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TMI Blog2018 (4) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... med 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 Rs. 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 of the assessee with a balance of E35,000/-. Thus, according to him the addition at the best ought have been made for the difference only. 6. Per contra, ld. Departmental Representative strongly supporting the orders of the authorities below submitted that assessee could not show genuineness of the credit nor the creditworthiness of Mrs. Kamal N. Katri . 7. I have considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Assessing Officer to restrict the addition to Rs. 55,000/-. Ground No.2 of the assessee is partly allowed. 8. Vide its ground number three, assessee assails additions of Rs. 3,70,456/- and Rs. 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 Kartha of the assessee (HUF). As per the ld. Authorised Representative, materials found from the premises of Shri. N.K. Mohnot could not have been used for an addition in the hands of the assessee. Contention of the ld. Authorised Representative was that presumption u/s.132(4A) of the Act could be taken only against the person who was searched, and not for fastening a liability on the assessee who was a third party. Relying on an order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 premises of Mr.N.K. Mohnot and as per the provisions of Sec.132(4A) and Sec.292C, the presumptions are applicable to Shri N.K, Mohnot, since the books of accounts were found in the premises of Mohnot. For ready reference, we extract the relevant provisions of Sec.132(4A) as under: (4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. No statement u/s.132(4A) was recorded from Mr. N.K. Mohnot with regard to the seized books of accounts of the assessee and confronted with the assessee regarding contents in the seized material and to make her responsible for the contents of the seized books. The assessee has flatly denied the books of accounts and were stated to be not in her hand writing. The normal course of action would be to record statement from shri N.K. Mohnot who was searched u/s 132 with regard to the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative submitted that a sum of Rs. 15,000/- was shown as due from M/s. Balaji Plastic and Metal Enterprises and Rs. 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 addition ought not have been made. 14. Per contra, ld. Departmental Representative submitted that receipts recorded by the assessee from debtors were months prior to actual payments made by such debtors. Hence, according to him, the addition was rightly made. 15. I have considered the rival contentions and perused the orders of the authorities below. It is not disputed by the Revenue that M/s. Balaji Plastic and Metal Enterprises had paid Rs. 10,000/- and Shri. R.N. Subramanian had paid Rs. 50,000/- to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Dass & Sons, No.16, Ramanan Road, Madras 600 079. The balance to their debit stands at Rs. 80,000/- as on 31.03.1983. Further, we are assessed to Income Tax by Income- tax Officer, Central Circle II, on his P.A. No.47-055-PX-5462. For Hindustan Electronics, Sd/- Proprietor. A reading of the above letter clearly show that the concerned creditor had given her PA number and also confirmed the credit. There is no finding by the Revenue that creditor was not a person of means. Only reason why credit was denied was that the creditor had come int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Textile as a debtor for Rs. 50,200/- and Rajlakshmi Paper Company as a debtor for Rs. 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 Rs. 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 Rs. 20,000/-. Addition to the extent of Rs. 60,200/- stands deleted. Ground No.4 of the assessee stands partly allowed. 26. Vide its ground No.5, grievance of the assessee is on an addition made for deposits in account No.578 of Canara Bank, Broadway Branch, Madras. 27. There is a similar ground raised by the assessee for assessment year 1982-83. I have already held in para 11 above, that addition for credits in this bank account could not have been made in the hands of the assessee. For the very same reasons mentioned in the said para, I delete the addition. Ground No.5 of the assessee is allowed. 28. Now, I take up the appeal of the assessee for assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 parties had shifted to Delhi. Their present address at Delhi was not furnished. From the above, It was .clear that the assess~e was not ready to co-operate with the Assessing Officer in substantiating its claim because of the evident reasons. Therefore, I am of the considered view that the AO was right in holding these creditors as bogus and also lacking the creditworthiness where the creditors actually existed. Even during the appellate proceeding, the assessee has not furnished any cogent material evidence to substantiate its contentions. Hence, it is proved that the assessee has failed to discharge the onus cast. Accordingly, the action of the ld. Assessing Officer is confirmed and addition of Rs.5,60,000/- + Rs.39,000/- is sustained''. Ld. Commissioner of Income Tax (Appeals) mentions that on verification made by the Department in the address given by the assessee it was found that the parties did not exist. At this juncture, it would be apposite to have a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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