TMI Blog2010 (8) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... otor car depreciation 6,774 Traveling 11,700 Business promotion expenses 10,463 4. The ld. CIT(A) erred in law and on facts in confirming an addition of ₹ 50,000/- made by the AO by treating a part of Agricultural income as Income from other sources 5. The ld. CIT(A) erred in law and on facts in confirming the addition of ₹ 2,00,000(being gift received of ₹ 1,00,000/- each from Shri Kamal Rathi and Shri Kishor Modi) as unexplained credit; 6. The ld. CIT(A) erred in law and on facts in confirming an addition of ₹ 2,30,000/- as unexplained credit being loan and interest accrued thereon taken by appellant from two parties in the year 1995 3. Ground no.1 regarding, validity of the assessment order being bar red by limitation. The main contention of the learned AR is that the assessment order was served upon the assessee in the month of February 2007 which was purported to have been passed on 22.12.2006. Thus, she has contended that when the assessment was served on the assessee after two month itself very likelihood to have been passed aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow. At this stage, the leaned AR stated that the assessee does not press this ground in view of the facts recorded by the AO. 9. After considering the rival content ions and on perusal of the relevant record, we find that the AO has recorded in paragraph 2 of the assessment order that this case was assigned to him as per the notification no. Addl/CIT-Range 22(3)/Notification/06-07 dated 26.7.2006. Thus it is clear that the case was transferred vide above notification. Even otherwise, when the assessee made a statement at Bar that this ground may be dismissed as not pressed. Accordingly, we dismiss this ground being not pressed. 10. In the result, the ground no.2 is dismissed. 11. Ground no.3, regarding the disallowance of expenses. The AO in the assessment order made disallowance at 20% of the various expenses by holding that personal use of telephone, motorcar cannot be ruled out and in respect of other expenses, the genuineness of these expenses are not verifiable in the absence of supporting documents except the cash vouchers. The details of disallowance are as under: Donation 16,102 Motor car 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee has claimed agricultural income at ₹ 1,18.540/- from the land acquired by the assessee on leave and license from CIDCO Under High Electrical Line. The land was stated to be used by the assessee for agricultural and tree-plantation purposes. The AO asked to the assessee to produce the details of agricultural land, sale bill and purchase bill of the agriculture produce. The assessee did not furnish the details of cultivation, sale bill and purchase bill. Accordingly, in the absence of record, the AO estimated ₹ 50,000/- out of agricultural income declared by the assessee as income from the other sources and added to the total income of the assessee. 18. On appeal, the CIT(A), confirmed the action of the AO. 19. Before us, the learned AR has submitted that the assessee has been returning his agricultural income regularly for last 7-8 years. The assessee acquired the land in question from CIDCO on leave and license for agricultural/plantation purpose because High Tension wire is going over the said land. She has contended that the AO has accepted the claim of the assessee of agricultural income of ₹ 1,76,480/- for the assessment year 2003-04 then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of mutual understanding agreement made between the family members. Regarding other gifts of ₹ 4,30,000/-, the AO summoned two parties i.e. Shri Kamal Rathi and Shri Kishor V Modi Both donors did not respond to the summons who stated to have given gift of ₹ 1,00,000/- each. In case of Kamal Rathi the summons received back with the remark of postal authority LEFT , whereas other donor Shri Kishor V Modi did not respond to the summons. The assessee did not file the details of gift received by him including ₹ 230000/-. Accordingly, the AO made an addition of ₹ 4,30,000/- being unexplained income of the assessee. 24. On appeal, the CIT(A) has confirmed the addition made by the AO. 25. Before us, the learned AR of the assessee has submitted that the AO has not mentioned any section under which the addition was made. However, presumably addition was made under section 68 of the Act. She has contended that the gift were received from Shri Kamal Rathi of ₹ 1,00,000 and Shri Kishor V Modi of ₹ 1,00,000 through gift deed in favour of the assessee. The assessee furnished their PAN details and copy of return of income. Therefore, the assessee dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gift from Shri Kamal Rathi and Shri Kishor V Modi of ₹ 1,00,000 each, the assessee has not established the relationship between the assessee and the donor and the occasion. Moreover, the assessee has also not produced the parties before the authorities below. In the absence of any relationship between the assessee and the donor the genuineness of the transaction is not proved. The AO had no occasion to verify the parties. Merely because the transactions was though through bank channel, the same cannot be treated as genuine and the capacity of the donor is also not conclusively proved in the absence of sources of gift. When the relationship between the assessee and the donor is no proved then the test of human probability comes into play for determining the genuineness of transaction. The lower authorities have fortified their views by the following decisions: ITO V/s Skyjet Aviation (P) Ltd (2000) 243 ITR 1 (AT) (Ahd) Sumiti Dayal V/s CIT (1995) 214 ITR 801 CIT V/s Durga Prasad More (1971)82 ITR 540 ACIT V/s Rajeev Tandon (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 222 ITR 344 would be squarely applicable to the facts of the present case. The amount which initially did not fall within the scope of the provisions rendering it liable to tax subsequently had become the assessee's income being part of the trading of the assessee. Similar view was also taken by a Bench of the Madras High Court in the case of CIT V/s Aries Advertising P Ltd (2002) 255 ITR 510. The court took the view that the assessee because of trading operation became richer by the amount which had been transferred and/or retained in the profit and loss account of the assessee. 5. In view of the above settled position of law and the facts of the present case, we are of the considered view that no question of law much less substantial question of law arises for consideration in the present appeal. Appeal dismissed in limine 29. Respectfully following the decision of the jurisdictional High Court in the case of Solid Containers Ltd V/s ACIT (supra), we dismiss this ground raised by the assessee. 30. Ground not 5 is dismissed. 31. In the result, the appeal of the assessee is dismissed. Pronounced in the Open Court on 6.8.2010. - - TaxTMI - TMITax - Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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