9911796707
TMI Blog2017 (7) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10. 2. The assessee, an individual, with house property and bank interest as his regular sources of income, was during the course of the assessment proceedings for the current year questioned by the Assessing Officer (AO) in respect of cash deposit of Rs. 100 lacs in his bank account with Indian Bank (Kumbakonam, Main Branch) on 04.10.2008. The assessee, vide letter dated 15.12.2011 (copy on record), explained to be negotiating purchase of a property, so that he had accumulated cash from all possible sources, i.e., as available to himself and his family members, toward the same. However, as the transaction (of purchase of property) did not materialize, the entire accumulated cash was deposited in the bank account, filing along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce of the cash deposited in the assessee's bank amount on 04.10.2008 is completely unproved. How would it matter, one may ask, whether the same, i.e., the cash deposited, is available with the assessee (say) a day prior to it's deposit or a few weeks or even months earlier, i.e., the time of its availability with the assessee, as long as it is prior to the date of its deposit in the assessee's bank account, whereat it gets cognized. In other words, it is the explanation on merits that is relevant, being claimed in the present case to be advanced to a party (without specifying the name of the party and the date of advance to it), so that it was outstanding with him. The explanation as to the source is thus a recall or repayment of the depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account) under law is despite the entries in the assessee's accounts. In its words: 'This section requires the assessee to prove the transactions resulting in a cash credit in his books of account. That would mean that the assessee has to establish the identity of the creditor, the capacity or the financial ability of the creditor to advance the amount and the genuineness of the transaction in spite of entries to that effect in the account books. If the assessee does not offer any explanation about the nature and source of the cash credits or the explanation offered is not satisfactory, then the cash credit may be charged to income-tax as the income of the assessee of that previous year. In considering the scope of this section, partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries v. CIT [1978] 114 ITR 689 (Cal), while dealing with the scope of the duty of the assessee in cases of cash credits in the names of third parties, it was held that the assessee has to prove the transaction which results in a cash credit in his accounts and such proof would include proof of the identity of his creditor, the capacity of such creditor to advance the money and the genuineness of the transaction and only after these things are established by the assessee by adducing evidence in support thereof, the onus shifts to the Department and that where the assessee merely establishes the identity of the creditor and nothing more, the cash credits can be treated as the income of the assessee from undisclosed sources. Again, in K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a man of modest means, is to exhibit the build-up cash with him up to the date/s it was given to a party/s toward purchase of property, which remains unspecified. This could be from his savings - which again would only be from his earnings, or earnings, and may towards its reasonability, require assessment of the necessary expenditure toward personal/household purposes, and other mandatory, proven outgoings, viz. taxes, deposits under PPF/life insurance, etc. It is this that would constitute the source. This could also be from his capital - which would though have to be proved, invested in an asset, since realized to generate cash. And of which, again, there is no whisper (in the assessee's explanation). Like-wise, for the mother, who has i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd such like questions, arise from the assessee's explanation, which is completely unsubstantiated, much less backed by any contemporaneous material. These aspects are qua the genuineness of the assessee's explanation, i.e., to the extent ascribed to the mother. Again, is the explanation consistent with the assessee and his mother's balance-sheet as on 31.03.2009; the cash statement rendered being, surprisingly, only up to 04.10.2008, and not up to the end of the year? How has the sum received from the mother been reflected in the assessee's and her mother's balance sheet as on 31.03.2009, i.e., as a gift or loan? In fact, it could also be that the assessee had financed the advance by the mother for the purchase and, accordingly, stands re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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