TMI Blog2016 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in disallowing the liability and adding the same u/s. 41(1) of the Act. - Decided against assessee Addition of cash credit u/s 68 - Held that:- There was no evidence of personal saving of ₹ 17,000/- made by withdrawal of earlier years. This amount was also clearly unexplained. There was no justification for the cash gifts of ₹ 25,000/- from maternal uncle Shri Suresh K. Doshi, ₹ 75,000/- from mother Smt Rita Rajendra Shah, ₹ 75,000/- from sister Ruchi and ₹ 50,000/- from maternal uncle Shri Dilip K. Doshi. Therefore, the CIT(A) held that the assessee could not establish the identity of the donors, the genuineness of the transactions and the creditworthiness of the donors. The CIT(A) also found that no confirmation for the gifted amount was furnished either before the Assessing Officer or before him. He accordingly held that so called gifted amount of cash of ₹ 25,000/-, ₹ 75,000/-, ₹ 75,000/- and ₹ 50,000/- were thus correctly treated as unexplained cash introduced in the books of account and the Assessing Officer was justified in treating the same as unexplained cash creditors. The CIT(A) also rejected the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /donors, however, on unwanted grounds and facts, the additions confirmed by learned CIT(A) requires to be deleted. 6. That the learned CIT(A) has confirmed the disallowance of expenditure of ₹ 9,625/- out of total expenditure of ₹ 49,697/- + ₹ 46,556/-) = ₹ 96,253/- on ad -hoc basis which is not legal and valid in law which deserves to be deleted. 7. That the expenditure disallowed of ₹ 9,625/- on adhoc basis is neither capital expenditure nor in the nature of personal and hence disallowance of expenditure of ₹ 9,625/- confirmed by CIT(A) b deleted. 8. That the appellant has not committed default of Sec. 139(1), however, finding is given for charging interest U/s 139 and also for charging of interest U/s 234A, 234B, 234C and 234D even though appellant has not committed default of Section 210, therefore unwanted interest charged by learned A.O. under various sections be deleted. 9. That there is neither concealment of particulars of income and /or furnished inaccurate particulars of income and therefore proceedings initiated for both the alleged default is not legal and valid on law and therefore penalty proceedings initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) erred in confirming the addition of ₹ 1,59,459/- made by Assessing Officer without considering the objections raised by the assessee; so he pleaded that the addition in question may be deleted. On the other hand, ld. Departmental Representative supported the order of the lower authorities. 2.2 After going through the rival contentions and material available on record, I find that the assessee had claimed to sold PP/HDPE sacks to M/s. A One Chemicals, Ankleshwar and M/s. Anmol Chemicals, Gandhinagar through M/s. Dharini Packaging which aggregated to ₹ 2,15,994/-. These parties had not cleared the dues on the ground that the money had been paid to M/s. Dharini Packaging. The assessee was thus not required to pay anything to M/s. Dharini Packaging and therefore, the liability actually ceased to exist and the same was rightly added to the income by resorting to the provisions of section 41(1) of the Act. Same is the situation in the case of M/s. Swiss Polyplast in whose case the outstanding amount was ₹ 61,410/-and these purchases were made through M/s. Dharini Packaging and this amount was also must have been adjusted by M/s. Dharini Packaging against i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account by the appellant. Even though the learned A.O. has added the said amount holding it as cash credit which deserves to be deleted. The Xerox copy of Bank Statement is enclosed and considering the same, addition deserves to be deleted. 2. ₹ 17,000/- - credited out of personal savings made by withdrawal made in earlier years and the cash of personal savings is deposited in my Bank Account with Punjab National Bank. I am residing with my parents and household expenses is borne by him and so whatever cash is available with me about ₹ 17,000/- was deposited in Bank Account which please note. My old Capital balance is ₹ 4,44,683/-. I am doing business with small capital and therefore for making payments to the traders/Creditors I have to borrowed loans from my relatives and friends and secondly I am unmarried doing business since last so many years and therefore the personal savings made by me is acceptable as I am unmarried and residing with my parents considering the smallness amount addition made by learned A.O. be allowed holding it as genuine cash credit. 3. ₹ 25,000/- - I have received gift of ₹ 25,000/- in cash from my maternal unc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be deleted. The appellant being a son of sister of donor and out of natural love and affection and being a custom in the Hindu Religion that sister is not getting any right in the house from where she was born and brought up and therefore this is a gift made by him during his life time before his death and therefore considering the facts and circumstances of the case, the addition deserves to be deleted. As far as the amount of ₹ 1,874/- was concerned, it was stated to be the opening balance in the bank account and brought in book of account by the assessee. The CIT(A) did not agree with the contention of the assessee because there was no withdrawal of this amount from the bank and therefore, he was of the opinion that it was required to be added back as unexplained cash credit. The CIT(A) further observed that there was no evidence of personal saving of ₹ 17,000/- made by withdrawal of earlier years. This amount was also clearly unexplained. There was no justification for the cash gifts of ₹ 25,000/- from maternal uncle Shri Suresh K. Doshi, ₹ 75,000/- from mother Smt Rita Rajendra Shah, ₹ 75,000/- from sister Ruchi and ₹ 50,000/- from ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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