TMI Blog2001 (10) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... and that of the AO be restored. 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed of." 3. The relevant facts related to the issue involved in brief are that during the assessment proceedings, the AO noticed that the assessee during the year under consideration had shown to have received Rs. 80,000 from Master Gagan Jain and Rs. 1,70,000 from Master Kartik Jain, who are minor son and nephew respectively, of Shri Narinder Kumar Jain, one of the partners of the assessee-firm. The AO asked the assessee to explain the source of income of the minors. In response to that the assessee vide letter dt. 9th Dec., 1993, had contended that the minors received the gifts from Dr. Mrs. S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minor became absolute owner of that sum and thereafter, they have lent Rs. 1,70,000 and Rs. 80,000 totalling Rs. 2,50,000 to M/s Mahavir Metal Alloys from where they have been earning interest @ 24 per cent till date. The amount of interest so earned has been fully shown in the income return by the minors in asst. yr. 1992-93 in their individual return (copy of individual return of minor is enclosed herewith). Furthermore, in next year, i.e., asst. yr. 1993-94 after the introduction of provisions of clubbing of income of minor with parents, the amount of interest earned by minors has been again shown in individual return of father and tax has accordingly been paid on it (copy of father's income statement showing clubbing of minors' in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditworthiness and genuineness of the transaction. So there was no material to come to an adverse conclusion. Accordingly, he deleted the addition of Rs. 2,50,000 and consequential disallowance of interest of Rs. 12,500. 5. Being aggrieved, the Department is in appeal. The learned Departmental Representative strongly supported the order of the AO and also submitted that the assessee could not prove the source from where the creditor acquired the money deposited with the assessee. It was, therefore, argued that the AO was justified in making the addition because the creditworthiness of the creditor was not proved. 6. In his rival submissions, the learned authorised representative reiterated the arguments placed before the authorities be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vert this fact. From the above, it is clear that there was no dispute regarding identification. As far as the genuineness of the transaction is concerned, the AO never doubted that, the only reason for making the addition was that the AO disbelieved the creditworthiness of the creditor, although, the source was duly explained to him. It appears that the AO doubted the source of the source. The Hon'ble Madras High Court in the case of S. Hastimal vs. CIT held that: "After the lapse of a decade, an assessee should not be placed upon the rack and called upon to explain not merely the origin and source of a capital contribution but the origin of origin and source of source as well. The difficulty on the part of any assessee to explain a t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
