TMI Blog2018 (4) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... d not the assessee. Additions for credits in these bank accounts could not have been made in the hands of the assessee. Such additions stands deleted. Ground of the assessee is allowed. Addition of repayment received from debtors - Held that:- It is not disputed by the Revenue that M/s. Balaji Plastic and Metal Enterprises had paid ₹ 10,000/- and Shri. R.N. Subramanian had paid ₹ 50,000/- to the assessee during the relevant previous year. These debtors were recorded in the books of the account of the assessee. Assessee had mentioned in a letter to the ld. Assessing Officer that the date of receipt was mistakenly recorded due to errors committed by its accountant. There is no case for the Revenue that the receipts if recorded on the correct dates would have resulted in any deficit cash in the preceding months. The addition ought not have been made just for an error committed in the date of recording the actual receipts from the debtors. The factum of receipts were not doubted, and the year of receipt was also the same. - Decided in favour of assessee. Addition being a credit standing in the name of one M/s. Hindusthan Electronics - Held that:- Books of accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessments. Accordingly, the ld. Assessing Officer had redone the assessments. Appeal of the assessee for assessment year 1982-83 is taken up first for disposal. 3. Four grounds have been raised by the assessee of which ground No.1 is general needing no specific adjudication. 4. Vide its ground 2, assessee assails an addition of ₹ 90,000/- being a loan claimed to have been received from one Mrs. Kamala N. Katri, which was considered as undisclosed income by the lower authorities. 5. Ld. Counsel for the assessee submitted that there were two credits in the name of Mrs. Kamala N. Katri viz E40,000/- on 09.10.1981 and ₹ 50,000/- on 15.12.1981. As per the ld. Authorised Representative, assessee had filed confirmation letter from the said creditor. Contention of the ld. Authorised Representative was that the confirmation was disbelieved for the sole reason that the creditor had shifted to Kolkota and could not be found in the address given by the assessee. As per the ld. Authorised Representative, Mrs. Kamala N. Katri was herself an assessee and debtors shown by her in the Trial Balance filed by her alongwith her return for assessment year 1982-83, had the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee . It is an admitted position that Trial Balance as on 31.03.1982 of Mrs. Kamal N. Katri, available with the Department, clearly reflected assessee as a debtor for ₹ 35,000/-. Hence I am of the opinion that the addition that could have been made was no more than ₹ 55,000/-. Assessee had also filed a confirmation which was not found to be bogus. In such circumstances, I direct the ld. Assessing Officer to restrict the addition to ₹ 55,000/-. Ground No.2 of the assessee is partly allowed. 8. Vide its ground number three, assessee assails additions of ₹ 3,70,456/- and ₹ 1,17,660/- being credits in bank account No.578 and bank account No.490 with Broadway Branch of Canara Bank, Chennai. 9. Ld. Authorised Representative submitted that two additions were made for credits in account No.578 and 490 with Canara Bank, Broadway Branch, Madras. As per the ld. Assessing Officer, these accounts, though held in the name of the assessee was neither opened nor operated by it. In any case, as per the ld. Authorised Representative, these bank accounts were found during a search proceedings on one Shri.N.K. Mohnot who was the son of the Karth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iya complex Pursawalkam High Road, Madras and Mohnot co, 1st floor,No.16 Raaman street, Madras. This is evident from the Panchnama drawn from the residential premises and business premises, which is not disputed by the Revenue. The assessee in her statement recorded in December, 1994 and stated that she is ordinarily residing in Jodhpur but not in Madras. The assessee has given the address in the Income Tax Returns No.38, College Road, Nungumbakkam, Chennai-600006, for the purpose of filing Income Tax Returns and according to the assessee, there was no search carried out by the Income Tax Department in the address of the assessee where she is residing either in Rajasthan or the address in Chennai. The department also could not place any evidence to controvert the above submission of the assessee. We have called for the records and the Panchnama of the searched premises, and the Department could not place any record to show that there was a search u/s.132 in the premises of No.38 College Road, Nungumbakkam, Chennai or in residential premises of the assessee in Chennai or any other place connected with the assessee. As stated earlier, the books of accounts were seized from the prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and executed or attested by the person by whom it purports to have been so executed or attested.] [( 2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.] Both the sections 132(4A) and Sec.292C presume that the books of accounts, documents found and seized from the premises of a person belong to the person who was under search u/s.132. In the case of the assessee, there was no search carried out u/s.132 of the Act, either in Chennai or in Jodhpur where she is ordinarily residing. The Department has not brought on record to show that she is residing with her son in Flat No.65, Parusawalakkam, Chennai or any other premises where the search u/s.132 was carried out in connection with N.K.Mohnot and others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epayment received from debtors. 13. Ld. Counsel for the assessee submitted that subject addition comprised of ₹ 10,000/- shown by the assessee as repayment of debtor balance by M/s. Balaji Plastic and Metal Enterprises, 110, Ennore High Road, Madras-21 and ₹ 50,000/- by Shri. R.N. Subramanian, 3, Sunkumar Agraharam Street, Madras-2. Relying on the trial Balance as on 31.03.1981, and statement of account filed by the assessee alongwith its return for assessment year 1981-82, ld. Authorised Representative submitted that a sum of ₹ 15,000/- was shown as due from M/s. Balaji Plastic and Metal Enterprises and ₹ 50,000/- as due from Shri. R.N. Subramanian. According to him, the additions were made, disregarding the opening balances, solely for a reason that assessee had recorded receipts of the amounts on a date which was at variance with what was mentioned by the concerned debtors. As per the ld. Authorised Representative, assessee had by mistake recorded the refund of loan in its books a few dates prior to the actual receipt. However, according to him, the amounts were undisputedly received by the assessee, and just for a mistake in recording the date, the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per contra, ld. Departmental Representative submitted that confirmation from M/s. Hindusthan Electronics was not made available to the lower authorities. According to him, books of accounts of Smt. Hema Mohnot did not have any entry for any loan given by her to the assessee. Thus, according to him, the credit was a bogus one and rightly added by the lower authorities. 20. I have considered the rival contentions and perused the orders of the authorities below. Assessee had on 05.04.1982 shown in its books, a loan of ₹ 80,000/- from M/s. Hindusthan Electronics. Ld. Assessing Officer was of the view that the said proprietorship concern was not in existence before 01.04.1983 and therefore the credit could not be believed. However, ld. Commissioner of Income Tax (Appeals), had in para 6 of his order clearly mentioned that assessee had filed a copy of the confirmation letter. What was mentioned in this letter is reproduced hereunder:- Confirmation Letter This is to confirm that we, Hindustan Electronics, 115, Choolai High Road, Madras 600 112. (Now at No.16, Ramanan Road, Madras 600 079) had advanced a loan of Rs. 80,000/- (Rupees Eighty Thousand Only) to M/s. P.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contra, ld. Departmental Representative submitted that assessee failed to furnish any evidence for substantiating the claim of receipts. As per the ld. Departmental Representative , even address of the two parties were not mentioned by the assessee. Thus, according to him, the additions were rightly made and confirmed by the ld. Commissioner of Income Tax (Appeals). 25. I have considered the rival contentions and perused the orders of the authorities below. Trial Balance of the assessee as on 31.03.1982, filed alongwith its return for assessment year 1982-83 do show M/s. Prakash Textile as a debtor for ₹ 50,200/- and Rajlakshmi Paper Company as a debtor for ₹ 10,000/-. This has not been disputed by the Revenue. When a debtor repays the loan, it is not akin to a fresh credit. A person who is receiving, refund of debt cannot be fastened with an onus to prove the source of the debtor. Assessee had shown ₹ 60,200/- as opening debtors in the name of M/s. Prakash Textile and Rajlakshmi Paper Company. Repayment to this extent could not have been disbelieved. Therefore I restrict the addition to a sum of ₹ 20,000/-. Addition to the extent of ₹ 60,200/- st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (Appeals) sustained the addition of E5,99,000/- made by the ld. Assessing Officer, appears at para 19 of his order and this is reproduced hereunder:- 19. Regarding the addition of ₹ 5,60,000/-- + ₹ 39,OOO/- on account of the unexplained credits in the name of six different individuals and concerns as reflected in the books of accounts of the assessee, the action of the AO is found to be reasonable and bonafide. The assessee had furnished confirmation letters from these parties but failed to furnish the relevant Ledger accounts and their complete addresses in the case of two creditors. The income tax particulars were also not furnished. The verification carried out at the given addresses proved that no such parties existed there. The assessee was asked to produce these sundry creditors before him for examination but the same was not complied with. The AR even questioned that under which authority the AO was directing him to produce the creditors in person before him. The AR expressed his inability to produce these creditors in person before the AO. In the case of M/S Uma Enterprises and M/S D.R. Enterprises, it was stated by the assessee that these part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Katha. P.A. No.14, Sydenhams Road, Madras 112. M. Gulab Confirmation Letter I M. Gulab confirm that I have made a loan of E89,000/- (EEighty Nine Thousand Only) to M/s. P.P. Dass Sons, No.38, College Road, Madras 600 006. The debit balance of their account as on 31.03.1984 is ₹ 89,000/-. I am assessed to Income Tax on P.A.NO.47-073-PT- 6593 by the 9th Income Tax Officer, City Circle VII, Madras -34. Further, I hereby undertake to appear before the Income tax Authorities to give evidence to the said advance made. Place:- No. 8, Basin Water Street, Madras -79. ( M. GULAB) Date: 6.12.1991 P.A. No.6, Vinayaka, Madaly Street, Madras 79. These three parties had given either GIR number or PA number. They had also given the name of the Assessing Officer with whom they were assessed. In my opinion, assessee having given the confirmations, which carried the necessary details, had discharged it s onus to prove the credits from Pradeep M. Shah, Kamal H. Shah and M. Gulab. Revenue, if it doubted the veracity of the claim could have easily verified it from the assessment records of these parties. Having chose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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