TMI Blog2011 (4) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... of rice superfine because the stock was damaged and remained in stock out of old husking and it was packed in used bags - As regards collusive transaction with M/s Prahlad Bhagat & Co. for purchase of rice @ Rs.900/- and sale @ Rs.750/-, the reasons for such transactions, the assessee explained the reasons for the same that good quality rice had been purchased from them and poor quality supplied - The only addition that can be sustained in this regard was with regard to supply made by M/s Prahlad Bhagat & Co. at Rs.771/- for which bags had been charged at Rs.2/- which is to be taken as loss of M/s Prahlad Bhagat & Co. and not that of the assessee - Decided against the assessee - ITA No. 410 of 2006 - - - Dated:- 6-4-2011 - MR. JUSTI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant had fully discharged its onus, is legally sustainable in the eyes of law? iv) Whether in the facts and circumstances of the present case, the action of the authorities below in sustaining the addition of Rs.16,676/- on account of excess loss claimed in Bardana account, is legally sustainable in the eyes of law? v) Whether in the facts and circumstances of the present case, the action of the authorities below vide Annexures A-1 to A-3 on its own presumption, is legally sustainable in the eyes of law? vi) Whether in the facts and circumstances of the present case, the impugned orders Annexures A-1 to A-3 are legally sustainable in the eyes of law? 3. Briefly stated, the facts necessary for disposal as narrated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts are that during the year the assessee had raised unsecured loan of Rs.45,000/- from one Shri Harbans Lal of Gali No.1, Jawala Nagar, Saharanpur (UP). During the course of assessment proceedings, the Assessing Officer got the statement of said Shri Harbans Lal recorded through his Inspector who reported that Shri Harbans Lal had admitted having advanced a sum of Rs.30,000/- but did not admit interest receipt. He also observed that the creditor was apparently not having any source of income and his sons were selling vegetable. The AO, therefore, treated the loan as bogus and also disallowed interest thereon. On appeal, it was submitted before the CIT(A) that the loan was received through bank draft prepared out of the maturity of FDRs an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CIT v. Precision Finance Pvt. Ltd., 208 ITR 465. Further, as held by the Calcutta High Court in the case of Shankar Industries v. CIT, 114 ITR 689, mere identity of the creditor is not enough, capacity of the creditor and genuineness of the transaction have also to be proved. In the instant case, there is nothing on record to prove the capacity of the creditor and genuineness of the transaction. Hence, we decline to interfere with the order of the CIT(A) in sustaining the impugned addition. This ground of appeal of the assessee is dismissed. 6. While upholding the disallowance of loss on account of Bardana, the Tribunal had observed as under:- 23. Ground No. 7 pertains to disallowance of bardana loss at Rs.1,15,490/- out of Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same rate at which rice is supplied. The assessee had paid Rs.16,076/- in excess. The total addition was worked out at Rs.1,31,586/-. It was submitted before the CIT (A) that the assessee had purchased 9279 new bags on 10.3.98, 19.3.98 and 30.3.98. This bardana was not used in closing stock of rice superfine because the stock was damaged and remained in stock out of old husking and it was packed in used bags. The bardana purchased in March was used for supplies made in March itself to DFSC who do not take delivery in old bags. The said bardana was supplied at the rate at which rice was supplied except for that which was supplied by M/s Prahlad Bhagat Co. who charges separately for new bags. As regards collusive transaction with M/s Prah ..... X X X X Extracts X X X X X X X X Extracts X X X X
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