TMI Blog2012 (5) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... hown. Therefore, we confirm the order of the ld. CIT(A). Addition u/s 40A(3) - Held that:- The payments made by the franchisee-distributor to the principal are only on his (the latter's behalf); it being only entitled to a commission for the services rendered. The question of no separate payment being made by the payee-principal to the payer-agent, i.e., toward the remuneration or commission. Thus the provision of s. 40A(3) was found as not applicable in the facts and circumstances of the case. See Koottummal Groups V. ITO [2011 (6) TMI 502 - ITAT COCHIN] - Decided in favor of the assessee - ITA No. 1151/Chd/2011 - - - Dated:- 11-5-2012 - H. L. Karwa , V.P. AND T. R. Sood , AM Appellant by: M. R. Bhagat and K. C. Suman Respondent by: N. K. Saini ORDER Per T. R. Sood , A.M In this appeal the assessee has raised the following grounds: 1 The appellate order is illegal, arbitrary and not based on proper appreciation of facts of the case and law applicable to the facts of the case. 2. The ld. CIT(A) erred in confirming addition of ₹ 1,50,000/- and 2,00,000/- received by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney was drawn from Indian Overseas Bank, Moga. 4. The Assessing Officer analyzed the data furnished and the contents of the statement and observed that assessee s brother, Pradeep Matkan who is stated to have given a gift, does not have credible sources. He is not income-tax assessee as he has filed return long back. His meager income is less than ₹ 1.00 lakh per annum. Therefore, it was not possible to accept the gift. Credit worthiness of the donor is not proved. Accordingly the same was added to the income of the assessee u/s 68 of the Act as non-genuine gift. In respect of other gift the Assessing Officer made further enquiries from the banks and it was found that Smt. Swaran Kanta had a saving bank account No. 10445 with Indian Overseas Bank, Rly Road, Moga. It was observed that no cash withdrawal has been made after 22.10.2006 that too for a paltry amount of ₹ 3000/-. There were two transfer entries of ₹ 1,50,000/- on 29.11.2006 which was obviously not withdrawn for treatment of his husband. Donor has made further cash withdrawal of ₹ 2.00 lakhs on 14.5.2007 which was cancelled and then there was a transfer of ₹ 2.00 lakhs on 14.5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a bank account, it is not possible for her to first withdraw money then gift in cash. She could have easily issued a cheque for the gift. Therefore, the circumstances clearly show that these gifts are bogus and have been shown only to justify the contribution of capital. 8. We have heard the rival submissions carefully and agree with the submissions of the ld. DR for the revenue. The assessee s brother, Shri Pradeep Matkan has himself stated that he has income of ₹ 250 to 300 per day and has a small business though his wife is also doing stitching of clothes. That only shows a very low financial status of Shri Pradeep Matkan with the meager income of less than ₹ 1.00 lakh. It is very difficult to save a sum of ₹ 1.50 lakh. Therefore, we are of the opinion that this gift is not genuine. As far as gift from Swaran Kanta is concerned, the enquiries by the Assessing Officer clearly shows that no cash has been withdrawn after 20.10.2006 whereas gift has been made in April, 2007. Later on in May, 2007 a sum of ₹ 2.00 lakhs was transferred which was found to have been used for making fixed deposit (STDR). Further a sum of ₹ 10,000/- lakh and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ep the cash at home Moreover, against tuition income no expenses have been shown on account of household expenses or personal withdrawals. Therefore, the addition was justified. 12. After considering rival submissions, we are of the opinion that the ld. CIT(A) has correctly disbelieved the story of accumulation of cash which has been made by the assessee just to explain the introduction of cash. If the assessee was really rendering tuition the money would have been deposited in the bank or at least some expenses on account of personal expenses have been shown. Therefore, we confirm the order of the ld. CIT(A). 13. Ground No. 4 After hearing both the parties, we find from the perusal of bank statement the Assessing Officer noticed that the assessee had made cash payments in excess of ₹ 20,000/- to Reliance Communication Infrastructure Ltd. (in short RCIL ). Initially it was explained that the assessee had to make cash payments as per the conditions in the agreement. Later on it was submitted that in fact, the assessee had made payments of less than ₹ 20,000/- to the representative of RCIL. The assessee was requested to produce that employee but it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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