TMI Blog2012 (10) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee 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. Copy of bank stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 accepted. The affid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged 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, Vill:- Malsika, Tal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s followed. Moreover, if any cash deposited in the bank account of the creditor appears to be unexplained after examining her return of income, a separate proceeding may be started against her in respect of other creditors. I find that they have land holding of about 2 hectare or more. Generally a holding of One hectare is considered small but a hold of land of about 2 hectare to about 6 hectare is a medium holding on which agriculturist may make some saving. The savings may be invested by the agriculturist or kept in hand as cash or deposited in bank as per the wishes of the agriculturist. There may be question of genuineness of transaction when cash is deposited in bank account of depositor immediately before it was advanced to the appellant. However, such cash may be available with the creditor 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 credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f matching amounts were issued by them in favour of the assessee. This is not a matter of co-incidence in one or two cases but a part of well-calculated design to first deposit matching amounts in the bank accounts of creditors and thereafter have the cheques issued in favour of the assessee from those bank accounts with a view to show that the transactions have been routed through banking channels and thereby create a cloak about the genuineness to the impugned transactions. If the creditors had requisite cash available with them, there was no reason as to why they would hold them back in cash and deposit the same just before issuing cheques in favour of the assessee. The whole story manufactured by the assessee rings false from beginning till end. The Assessing Officer has brought sufficient materials 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 retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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