TMI Blog2014 (11) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the gift was made after one month and a few days cannot disprove the genuineness of the gift when it was a brother helping his real brother, who, in turn, was setting up his factory and further the source of the gift is specific and substantiated. The loan of ₹ 1 lac was given by one brother to another through cheque - Source of the amount in the bank account is evident from the AO’s own recording that the account of Shri Rajender Kumar was overdrawn to that extent - As the explanation about the source of deposit in his bank account is specific and substantiated, CIT(A) was fully justified in deleting the addition - Smt. Sumitra Devi was admittedly an employee drawing a salary of ₹ 10,000/- 12,000/- per month. She withdrew a cash of ₹ 57,000/- from her bank account on 10.2.2006 and the sum of ₹ 50,000/- out of that was re-deposited on 11.7.2006 in her bank account, for which a cheque was issued to the assessee as loan - she withdrew a sum of ₹ 57,000/- from her regular bank account which was claimed to have been re-deposited for giving loan to the assessee - The AO has simply rejected the assessee’s contention of re-deposit of cash withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri R. S. Syal, AM And Shri C. M. Garg, JM,JJ. For the Petitioner : Shri Sudhanshu Srivastav, Advocate For the Respondent : Shri Satpal Singh, Sr. DR ORDER Per R. S. Syal, AM:- These appeals by the Revenue relating to the assessment year 2007-08 are in respect of three separate but connected assesses. Since some of the issues raised in these appeals are common, we are proceeding to dispose them off by this consolidated order, for the sake of convenience. ITA No.661/Del/2011- Sh. Nihal Singh 2. The respondent in the present appeal, namely, Shri Nihal Singh Yadav, is one of the partners of M/s Golden Tex which is respondent in ITA No.660/Del/2011. Golden Tex, a partnership firm was established on 14.03.2006 with four partners. One partner, namely, Smt. Kanta Devi retired on 20.3.2007. During the financial year 2006-07 relevant to the assessment year under consideration, the assessee contributed capital of ₹ 30.84 lac in the partnership firm. During the course of assessment proceedings of the firm, the AO made certain inquiries about the source of such capital contribution. Unsatisfied with the explanation given on behalf of the assessee, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount in the hands of the payer is very important aspect in the entire process of proving the genuineness of the transaction. Source of a credit can be proved by giving a specific explanation duly substantiated and not by a general unsubstantiated explanation. Once such a specific and substantiated explanation is tendered, then it is for the AO to either accept the same or reject with some contrary evidence. There can be no rejection of such specific and substantiated explanation in a general manner. But if the explanation tendered by the assessee is itself general or unsubstantiated, then nothing wrong can be found in the action of the AO in rejecting such general explanation and making addition. It is clear that primary onus is always on the assessee to prove the transaction. If the primary onus is not at all discharged or partly discharged by giving a general, vague or unsubstantiated statements, then the assessee cannot later on put the blame on the AO for addition. It can be explained with the help of a simple illustration. If the assessee gives a specific explanation about the source of the deposit, being the savings of the payer, then such an explanation is general, unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the amounts received by him from other persons. Gift of ₹ 2.50 lac from Shri Rajender Kumar. 5. The assessee claimed to have received cash gift of ₹ 2.50 lac from Shri Rajender Kumar on 15.4.2006. Shri Rajender Kumar happens to be the real brother of the assessee. An affidavit was furnished along with other documents evidencing the source of amount in the hands of Shri Rajender Kumar. It was stated that Shri Rajender Kumar sold house No. 960, Sector 3, Part-1, HUDA Rewari on 7.3.2006 for a consideration of ₹ 9.54 lac, out of which a sum of ₹ 2.50 lac was gifted to the assessee. The AO did not accept the genuineness of the gift on the ground that the amount was gifted after one month and a few days from the date of sale. He further observed that Shri Rajender Kumar was a person of little means and, hence, he could not have given the gift to the assessee. The ld. CIT(A), as discussed above, deleted the additions in an across-the-board manner, without going into the details of each amount. 6. From the material on record, it is noticed that the assessee s brother Shri Rajender Kumar sold his house on 7.3.2006 for a consideration of ₹ 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the rival submissions and perusing the relevant material on record, it is observed that Smt. Sumitra Devi was admittedly an employee drawing a salary of ₹ 10,000/- 12,000/- per month. She withdrew a cash of ₹ 57,000/- from her bank account on 10.2.2006 and the sum of ₹ 50,000/- out of that was re-deposited on 11.7.2006 in her bank account, for which a cheque was issued to the assessee as loan. The genuineness of the amount credited by Smt. Sumitra Devi in her bank account on various dates by means of salary cheques has not been disputed by the AO. It is further clear that she withdrew a sum of ₹ 57,000/- from her regular bank account which was claimed to have been re-deposited for giving loan to the assessee. The AO has simply rejected the assessee s contention of re-deposit of cash without pointing out the utilization of such amount elsewhere. Once it is admitted that a particular sum was withdrawn from bank, then its redeposit cannot be assailed by the Revenue without showing the utilization of such amount elsewhere. As the amount of ₹ 57,000 was withdrawn from her known sources of income, its redeposit cannot be questioned. Considering the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on record, it is observed that the assessee concocted a story of having received a gift of ₹ 3 lac from his father, Shri Ram Kishan Yadav. There is no reliable evidence to substantiate the sale proceeds of ₹ 4 lac of agricultural produce out of which the alleged gift of ₹ 3 lac was made to the assessee. The fact that Shri Ram Kishan Yadav is drawing pension of ₹ 6,000/- per month and had never credit balance of more than ₹ 7,000/- in his bank account, do support the AO s contention about the non-genuineness of the gift alleged to have been received by the assessee. We, therefore, set aside the impugned order on this issue and restore the addition of ₹ 3 lac. Loan of ₹ 3.35 lac from Shri Ram Kishan Yadav. 15. The assessee again showed to have received a loan of ₹ 3.35 lac from his father, Shri Ram Kishan Yadav. It was stated that Shri Ram Kishan Yadav raised a loan of ₹ 3.35 lac from one Shri Rohtash and, in turn, advanced this loan to the assessee. Not convinced with the assessee s submissions, the AO made the addition which was deleted in the first appeal. 16. After considering the rival submissions, we find that the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The ld. CIT(A) deleted the addition. 20. After considering the rival submissions and perusing the relevant material on record, it is observed that the assessee has made a story of Smt. Shakuntla Devi receiving loans from some persons in cash and, thereafter, advancing the loan to the assessee after routing the same through her bank account. The explanation given by the assessee is vague and unsubstantiated. In the absence of the genuineness of the receipt of loans from Smt. Shakuntla Devi, we are of the considered opinion that the ld. CIT(A) was not justified in deleting this addition. We, therefore, confirm the action of the AO in making the addition. Loan of ₹ 3 lac from Shri Jagram Yadav. 21. The assessee claimed to have received a loan of ₹ 3 lac from Shri Jag Ram Yadav, who happens to be husband of Smt. Shakuntla Devi, the alleged creditor who claimed to have advanced a loan of ₹ 4 lac to the assessee. The assessee received a draft of ₹ 3 lac from Shri Jagram Yadav. On perusal of the bank account of Shri Jagram Yadav, it was observed that he had deposited cash of ₹ 2 lac in his bank account on 31.7.2006. He also claimed to have receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dduce any further evidence in support of the genuineness of the transaction. The ld. CIT(A) deleted the addition. 26. After considering the rival submissions and perusing the relevant material on record, we find that there is no plausible explanation of the deposits made in the bank account of Shri Mahabir Parsad Yadav of equal sums just few days prior to the advancing of the loan to the assessee. In the absence of any evidence to support the source of the deposits in bank accounts, we are of the considered opinion that the addition got wrongly deleted in the first appeal. We, therefore, order for the restoration of this addition. Loan of ₹ 4 lac from Shri Ramjas Yadav. 27. The assessee claimed to have received a loan of ₹ 4 lac by cheque from Shri Ram Jas Yadav. On perusal of the bank account of Shri Ramjas Yadav, it was observed that equal amount of cash was deposited in the bank account for which there was no explanation as Shri Ramjas Yadav had also expired. The AO made addition and the ld. CIT(A) deleted the same. 28. We find that the facts and circumstances of this addition are similar to those of Shri Mahabir Parsad Yadav discussed immediately above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of the firm for lack of proper explanation with reference to the source of investment. Addition was made in the hands of the firm on protective basis and in the hands of the assessee on substantive basis. The ld. CIT(A) deleted the addition in the same way as he did for Sh. Nihal Singh, the other partner, whose appeal has been disposed of hereinabove. We will deal with various items leading to total of ₹ 26 lac, one by one. Loan of ₹ 5 lac from Shri Kehar Singh 35. The assessee claimed to have received a loan of ₹ 5 lac from one Shri Kehar Singh by means of demand draft on 17.6.2006. On a perusal of the bank account by Shri Kehar Singh, the AO observed that cash of ₹ 5 lac was deposited in his bank account on 16.6.2006, out of which a demand draft for equal sum was issued in favour of the assessee on 17.6.2006 as loan. Shri Kehar Singh stated that he took a loan of ₹ 5 lac in cash from one Shri Lala Ram, who had sold his agricultural land on 5.6.2006 for a total consideration of ₹ 8,84,000/-. An affidavit of Sh. Lala Ram was filed to this effect. The AO did not accept the genuineness of the credit and made the addition. The ld .CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, it was noticed by the AO that a sum of ₹ 2,00,500/- was deposited in his bank account just one day prior to the date of making of the demand draft for giving loan to the assessee. The AO, therefore, made addition for the said sum because no plausible explanation was furnished about the source of the amount in the hands of Shri Ashok Kumar. The ld. CIT(A) deleted the addition. 40. After considering the rival submissions and perusing the relevant material on record, it is observed that the assessee neither filed any confirmation of loan nor any documentary evidence to prove how the amount came to the bank account of Shri Ashok Kumar. In the absence of such basic details, we are of the considered opinion that the amount was rightly added by the AO. The impugned order is set aside on this score. Loan of ₹ 3 lac from Shri Sunita Yadav. 41. The assessee claimed to have received a loan from his wife Smt. Sunita Yadav. During the course of investigation by the AO, she deposed that a loan of ₹ 3 lac was given to the assessee after receipt of a gift of the same amount from her sister Smt. Rajesh Yadav. In the absence of any documentary evidence filed in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement about the sale of crop by Shri Sheesh Ram Yadav resulting into realization of ₹ 2.50 lac, no documentary evidence was placed either before the AO or before us to substantiate the explanation that the crop was in fact sold for this amount by Shri Sheesh Ram Yadav. It is a case of a vague and unsubstantiated explanation. In the absence of any direct documentary evidence for sale of crop, except a certificate from Sarpanch, we are not inclined to accept the genuineness of this loan. This addition is restored. Loan of ₹ 4 lac from Smt. Anita Yadav. 47. The assessee claimed to have received a loan of ₹ 4 lac by two cheques of ₹ 2 lac each dated 2.12.2006 and 4.12.2006 from Smt. Anita Yadav. On perusal of the bank account of Smt. Anita Yadav, it was noticed that a sum of ₹ 4 lac was deposited in cash in her bank account, out of which this loan was claimed to have been advanced to the assessee. The source of amount in the hands of Smt. Anita Yadav was stated to be a gift received by her in cash from Shri Ram Kishan Yadav. Shri Ram Kishan Yadav executed an agreement on 3.11.2006 and received a sum of ₹ 5.15 lac as advance against the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st appeal. 51. After considering the rival submissions and perusing the relevant material on record, it is observed that the assessee made a specific and substantiated explanation about the source of money in the hands of his creditor. The AO did not venture to verify this definite explanation given before him. In the absence of any contradiction of the definite and substantiated explanation given in support of the loan, we are satisfied that the ld. CIT(A) was fully justified in deleting this addition. We order accordingly. 52. In the result, the appeal is partly allowed. ITA No.660/Del/2011- M/s Golden Tex 53. The first issue raised in this appeal is against the deletion of addition of ₹ 14 lac made by the AO u/s 68 of the Act. Facts have been summarily noted supra about this partnership firm which was established in the preceding year and had not started its manufacturing activity during the previous year relevant to the assessment year under consideration. The assessee claimed, inter alia, to have received unsecured loans amounting to ₹ 14 lac from certain persons. The AO was not satisfied with the genuineness of the source of the amounts and, accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation given by Shri Raj Kumar about the receipt of ₹ 1.60 lac from his father, there can be no reason to discredit the loan given by him out of this money available with him. We, therefore, uphold the impugned order in deleting this addition. Loan of ₹ 2.50 lac by Shri Raj Singh Yadav 57. The assessee claimed to have received interest free loan from Shri Raj Singh Yadav through cheque on 24.11.2006. The source of loan was given to be realization from the sale of crop. In the absence of any documentary evidence supporting the claim of sale of crop, the AO made addition for this sum, which was deleted in the first appeal. 58. After considering the rival submissions and perusing the relevant material on record, it is observed that cash of ₹ 2.50 lac was deposited in the bank account of Sh. Raj Singh Yadav immediately before the issuance of cheque to the assessee for equal sum. In the name of the source of the amount of deposit in his bank account, a general unsubstantiated explanation was given about the receipts from sale of crop. No reliable documentary evidence in the shape of Form-J etc. was filed to establish the receipt from the sale of crop. In our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was also explained to be out of his property, of which he was the absolute owner. The AO did not find any force in the specific explanation given to him about the source of the deposit. Neither Shri Phul Chand Yadav was summoned for examination, nor any other inquiry was conducted to disbelieve the specific and authenticated explanation about the gift made by a father to his daughter. Under these circumstances, we are of the considered opinion that the assessee succeeded in discharging the primary onus cast upon him with regard to this loan transaction. The impugned order is upheld on this score. 63. This ground in totality is, therefore, partly allowed. 64. The other two grounds are against the deletion of addition of ₹ 26 lac and ₹ 30.84 lac made on protective basis in the hands of the assessee firm and on substantive basis in the hands of Shri Rajnan Kumar Yadav and Shri Nihal Singh, the partners of the assessee firm. We have separately dealt with the appeals filed by the Revenue in respect of these two partners in whose hands the additions were made on substantive basis. In view of our decision given in these two appeals, where additions were made on substan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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