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TMI Blog2016 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ? 2. Whether the Hon'ble ITAT Bench, Amritsar was right in facts and circumstances and in law in confirming the action of the Ld. CIT (A) in deleting the addition made by the A.O. on the ground that the assessee had failed to produce books of accounts and relevant pass books of M/s Ajay Electronics, Finance Division to substantiate his claim that sum of Rs. 1,40,00,000- was actually given to Sh Ajay Kumar? 3. Whether the Hon'ble ITAT Bench, Amritsar was right in facts and circumstances and in law in not appreciating the case law of Hari Chand Virender Paul vs. Commissioner of Income tax reported at 140 ITR P&H vide which it has been held that "Credits in the name of third parties-Assessee must prove identity of credits, capacity of creditor to advance money and genuineness of transaction-then only burden shifts to the Department?" The relevant facts which need to be noticed for adjudicating upon the present appeal are that on 01.12.2003, the assessee filed its return declaring therein an income of Rs. 11,77,772/-. The same was processed under Section 143(1) of the Act. Thereafter the assessee was issued a notice under Section 148 of the Act as to why it may not be re-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the deal did not mature this money was returned by him. Since the above transaction was through the imprest account of Ajay Kumar and the money was returned within five days of its receipt, the same was not reflected in the capital account. On return of the money by Ajay Kumar the same was then returned to the public by Ajay Electronics Finance Division. After going through the audit report of the assessee attached with the return of income pertaining to the assessment year in question, the assessing officer found no reference to any branch office by the name of Ajay Electronics Finance Division. No cash in hand was also found in the account of the abovesaid Finance Division. In fact, Ajay Electronics Finance Division was shown in the list of sundry creditors whereas if it was a branch as projected by the assessee, it should have figured in the capital head. The assessing officer further found that the profit and loss account of Ajay Electronics Finance Division was not attached with the return of income and that if Ajay Kumar as a partner had withdrawn money from the assessee for personal use, the same should have been shown in the capital account. Finding the explanation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm is more than Rs. 40 lacs and accounts are duly audited by the C.A. 8) Rakesh Kumar, S/o Sh. Tara Chand, R/o Pathankot. Q.6: Please state the total purchases made during the FY 02.03 from M/s. Ajay Electronics Pathankot? A. I have made the purchases during the FY 02.03 about Rs. 2 lacs to Rs. 3 lacs. Q.No.7. As per cash book of M/s. Ajay Electronics, you have made the payments of Rs. 20,000/- on the dates 24.12.02, 25.12.02, 26.12.02 & 27.12.02. Please confirm the above payments? A : Sir, I have made the payments on above dates to M/s. Ajay Electronics & Co. in cash. 9) Rakesh Kumar, S/o Sh. Ram Nath, V. Budha Ngr., Pathankot (Confirmation made about cash payments made to the appellant firm on 2nd, 3rd, 27th and 29th Dec., 2002 vide reply to Q.No.6 and further vide reply to Q.No.7, the deponent averred that my total sales during the above period i.e.2002-03 about Rs. 3-4 lacs. 10) Gurmeet Singh, S/o Channa Singh, R/o. Master Colony, Dinanagar (confirmation made about cash payments made on 7th, 8th and 9th Dec., 2002 in reply to Q.No.6 and further in answer to Q. No.7, it is deposed that I have made about Rs. 2-3 lacs purchases during the same FY 2002-03. 11) Ashok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further goes on to depose that he had made purchases from the firm to the tune of Rs. 3 lacs but as to when these purchases had been made and when payment for these purchases was made, which were crucial facts, find no consideration in the Commissioner's order. Kapil Kumar son of Prem Kumar while replying to queries No.5 and 6 is stated to have made purchases of Rs. 4 lacs from the assessee and payments for such purchases were stated to be made in cash sometimes on a weekly or fortnightly basis. We are at a loss to find out from the order of the Commissioner as to what was asked for in questions No.5 and 6. Further, the statement of Kapil Kumar does not reveal when the stated purchases and the payments for the same had been made. As per the statements of above-said Kapil Kumar and Ramesh Kumar, they did not loan any money to the assessee or its finance division. This contradicts the assessee's stand that this fact has also been ignored by the Commissioner. The statements of the other persons who allegedly had given loans to the assessee through its finance division have also not been considered the way they deserved to be. It is thus clear that the order of the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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