LATE PACHANDASS MOHNOT, REP BY L/H.SHRI M.K.MOHNOT,CHENNAI vs. ACIT, CHENNAI

आदेश / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

Since the assessee is common in all these four appeals, these appeals are clubbed together, heard together, disposed off by this common order for the sake of convenience.

Now we take up ITA No.1586/Mds./2016 2. The main grievance of the assessee in this appeal is with regard to sustaining the addition of 40,000/- as unexplained investment in M/s.Emkay Credit Corporation.

Afterwards, the assessee discontinued maintaining the books of accounts for his business from 01.04.1976. The enquiries subsequent to the search revealed that the assessee was a partner in a firm named as M/s.Emkay Credit Corporation during the year ending on 31.03.1997. The assessee had invested an amount of `40,000/- in this firm, which was not shown in the return of income.

3.2 The original assessment completed on 10.11.1980 was reopened u/s.147(a) of the Act. During the re-assessment proceedings, the assessee was asked to explain the source of `40,000/- claimed to have been invested by him in M/s.Emkay Credit Corporation as capital during the assessment year under consideration. From the re-assessment order u/s.144 r.w.s.147 of the Act dated 25.03.1987, it is revealed that in spite of the repeated reminders and opportunities provided to the assessee , no such information was furnished by them which could have substantiated the genuineness of sources of this investment. Under these circumstances, the ld. Assessing Officer finalized the re-assessment order taking the investment of `40,000/- as unexplained investment. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

3.3. Before the Ld.CIT(A), the assessee seems to have produced trial balance as on 31.03.1977, which reflected the amount of investment of `40,000/- in M/s.Emkay Credit Corporation. Further, the assessee produced the capital statements of earlier years from which the funds for investment had emanated. Accordingly, the Ld.CIT(A) directed the AO to verify the genuineness of the documents/trial balance etc. produced before Ld.CIT(A) and after considering the same, to give necessary credit.

In pursuance of the directions of the Ld.CIT(A), the AO verified the relevant records during the revision proceedings. It was revealed that no such investment was shown in the statement and trial balance submitted by the assessee along with the return of income. According to ld. Assessing Officer, the assessee had showed only the capital the capital account as on 31.03.1977 in which he had reflected the amount of opening balance at `40,544/- and the closing balance at `41,144/-. There was no withdrawal made in the capital account for the purpose of investment in M/s.Emkay Credit Corporation. The only withdrawal shown by the assessee was towards the cash gift made to Bijal Shah Trust.

Accordingly, the AO confirmed the addition made in the original assessment order. Aggrieved by the order of the ld. Assessing Officer, the assessee again preferred an appeal before the Ld.CIT(A).

3.4 In the second round, the Ld.CIT(A) called for a remand report from the AO. The AO wrote a letter dt.10.10.2002 to the assessee. The relevant paras of the letter are reproduced as under:-

“…… You have submitted that the AO who passed the order was very irresponsible in stating that the assessee had not withdrawn any amount from capital account to invest in M/s.Emkay Credit Corporation. In this background you are requested to file the copies of capital account that you have filed before the ld. Assessing Officer for my perusal. Not only that it was found that in the trial balance as on 31.03.1977, which was filed with the original return, the payment to M/s.Emkay Credit Corporation was not found whereas the same was finding a place in the trial balance filed before the CIT(A). You may give satisfactory classification in this regard.”

3.5 In this regard, the ld. Assessing Officer submitted a letter dated 06.11.2002 is reproduced as under:-

“Kind attention of the CIT(A) is invited to the above referred subject. The CIT(A) has directed the AO to prepare a remand report after analyzing the assessee’s written submissions and sought several clarifications by writing a letter to the assessee on 10.10.2002. The letter was also served on the assessee. Till date, neither the assessee nor the representative appeared either before me or the AO to clarify the issues raised in his written submissions. In these circumstances, I am to state that the CIT(A) has to uphold the additions and disallowance made in the assessment against which assessee filed the appeal as it seems that the assessee has no material to support his submissions. That is why he did not bother to appear.”

3.6 Ld.CIT(A) observed that on perusal of the appeal file, it is revealed that the assessee had not complied with the above letter of AO. According to Ld.CIT(A), the AO was right in holding the said investment as unexplained. Ld.CIT(A) observed that there is a letter dated 30.09.1994 addressed to DCIT(A) from the ld.A.R. As per this letter, the ld.A.R had furnished a copyof the trial balances and capital account for assessment year 1974-75, 1975-76 and 1976-77. There is no trial balance furnished for relevant to assessment year 1977-78. The ld.A.R had furnished only a copy of the Capital account for this relevant assessment year. The relevant capital account for assessment year 1977-78 begins with the following undertaking given by the assessee.

“I am doing money lending business. I have not maintained the books of accounts properly. I estimate my income as under:

3.7 According to Ld.CIT(A), from the perusal of above statement of the appellant, it is evident that the assessee has not maintained any books of accounts which automatically reveals that there cannot be any trial balance without the books of accounts. The income has been declared on estimation basis only. In the capital account, there is opening balance at `40,544/- and income for the year at `8,200/-. Against this, the assessee has shown the withdrawal at `6,000/- towards cash gift to M/s.Bijal Shah Trust and drawings at `1,600/-. The remaining capital of `41,144/- has been carried forward to the next financial year. Hence, the Ld.CIT(A) observed that there is no such capital investment of `40,000/- in M/s.Emkay Credit Corporation during the assessment year under consideration. Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

I have heard both the parties and perused the material on record. 4.

The assessee, in spite of several opportunities given by the Department, failed to prove the source of investment of `40,000/- in M/s.Emkay Credit Corporation. It was stated that it is withdrawn from the Capital Account.

However, the assessee is not able to substantiate any withdrawal by way of cash or cheque to invest in M/s.Emkay Credit Corporation. Being so, in the absence of any evidence for source of investment in M/s.Emkay Credit Corporation, I have constrained to sustain the addition of `40,000/-.

Hence, the grounds raised by the assessee in ITA No.1586/Mds./2016 stand dismissed.

Now we take up ITA No.1587/Mds./2016 14. The assessee raised the following grounds for adjudication.

2. The learned Commissioner of Income Tax (Appeals)-4 ought to have seen that the appellant had produced necessary documentary evidence to prove the receipt of gift from Sri.Lala Chand and Mrs.Agarwal and ought to have accepted the gifts as geniuine. The learned CIT(A) erred in drawing adverse inference since the appellant was unable to produce the Donors, especially after a period of 20 years.

3. The learned Commissioner of Income Tax (Appeals)-4 erred in treating the loan of `2,50,000/- taken by the appellant from M/S. Hem Investment under the head unexplained cash credit. The learned CIT(A) ought to have seen that the appellant has produced confirmation letter from the Creditor and the said creditor is also assessed to tax thus the appellant has discharged his responsibilities cast under section 68 of the Income Tax Act.

“Since the assessee is unable to produce the right address of Sri Daulat ram. Hence, we are withdrawing ground No.4.” Accordingly, ground No.4 is dismissed as not pressed.

15.1 The assessee failed to produce the creditors/donors for examination before the AO. It was very clear from the manner and conduct in which the assessee was responding to the queries raised by the AO that the assessee was not having sufficient evidence to prove the genuineness of these transactions nor was he in a position to produce the parties.

Accordingly, the ld. Assessing Officer completed the assessment u/s.143(3) of the Act on 29.03.1985 after making certain additions.

Aggrieved, thease carried the appeal before the Ld.CIT(A). On appeal, Ld.CIT(A) confirmed the action of ld. Assessing Officer. Against the order of Ld.CIT(A), the assessee was in appeal before Tribunal. The Tribunal passed an order on 31.12.1991 by which the assessment order was set aside with certain directions. Accordingly, the re-assessment proceedings were initiated and the assessee was completed as under:-

15.2 Cash gift in the name of Sri Lalchand: The amount of Rs;5,000/- was credited to the assessee’s capital account on 01.03.82 as representing cash gift received from Shri Lalchand. In support of this gift, a Photostat copy of the gift deed (Memorandum of declaration of gift) stated to have been executed by Shri. Lal chand on 03.03.82, was furnished by the assessee. Here also the authenticity of the alleged gift deed was not proved. As per the Photostat copy of the aforesaid gift deed, Shri.

Lalchand was assessed to income-tax. The verification revealed that there was no such assessee in the name of Shri Lalchand in 1 City Circie-VIl (6) under G.l.No.8820-L. The assessee was specifically requested to state whether Shri Laichand was in anyway related to him and, if so, the exact relation-ship may be furnished. This information was not furnished by the assessee.

15.3 Cash gifts: The amount of Rs. 10,000/-was credited to the assesseee’s capital account on 1.3.82 as representing cash gifts received from Mrs. Maya Agarwal. In support of the aforesaid cash gift of Rs. 10,000/-, the assessee had furnished a Photostat copy of the gift deed (Memorandum of Declaration of Gift) stated to have been executed by Mrs. Maya Agarwal on 1.3.82. The Photostat copy of the gift deed furnished by the assessee along with the letter dt. 4.3.85 of Mohnot & Co., (received by the AC on 8.3.85) showed that the gift deed adverted to was executed by Mrs. Maya Agarwal on 1.3.82. But the relevant stamp paper (of the value of Rs.51-) on which the gift deed was written was found to have been purchased from the stamp vendor on 3.3.82 only. When the stamp paper on which the gift deeds written was purchased only on 3.3.82, it was unacceptable that the gift deed could have been executed on 1.3.82. The original of the gift deed claimed to have been executed by Mrs. Maya Agarwal was not produced for perusal, although the assessee was specifically requested to produce the same. The information as to whether the alleged donor Mrs. Maya Agarwal was in any way related to the assessee and, if so, the exact relationship was not furnished by the assessee in spite of repeated requests made by the AO. Further, the Photostat copy of the aforesaid gift deed revealed that the witnesses had not signed the deed, although space was clearly provided for the signatures of two witnesses. Evidently, the assessee had deliberately withheld this information for the reasons best known to him. That apart, the income-tax records of Mrs. Maya Agarwal did not indicate that she was financially such a well off person to have given the cash gift of Rs. 10,000/- to the assessee. If, as claimed by the assessee, Mrs. Maya Agarwal had given the cash gift of Rs,10,000/- she should have furnished her return of gift to the concerned Gift tax Officer. But she did not appear to have filed any gift tax return.

15.4 As regards the gift shown to have been received from Mrs. Maya Agarwal, the assesseee’s representative in his letter dt.21.9.93 stated that this was a mistake which could have occurred at the hands of stamp vendor or it may be due to some clerical error from their office. The assessee did not furnish any details about the gift shown to have been received from Sri. Lalchand. Neither additional information nor any evidence was produced in support of these gifts, even though he was specifically asked for by the AO. Nor did the assessee produce the parties before the AO in spite of the several opportunities provided to him. As per the decision reported in 190 ITR 203, the assessee should produce the donors if called for by the AO and the burden was on the assessee to prove the genuineness and creditworthiness of these donors. But the assessee failed to discharge the onus cast upon him. In these circumstances, it was held by the AO that the amount of gifts shown to have been received from Mrs Maya Agarwal and Sri. Lalchand, was assessee’s income from undisclosed sources which was added back to his income.

The assessee is not able to explain this cash gift and the gift was received by cash. It is the duty of the assessee to prove the identity & capacity of the donors and also genuineness of the transactions. Since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA in [2007] 291 ITR 278 (SC) wherein held that:-

“the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence.”

Hence, this ground of appeal raised by the assessee stands dismissed.

17. The next ground is treating the loan of `2,50,000/- taken by M/s.Hem Investment, which was added to the income of assessee with the following reasons.

17.1 In the assessee’s books for the year ending on 31.03.82, there was a credit of Rs.2,50,000/- on 25.04.81 in the name of M/S Hem Investments of which the assessee’s daughter-in-law, Smt. Hema Mohnot, was said to be the proprietor. According to the assessee’s combined cash book and ledger pertaining to the period 1.04.81 to 31 .3.82 (impound on 8.3.85 and kept in the office custody), the aforesaid credit of Rs.2,50,000/- represented the cash loan received from M/s. Hem Investments, No. 16, Ramanan Road, Madras. The assessee did not let in any evidence to prove the veracity of this credit. The manner in which the alleged cash loan transaction was entered in the books of Smt. Hema Mohnot appeared to be suspicious. Neither the assessee nor did his daughter-in-law, Smt.

Hema Mohnot, let in any evidence to prove the veracity of that transaction. The cash book and ledger in the case of the assessee as well as in the case of Smt. Hema Mohnot (which was impounded by the AO on 8.3.85) appeared to have been written up at a stretch for the occasion to suit the convenience and purposes of these two assessees. These records did not appear to be authentic and contemporaneous record of the transaction. In any case, the entries in the cash books of the assessee and his daughter-in-law pertaining to the relevant period did not appear to have been made pari passu with the transaction, as and when they took place. No details were furnished about this transaction till the finalization of the assessment proceeding. It was simply stated that the creditors’ confirmation letters were filed. It may be mentioned that Mrs. Hema Mohnot could not explain satisfactorily the loans/gifts shown to have been received furing the relevant period for giving an advance to M/s.Premier Investmerns. Whereas M/s.Premier Investments which was claimed to be proprietary concern of the assessee, Sri Pachandass Mohnot, utilized this amount for advancing loan to Mukesh Seth as per the separate trial balance of M/s.Premier Investments. The transaction was not explained duly with necessary evidence. Under these circumstances, The ld. Assessing Officer made the addition as unexplained investment of assessee. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) observed that since either the assessee or M/s.Hem investment had failed to prove the genuineness of this transaction, the ld. Assessing Officer was right in holding this amount as unexplained and undisclosed income of assessee itself. Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

As discussed earlier para, the assessee failed to prove the identity of the party & capacity of the party and also genuineness of the transactions.

Since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA in [2007] 291 ITR 278 (SC) wherein held that:-

“the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence.”

Hence, this ground of appeal raised by the assessee stands dismissed.

18.1 In the result, all the grounds raised by the assessee in ITA No.1587/Mds./2016 stand dismissed.

Now we take up ITA No.1588/Mds./2016

Shri Daulat ram Rs.10,000/- ( 20.08.1982)

Smt Urvasi Manghi Rs.10,000/- (13.08.1982)

The ld. Assessing Officer asked the assessee to furnish the loan confirmation letters, etc. and other particulars vide letter dated 24.02.1986. As the assessee did not furnish the requisite details as required u/s.68 of the Act, the loans were added back to the income of assessee by ld. Assessing Officer. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) confirmed the action of the ld. Assessing Officer. Against the order of Ld.CIT(A), now the assessee is in appeal before us.

In this case also, the assessee has not placed any evidence to prove the identity & capacity of the donors and also genuineness of the transactions.

Since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA in [2007] 291 ITR 278 (SC) wherein held that:-

“the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence.”

Hence, this ground of appeal raised by the assessee stands dismissed.

22. The next issued raised in this appeal is with regard to sustaining of 5,000/- as bogus gift.

On appeal, the Ld.CIT(A) endorsed the view of the ld. Assessing Officer.

Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

On this count also, the assessee failed to discharge the onus cast upon him to prove the genuineness of the donor and also the genuineness of his credit worthiness. As discussed in earlier para, since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA in [2007] 291 ITR 278 (SC) wherein held that:-

“the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence.”

Hence, this ground of appeal raised by the assessee stands dismissed.

25. The second issue in this appeal is with regard to confirming undisclosed investment of `50,000/-.

25.1 The facts of the case are that from the perusal of the books of accounts, it was noticed by the AO that the assessee was receiving interest income from Mr Bhawarlal and Mr. Arumugha Nadar. However, the corresponding investment on which interest was being reflected in the books of accounts was not disclosed in the books of accounts. The assessee was allowed to inspect the seized books of accounts and other documents. From the perusal of the books of accounts seized by the CBI relating to the assessment year under consideration, it was noticed that there was an amount of `50,000/- shown as opening balance (debit) due from Prema Vaswani. The assessee did not give any explanation about this debit entry. The amount shown in the previous assessment year 1982-83 as sundry debtors, was a different from (is to be received from Prema Vaswani) the amount shown in the books relating to the assessment year 1983-84 seized by the CBI. The details of sundry debtors reflecting in the books of accounts of the assessee for the previous assessment and 1982 - 83, were not substantiated. Hence, the AO has made an addition of `50,000/-as unexplained investment. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

On appeal, Ld.CIT(A) observed that in spite of a number of opportunities of being heard provided to the assessee, the assessee failed to reconcile the difference and accordingly failed to discharge the onus cast upon him.

Therefore, Ld.CIT(A) came to a conclusion that the AO was right in treating this amount of `50,000/-as unaccounted investment. The action of the AO is confirmed. Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

The assessee, in spite of several opportunities given by the Department, failed to prove the source of investment of `50,000/- . It was stated that the interest was received from Mr Bhawarlal and Mr. Arumugha Nadar.

However, the corresponding investment on which interest was being reflected in the books of accounts was not disclosed in the books of accounts.

Being so, in the absence of any evidence for source of investment, I have constrained to sustain the addition of `50,000/-. Hence, this ground raised by the assessee in ITA No.1588/Mds./2016 stands dismissed.

27.1 The facts of the issue are that there were five accounts of the debtors reflecting in the books of accounts of the assessee. The assessee stated that these accounts represented the repayment of loans advanced to them. He was asked to furnish their complete addresses, the Ledger accounts and also their income tax particulars. However, no such details were furnished. But in the case of only three persons namely, Mr Premkumar Sheth, Mr Kanti Bhai and M/s.

Natraj Film Distributors, the assessee could furnish their addresses. ln response to the summons issued to these three persons, the replies were received from Mr Premkumar Sheth and Mr Kanti Bhai Sheth only claiming that the relevant books of accounts were seized by the income tax department and hence they could not furnish the relevant information. The summons issued to M/s. Natraj Film Distributors was received back unserved. There were no addresses and relevant information furnished in respect of the remaining debtors. Therefore, the ld. Assessing Officer had made an addition of `50,000/- as unexplained investment.

Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

27.2 On appeal, the Ld.CIT(A) observed that from the perusal of the facts of the case, it is revealed that the AO has added back the entire amount of `2,82,000/-as unexplained credits in the account of the above mentioned debtor. According to Ld.CIT(A), the information furnished by Mr Premkumar Sheth and Mr Kanti Bhai Sheth did not deny the impugned transactions Since the relevant books of accounts of these two persons were lying impounded with the Department the AO should have verified the relevant books of accounts before coming to any conclusion. However, from the perusal of the assessment order, it seems that no such effort was made by the AO. Therefore, in the absence of any cogent material documents to substantiate the addition effected by the AO, the credit amount of `1,00,000/- reflected in the name of Mr Kanti Bhai Sheth and `1,10,000/-reflected in the name of Mr Premkumar Sheth need to be deleted.

The remaining addition of `72,000/- is confirmed by the Ld.CIT(A). Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

As discussed by the Ld.CIT(A), the assessee has not given details of the creditors. Hence, having no option, I sustain the addition made by Ld.CIT(A). This ground raised in this appeal is rejected.

29.1 The facts of the case are that the assessee was maintaining a bank account with the Bank of Thanjavur having a total deposits of `8,17,930/- during the relevant year under consideration. It was noticed by the AO that the transactions of this bank account were not reflected in the books of accounts of the assessee on the basis of which the return of income for the relevant year was filed. The assessee was asked to reconcile the transactions as appearing in the seized books of accounts viz a viz the relevant bank account statement. However, the assessee failed to furnish any satisfactory evidence to substantiate the transactions of this bank account. Accordingly, the AO added back the amount of `8,15,000/-as undisclosed income of the assessee. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

29.2 On appeal, the Ld.CIT(A) observed that from the perusal of the relevant facts of the case, it is revealed that the net effect of the transactions of this bank account was not declared by the assessee in his relevant income tax return. The assessee had only reflected the balance amount of the relevant bank account in the balance sheet. The assessee had failed to discharge the onus cast upon him to reconcile the transactions of the bank account from the seized books of accounts viz a viz the relevant bank account statement. Since the assessee had deliberately evaded the inclusion of the credit entries of this bank account in his income tax return, the A.O was absolutely right in adding back the entire deposits as assessee’s undisclosed income. Hence, the Ld.CIT(A) confirmed the addition made by ld. Assessing Officer. Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

In the above bank account with M/s.Bank of Thanjavur was not disclosed to the Department by the assessee and not explained the reasons for deliberately evading the inclusion of the credit entries of this bank account in his return of income, the addition is sustained. Hence, this ground is rejected.

30.1 In the result, the appeal in ITA No.1588/Mds./2016 is dismissed.

Now we take up ITA No.1589/Mds./2016 31. Grounds Nos.2 & 3 raised by the assessee as follows:-

3. The Ld.CIT(A) ought to have seen that the appellant has produced confirmation letter from the creditor and the said creditor is also assessed to tax thus the appellant has discharged his responsibilities cast u/s.68 of the Act. Having accepted the payment of interest the Ld.CIT(A) ought not to have assessed the principle amount as unexplained credits. 31.1 At the time of hearing, the ld.A.R made an endorsement as follows:-

“Since the assessee is unable to produce the right address of Sri Daulat ram. Hence, we are withdrawing ground Nos.2 & 3” Accordingly, grounds Nos.2 & 3 are dismissed as not pressed.

32.1 The brief facts of the case are that the assessee has shown a cash gift of `20,000/- each from five different persons totaling to `1,00,000/-.

During the original assessment proceeding, the assessee had failed, to substantiate the genuineness of these gifts and, accordingly, this amount was treated as unexplained cash credit by the AO. During the fresh assessment proceeding, the assessee was asked to furnish the relevant particulars to substantiate the genuineness of these gifts. The assessee was also allowed to inspect the seized documents for furnishing his reply.

It was noticed by the AO from the cash book for the relevant period seized by the CBI that the transactions were not recorded on the said dates on which the assessee had stated the same to have been received. The verification from the respective income tax offices revealed that in many cases no such donors existed in the files of the AOs. Moreover, the assessee could furnish Xerox copies of acknowledgements for having filed the gift tax returns in respect of only four donors. In the case of Mr Parasmal Kothari, it was found from his reply that he had gifted the amount to one Mr. Ranganathan and not to the present assessee.

Accordingly, the assessee was requested by the AD to produce the donors before him for examination. A number of opportunities were provided to the assessee in this regard. However, the assessee deliberately avoided their attendance before the AO. In view of these facts of the case, the AO treated this amount of `1,00,000/- as unexplained cash credit introduced by the assessee in his books of accounts. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

On appeal, Ld.CIT(A) observed that the assessee had failed to discharge the onus cast upon him to prove the genuineness of these transactions.

Hence, the addition of `1,00,000/- was confirmed by Ld.CIT(A). Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.

32.2 I have heard both the parties and perused the material on record. In this issue, the assessee is not able to lead any evidence regarding the identity of the parties, capacity of the parties and genuineness of the transactions. Since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA in [2007] 291 ITR 278 (SC) wherein held that:-

“the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence.”

Hence, this ground of appeal raised by the assessee stands dismissed.

33. The ground No.5 is with regard to confirming the addition of `4,90,000/- made by the ld. Assessing Officer under the pretext that the appellant has introduced his undisclosed income in the guise of credits.

33.1 The brief facts of the case are that the assessee was showing an amount of `4,90,000/-as credit entries in the Ledger accounts of five different debtors. It was stated by the assessee that these credits pertained to the repayment of loans paid by the above mentioned debtors.

The assessee was asked to furnish the requisite details to substantiate the genuineness of these transactions. However, the assessee’s representative vide his reply dated 22nd September 93, stated that he was under no obligation to file the confirmation letters of these parties. But he furnished the addresses of four parties out of the total five account holders.

Accordingly, the AO issued letters and summons to these parties for furnishing the requisite details. Mr R Srinivasan expressed his inability to furnish the details. M/s. South Eastern Carriers stated that they had no such transaction with the assessee. The letter issued to M/s. Natraj Film Distributors was received back unserved with the remarks of the postman that no such address was available. The assessee did not furnish the address of Mrs. Prema Vaswani. The verification from income tax office revealed that no such assessee was existing. As regards the transaction with Mr R Srinivasan, the entries found in the books appeared to be interpolation. Many of the credits shown were before 22.11.83 and not found in the books of accounts impounded by the department. Hence, the AO added this amount to the income of assessee. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) observed that the AO was absolutely right in holding this amount of `4,90,000/- as unexplained credit introduced in the books of accounts of the assesses in the name of the different debtors. Accordingly,the Ld.CIT(A) confirmed the addition made by the ld. Assessing Officer. Against the order of Ld.CIT(A), now the assessee is in appeal before us.

33.2 I have heard both the parties and perused the material on record.

As discussed earlier, since the assessee has failed to prove the genuineness of the creditors, the addition is sustained by placing reliance in the judgement of Apex Court in the case of CIT Vs. P. MOHANAKALA (supra). Hence, this ground of appeal raised by the assessee stands dismissed.

33.3. In the result, the appeal in ITA No.1589/Mds./2016 is dismissed.