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TMI Blog2017 (6) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... f M.K. Mohnot, the assessments were taken up and completed in the assessee's case u/s 143(3) of the Act, the matter went up to the ITAT and the ITAT remitted the matter back to the file of the A.O. In the second round, the assessing officer completed the assessments u/s 143(3) r.w.s. 254 of the Act and the assessee is in appeal before us against the order of the Ld.CIT(A). 3.0 The First issue for the Assessment year 1980-81, is the loan from Shri S.K.Bhandari. This issue is involved in A.Y. 1980-81, 1982-83 and 1983-84. For the sake of convenience the facts are extracted from the A.Y 1980-81. The assessee accepted a loan of Rs. 10,000/- from Mr.SK Bhandari. The AO made the enquiries regarding Shri SK.Bhandari but could not find him in the given address. The assessee neither furnished the new address nor produced him for examination. No other evidence was produced before the AO to prove the genuineness of the loan. Therefore, the AO made the addition of Rs. 10,000/- which was confirmed by the Ld.CIT(A). 3.1 Aggrieved by the order of the CIT(A) the assessee filed the appeal before us. The Ld.AR of the assessee argued that the assessee is not a new creditor and the credit was exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andari. Therefore, we are of the view that the AO made the addition purely on surmise without any evidence. Thus the addition made by the AO is deleted and the orders of the lower authorities are set aside. This ground of the appeal is allowed. 7.0 The next ground is the addition made on the basis of seized books of accounts. This issue is involved for the A.Y 1980-81, 1982-83, 1983-84 and 1984-85. During the search proceedings, note books marked as GS/LS were found and seized. Smt. Meena Kumari is the mother of Shri N.K. Mohnot. The assessing officer made the addition on the basis of seized materials for the A.Y 1980-81, 82-83, 83-84 and 1984-85 as follows: Assessment Year 1980-81 1982-83 1983-84 1984-85 Addition for Advances to various persons 1,32,000 3,39,650 3,53415 --- Addition of interest estimated * 20,000 22,000 22,000 - Addition of interest** 45,000 9,415 1,10,000 i) For the A.Y.1980-81 the addition of Rs. 1,32,000/- represent the advances made to various persons as per the seized note book and the amount of Rs. Rs. 20000/- was the interest estimated on the said advances. ii) For the A.Y .1982-83 the addition of Rs. 3,39,650/- arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the trial balance. It was initially contended by the appellant that these books of accounts did not relate to her. Later it was contended that these books of accounts did not disclose true affairs of her accounts. Since the books of accounts were seized from the premises of the assessee during the search operation, the onus was on the assessee to prove that either the books of accounts did not relate to her or the contents were not correct. However, the assessee failed to substantiate on both the accounts. Accordingly, it was rightly held by the AC that the books of accounts seized during the search operation, represented her unaccounted financial business activity. Therefore. In the absence of any documentary evidences to substantiate her contentions, the AC rightly added back the amount of Rs. 3,39,650/-as unexplained income from her unexplained financial business activity. Since these credits and capital account were not reflected in her books of accounts, the AC estimated and amount of Rs. 45,000/-as interest income thereon. In view of the above, the action of the AD in adding back these two amounts to the income of the assessee, is confirmed. 7.3 Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence 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 any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true ; and (iii) that the signature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /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 contents of the note books and to confront the contents of the statement with the assessee and to draw inference. But no such exercise was done in this case. Therefore, in the absence of any evidence to show that there was action u/s132 of Income tax act in the assessee case and exercise has been made by the Revenue to prove that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. The AO found the following new credits in the trial balance as on 31.03.82, which was added back to the income. Name Opening balance Credit during the year Date Total 1. Sri Prakkashchand K. Jain 85,000/- 20,000/- 15.12.81 1,05,000/- 2. Sri Kishore Kumar P. Jain 65,000/- 30,000/- 15.12.81 75,000/- 3. Sri Nirmal Kumar P. Jain 60,000/- 35,000/- 15.12.81 95,000/- 4. Sri Sushil Kumar Bhandari 45,000/- 15,000/- 05.10.81 55,000/- 5. Sri Omprakash Gupta 50,000/- 15.12.81 50,000/- Total 1,50,000/- 9.1 For the A.Y.1983-84 the AO has made the addition of (Rs.2,25,000/-+2,33,500/-) Rs. 4,58,500/- as unexplained cash credits in respect of the following creditors. Sk. Bhandari Rs. 1,00,000/- Kishore Kumar Jain Rs. 45,000/- Nirmal Kumar Jain Rs. 55,000/- Om Prakash Gupta Rs. 25,000/- Kesharimal Jhaverchand Rs. 1,50,000/- Prakash chand & Sons Rs. 83,500/- Rs. 4,58,500/- The AO has given several opportunities to the assessee in the original assessment as well as in the re-assessment proceedings. But the assessee failed to furnish any fresh evidence during the reassessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration carried out by the Income Tax Department and the CBI. Therefore, the transactions pertaining to the present assessee reflected in their returns of income would not genuine and bonafide. Finally, after exhausting all the options, the AC requested the assessee to produce the sundry creditors in person before him. However, in spite of repeated reminders and opportunities, the assessee failed to comply with the same. From the perusal of the above facts, it is clearly revealed that the assessee was deliberately avoiding furnishing of information and, accordingly, he had failed to discharge the onus cast upon her. In view of this, I am of the considered opinion that the action resorted to by the AC was the most reasonable and bonafide under these circumstances. Hence, the action of the AO is confirmed. 9.3 The assessee filed appeal before us against the order of the CIT(A) and reiterated the submissions made before the lower authorities. On the other hand the Ld. DR supported the addition made by the AO. 9.4 We heard both the parties and perused the material placed on record with regard to the creditors in the case of Shri S.K. Bhandari, we have confirmed the addition in para No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces made and re-payment received from the party and the same cannot be held as unexplained cash credits. On the other hand the Ld.DR supported the orders of the lower authorities. 10.2 We heard both the parties and perused the material placed on record. In the assessee's case, the assessment related to 1982-83 and the search was conducted in November, 1983. The case was remitted back to the file of the AO with a direction from this Tribunal to furnish all the necessary evidences to prove the case. From the Assessment Order, it is seen that the AO has given a number of opportunities to the assessee and the assessee has not produced the relevant evidences to prove the genuineness of the transaction. In this case, the amount of Rs. 10,000/- stated to be received from M/s.Balaji Plastics towards re-payment of the loan. The assessee also stated that Hundi Receipt signed by the buyer was furnished. But the party has denied the transaction, hence it is obligation on the part of the assessee to prove the transaction by producing the creditors. Both the authorities have stated that the assessee has not produced any evidence to prove the genuineness of the transaction Therefore, we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced the cash book and ledger relevant to this period and these were examined by the AC and no such transaction was found. The fact was already brought to the notice of the assessee long back. Similarly, other persons mentioned above, Filed letters dt. 10.02.87 and stated that only interest was paid by them and not the principal amount during the relevant period. 5. From the above, it was clear that the assessee did not actually recover the money as claimed by her but had only introduced her unaccounted money in the guise of repayment of loans by the said parties. In spite of several opportunities provided to the assessee, no evidence to substantiate the assessee's claim was furnished nor was any additional information furnished. Under these circumstances, the amount shown in the names of various debtors was treated as assessee's undisclosed income brought into books in the guise of repayments of loan and charged to tax. 12.1 Aggrieved by the order of the A.O, the assessee went on appeal before the CIT(A) and the Ld..CIT(A) confirmed the addition and the relevant paragraph of the CIT(A) is extracted asunder: 11. The AO has made an addition of Rs. 1,68,500/- on account of unexpl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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