TMI Blog2005 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... The opposite party assessee (hereinafter referred to as assessee ) was assessed to tax in the status of individual. The accounting period for the previous year ended on 11-10-1986. In the books of account of the assessee, deposit of ₹ 50,000 was found in the name of Smt. Vimlesh Aggarwal and a sum of ₹ 45,000 was found credited in the name of Smt. Shashi Aggarwal. The assessing authority asked the assessee to explain the aforesaid deposits. In pursuance thereof, it was explained that a sum of ₹ 50,000 was paid by Smt. Vimlesh Aggarwal from the bank account No. 2128 in the Bank of Baroda which stood in the joint name of Smt. Vimlesh Aggarwal and Smt. Shashi Aggarwal. Copy of the pass book was also filed. The entry in the pass book was as follows : Date Amount Cr. Dr. 17-3-1986 By cash 40,000 20-3-1986 By cash 11,000 28-6-1986 15,000 19-7-1986 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otection under the voluntary disclosure scheme was extended only to the declarant and not to third party. The Assessing Authority was of the view that the assessee introduced his black money by filing voluntary returns of his daughters. 5. Assessee filed appeal before the Commissioner of Income-tax (Appeals). Commissioner of Income-tax (Appeals) allowed the appeal and held as follows : I have carefully considered the submissions of the learned authorised representative and have also gone through the assessment records. To me, there appears to be some contradiction in the approach of the Asses-sing Officer. He has mentioned at page 3 of the assessment order that the amount disclosed in the Amnesty Scheme actually belongs to the assessee as no proof regarding source of income in the hands of the depositor has been furnished. Although, the exact amounts disclosed by these two ladies in the Amnesty Scheme are not known. It is observed that Smt. Vimlesh had deposited a sum of ₹ 51,000 in March, 1986 and Smt. Shashi had deposited a sum of ₹ 73,000 in March, 1986. The deposits which have been made in the names of these two ladies in the books of the appellant have aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed statement of ladies recorded by the Assessing Officer is not available on record. Assuming that the source of disclosure made under the Amnesty Scheme were not explained by the ladies, it does not follow that amount deposited in bank belonged to the assessee. The Assessing Officer has not placed any material on record to show that amounts deposited in bank were assessee s income or that assessee was responsible for making the deposits. We agree with learned CIT(A) that immediate source of deposits, i.e., the bank accounts of the creditors was established in this case. The assessee thus discharged initial onus that lays on him to prove the cash credits. 7. Heard Sri A.N. Mahajan, learned Standing Counsel for the Revenue and Sri Bhupeshwar Dayal, learned counsel for the assessee. 8. Learned Standing Counsel for the Revenue submitted that benefit of Amnesty Scheme was available to the declarant and not to the assessee in whose books of account the deposit was found. He submitted that it was open to the assessing authority to make the enquiry and to add the cash credit in the hands of the assessee. In support of his contention, he relied upon the decision of the Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous years. 69. Unexplained investments.-Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. 11. Under section 68 of the Act if any sum is found credited in the books of account of the assessee and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Therefore, what has to be enquired into by the Assessing Authority is about the nature and sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions are proved the burden shift on the revenue to prove that the amount belong to the assessee. (vide CIT v. United Commercial Industrial Co. (P.) Ltd. [1991] 187 ITR 596 5 (Cal.), M.A. Unneerikutty v. CIT [1992] 198 ITR 1476 (Ker.) SLP dismissed 2001 ITR (St) 23, CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465 7. 14. It has been held by the various High Courts that the assessee cannot be asked to prove source of source or the origin of origin (vide S. Hastimal v. CIT [1963] 49 ITR 273 (Mad.), Tolaram Daga v. CIT [1966] 59 ITR 632 (Assam), CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC), Sarogi Credit Corpn. v. CIT [1976] 103 ITR 344 (Pat.). 15. In the case of Jalan Timbers ( supra), the Division Bench of Gauhati High Court held that under section 68 of the Income-tax Act, the assessee has to prove three important conditions (1) Identity of the person, (2) Genuineness of the transaction and (3) capability of the person giving cash credit. On the explanation being given the assessing authority can reject the explanation by cogent grounds and if the grounds are based on no ground, presumption against the assessee does not arise. 16. In Sreelekha Banerjee v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sources of the investments are found to be unacceptable the only course open to the Income-tax Officer was to treat the value of the investments to be the income of the assessee. The submission is that the word may in section 69 should be read as shall . We are unable to agree. As pointed out by the Tribunal, in the corresponding clause in the Bill which was introduced in Parliament, the word shall had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word may . This clearly indicates that the intention of Parliament in enacting section 69 was to confer a discretion on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the Income-tax Officer is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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