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TMI Blog2012 (7) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the Ld. Assessing Officer on account of cash credit us. 68 of the Act and has also erred in law and on facts in confirming the disallowance of interest thereon amounting to Rs.32,780/-. 2. The Hon'ble CIT(A) has also erred in law and on facts in confirming the disallowance of Rs.4,265/- @ 25% of Rs.17,066/- out of telephone, mobiles and vehicle expenses. 3. The Hon'ble CIT(A) has also erred in law and on facts in confirming the addition of Rs.72,000/- which was made by the Ld. Assessing Officer on account of low household withdrawals." 2. The facts of the case are that assessee field his return of income declaring total income at Rs.1,09,510/-. Subsequently, case was selected for scrutiny and the Assessing Officer made addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the case of CIT v. Orissa Corporation P. Ltd. 159 ITR 78 (SC) and with regard to capacity of creditor - the relevance was placed in the case of Oceanic Products Exporting Co. v. CIT 241 ITR 497 (Kar) and in respect of genuineness of the transaction Ld. AR relied upon the decision of Dhanlaxmi Steel Re-rolling Mills v. CIT 228 ITR 780 (AP). Ld. AR submitted that all the depositors are related to the assessee and therefore their proof of identity is well established. Further, it is submitted that all the depositors are assessed to tax and their details i.e. PAN etc are with the Department. Further, it is submitted that from the bank account, it is evident that the depositors have sufficient funds to give loan to the assessee. Ld. AR has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no evidence of the creditors having been engaged in any business whatsoever especially the five ladies who were all housewives. Therefore, I am not convinced that they had the creditworthiness or the means to give substantial loans to the Assessee. Moreover, the purpose for which the loans were taken was not established by the Assessee. If the loans were not taken for meeting any financial obligations or business commitments, it would be obvious that they we simply accommodation entries taken for the purpose of introducing unaccounted incomes in the books of account. The addition of the sum of Rs.2,06,000 under the provisions of sec. 68 of the IT Act is therefore, confirmed.' 10.1 In any case, no rule of law can be laid down in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer was not convinced with the statements of the two lady depositors. We do not agree with the reasoning given by Ld. CIT(A) for rejecting the ground of appeal simply on the basis that the depositors who are summoned were leady member and they could not earn the income as claimed by them in the return of income. The Revenue has not placed anything on record showing that those lady depositors were not having any source of income. We are not convinced with the reasoning of Ld. CIT(A) that the lady depositors were not having independent source of income. It is not disputed that the lady depositors are assessed to tax and income tax return filed by them was duly accepted by the Department. In this view of the matter, we direct the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and they also made withdrawal from their source of income It is submitted that the addition of Rs.73,000/- was unjustified. 10. On the contrary, Ld. SR-DR supported the orders of authorities below. 11. We have heard the rival contentions, perused the materials available on record. We find that Ld. CIT(A) has given a finding in para-21 of his order, same is reproduced hereinbelow:- "21. National surveys have revealed that the highest per capita household income is earned by the families of Surat. The average annual per capita household income in Surat has been pegged at Rs.4.5 lacs approximately. This also means that with higher money supply and higher disposable income, there would be a higher demand leading to higher prices and conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for this reason that there are a lot of deeming provisions in the Income-tax Act and consequently, several factors are assumed or presumed and on the basis of such presumptions and assumptions, conclusions are allowed to be drawn regarding the correct and true income of an Assessee. In the case of household withdrawals, the assumption regarding inadequacy is drawn on the basis of the expenditure that any ordinary middle-class family is likely to incur in course of the year. Therefore, simply because the AO did not bring any material evidence on record to show that household expenses had been incurred from out of unaccounted income, the addition cannot be deleted. The presumption made by the AO and estimation made was very much realistic. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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