9911796707
TMI Blog2012 (10) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication. 3. The assessee is an individual. He is engaged in the business of civil construction. He filed his return of income on 29-10-2007 returning total income at ₹ 6,18,060/-. After processing, the return was selected for scrutiny during which it was found that the assessee had credited a sum of ₹ 24,90,000/- in his books of account as cash credit in the names of 8 creditors as per details given in Para 3 of the assessment order. After hearing the assessee, the assessee treated the impugned cash credits as unexplained and consequently brought the same to tax under section 68, with the following observations:- "4.1 Sonalben Vajubhai Kanani, Vill: Malsika, Dist Amreli deposit of ₹ 3,50,000/- In the letter dated 23.11.2009 it is mentioned by the above lady that she is residing at Village Malsika with her husband, in law and two children. It is submitted that there is no agricultural land and she is doing business in sharies and carpets at the above village. It is stated that she had filed return of income with I.T.O., Ward 2 (4), Amreli and she has deposited cash of ₹ 3,50,000/- in the bank account from which cheque has been given to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id person has taken bank loan of ₹ 22,000/- from S.B.S., Dhari. There is one more bank loan of ₹ 20,000/- taken by her from the same bank. No evidence in the form of bills for sale of agriculture produce is filed to prove the claim of huge agricultural income from such small agricultural land. The said depositor is having bank account with S.B.S., Dhari. There are cash deposits of the same amount prior to issue of cheque and on each occasion the depositor is left with very negligible balance. The question that arises is why the depositor should keep such huge cash on hand at her village when she is already having a bank account. If she had capacity of giving such huge loan of ₹ 4,00,000/-, there should have been no need to take bank loan of small amount of ₹ 22,000/- and ₹ 20,000/-. It is also significant to note that there are small cash withdrawals from the bank account which also defeats the claim of huge cash on hand at her village. In any case, in absence of complete details of sale of agriculture produce with copy of sale bills for agriculture produce as also the details of expenses towards agriculture, her capacity to have such amount cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from which alleged cheques have been given. The depositor has filed copy of bank statement in respect of account No.66017704872 which is newly opened only on 05.010.2007 and therefore the same is not relevant to the assessment year. No evidence in the form of bills for sale of agriculture produce is filed to prove the claim of huge agricultural income from such small agricultural land. The question that arises is why the depositor should keep such huge cash on hand at his village when he is already having a bank account. It is also significant to note that there are small cash withdrawals from the bank account which also defeats the claim of huge cash on hand at his village. In any case, in absence of complete details of sale of agriculture produce with copy of sale bills for agriculture produce as also the details of expenses towards agriculture, his capacity to have such amount cannot be accepted. The affidavit is only self serving statement to help the assessee. As I am not satisfied about the genuineness of the same, it is treated as unexplained within the meaning of section 68 of the Act and added to the total income of the assessee. 4.6 Shri Babulal Ambabhai Kanani, Vil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash withdrawals from the said bank account clearly suggest that the claim of huge cash on hand at his village. In any case, in absence of complete details of sale of agriculture produce with copy of sale bills for agriculture produce as also the details of expenses towards agriculture, his capacity to have such amount cannot be accepted. The affidavit is only self serving statement to help the assessee. As I am not satisfied about the genuineness of the same, it is treated as unexplained within the meaning of section 68 of the Act and added to the total income of the assessee." 4. On appeal, the ld. CIT (A) has deleted the impugned additions, with the following observations: "4. I have gone through the assessment order and submissions of appellant. Assessing Officer has narrated the details of the creditors of loan in the manner as under: Sr No Name of Agriculturist Village Malsika, Tal Dhari, Dist Amreli. Land Owned as per affidavit (In hector) Loan given to appellant (Rs.) 1 Sonalben Vajubhai Kanai Village Malsika, Tal Dhari, Dist Amreli. 0 350000 2 Shambhubhai Nanjibhai Kanani Village Malsika, Tal Dhari, Dist Amreli. 2-48-89 490000 3 Santokben Narshibhai Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor by way of sale of agricultural produce or recall of any investment made out of earlier saving. Moreover, when the creditor owns up the transaction and has sufficient capacity to advance the loan to appellant, the creditor is answerable for such cash rather than the appellant unless it is proved that appellant has close association with such creditors or had the bank account of the creditor under his control and the appellant himself deposited the cash in the bank account of such creditor who advanced the cheque of loan to him. Therefore the circumstantial evidence of deposit of cash by creditors in their bank accounts before advancing the cheque of loan cannot be considered as sufficient evidence for the cash pertaining to appellant in absence of any other evidence collected by the Assessing Officer in respect of control of appellant over the bank account of such creditors and against the fact that the creditors had sufficient land holding to advance such loans or was income tax assessee. I find that the identity, capacity of creditors and genuineness of transactions cannot be said to be not proved by the appellant in the present case and Assessing Officer has not sufficiently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials on record to show that the impugned cash credits were not at all genuine. His order deserves to be confirmed and is accordingly confirmed. 8. The Ld. CIT (A) has proceeded on the basis that "the capacity of a creditor may be presumed to be there to advance loan to appellant if such creditor is an income tax assessee and nothing advance has been proved from her income tax return of income against her capacity." We are unable to agree with the aforesaid observations made by the CIT (A). The creditworthiness of a creditor is not a matter of presumption but a matter of fact to be established by the assessee on the basis of evidence. The mere fact that the creditors are income-tax payee does not by itself establish the availability of cash in their hands or their creditworthiness to advance any sum of money. The ld. CIT (A) further observes that the source of source need not be proved by the assessee. We are unable to accept the aforesaid reasoning also. The question here is not to prove the source of source but of satisfactorily establishing the nature and source of cash credits found recorded in the books of the assessee. In the face of materials brought on record by the AO, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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