TMI Blog2012 (9) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be the income of the firm and will be added to the income of the firm and can be accordingly taxed. The view taken by the CIT (A) appears to be erroneous on the face of it - against the assessee. Addition made on account of estimation of income - CIT (A) restricted the addition to Rs. 75,000 - Held that:- The books of account of the assessee are not reliable and expenses were not supported by proper vouchers. Being so, AO is justified in rejecting the books of account and estimating the income. However, the estimation of income at 10% of the gross receipts is at higher side, thus the net profit at 9% of gross receipts instead of 10% as estimated by the Assessing Officer need to be made - CIT (A) was not justified in sustaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver returned any agricultural income in his return for the earlier year. Regarding the advance received on account of sale of agricultural land at Rs. 35,00,000, this claim was rejected since no details were filed with regard to the mode in which such advance is received and the person from whom it is received. The details of transaction were not furnished and nothing has been reflected in the return of income. With regard to accumulated savings since the 50% of returned income at Rs. 3,63,990 is considered as sources and as such further deduction was not given. Thus the Assessing Officer considered Rs. 44,51,033 as capital introduced by Sri K.G.K. Prasad as unexplained income. 3.2 Regarding capital introduced by Sri K. Seshu Prasad, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , genuineness of transaction and capacity of the parties to introduce the capital are not at all proved. Being so, it is to be treated as unexplained income in the hands of the assessee firm. 5. On the other hand, the learned AR submitted that the capital is introduced by the partners and they have confirmed the transaction and in these circumstances, by any stretch of imagination it cannot be considered as unexplained credit in the hands of the assessee firm. He relied on the order of the Tribunal dated 30th July, 2010 in the case of M/s. Shree Raghuram Residency, Hyderabad in ITA no. 183/Hyd/2010 and Order of the Tribunal dated 23.10.2009 in the case of Vikas Oil Industries, in ITA No. 632/Hyd/09. 6. We have carefully gone through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame view. It has been hold as under (headnote) : "Where any sum is found credited in the books of the assessee, the initial onus is on the assessee to offer an explanation of the nature and source of a cash credit. If the explanation is not found satisfactory or reasonable, the Income-tax Officer can treat such money as the assessee's income from undisclosed sources. It is not necessary for the Income-tax Officer to locate the exact source of the credits. The assessee can prove the genuineness of the credits by establishing from some plausible evidence the identity of the creditor and his creditworthiness." 8. A similar view has been taken by the Patna High Court in the case of CIT v. Anupam Udyog [1983] 142 ITR 133, that if there are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , shows that Section 68 applies when the sum in respect of which the explanation of the assessee is not accepted is found credited in the books of account. In such a situation, the sum so credited is charged to income-tax as the income of the assessee of that previous year in which it is found credited in the books of account. Section 69 applies to unexplained investments which are not recorded in the books of account." 10. The same view was taken by the Punjab and Haryana High Court also in the case of Smt Shanta Devi v. CIT [1988] 171 ITR 532, as under that where any sum is found credited in the books of account of an assessee who offers no explanation of the nature and source of the cash credit and if the explanation is not found satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to be the income of the firm and will be added to the income of the firm and can be accordingly taxed. The view taken by the CIT(A) appears to be erroneous on the face of it. Hence, we decide the issue against the assessee and reverse the order of the CIT(A) on this issue. 13. The next ground raised by the Revenue is with regard to deletion of addition made on account of estimation of income. Brief facts of the issue are that assessee produced the books of account and vouchers were produced in respect of purchases. However, supporting vouchers towards expenses were not produced. In the absence of proper vouchers books of account were rejected and income was estimated at 10% of gross receipts of Rs. 3,01,81,163 worked out at Rs. 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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