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2016 (11) TMI 536 - ITAT HYDERABAD

2016 (11) TMI 536 - ITAT HYDERABAD - TMI - Disallowance towards credit purchases - Held that:- AO did not make any enquiry whether M/s. Shagun Jewellers, Delhi has any branch or unit in Chennai or they have endorsed these DDs to some other party. The confirmation from SBH only indicates that these DDs were payable at Service Branch, Chennai. This even though does not prove that the DDs are encashed by assessee but certainly does not support that the payments are bogus. In the absence of contrary .....

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ew of that, we are of the opinion that the disallowance towards credit purchases is not sustainable. - Decided in favour of assessee - Credits given by Shri Omprakash Sirvi, Shri Kanaram Sirvi and loan from Mahesh Bank - Held that:- ince all the family members are in the same place and have been working in the jewellery and the Girvi business (all of them shown the similar sort of incomes in their returns), it can be presumed the loan funds obtained from Mahesh Bank could have been utilized .....

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ri Kanaram Sirvi, the credit can be given to assessee’s purchase of stock. Accordingly, we are of the opinion that addition made by AO is not warranted.- Decided in favour of assessee - Unexpalined investment in the house - assessee explained that he has obtained ₹ 3,50,000/- from his father-in-law, Mr. Ratanlal Panwar and Mr. Sohan from Rajastan. Assessee also claimed credit from the loan funds and business funds to an extent of ₹ 8,50,000/- Held that:- Before us, except filing .....

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ed but here also no enclosures were filed at least to identify the person who has issued the confirmation letter. The revenue contention that no proof was furnished either for receipt of the amounts or for establishing the creditworthiness has to be accepted. Since, no further evidence was furnished before us, we are also not in a position to appreciate the assessee’s contention. In view of that, addition made as ‘unexplained investment’ in the house stands confirmed. - Decided against assessee .....

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in the business of trading of jewellery and money lending [Girvi]. A survey operation u/s. 133A of the Income Tax Act [Act] was conducted at the business premises of assessee on 11-10-2007. Assessee made disclosure to the tune of ₹ 30,03,071/-. Assessee explained that an amount of ₹ 7,30,000/- was disclosed for AY. 2007-08 and ₹ 11,50,250/- for AY. 2008-09. The balance amount of ₹ 11,22,821/- was not disclosed as assessee was able to explain the stock availability in the .....

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d by cheque or DD in the name of those parties. AO enquired from the State Bank and found that the DD taken was paid at Chennai. Since M/s. Shagun Jewellers, Delhi has not received the DD and on enquiry also got a confirmation that they do not have any transaction with assessee, AO disbelieved the purchase of jewellery to an extent of ₹ 8,06,161/-. In addition to the above, AO also enquired about the stock availability on the date of survey. In the explanation given, assessee has claimed c .....

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. Thus, as against ₹ 14,37,241/- returned income, assessment was completed at ₹ 38,16,402/-. 3. Before the Ld.CIT(A), assessee made various submissions and filed confirmation letters given to AO, but without much success. Ld.CIT(A) confirmed all the additions made by the AO. Assessee is accordingly aggrieved and raised the grounds as under: 2. The Learned CIT(A) erred by upholding the addition of ₹ 8,06,161/- on the grounds of not believing the Credit purchases even though purc .....

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ch there is unexplained investment in girvi items. 4. The Learned CIT(A) erred in upholding the addition made by the assessing officer of ₹ 3,50,000/- being the amount received as loan from father in law ₹ 1,50,000/- and loan from Sri Sohan ₹ 2,00,000/- disbelieving the confirmations given by these creditors and other aspects and as such there is unexplained investment in construction of house property. 5. The Learned CIT(A) erred by not properly appreciating evidences, confirm .....

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lly in Ranga Reddy District. Since assessee is in the joint family, the funds are also mixed up and since Dharmichand Sirvi is also incapacitated due to health reasons, his brother, Shri Kanaram Sirvi was authorized to transact bank and other activities. He also filed confirmation letters from other loan creditors which were furnished before the AO. Paper Book also contain Income Tax returns of other family members to submit that all the persons from whom assessee has borrowed funds has creditwo .....

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nces in support of the contentions. 5. Ld. DR however, submitted that assessee has furnished a bill in the name of M/s. Shagun Jewellers, Delhi, whereas amount was paid in Chennai. So, the same was disbelieved by the AO. In addition the creditworthiness of various creditors are not proved. He supported the orders of AO and CIT(A). 6. We have considered the rival contentions and perused the documents placed on record including statements of assessee in the course of survey. As seen from the docum .....

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ch or unit in Chennai or they have endorsed these DDs to some other party. The confirmation from SBH only indicates that these DDs were payable at Service Branch, Chennai. This even though does not prove that the DDs are encashed by assessee but certainly does not support that the payments are bogus. In the absence of contrary evidence, it is to be accepted that assessee has issued cheques on his bank account, from which DDs were purchased and those DDs were encashed. Therefore, simply because D .....

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are allowed. 7. Coming to the credits given by Shri Omprakash Sirvi, Shri Kanaram Sirvi and loan from Mahesh Bank, there is no dispute with the fact that Shri Omprakash Sirvi and Karanam Sirvi are assessees on record. They have their own sources of income and have been filing returns. Not only that they have confirmed the advancing of moneys. They are also having Permanent Account Numbers (PAN) and assessees on record. Being the family members, they must have utilized funds in the business. The .....

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y members in the name of Shri Kanaram Sirvi. as he was not in a position to go to the bank due to health reasons. Since all the family members are in the same place and have been working in the jewellery and the Girvi business (all of them shown the similar sort of incomes in their returns), it can be presumed the loan funds obtained from Mahesh Bank could have been utilized by assessee. It is also seen that AO has quantified the excess stock or undisclosed income in the course of survey. Theref .....

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12,23,000/- added by AO is not warranted. The ground to that extent is allowed. 8. The last issue contested by assessee is doubting the investment in the house for which assessee explained that he has obtained ₹ 3,50,000/- from his father-in-law, Mr. Ratanlal Panwar and Mr. Sohan from Rajastan. Assessee also claimed credit from the loan funds and business funds to an extent of ₹ 8,50,000/- which was given by the AO. AO however, doubted the loans from father-in-law and Mr. Sohan, who .....

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