TMI Blog2008 (4) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... t also, about the discharge of burden on the part of the assessee, to prove identity and genuineness of the transaction. So far as capacity of the lender is concerned, in our view, on the face of the judgment in Daulat Ram's case [ 1972 (9) TMI 9 - SUPREME COURT] , and other judgments, capacity of the lender to advance money to the assessee, was not a matter which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. In that view of the matter, since this part of the judgment runs contrary to the judgment of Daulat Ram's case, while this Court in a subsequent judgment in Mangilal's case [ 2006 (10) TMI 100 - RAJASTHAN HIGH COURT] , relying upon Daulat Ram's case, has taken a contrary view, we stand better advised to follow the view, which has been taken in Mangilal's case. The net result is that all the three questions are answered in favour of the assessee, and against the revenue. The appeal is accordingly allowed, and the additions with respect to the entries of Vijay Kumar and Dharm Singh, for the amounts of ₹ 50,000 each, respectively made in the income of assessee, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in 87 ITR 349, CIT Vs. R.Y. Durlabji, reported in 211 ITR 178, CIT Vs. Orissa Corporation, reported in 159 ITR 78, DCIT Vs. Rohini Builders, reported in 256 ITR 360, and Sarogi Credit Corporation Vs. CIT, reported in 103 ITR 344, out of which, the judgments in Daulat Ram (supra) and Orissa Corporation's case (supra) are the judgments of Hon'ble Supreme Court, while the judgment in R.Y. Durlabhji (supra) is of this Court, and the later two judgments are of Gujarat and Patna High Courts, respectively. The learned CIT(A) affirmed the additions, with respect to the amounts of Dharm Sudhir and Vijay Kumar, so also entries in the name of Jyoti Devi and Kamla Devi. Rest of the additions were set aside. 3. Aggrieved of this, assessee filed an appeal before the learned Tribunal, and the learned Tribunal deleted the additions made with respect to Jyoti Devi and Kamla Devi, however, affirmed the additions, with respect to the entries relating to Dharm Sudhir and Vijay Kumar, though with regard to the entries of Jyoti Devi and Kamla Devi, it was found, that these two ladies confirmed the payment. Jyoti Devi could not be produced before the AO, and her husband was produced, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s case, Orissa Corporation's case, and Rohini Builder's case. On the other hand, learned counsel for revenue relied upon the judgment of this Court, in CIT Vs. R.S. Rathore, reported in 212 ITR 390, and CIT Vs. Kishorilal Santoshilal, reported in 216 ITR 9 and submitted, that in order to determine whether any addition is to be made under Section 68 or not, six conditions are required to be considered, as mentioned in Kishorilal's case (supra), which include, that if the explanation is not supported by any documentary or other evidence, then the deeming fiction created by Section 68 can be invoked. 5. We have heard Counsel, and have gone through the judgments cited at Bar. 6. In Mangilal's case (supra), this Court was considering the provisions of Section 69A, where some gold was seized by the customs authorities, and addition about the value thereof was sought to be made in the income of the assessee. The precise facts were that a search was conducted at the premises of the assessee by customs authorities, and 11 pieces of primary gold and gold ornaments were recovered, which were seized by the customs authorities. The proceedings for confiscating the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opal Singh, Om Prakash and Gauri Shanker, about the purpose for which the gold ornaments were delivered, was found to be not acceptable, could not have provided any nexus between the facts and conclusions reached, by drawing inference therefrom, that the gold ornaments belonged to the assessee. 7. Really speaking, the judgment in Daulat Ram's case (supra) is the authority, for the proposition, that assessee cannot be required to prove the source of the source. It was precisely held in Daulat Ram's case (supra), that the fact that lender has not been able to give satisfactory explanation regarding the source of the fund lent by him, would not be decisive, even of the matter, as to whether, the lender was the owner of that sum, even though the explanation furnished by him, regarding that source of money, is found to be not correct. From the simple fact, that the explanation regarding source of money, furnished by the lender, whose money is lying deposited, has been found to be false, it would be a remote and far-fetched conclusion to hold, that the money belongs to the assessee, and that, he would in such a case had any direct nexus between the facts and conclusions found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case even on these parameters, first requirement is not relevant. So far as second requirement is concerned, there is no doubt about initial burden being on the assessee. So far as third requirement is concerned, obviously if the explanation is not satisfactory, then it is added. Then fourth requirement is, that the firm has to establish that the amount was actually given by the lender. Fifth requirement is about genuineness and regularity in maintenance of the accounts, obviously of the assessee, and it is not the finding, that the accounts were not regularly maintained. Then sixth requirement is that if the explanation is not supported by any documentary or other evidence, then the deeming fiction created by Section 68 can be invoked. In the present case, so far as 6th requirement is concerned, it is very much there in existence, inasmuch as the amount has been advanced by account payee cheques, through bank, and is duly supported by documentary evidence, as well as the evidence of the two lenders, and that satisfies the 2nd requirement also, about the discharge of burden on the part of the assessee to prove identity and genuineness of the transaction. So far as capaci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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