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2016 (1) TMI 489 - ITAT AHMEDABAD

2016 (1) TMI 489 - ITAT AHMEDABAD - TMI - Addition u/s 68 - cash credit - Held that:- Assessee claimed that sum of amount has been received from her son and daughter - the assessee has produced prima facie evidence about the source of amount - The AO, except disbelieving the version of the assessee, failed to bring any evidence contrary to the one submitted by the assessee. Thus, the addition to this extent, source proved, would be deleted. The assessee has explained the sources.

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e ld.AO has not given any plausible reasoning for rejecting this explanation. From the perusal of the bank statement, it is discernible that some of the cash was withdrawn and re-deposited within very short period. Therefore, in our opinion, the alleged surplus cash accumulated in the cash book out of the withdrawals from the bank is to be considered as source of re-deposit. - Decided in favour of assessee in part. - ITA No.2331/Ahd/2011 - Dated:- 3-11-2015 - SHRI RAJPAL YADAV, JUDICIAL MEMBER A .....

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by the AO with the aid of section 68 of the Income Tax Act. 3. Brief facts of the case are that the assessee is an individual. She derives income from house property and commission. She has filed her return of income on 20.10.2008 declaring taxable income at ₹ 3,97,181/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. The ld.AO got an information through Annual Information Wing that the asses .....

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ted the assessee to explain the source of deposits in her bank account. The assessee has made elaborate submission on different aspects. In brief her explanation for the deposits has been given in the written submissions. The explanation is as under: Sr. No. Particulars Amount (Rs.) Erroneous Additions made by AO 1. Cash received from family partition arrangement: Treated capital receipts as unaccounted income • Mrs. Minal Mehta 7,50,000 • Mrs.Dipal Mehta 7,50,000 • Rahi Mehta 5,0 .....

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cate that the AO was not satisfied with the explanation of the assessee. He made a net addition of ₹ 53,88,401/- out of the alleged unaccounted deposits made in the bank account. 4. Appeal to the CIT(A) did not bring any relief to the assessee. The assessee has filed a paper book running into 66 pages. She has also filed statement of facts along with appeal running into 11 pages wherein she has explained her case. The ld.counsel for the assessee took us through the statement of facts as we .....

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, the sum so credited may be charged to the income-tax, as the income of the assessee of that previous year. In order to discharge the onus put forth by this section i.e. in order to explain the nature and source of deposits, assessee has to prove identity of the depositors, genuineness of the transactions and creditworthiness of depositors. In other words, in the present case, as far as identity is concerned that is not in dispute, because, it is the assessee who has made the deposits. The asse .....

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om 1st day of February, 2007. Copy of this agreement is available at page no.38 to 45 of the paper book. On the strength of this agreement, it was contended by the ld.counsel of the assessee that HUF in the name of Sobhagmal Mehta was in existence and the assessee was the member of this HUF. By virtue of this agreement, the HUF was dissolved and assessee alongwith other family members of the HUF received consideration of ₹ 20 lakhs which was used for deposits in this bank account. The ld. .....

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) Where, at the time of making an assessment under section 143 or section 144, it is claimed by or on behalf of any member of a Hindu family assessed as undivided that a partition, whether total or partial, has taken place among the members of such family, the [Assessing] Officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family. (3) On the completion of the inquiry, the [Assessing] Officer shall record a finding as to whether there has been a to .....

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in addition to any tax for which he or it may be separately liable and notwithstanding anything contained in clause (2) of section 10, be jointly and severally liable for the tax on the income so assessed. (5) Where a finding of total or partial partition has been recorded by the [Assessing] Officer under this section, and the partition took place after the expiry of the previous year, the total income of the previous year of the joint family shall be assessed as if no partition had taken place .....

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rally liable for the tax on the income so assessed. (7) For the purposes of this section, the several liability of any member or group of members thereunder shall be computed according to the portion of the joint family property allotted to him or it at the partition, whether total or partial. (8) The provisions of this section shall, so far as may be, apply in relation to the levy and collection of any penalty, interest, fine or other sum in respect of any period up to date of the partition, wh .....

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ng shall be recorded under sub-section (3) that such partial partition had taken place and any finding recorded under sub-section (3) to that effect whether before or after the 18th day of June, 1980, being the date of introduction of the Finance (No. 2) Bill, 1980, shall be null and void; (b) such family shall continue to be liable to be assessed under this Act as if no such partial partition had taken place; (c) each member or group of members of such family immediately before such partial par .....

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(a) "partition" means- (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or (ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition; (b) "partial partition" means a partition .....

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f partition ought to have been provided to the notice of the department, and finding could have been recorded indicating the partition. The assessee failed to provide any such fact before the AO. She failed to produce copies of balance sheet demonstrating the capital balance or any other asset with the HUF which has been devolved upon the members of the HUF on its alleged partition. To our mind it is a faint attempt at the end of the assessee to explain the source of ₹ 20 lakhs. With the h .....

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the bank account. The evidence submitted by the assessee in respect of her claim is as under: Sr.No. Sr.No. Name of Party to whom jewellery sold Amount Proof Attached. 1. Neel Gems 1,69,508 Confirmation, P&I A/c., Balance Sheet, ITR, Computation PAN:AACHD7516K 2. Kasuhal Diamond 6,26,294/- Confirmation, P&I a/c, Balance Sheet, ITR, computation PAN: AAGHS2434C 3. Sonal Gems 8,57,684/- Confirmation, P&I A/c., Balance Sheet, ITR, Computation PAN: ACRPM0529 P Total 16,53,036/- 9. The cop .....

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out the defects in the evidences by crossverifying the facts. No such steps were taken by the AO, therefore, to this extent, it could be expected that the assessee has explained the sources of the funds deposits in the bank account upto ₹ 16,53,000/-. 10. The next evidences submitted by the assessee is with regard to amount of ₹ 9,25,000/-. The assessee has stated that this amount is received from her son and daughter. She filed details of their bank account and other evidences. A p .....

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are available. All these three accounts, a sum of ₹ 1,00,000/-, ₹ 4,00,000/- and ₹ 1,25,000/- stands credited in the bank account of the assessee. Thus, the assessee has produced prima facie evidence about the source of amount to the extent of ₹ 9,25,000/-. The AO, except disbelieving the version of the assessee, failed to bring any evidence contrary to the one submitted by the assessee. Thus, the addition to this extent would be deleted. The assessee has explained the s .....

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