TMI Blog2007 (1) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... finding on that account does not call for interference. Cash credits - HELD THAT:- The fact that the explanation furnished by Sri Devendra Sankhla about his source of such advancement has not been accepted by the Revenue authority cannot lead to any presumption that the source of such advancement by Sri Devendra Sankhla emanated from the assessee. Therefore, addition of Rs. 16,000 in the income of assessee as cash credit in the name of Sri Devendra Sankhla cannot be sustained. Such addition of income of assessee has to be deleted from the income of assesse. Since, in the present case the AO has definitely referred to non-furnishing of complete address of the creditor and that has hampered the inquiry into the correctness of the adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the asst. yr. 1991-92 which represented the cash credits taken by the assessee from one Sri Ramulal and Shri Devendra Sankhla? 2. Whether, the learned Tribunal was justified in upholding of addition to the extent of 1/4th of depreciation and Rs. 1,000 on account of expenditure on books and periodicals?" Question Nos. 3 and 4 referred to an amount in appeal are general and does not relate to any specific subject-matter. 2. So far as question No. 2 is concerned we find that the AO has considered the claim of the assessee for allowing as deduction the expenses incurred by him on purchase of books. periodicals and stationery for the purposes of his business. However, the AO found when inquired to verify the purchases of these items the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all for interference. 5. The question No. 1 relates to disallowance on account of cash credits found in the books of the assessees. Rs. 16,000 was alleged to have been borrowed to have been by Sri Devendra Sankhla and Rs. 16,000 was allegedly borrowed from one Ramulal. Assessee has produced the confirmation letters from both the creditors and has also produced Sri Devendra Sankhla before the AO. Sri Devendra Sankhla on being produced before the AO, affirmed that he had given in advance a sum of Rs. 16,000 to the assessee. However, the explanation of the assessee about the receipt of Rs. 16,000 from Devendra Sankhla was rejected on the ground that on inquiry from Devendra Sankhla the creditor could not satisfactorily explain source wherefr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be traced to the assessee itself. In the present case while existence of Sri Devendra Sankhla the creditor is not in doubt, and he has admitted to have advanced the loan to the assessee. The fact that the explanation furnished by Sri Devendra Sankhla about his source of such advancement has not been accepted by the Revenue authority cannot lead to any presumption that the source of such advancement by Sri Devendra Sankhla emanated from the assessee. Therefore, addition of Rs. 16,000 in the income of assessee as cash credit in the name of Sri Devendra Sankhla cannot be sustained. Such addition of income of assessee has to be deleted from the income of assesse 6. Another Rs. 16,000 has been added to the income of assessee as unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact about advancement of the amount by a creditor to the assessee has been explained satisfactorily or not. Once the fact of advancement has been properly proved it is not further obligation of the assessee to prove the source of source to reject the explanation about such credit with the assessee. 7. Since, in the present case the AO has definitely referred to non-furnishing of complete address of the creditor and that has hampered the inquiry into the correctness of the advance made by the alleged creditor or his existence, the finding reached by the AO about .unsatisfactory state of explanation furnished by the assessee about having received Rs. 16,000 from Ramulal and consequential addition of such amount as an income from undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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