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TMI Blog2016 (5) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained cash credit u/s 68 of the I.T. Act. He has further erred in disallowing Rs. 8,260/- on account of interest paid to Shri Mohan Lal Gupta. (2) The ld. CIT(A) has erred on facts and in law in upholding the rejection of books of account by applying provisions of Section 145(3). (2.1) The ld. CIT(A) has erred on facts and in law in confirming lump sum trading addition of Rs. 30,000/- to the trading result declared by the assessee. 2.1 Brief facts of the case are that the assessee was found to have taken cash credits of Rs. 7.00 lacs as under:- ''(i) Smt. Maya Devi During the year under consideration the assessee has taken loan of Rs. 5.00 lacs vide cheque no. 12588 on 13-01- 2010. The assessee was asked to prove creditworthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Africa and it was not properly explained that how the loan of Rs. 5.00 lacs was obtained by the assessee when both of them are not known to each other. Further it is held in various enquiries conducted by the Department that most of the amount received from foreign country persons is routed though bank account just to introduce undisclosed income. Looking to the above facts, creditworthiness of Smt. Maya Devi is not proved and the cash creditor of Rs. 5.00 lacs remains unexplained as per provisions of Section 68 of the I.T. Act ,1961. Therefore, amount of Rs. 5,00,000/- is added to the total income of the assessee. This would result in addition of Rs. 5,00,000/- (ii) Shri Mohan Lal Gupta During the year under consideration the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no satisfactory explanation was furnished. From the above, it is very much clear that the transaction was just routed through the banking channel just to introduce undisclosed income of the assessee. Further bank interest of Rs. 8,260/- is also not genuine as claimed in the absence of genuineness of loan and same is separately disallowed under the head "Disallowance of Interest". Looking to the above facts, creditworthiness of Shri Mohan Lal Gupta is not proved and the cash creditor of Rs. 2,00,000/- also remains unexplained as per provisions of Section 68 of the I.T. Act, 1961. This would result in addition of Rs. 2,00,000/- Therefore, total addition of Rs. 7,00,000/- (Rs. 5,00,000 + Rs. 2,00,000/-) is made u/s 68 of the I.T. Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. Hence, the assessee's books of account cannot be accepted as complete and correct and therefore, the true profits of the assessee's business cannot be deduced and hence provisions of Section 145(3) of the I.T. Act, 1961 are clearly applicable in the case of the assessee.'' 2.2 In first appeal, the addition in respect of cash credit was confirmed by the ld. CIT(A) by following observations. ''4.4 The appellant has stated that a loan of Rs. 5.00lcs was received from Smt. Maya Devi vide cheque no. 12588 on 13-01-2010. It is submitted that confirmation from the creditors could not be filed as she is a Non-Resident Indian (NRI). It is stated that she is not an assessee to tax. However, a copy of her bank account has been filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction. 4.7 Further, as regards the credits from Shri Mohan Lal Gupta are concerned, the same position lies in that case as well. Appellant has failed to adduce sufficient evidence to prove the creditworthiness of the creditor as he is a salaried employee having an income of Rs. 2.40lacs and no capacity to lend money of Rs. 2.00 lacs. Further, AO has found out that there are cash deposits of Rs. 49,900/- in the bank account of the creditor before issue of cheques. The cash deposit has been made twice in the bank account and an amount of Rs. 49,900/- has been chosen with a view to avoid furnishing of PAN in the bank account as cash deposits of Rs. 50,000/- require the same. Thus, clearly the whole transaction appears to have been entered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dead and thereafter filed a claim that she was alive and not returning in India but she was living in South Africa. Similarly, an affidavit was filed at the stage of ld. CIT(A) which has not been relied on and no supporting evidence in this behalf was produced. Therefore, it emerges from the records that the assessee has failed to discharge his onus in this behalf. Same is the case with Shri Mohan Lal Gupta. The assessee has failed to demonstrate that Shri Mohan Lal Gupta had capacity to lend money of Rs. 2.00 lacs besides transactions have been deliberately calibrated at Rs. 49,900/- just short of Rs. 50,000/- to avoid any computer enquiry and Shri Mohan Lal Gupta has not shown to have offered the alleged interest held by him. Thus ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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