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TMI Blog2014 (7) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... iled return of income declaring total income of Rs. 75,090 and filed audited accounts along with the Form 3CB. As seen from the profit and loss account, it has sales of about Rs. 1.93 crores. In the course of scrutiny assessment, the Assessing Officer noticed that the assessee has deficit cash balance on two occasions during the year, i.e., on October 8, 2004, there was a deficit of Rs. 2,69,453 and on October 25, 2004, there was a deficit of Rs. 4,53,533. Therefore, the Assessing Officer redrew the day-to-day cash balance in the presence of Mr. R. Markendeya, managing partner and Sri Srisailam, his accountant and revised balances was extracted in page 3 of the assessment order. The total deficit was worked out to Rs. 2,69,454 + Rs. 1,84,10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case carefully, it is noticed that on this issue also my predecessor has called for remand report of the Assessing Officer, the Assessing Officer vide letter dated September 13, 2010, submitted its remand report, gist of which is reproduced as under : 'The other disallowance made is on account of the deficit cash balances worked out on two particular dates amounting to Rs. 4,53,560, i.e., on October 8, 2004, Rs. 2,69,454 and on October 25, 2004, Rs. 1,84,106. The assessee explained that as the payments were made by the partners. To this effect copies of affidavits, stated to have been submitted before the Commissioner of Income-tax (Appeals), have been furnished. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d report, it is clear that the affidavits submitted before the Commissioner of Income-tax (Appeals) was an afterthought exercise because the assessee itself has admitted that it was not having a regular accountant, therefore, the entries were not made in the books of account. No reply was filed before the Assessing Officer during the scrutiny assessment proceedings except these affidavits no other evidence was submitted to prove that the payments were made by the partners on behalf of the firm. In the absence of any documentary evidence submitted before the Assessing Officer and before me to corroborate the facts mentioned in the affidavits, therefore, it is held that the appellant has failed to prove the discrepancy as per the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70,000 on October 18, 2004 and Rs. 1,85,000 on October 25, 2004. However, the actual cash deficit as worked out by the Assessing Officer in page 2 was at Rs. 4,53,553 on October 25, 2004. The assessee because of the working of the Assessing Officer in different manner in page 3 of the order, tried to explain the amount as advanced in those days as worked out by the Assessing Officer which is indeed an afterthought. Actually, as per the working of the Assessing Officer extracted in page 3 of the order, he arrived at deficit at Rs. 2,69,454 on October 18, 2004 and without adjusting this deficit, reworked out further deficit on October 25, 2004, at Rs. 1,84,106 and added these two amounts to arrive at the peak deficit at Rs. 4,53,560. Because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction and sale of textiles. As and when the firm needed funds for its activities, I am from out of my own sources, provided the same for temporary accommodation. On October 8, 2004, I have given an amount of Rs. 40,000 (Rs. forty thousand only) to the appellant firm. Again on October 25, 2004, I have given an amount of Rs. 25,000 (Rs. twenty-five thousand only). The aggregate of the two amounts, i.e., Rs. 65,000 same was returned to me during the same financial year." (emphasis supplied) 6.2. Similar affidavits were furnished by the other persons/partners stated above. As can be seen from the above, there is a confirmation that they have advanced funds and also that the entire amount advanced by them was returned during the same financia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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