TMI Blog2015 (2) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Member).- This is an appeal filed by the assessee against the order dated November 11, 2013 of the Commissioner of Income-tax (Appeals)-II, Ludhiana. 2. In this appeal, the assessee has raised the following grounds : 1. That the Worthy Commissioner of Income-tax (Appeals), Ludhiana has erred in dismissing the appeal and confirming the addi tion made by the Assessing Officer to the tune of ₹ 15,96,000 under section 68 out of loan amount received from creditors and ₹ 3,00,000 on account of so-called low withdrawals. 2. That the addition has been confirmed against the facts and circumstances of the case and submissions made during the course of hearing has not been considered properly. 3. That the Worthy Commissioner of Income-tax (Appeals) has erred in not considering that the confirmation from the creditors, permanent account number, copy of the Income-tax return and copy of bank account pertaining to the creditors had been filed before the Assessing Officer and, as such, the addition was confirmed on assumption and presumption. 4. That the Commissioner of Income-tax (Appeals) has also erred in not consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) who in turn asked to produce those persons before the Assessing Officer during remand proceedings and matter was remanded to the Assessing Officer. All those persons were produced before the Assessing Officer and in this regard he referred to the various documents filed and copies of the statements recorded by the Assessing Officer of various persons which are placed in the paper book. He also referred to the statement of Shri Ankit Garg who is owner of M/s. Satyam Commodities which is filed in the paper book at pages 123 to 126. After recording the statements, the assessment was completed under section 143(3) of the Act and copy of the assessment order is filed at page 136 where only the nominal addition has been made and returned income has been accepted. Thus, the assessee has clearly proved the three ingredients, i.e., (i) name of the lender, (ii) genuineness of the transaction, and (iii)source of the credit. Even the persons from whom loans were taken were presented before the Assessing Officer wherein they have confirmed the loans. In any case, the Tribunal in the similar circumstances has deleted the addition in the case of Shri Seva Ram v. ITO in I. T. A. No. 327/Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was opening balance amounting to ₹ 6,56,554. Copy of account of Sewa Ram Hindu undivided family is reproduced hereunder : Date Particulars Debit Credit Balance 1.4.2006 By opening balance . . . 6,56,554.00 6,56,554.00 23.5.2006 To cheque No. 805339 1,500.00 . . . 6,55,054.00 12.9.2006 To cheque No. 291454 5,000.00 . . . 6,50,054.00 28.9.2006 By cheque No. 809838 . . . 36,466.00 6,86,520.00 13.10.2006 By cheque No. 058588 . . . 48,200.00 7,34,720.00 25.10.2006 To cheque No. 291480 6,894.00 . . . 7,27,826.00 3.11.2006 By cheque No. 058589 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved because loans were received through genuine transactions and even confirmations were filed. Capacity stands proved by disclosure of the source of fund by way of profit from commodity transactions. Therefore, the matter should have ended there only. If the Assessing Officer was of the view that these profits are not genuinely earned by these family members then initially assessments of such family members should have been taken up for scrutiny and enquiry should have been made by recording the statements of such family members which has not been done. The fact remains that earning the profit through commodity transactions has not been doubted. Only aspect which has been doubted is that cheques have been issued by the assessee on behalf of the members of the family. Again referring to the copy of account, it is clear that Sewa Ram Hindu undivided family has been treating its account with the assessee as current account and some other payments perhaps for payment of Income-tax and deposit in the saving schemes has been also issued by the assessee on behalf of Sewa Ram Hindu undivided family. In fact cheque for ₹ 1,500, ₹ 5,000, ₹ 6,894, ₹ 7,000, ₹ 70, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by the assessee on a later date. If there is no column for giving the details of voter card in the client registration form then there was no need to give voter card along with registration form and therefore, this objection is also of no substance. 10. We do not find any force in the submissions of the learned Departmental representative for the Revenue that the observations of the hon'ble Supreme Court in case of CIT v. P. Mohanakala [2007] 291 ITR 278 (SC) is applicable to the case of the assessee. According to him once the Assessing Officer has given a finding that the expla nation of the assessee is not satisfactory then the same is binding on the assessee. In case of CIT v. P. Mohanakala the hon'ble apex court was concerned with a case where the assessee and his family members have received gifts of ₹ 1,79,27,703 in various years from non-resident Indian (NRI) who was not related to the assessee. Various contradictions were found in the statements of Shri Sam pathkumar who was a common donor and the Assessing Officer recorded various findings which have been summaries by the court at paragraph 8 which is as under (page 283) : 'The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice that section 68 of the Act itself provides, where any sum is found credited in the books of the assessees for any previous years the same may be charged to Income-tax as the income of the asses sees of the previous year if the explanation offered by the assessees about the nature and source of such sums found credited in the books of the assessees is in the opinion of the Assessing Officer not satisfactory. Such opinion formed itself constitutes a prima facie evidence against the assessees, viz., the receipt of money, and if the assessees fail to rebut the said evidence the same can be used against the assessees by holding that it was a receipt of an income nature. In the case in hand the authorities concurrently found the explanation offered by the assessees unacceptable. The authorities upheld the opinion formed by the Assessing Officer that the explanation offered was not satisfactory. The assessees did not take the plea that even if the explanation is not acceptable the material and attending circum stances available on record do not justify the sum found credited in the books to be treated as a receipt of an income nature. The burden in this regard was on the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore pertinent. The order of the court reads as under : 7.11.1994 : Their Lordships B. P. Jeevan Reddy and S. B. Maj mudar JJ. dismissed a special leave petition by the Department to appeal against the judgment dated April 24, 1994 of the Punjab and Haryana High Court in I. T. R. No. 138 of 1992, whereby the High Court upheld the order of the Tribunal and answered the questions referred to it in favour of the assessee. In this case, certain cash credits in the names of the assessee's wife, son and daughter-in-law were added back by the Officer as unexplained cash credits and certain payments in cash in excess of ₹ 2,500 were disallowed. The Appel late Tribunal allowed the assessee's appeal holding that since the cash credits came from bank accounts held by the wife, the son and the daughter-in-law, the Officer could not add back these amounts unless he could prove that these persons were the benamidars of the assessee. With respect to the cash payments in excess of ₹ 2,500, the Tribunal held that the matter was covered by a Board Circular and the payments had to be allowed. CIT v. Chunnilal S. L. P. (Civil) No.21334 of 1994.' Thus it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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