TMI Blog2010 (6) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee submitted a return of income under section 153A of the Act disclosing additional income of Rs. 25 lacs on estimate basis on account of loose papers found during’ the course of search - Held that: ld.A.M. was not correct in stating that the assessee is not entitled to set-off of Rs. 5,28,302 against the addition of Rs. 12 lakhs confirmed by the ld.CIT(A) on account of blank cheques found with the assessee - assessee has discharged the onus of proving the identity of the creditor, the capacity of the creditor and the genuineness of the transaction - Decided in favor of the assessee Regarding addition of Rs. 2 laks, I find that Shri Shri Dataram Tehlani is regularly assessed to Income-tax - It seems that the Assessing Officer had made the addition without proper verification and without giving finding in respect of the creditor. In my opinion, the assessee has discharged the onus of proving the identity of the creditor, the capacity of the creditor and the genuineness of the transaction - Decided in favor of the assessee - 110 AND 221 (JAB.) OF 2008 - - - Dated:- 15-6-2010 - H.L. KARWA, K.P.T. THANGAL, B.R. KAUSHIK, JJ. S.P. Chaowdhary for the Appellant. A.P. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as stated that the application money received for the purpose of M/s. Dolphin Marbles were issued for the business purposes. This plea was not accepted by the Assessing Officer. Hence, the amount of Rs. 20 lakhs treated as the income of the assessee on substantive basis and audited in the hands of M/s. Dolphin Marbles on protective basis. It was also contended on various occasions that another partner i.e., Gupta s brother and Smt. Saroj Gupta had imprest account and withdrawal was made from therein as well. Aggrieved by the above addition, assessee approached the first appellate authority. 2.1 The addition made by the Assessing Officer was deleted by the learned CIT(A) vide para 4.4 of his order observation as under: "The counsel of the assessee submitted that during the course of hearing the assessee submitted before the Assessing Officer that from July 2004 to January 2005 the company withdrew sum of Rs. 20 lakhs from bank account as below: 20-7-2004 2,00,000 20-7-2004 3,00,000 28-7-2004 2,00,000 28-7-2004 3,00,000 10-8-2004 2,00,000 10-8-2004 3,00,000 17-8-2004 1,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, Opera House and Zaveri Bazar, Bombay and explained the sources of acquiring of gold weighing 77.43 gms. for the asst. year 2001-02 and 505.250 gms. for the assessment year 2002-03. The Assessing Officer accepted the above explanation as well. 3.1 Regarding investment Smt. Saroj Gupta, it was submitted as under : "Regarding investment by Smt. Saroj Gupta as detailed above in various years, assessee vide reply dated 27-11-2006 stated as under : (i) That the assessee purchase 131.12 gms. of gold ornaments at Rs. 62,500 which was paid on 22-1-1994 as per cash book dated 22-1-1994 in page No. 290 of M/s. Gupta Brothers, Katni in which she is a partner, the book entry mentioned in the copy of purchase bill of gold ornaments. (ii) That the assessee deposited 525 gms. of gold under taxfree Gold Bond Scheme in the assessment year 1995-96 but the supporting documents are not traceable. (iii) That the assessee purchased 465.560 gms. gold from one of Shri Ashok Bhasin at Rs. 2,24,000 in assessment year 1996-97 which was paid by cheque in the account of Punjab National Bank, Katni, the details are shown in copy of receipts of gold ornaments which are already fled and placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of the appellant. The search party neither inventorized nor seized many such papers even though some of which might have been relevant for the current assessment. 5.4 Without prejudice to the above, the counsel submitted that the purchase bills of gold ornaments and jewellelry clearly show that purchases were effected prior to the relevant previous year. Therefore, addition cannot be made in the hands of the appellant for the assessment year under consideration. Also Smt. Saroj Gupta, is herself an Income-tax assessee and is filing her own returns of income. When the jewellery is claimed to belong to Smt. Saroj Gupta, any unexplained acquisition of jewellery by her should be taxed in her hands - not in the hands of the appellant. The counsel is of the opinion that in case the Assessing Officer was not satisfied with the explanation of Smt. Saroj Gupta, he should have made the addition of the jewellery in the hands of Smt. Saroj Gupta, with protective addition in the hands of the appellant not vice-versa. 5.5 Decision vis-a-vis jewellery of Smt. Saroj Gupta : Since Smt. Saroj Gupta is assessed to tax and the alleged unexplained jewellery is claimed by her to belong to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this ground by the revenue is liable to be dismissed and it is dismissed. 4.5 Coming to the next ground, it is against deletion of addition of Rs. 38,018 made on account of jewellery claimed to belonging to Shri Mukesh Gupta. 4.6 The issue as dealt with by the learned CIT(A) vide paras 5.8, 5.9 and 5.10 is as under : "5.8 During the course of search 163.800 grams of gold jewellery was stated to be belonging to appellant s son Shri Mukesh Gupta. The source of the gold is stated to be previous gold 60 grams, purchase in assessment year 2003-04 113.800 grams, total 163.800 grams. The Assessing Officer accepted gold to the extent of 100 grams by keeping in view instruction No. 1916 dated 11-5-1994. He held 63.800 grams of value Rs. 38,018 to be excess. 5.9 Counsel of the appellant produced purchase bill of Tribhuvandas Bhimji Zaveri, Mumbai dated 22-11-2003, evidencing purchase of 1133.85 grams of gold ornaments by Shri Mukesh Gupta for Rs. 62,602. The counsel submitted that the gold was purchased by Shri Mukesh Gupta out of his own savings, both the purchase bill and affidavit duly executed by Shri Mukesh Gupta to the effect that the gold was purchased by him were produced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddress of donor at Singapore and admittedly Assessing Officer directly routed a letter and the donor confirmed that he held there was reason to reject assessee s contention. 5.3 Contending parties reiterated their respective stands on consideration brought on record and also considering the capacity, genuineness arid identity of the person is established. In the absence of evidence to show that money routed and generated from the assessee and came back, there is no reason to disturb the order of the first appellate authority. Appeal by the revenue fails and it is dismissed. 6. Coming to the next ground, it is against the order of learned CIT(A) in deleting the addition of Rs. 4,50,000 that there was cash credit reflected in the books of account. 6.1 Addition was made by the Assessing Officer vide para 6.1 of his order observed as under : "During the year under consideration, assessee in his balance sheet has shown fresh cash credits in the name of various persons as under :- 1. Devandas Pathashu Mal Rs. 2,50,000 2. Detaram Tehlani Rs. 2,00,000 Assessee was required to furnish complete details of creditor i.e., date of credit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 6.2 Regarding the credit standing in the name of Shri Devandas Pathashu Mai, it was submitted that Rs. 2,50,000 consists of opening cash balance of Rs. 50,000 and a sum of Rs. 2 lakhs advanced during the year. It was found that Shri Devandas was regularly assessed to Income-tax. Assessee filed the copy of account of the person concerned appearing in his books of account. Assessee filed an affidavit from Shri Devandas confirming the advance through cheque. He further found that from balance sheet, the person concerned also advanced Rs. 3,75,000 to Shri Ishaq M Gulam and it has been accepted by the department. Coming to the credit stood in the name of Shri Dataram, it was found that he too was assessed regularly. Assessee filed affidavit from Shri Dataram confirming the advance through bank challan, which was also acknowledged in the return of income. Shri Dataram in his balance sheet disclosed to the department showed assessee as loan debtor. Shri Dataram also advanced money to others. He appeared before the Assessing Officer and confirmed. However, Assessing Officer incorrectly recorded that he was not produced. The learned CIT(A) held that both the creditors are assessed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs confirmed by the learned CIT(A). 8.1 The learned CIT(A) allowed the claim of the assessee on the basis of the following facts : 8.2 The assessee filed the return of income under section 153(A). Disclosed additional income of Rs. 25 lakhs on estimate basis on account of loose sheets found during the course search and seizure operation. Assessee has also paid tax on the same. Subsequently, Assessing Officer scrutinized and determined the income on account of loose sheet, which represents purchase and sale of Kerosene and diesel out side the books at Rs. 19,71,698. Thus, there was a excessive disclosure of Rs. 5,28,302. In further appeal, the learned CIT(A) confirmed further that Rs. 12,000 made on account of blank cheque found with the assessee, which was appealed, assessee requested to set off and the learned CIT(A) allowed it. Revenue is aggrieved and comes in further appeal. 8.3 Considering the facts that CIT(A) has confirmed an addition to the extent of Rs. 12 lakhs, we find no reason why the set off claimed by the assessee allowed to the extent of Rs. 5,28,302 should be distributed. 8.4 The appeal by the revenue on this ground which is consequential is also liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant submitted that appellant had filed reply on 18-10-2006 that the persons whose blank cheques were seized happen to be creditors in the sister concern of other appellant M/s. Oriental Automobiles-Katni. The assessee had filed balance sheet of M/s. Oriental Automobiles, Katni to prove the same. It was explained that broker had visited assessee s premises to ascertain whether further loans from these creditors are required as they have sufficient funds. It appears that through mistake the cheques were left with the assessee. As far as the two heques of Rs. 1,50,000 and Rs. 1,00,000 issued by Smt. Shobha Khareyun is concerned, the name was kept blank so that assessee may use it for himself or his sister concern according to necessity, Smt. Shobha Khareyu issued a fresh cheque of Rs. 1,50,000 in the name of M/s. Oriental Automobiles-Katni, the transactions are duly recorded in the account of M/s. Oriental Automobiles-Katni. Photocopy of relevant page of ledger of Orient-Automobiles for the period 1-4-2005 to 31-3-2006 showing cheque of Rs. 1,50,000 received on 11-4-2005 (after the date of search) was submitted as part of paper books. Decision : No prudent person will ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash found was withdrawn from the account of M/s. Dolphin Marbles P. Ltd., the Assessing Officer rejected the explanation of the assessee for the reasons discussed in detail at para 5 pages 2 to 5 of Assessment Order dated 26-2-2006 under section153A of the Income-tax Act in the case of assessee Shri Vishwanath Gupta and held as under : "The amount of Rs. 20 lakhs found at the residential premises which (is) stated to be amount withdrawn from Dolphin Marbles is added to the total income of Shri Vishwanath Gupta on substantive basis, and the same is added in the hands of M/s. Dolphin Marbles P. Ltd. on protective basis. In view of the above discussion the contention of the assessee that the withdrawals (were) made from Dolphin Marbles is not accepted." 3. The ld. CIT(A) deleted the addition as per para 4.5 of his irnpugned order dated 18-3-2008, which has been reproduced at para 2.1 of the proposed order of the ld. V.P. In brief the ld. CIT(A) held that on perusal of bank statement of M/s. Dolphin Marbles P. Ltd., entries in its books of account showing withdrawal of cash from the bank account and payment to Shri Vishwanath Prasad Gupta the addition of Rs. 20 lakhs is deleted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Marbles (P.) Ltd. (supra). I respectfully do not agree with the decision of the ld. V.P. on this issue and for the reasons discussed in the case of Dolphin Marbles (P.) Ltd. (supra) on the issue f protective addition of Rs. 20 lakhs, I consider it proper to set aside the substantive addition in the case of the assessee Shri Vishwanath Prasad Gupta and restored it to the Assessing Officer with the direction that he should decide this issue afresh in view of the directions given in the case of Dolphin Marbles (P.) Ltd. (supra). This ground of appeal is therefore allowed for statistical purposes. 6. The ground Nos. 1(ii) to (iv) of appeal of the revenue are against deletion of addition of Rs. 13,11,500, Rs. 48,285 and Rs. 38,018 on account of unexplained jewellery respectively claimed to be of Smt. Saroj Gupta wife of the assessee, Smt. Smita Gupta daughter-in-law of the assessee and Shri Mukesh Gupta son of the assessee. 7. The ld. V.P. has held that Smt. Saroj Gupta was herself assessed to Wealth-tax and Income-tax and therefore addition, if any, should be made in her own case. The decision of the ld. CIT(A) deleting the substantive addition in the hands of the assessee was ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. 9. Ground No. 1(v) is against deletion of addition of Rs. 2,00,000 made by Assessing Officer treating the gift received from Shri Navin Khera as unexplained cash credit. The issue has been discussed by the Assessing Officer in para 6 at page 21 of the Assessment Order the A.O. required the assessee to prove the genuineness of the gift and the capacity of the alleged donor. The assessee filed a copy of gift deed dated 25-6-2004 but failed to produce the donor or file any other evidence to prove the genuineness of the gift and the capacity of the alleged donor. The Assessing Officer observed that there was neither any relationship between the donor and the donee, nor there was any occasion for the gifts in question. Relying on the decision in the case of Sumati Dayal v. CIT [1995] 214 ITR 8011 (SC). He held that the amount of Rs. 2 lac was liable to be added the income of the assessee under section 69 of the Act. 10. The ld. CIT(A) observed that the gifts were received by two cheques issued to the assessee from the bank account of the donor and was supported by the gift deed executed by the donor. According to him since the donor had confirmed the gift in question, the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd applying the test of human probabilities. 16. It has also been held by the Hon ble Punjab Haryana High Court in the cases of (i) Subhashchand Verma v. CIT [2009] 311 ITS 2392 (Punj. Har.) (ii) Jaikumar Jain v. Asstt. CIT [2009] 311 ITR 3393 (Punj. Har.) (iii) Subhash Chander Sekri v. Dy. CIT [2007] 290 ITR 300 (Punj. Har.) (iv) Jaspal Singh v. CIT [2007] 290 ITR 3064 (Punj. Har.) and (v) Yashpal Goel v. CIT [2009] 310 ITR 755 (Punj. Har.) that the burden of proving that gift was genuine and was received out of natural love and affection, was on the tax payer. It has also been held that the burden to establish that the donors had the means to give the gifts and the gifts in question were genuine and given out of natural love and affection, was also on the donor. 17. The findings of the fact given by the Assessing Officer and approved by the Hon ble Punjab Haryana High Court in the case of Jaspal Singh (supra) as per para 3 of the decision are summarised below : 1. The donor is not in any way related or closely connected to the assessee. 2. He is a professional donor. 3. The donor never received similar gifts from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no love and affection. It was nothing but a subterfuge to avoid income-tax. The transactions were not genuine ones." (Emphasis supplied) 21. At page 81 of the aforestated order, the Hon ble P H High Court has also observed that "The so-called gift set lip by the appellants as not bona fide transaction. The unscrupulous use every gimmick to avoid paying income-tax if the -State exchequer is made the target of deceit and the revenue comes down, the development of the country will be a casualty. It is reprehensible that some citizens spend on litigation and unnecessarily bring matters before courts than to pay tax on their income. The tendency needs to be discouraged and curbed." 22. In the case of Tirath Ram Gupta v. CIT [2008] 304 ITR 1457 (Punj. Har.) it was held that "A gift cannot be accepted as such to be genuine, merely because the amount has come by cheque or draft through banking channels, unless the identity of the donor, his credit worthiness, relationship with donee and the occasion are proved. Unless the recipient has proved the genuineness thereof, the gift can very well be treated to be an accommodation entry of the assessee s own money, which is not disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner who has confirmed the introduction of capital in the case of the assessee firm. The decision, with due respect, cannot be applied to the case of the assessee because in this case gifts are claimed to have been received from total strangers who had no capacity to give the gifts and the money equivalent to the amounts of gift was deposited just prior to the dates of issue of the gift cheques in their respective accounts. 26. Another decision in the case of CIT v. Nevendram Ahuja [2007] 270 ITR 453 (MP) relied upon by the ld. counsel of the assessee with due respect, is also not applicable to the case of the assessee because in that case the credit in question was on account of advance given by the creditor for taking the house on rent, as distinguished from a loan or a gift from a third party and the identity of the depositor and the genuineness of the transaction had been duly established. 27. It is however, observed that in the case of CIT v. Rathi Finlease Ltd. [Income-tax Appeal No. 63 of 2004, dated 11-10-2007] the Hon ble M.P. High Court has held that though confirmation letters were produced, genuineness of share application money received by the assessee company c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sufficient to discharge the onus of the assessee to prove the credit worthiness of the creditors and the genuineness of the transactions. He also relied on the decision in the case of Shankar Industries v. CIT [1978] 114 ITR 689 (Cal.) and held that "the assessee failed to discharge the onus of proving the capacity, credit worthiness of cash credits and therefore the same is added to the total income of the assessee." He also accordingly disallowed the claim of payment of interest of Rs. 18,000 to these creditors. 30. The ld. CIT(A) as per discussion in para 9.5 of the impugned order and held that "the recent trend of Judicial decisions including that of the Jurisdictional High Court in such cases is that once the creditor has confirmed the credit appellant can not be questioned the source of cash which was deposited in the creditors bank account prior to the advancement of loan to the appellant. For this reason, the cash credits are being held as legally proved. The addition of Rs. 4,50,000 stands deleted". The addition of Rs. 18,000 being interest on this credit was deleted as per para 10.1 of the impugned order of the ld. CIT(A) because the cash credits were "held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transaction and there was no transaction even of Rs. 1,000 in the account as has been taken note of by the ld. V.P. in para 6.4 of his order. The credit in the case of Shri Dataram Tehelani is also on similar lines. It is also clear from the relevant portion of the Assessment Order, reproduced by the ld. V.P. at para 6.1 that the "assessee filed the confirmation from the cash creditors and also copy of the bank statement of the creditors." The Assessing Officer has also observed that "the assessee has not given any information or evidence regarding the sources of funds out of which such credit has been given. Simply giving confirmation letters is not enough to prove the creditworthiness of the creditor." Thus it is very clear that only the confirmation letters and copies of bank accounts were filed before the Assessing Officer and no other evidence discussed by the ld. CIT(A) in his impugned order were filed before the Assessing Officer. It is also seen from the Form No. 35 dated 6-1-2007, filed by the assessee before the ld. CIT(A) on 12-1-2007, that no specific objection was taken to point out that the Assessing Officer had not considered all the relevant evidence filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and other such decisions discussed above. 36. The order of the ld. CIT(A)on these issues in my considered opinion can not be sustained and the issue is required to be restored to the file of the Assessing Officer with the direction that he should decide these issues afresh after considering all the relevant material discussed above and giving proper opportunity to the assessee. These grounds are therefore allowed for statistical purposes. 37. The ground No. 1(viii) of the appeal of the revenue is against the decision of the ld. CIT(A) in allowing the set-off of Rs. 5,28,302 against the addition of Rs. 12,00,000 confirmed by him. It is seen from Form No. 35 dated 6-1-2007 filed before the ld. CIT(A) 12-1-2007 that this ground has not been taken before the ld. CIT(A). This issue has been discussed by ld. CIT(A) in his impugned order at para 15. It is very clear that additional ground was also not taken before the ld. CIT(A) on this issue. The ld. CIT(A) observed that the assessee had disclosed additional income of Rs. 25 lakhs in his return of income under section 153A of the Income-tax Act on estimate basis on account of loose papers found during the course of search. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the learned AM? (ii) Whether, on facts and in the circumstances of the case learned Vice-President was justified in confirming the order of the Commissioner of Income-tax(A) in deleting the addition of Rs. 2 lakhs made by the Assessing Officer, treating the gifts received from Shri Naveen Khera as unexplained cash credits or the AM is justified in reversing the order of the Commissioner of Income-tax(A) ? (iii) Whether, on facts and in the circumstances of the case, the learned Vice-President is right in upholding the order of the Commissioner of Income-tax allowing the set-off of Rs. 5,28,302 or the learned AM is right in allowing the appeal by the revenue ? (iv) Whether, on the facts and in the circumstances of the case, the issue regarding deletion of addition of Rs. 4,50,000 on account of cash credit considered unexplained by the Assessing Officer and Rs. 18,000 being interest paid thereon disallowed by the Assessing Officer should be restored to the Assessing Officer for fresh consideration, as held by the learned AM ? We, accordingly, forward the records of the appeal mentioned above to the Hon ble President of the Tribunal. THIRD MEMBER ORDER Per H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reasons stated in paragraph 4.5 of his order. 3. While deciding the appeal of the revenue, the ld. Vice President (J.M.) has confirmed the order of the ld.CIT(A) for the reason that the order of ld.CIT(A) in the case of Dolphin Marbles (P.) Ltd. (supra) has been confirmed and receipt of share application money has been accepted. However, the ld.A.M. opined that it would be proper to set aside the substantive addition in the case of Shri Vishwanath Prasad Gupta and the issue be restored to the file of the Assessing Officer with the direction that he should decide the same afresh in view of the directions given in the case of Dolphin Marbles (P.) Ltd. (supra). 4. I have heard the rival submissions and have also perused the material available on record. While deciding Question No. (i) in the case of Dolphin Marbles (P.) Ltd. (supra) by my order of even date, I have agreed with the view of the ld.V.P. that the company had received share application money to the extent of Rs. 25 lakhs. In the instant case, money has been withdrawn by the assessee being director of the said company from company s bank account. It is observed that the ld.CIT(A) has verified the same and confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The alleged gift was made by depositing the amount of Rs. 1 lakh each on two occasions in cash. It is claimed-that the donor had confirmed the gift by writing a letter directly to the Assessing Officer from Singapore. This letter is also of no consequence, particularly while the identity of the donor is not established. Furthermore, the said letter is also not attested or authenticated by any authority. The assessee did not produce alleged donor for examination before the lower authorities for the reasons best known to him. There is no evidence on record to show the capacity of the donor in making the alleged gift. Considering the relevant facts and materials available on record, I agree with the view taken by the.ld.A.M. 9. The brief facts relating to question No. (iii) are that the assessee submitted a return of income under section 153A of the Act disclosing additional income of Rs. 25 lacs on estimate basis on account of loose papers found during the course of search. The assessee has also paid tax on the same. However, during the course of assessment proceedings, the Assessing Officer scrutinized the loose papers meticulously and determined income on account of loose pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. On appeal, the ld. CIT(A), deleted the addition. 14. The revenue preferred an appeal before the Tribunal against the order of the ld.CIT(A). 15. The ld.V.P. has confirmed the order of the ld. CIT(A) deleting the impugned addition. However, the ld.A.M., who wrote the dissent, held that the order of the ld. CIT(A) cannot be sustained and the issue is required to be restored to the file of the Assessing Officer with the direction that he should decide the issue afresh after considering the relevant materials and after giving proper opportunity of being heard to the assessee. 16. I have considered the facts, the dissenting orders and rival contentions. As regards the addition of Rs. 2,50,000, I find that the sum of Rs. 2,50,000 consists of opening balance of Rs. 50,000 and a sum of Rs. 2 lakhs advanced during this assessment year. This fact is clear from the ledger of Deandas Pathashumal. A copy of the same is available at page 67 of the assessee s Paper Book. Thus, there was no question of making the addition of Rs. 50,000. As regards the sum of Rs. 2,00,000 advanced during the year under consideration, it is claimed that Shri Devandas Pathashumal is regularly assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction is recorded, is available at pages 79 and 80 of the assessee s Paper Book. Shri Dataram Tehlani is also regularly assessed to tax and filed coy of acknowledgement of return of income. In the Balance Sheet placed at page 83 of the Paper Book, Shri Dataram Tehlani has disclosed to the department that the assessee is a loan debtor. The Balance Sheet also shows that Shri Dataram Tehlani had advanced Rs. 2,10,000 to Modern Bidi Factory. This loan has been accepted by the department. It is claimed that Shri Dataram Tehlani also appeared before the Assessing Officer. However, the ld.Assessing Officer incorrectly recorded that the creditor was not produced for examination. It seems that the Assessing Officer had made the addition without proper verification and without giving finding in respect of the creditor. In my opinion, the assessee has discharged the onus of proving the identity of the creditor, the capacity of the creditor and the genuineness of the transaction. In that view of the matter, I agree with the view taken by the ld.V.P. 18. Since I have agreed with the view taken by the ld.V.P. that there was no justification in making the addition of Rs. 4,50,000 under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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