the assessee firm under s. 68 of the Act and disallowed interest of Rs. 2,900 thereon. 7. As regards the creditor at (v) above, according to the AO the intimation slip was sent in earlier assessment year for cross confirmation but the same came back unserved. He noted that this year also, same GIR No. of Bombay was given and despite the fact that the assessee was made aware of the position regarding non-confirmation, no further evidence was produced. He, therefore, added the credit of Rs. 8,000 appearing in the name of Ku. Disha to the income of the assessee firm under s. 68 and disallowed interest of Rs. 775 paid thereon. 8. Against the above additions, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(2), Indore. Smt. Nirmalabai w/o Maheshkumar Garg was reported to be partner having 25% share in the firm, Gajanand Bhuramal, assessed by ITO, Khargone. She did not file her return, income being below taxable limit. It was submitted that her income ranged between Rs. 9,000 to Rs. 12,000 during the asst. yrs. 1983-84 to 1988-89. For the asst. yr. 1989-90, she declared income of Rs. 34,537. 10. With regard to the credit of Rs. 32,000 appearing in the names of Shri Babulal Agrawal and Gulabbai Agrawal, it was submitted before the learned CIT(A) that during the assessment proceedings, confirmatory letter was filed and bank pass books were produced for examination before the AO. It was further submitted that before the amount was deposited in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained. It was in this background that the AO came to the conclusion that the creditworthiness of the creditors could not be established. He accordingly supported the order of the AO, and submitted that the learned CIT(A) was not justified in deleting the impugned addition. Shri R.L. Rawka, the learned counsel for the assessee, on the other hand, supported the order of the learned CIT(A). He submitted that the assessee had discharged the onus, which lay on it to prove the nature and source of credits appearing in its books of account. During the course of assessment proceedings, the assessee firm filed confirmatory letters from each of the creditors, who had admitted to have advanced the loans to the assessee firm. The loans were advanced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned addition by rejecting the assessee's valid explanation. On appreciation of the explanation and evidence brought on record, the learned CIT(A) has come to the conclusion that the assessee firm discharged its onus of proving the nature and source of credits appearing in its books of account and, therefore, his findings deserve to be sustained. 14. We have considered the rival submissions and perused the evidence on records. It is now well established that the initial onus to prove the nature and source of credit entry appearing in the books of the assessee lies on the assessee to establish the identity of the creditors, their creditworthiness and the genuineness of the transactions. The assessee submitted before the AO copy of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, summoned the above creditors under s. 131 of the Act. In response thereto, Shri Mahesh Kumar Garg attended, whose statement was also recorded. In response to summons issued to Shri Babulal Agrawal and Smt. Gulabbai Agrawal, their son, Shri Arun Goyal, Advocate, appeared before the AO. The summons issued to Shri Babulal Gopilal came back unserved, as by the time he had expired. On these facts it has to be held that the assessee has proved the identity of the creditors. All the creditors have admitted having deposited their money with the assessee firm through cheques, which is evident from their copy of account available on records. We are conscious of the fact that more payment to the assessee firm through cheque by the creditors is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
