TMI Blog2018 (8) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding at the paying of the year, amount received during the year as well as received after the close of financial year 2002-03 but all these details rather than solving the issue and making it more complicated to arrive on a conclusion. Considering the issue, business income, agriculture income, a portion of the addition so made deleted. - Additions for remaining amount confirmed - Decided partly in favor of assessee. Additions u/s 69A - alleged investment in purchases - assessee does not maintain the regular books of accounts and is filing Income Tax return following the provisions of Sec. 44AF of the Income Tax Act since last so many years. - Held that:- Even though the assessee is not maintaining regular books of accounts but he has submitted the figure of closing stock in the statement of financial affairs. - The amount of stock is much more than sales shown by the assessee - This clearly establishes that the assessee was engaged in making sales out of record which was not disclosed in the total turnover shown in the return of income. - Based on reverse calculation, additions confirmed by the CIT(A) sustained - Decided against the assessee. - ITA No.757/Ind/2016 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal before the Ld. CIT(A) and partly succeeded. 4. Now the assessee is in appeal before the Tribunal raising 4 grounds of appeal out of which Ground No. 4 is general in nature. Ground No. 1 2 are inter connected and therefore taken together which reads as follows; 1. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in maintaining addition of ₹ 7, 15, 900/- being total amount advanced against the promissory notes during the A. Y. 2003-04 without properly appreciating the facts of the case and submission made before him. 2. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in maintaining the addition of ₹ 99, 848/- on account of interest on promissory notes. 5. Brief facts relating to these two grounds are that during the course of survey proceedings u/s 133A on 27. 05. 2003 various incriminating materials in the shape of promissory notes were found which indicated that the assessee was involved in money lending business and was giving short term loans of small amounts. The assessee himself surrendered income of ₹ 9, 00, 000/- at his own will for the alleged promissory notes. However in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2002-03. Detail of addition as made by the assessing officer in these years and that of year under appeal is as under:- S. No Particulars 2000-01 2001-02 2002-02 2003-04 1. 1 Promissory Notes 54, 200 65, 500 82, 800 7, 15, 900 1. 2 Interest on Promissory notes 4, 878 14, 448 24, 330 99, 848 2. 1 Sundry Debtors as shown in the Balance Sheet 49, 200 1, 14, 700 1, 26, 430 5, 41, 770 2. 2 Cash in hand 99, 058 68, 420 3, 282 43, 385 1, 48, 258 1, 83, 120 1, 29, 712 5, 85, 155 3. 1 Deleted by the Ld CIT[A] 54, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0- 01 2001-02 2002-03 1999- 00 54200 5000 30000 19200 2000- 01 65500 0 0 23000 20000 22500 2002- 03 715900 0 0 0 259900 456000 Total 918400 5000 1330 23000 330300 558770 7. 3. 4 That in view of the above, the amount of promissory notes as found in possession of the appellant was duly explained and properly reflected in the Statement of affairs as filed with the return of total income before the assessing officer. The Ld CIT [A] while deciding the appeals for the Asst Years 2000-01, 2001-02 and 2002-03 has also accepted similar contention of the appellant. The addition of ₹ 7, 15, 900/- is therefore neither legal nor proper, the same now requires to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the perused the records placed before us. The assessee has challenged the finding of Ld. CIT(A) confirming the addition of ₹ 7, 15, 900/- for the alleged unaccounted investment in promissory note and addition of ₹ 99, 848/ made by the Ld. A. O calculating interest on promissory note not offered to tax. 10. This fact is not disputed by the assessee that during the course of survey promissory notes were found which indicated that the assessee apart from his business of retail trading was also engaged in money lending business by way of giving short term advances on interest. Perusal of the promissory notes placed in the paper book indicates the amount advanced on interest, name of the money lender, name of the borrower, date of signing the promissory note and rate of interest. The Ld. Counsel for the assessee in its contentions has referred to the findings of Ld. CIT(A) for other assessment years which are connected to the survey proceedings wherein assessee has been granted relief for the additions made on promissory notes was deleted. It is true that the amount of addition in the other assessment years are very small and the maximum addition relating to promissory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was having explained source to cover up the investment in the promissory notes. For reaching to the correct conclusion we have gone through the computation of income and statement of affairs filed by the assessee during the A. Y 1999-2000 placed at page 103 of the paper book which shows that the assessee was having closing capital balance of ₹ 6, 43, 781/- and sundry creditor of ₹ 68, 409/-. Against the total of ₹ 7, 32, 190/- on the liability side assessee has shown investments in PPF, closing stock, old property, sundry debtors of ₹ 49, 200/- and cash in hand and bank balance of ₹ 1, 09, 200/-. In this statement of affairs ₹ 49, 200/- is the amount shown as sundry debtors and promissory notes found for this year were at ₹ 54, 200/. Similarly in the financial year 2000- 01 sundry debtors of ₹ 1, 14, 700/- have been shown in the statement of affairs and promissory notes at ₹ 65, 555/- and as far as financial year 2001-02 is concerned debtors have been disclosed at ₹ 1, 26, 430/-. From the perusal of statement of financial statement filed by the assessee the source of investment in assets has been explained by way of openi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome invested in the money lending business by way of issuing promissory notes. Ground No. 1 of the assessee is partly allowed. 17. As regards Ground No. 2 relating to alleged interest income of ₹ 99, 848/- as interest on promissory notes we are of the view that the assessee deserves set off of interest income of ₹ 20, 000/- shown in the income tax return and we accordingly accept the alternate submission of the assessee and confine the addition to ₹ 79, 848/-. In the result Ground No. 2 is partly allowed. Ground No. 3 18. Now we came to Ground No. 3 which reads as follows; 3. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in maintaining the addition of ₹ 137864/- on account of alleged investment in purchases by observing that such purchases were not recorded in the regular books of accounts and assessee has failed to furnish the source of investment. 19. Brief facts of this ground are that the Ld. Assessing Officer on the strength of the list of purchase bill and loose papers bundle appearing at LP-4 found during the survey noticed that there was unaccounted investment in purchase of ₹ 1, 37, 864/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lways upon the appellant and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of loan: given. But the law is equally settled that if the, initial burden is discharged by the appellant by producing sufficient materials in support of the unexplained money, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the appellant and in the process, the onus may again shift from the Assessing Officer to the appellant. It has been held in the case of CIT vs. K. T. M. S. Mohammad {1997} 92 Taxman 169/228 ITR 113 (Mad. ) that the burden of proof is always on the assessee. Therefore, the appellant failed to discharge the burden of proof by not establishing the source of investment in the promissory notes. Therefore, the addition made by the AO on this ground amounting to ₹ 7, 15, 900/- is Confirmed. The appeal on this ground is Dismissed . 20. Now the assessee is in appeal before the Tribunal. The Ld. Counsel for the assessee submitted that assessee is an Individual carrying on the business of Trading of Pump Sets, its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition as made to the Total income of assessee of ₹ 137854/- required to deleted. 21. On the other hand Ld. Departmental Representative supported the orders of CIT(A). 22. We heard the rival submissions and perused the records placed before us. Through Ground No. 3, the assessee is aggrieved with the findings of Ld. CIT(A) confirming the addition of unaccounted purchase of ₹ 1, 36, 864/-. We find that the assesee regularly prepares financial statements and offers business income u/s 44AF declaring the net profit @5% on the turnover during the year which for the instant appeal the turnover stood at ₹ 11, 60, 000/- and assessee declared income of ₹ 58, 000/-. The issue arised from the document seized during the course of survey relating to purchase. We still first like to go through the relevant facts linking to the purchases. Even though the assessee is not maintaining regular books of accounts but he has submitted the figure of closing stock in the statement of financial affairs. We start with the figure of closing stock shown by the assessee as on 31. 3. 2002. Particulars Amount Closing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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