TMI Blog2015 (1) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, appears that the impugned addition has been made merely on the basis of surmises and conjecture. Therefore, the deposits in question were genuine and the addition made by the AO and confirmed by the ld. CIT(A) was not justified, we, therefore, delete the same. - Decided in favour of assessee. Additional income from Tanker not shown - Held that:- In the present case it is an admitted fact that the assessee maintained separate books of accounts for the tanker which were not rejected by invoking the provisions of section 145(3) of the Act. The AO disallowed 50% of the total expenses without any basis and the ld. CIT(A) also worked out the expenses on the basis of consumption of diesel but ignored other expenses like salary to the driver & the cleaner, repairs & maintenance, depreciation etc. In the present case the assessee received the reimbursement of the expenses on the basis of certain parameters fixed by the Petroleum Company those parameters were not doubted. The assessee received the transportation charges of ₹ 18,82,516/- claimed the expenses at ₹ 16,86,875/- which were much less than the reimbursement made by the Petroleum Company, the assessee after cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... craves leave to add or amend the grounds of appeals before the appeal is finally heard or disposed off. 3. Ground No. 6 is general in nature while the Ground No. 5 was not pressed, therefore, these grounds do not require any adjudication on our part. Grievance of the assessee vide Ground Nos. 1 and 2 relates to the confirmation of addition of ₹ 10,74,600/- made by the AO on account of cash credit. 4. Facts related to this issue in brief are that the assessee filed the return of income on 01.12.2003 declaring an income of ₹ 79,365/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 30.08.2004. Later on, the case was selected for scrutiny. 5. During the course of assessment proceedings the assessee furnished the affidavits of the cash creditors and produced 9 cash creditors whose statements were recorded. The AO noticed that the assessee received unsecured loans amounting to ₹ 17,18,198/- from 62 new and 20 old creditors. The AO asked the assessee to establish the identity, creditworthiness and the genuineness of the transactions. He also noticed that the assessee had accepted an amount less than ₹ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above are being produced herewith for your goodself's ready reference. c) The Assessing Officer has discussed these aspects at pages 1, 2 3 of his order, but then in para-5, he has made the addition on account of such amounts lent by those persons by stating that such persons have not confirmed the date of advancement and such persons are not being assessed to tax with the Income Tax Department and lastly, he has also doubted the genuineness of transactions that the said amount, have been advanced without interest. The Assessing Officer has not doubted about the identity of the persons, but doubted to the other aspect i.e the capacity. d) It is being submitted herewith that all such persons when produced, have confirmed the advancement of loans with sources thereof and replied to all the queries as raised by the Assessing Officer and your goodself can peruse any statement, which will confirm that all such persons have emphatically stated that they have advanced the loan to the appellant. It is not a case of the Assessing Officer that the persons did not appear or did not reply to the various queries and even some of the persons when asked about their bank accounts, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a settled law that the assessee should not be placed upon the rack, should not be called upon to explain not merely the origin and the source of contribution, but the origin of origin and source of source as well. This view have been taken by the Hon ble Supreme Court in the case of Hasti Mal Vs. CIT as reported in 49 ITR 112. h) It is also a settled law by the Hon'ble Supreme Court in the case as reported in the case of Shri Lekha Banerji Vs. CIT in 49 ITR 112 that if the explanation given by the assessee is bonafide then the department cannot convert the good proof into no proof or otherwise act non-reasonably rejected Also, where the explanation have been given by the assessee, then it cannot be rejected arbitrarily without any sufficient ground, unimaginary or irrelevant ground This view finds support from the decision of the Delhi High Court in the case of Sona Electric Co. as reported in 152 ITR 507. In our case, we have given the detailed explanation of each and everything about the credits and it is upto the department to peruse the matter further to trace and examine the credit worthiness. This has been held by the Hon ble Supreme Court in the case of CIT Vs Ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the authorities below and further submitted that the confirmation and the affidavits of the creditors for advancement of loans were furnished during the course of assessment proceedings and all the persons were produced before the AO with identity proof and they had confirmed about the deposits of amount alongwith source of their income. It was stated that no discrepancy had been noticed by the AO or by the ld. CIT(A) and the only doubt had been raised with regard to the capacity of the persons since no interest had been paid to them. It was stated that the evidence of land holding had been given which was not doubted either by the AO or by the ld. CIT(A). It was further stated that there is no bar in giving a deposit by way of cash and the creditors have clearly stated that they did not have any bank account, the amount had been deposited by them in cash which is one of the accepted mode of the financial transaction. It was contended that merely on this basis that cash had been received the doubt could not be raised. It was also contended that the interest had not been charged because of the reasons that the assessee was dealing in resale of Petroleum Products which were req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash to ensure the regular supplies of the Petroleum Products like diesel etc. which was required for the purpose of harvesting and sowing, the said explanation of the assessee was not rebutted at any stage. It, therefore, appears that the impugned addition has been made merely on the basis of surmises and conjecture. It is well settled that the doubt or suspicion howsoever strong it cannot replace the reality based on the evidence. In the present case also the assessee produced the depositors before the AO, their statements were recorded, the evidences of their land holding were also produced which were not doubted, the assessee was dealing in resale of the Petroleum Products and the depositors to ensure the uninterrupted supply of the diesel etc. during the harvesting or sowing season made the deposits. Therefore, the deposits in question were genuine and the addition made by the AO and confirmed by the ld. CIT(A) was not justified, we, therefore, delete the same. 11. The next issue vide Ground Nos. 3 4 relates to the sustenance of addition of ₹ 3,60,199/-. The facts related to this issue in brief are that the assessee was running a Petrol Pump for which it required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of ₹ 3,60,199/- and sustained the disallowance to that extent. 14. Being aggrieved the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee was incurring the expenditure on account of salary to the driver and cleaner, maintenance/repair expenses of the tankers and also incurred expenditure for the diesel consumed by tanker. It was stated that the assessee maintained a separate account in respect of such tanker, the gross income of which was disclosed at ₹ 1,96,242/- and after claiming the depreciation at ₹ 1,52,275/-, the net income was shown at ₹ 43,867/- which was more than the income deemed to be shown u/s 44AE of the Act. It was further stated that the addition sustained by the ld. CIT(A) on the basis of average consumption per liter of diesel was not justified because there were other expenses of repair/maintenance, driver/cleaner salary and that there could not be any fixed consumption of diesel which depended upon many factors such as traffic hazard on the way etc. It was stated that the amount was reimbursed to the assessee on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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