SAKETKUMAR RUGNATH TANNA,AHMEDABAD vs. THE DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member ITA Nos.977 & 978/Ahd/2019 IT(SS)A No. 343/Ahd/2019 Asst. Years 2007-08 & 2014-15 & 2013-14 Saketkumar Rugnath Tanna The D.C.I.T, 68, Chimanbhai Jivabhai Central Circle-2(2), Market,Vasna, Vs Ahmedabad. Ahmedabad-382460. PAN: ABCPT5144R (Appellant) (Respondent) ITA No.976/Ahd/2019 & IT(SS)A No. 337/Ahd/2019 Asst. Year 2014-15 & 2013-14 Indumati Rugnath Tanna, The D.C.I.T, By L/h.Saketkumar Central Circle-2(2), Rugnath Tanna, Vs Ahmedabad. 68, Chimanbhai Jivabhai Market, Vasna, Ahmedabad-382460. PAN: ACDPT3383Q (Appellant) (Respondent)

ITA No.921/Ahd/2019 Asst. Year 2007-08 The A.C.I.T. Indumati Rugnath Tanna, Central Circle-2(2), By L/h.Saketkumar Ahmedabad. Vs Rugnath Tanna, 68, Chimanbhai Jivabhai Market, Vasna, Ahmedabad-382460. PAN: ACDPT3383Q (Appellant) (Respondent)

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ITA No.975/Ahd/2019 & IT(SS)A No. 331/Ahd/2019 Asst. Year 2014-15 & 2013-14 Ritaben Saketkumar Tanna, The A.C.I.T. 68, Chimanbhai Jivabhai Central Circle-2(2), Market, Vasna, Vs Ahmedabad. Ahmedabad-382460. PAN: AASPT6796Q (Appellant) (Respondent) ITA No.920/Ahd/2019 Asst. Year 2007-08

The A.C.I.T, Ritaben Saketkumar Tanna, A Central Circle- 68, Chimanbhai Jivabhai 2(2), Vs Market,Vasna, Ahmedabad. Ahmedabad-382460. PAN: AASPT6796Q [Appellant] (Respondent)

Assessee Represented : Shri Mehul K. PATEL, AR Revenue Represented : Shri Sudhendu Das, CIT-DR Date of hearing : 04-07-2024 Date of pronouncement : 28-08-2024 आदेश/ORDER PER BENCH:

These Appeals are filed by the Assessee and the Revenue as against separate appellate orders passed by the Commissioner of Income Tax (Appeals)-7, Ahmedabad arising out of the assessment orders passed under sections 144 r.w.s. 147 and 143[3] of the

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Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years as mentioned in the cause title. Since the issues involved in these appeals are abated/pending assessments and additions made thereon are identical in nature and the Assessees herein are same family members of Son, Mother and Wife, for the sake of convenience the same are disposed of by this common order.

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3.1. CASH DEPOSITS IN BANK ACCOUNT: The AO has observed that the assessee made cash deposits of Rs.16,09,54,498 in his current account no. 409 with Mahila Vikas Co-Operative Bank (hereinafter referred as MVCB) from FY 2007-08 to 2013-14 till date of search and during the year under consideration, there was cash deposit of Rs.3,74,66,498 in above bank account. The assessee in his statement recorded during the course of search/ survey on 15-10-2013 and in reply to question no 19 and question 42 of statement recorded on 16/10/2013 has stated that cash deposited in above account is out of total cash collected from three concerns of the assessee namely M/s. Saketkumar Rugnath, M/s. Bhavchand Jairam and Ms. Raghunath Bhavchand. Thus, AO in his notice asked assessee to give bifurcated amount of cash deposited in the three concerns. The AO has also referred to question nos. 37 & 48 of statement recorded on 17/10/2013, wherein the assessee has stated that he has taken cash from five parties/sharoffs and such cash loans are not reflected in the balance sheet as loans were taken for only 2 to 3 days and thereafter it was squared up, hence AO asked the assessee to submit copies of accounts in respect of cash loan taken from Shroff's to establish genuineness and creditworthiness of the Shroffs. The AO has also referred to post search statement recorded on 04/04/2014, wherein in reply to question no 3, the assessee has stated that he has taken cash from Shroffs to pay the farmers, in reply to question No. 5, it was submitted that payment received from customers as well as Shroffs were entered into cash book and cash deposits are used for payment of business expenses incurred. The assessee in his statement has stated that he has not

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done any cheque discounting business, whereas cash book submitted by the assessee show sufficient cash balance on each day and such cash balances were sufficient for making payment to the farmers, which goes to prove that cash taken from Shroff are not used for making payment to farmers, hence the Ld. A.O. asked the assessee to provide explanation regarding cash deposited in bank account with MVCB.

3.2. The assessee stated that cash was taken from Shroffs after giving post dated cheques [PDCs] and cash received is paid to farmers and agricultural produces so acquired are delivered to Traders from whom cash received was deposited in his bank accounts. Thereafter, PDCs given to the Shroffs were cleared, thus the assessee explained that sources of cash deposits are cash receipts from business. It was also contended by the assessee that, as all the three firms have discounted their cheques with the Shroffs and got the cash against the cheques, therefore such amounts are not loans or deposits for which provisions of section 269SS are not attracted. However in his reply the assessee has not bifurcated cash deposits in MVCB and in the Three concerns. The assessee has stated that Rs.1,55,39,500/- pertain to his Firm assessee. The assessee further stated that amount pertaining to M/s. Rugnath Bhavchand Prop. Smt. Indumatiben R. Tanna is Rs.8,45,000 which pertains to bank account no 182 and Rs.2,29,500 pertain to Bhavchand Jairam Prop Ritaben S. Tanna, which pertains to bank account no 183 and these two deposits do not pertain account no.409. Hence entire cash deposited in bank account no 409 is considered in his hands as substantial addition

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and protective assessment in the hands of Smt. Indumatiben R. Tanna and Smt. Ritaben S. Tanna.

3.3. Thereafter, AO has provided assessee bifurcation of cash deposits, cheque deposits and interest amount of all the bank accounts held in the name of the assessee and asked him to explain source of such deposits. The assessee has reiterated the contention regarding cash deposits and explained that sources of credit in the bank account is the cheque discounted from Shroffs and cheques received from Traders to whom agricultural produces were sold. It was also stated that due to uncertainty of business, he has to keep cash on hand with him and carry out cash discounting, which is commercial expediency. The above explanation was not accepted by AO on the ground that assessee is working as Commission Agent only, which is evident from audit report hence such Agent is not required to make payment to farmers directly but actual buyer/trader is required to pay such farmers directly. The AO has also referred to reply dated 05-08-2015 filed by the assessee, wherein he has stated that there was no trading business of onion and potatoes during the year. The AO has also referred to impounded cash book and accounts maintained in Kisan Software wherein it is found that most of cash deposited in the MVCB pertained to cash taken from Shroffs and not for realisation of sale proceeds which makes entire theory of assessee incorrect. The AO has referred to various statement of Shroffs taken during the post search inquiry from which it is found that none of the Shroffs produced the sources of cash given to the assessee or unable to produce the name of persons from whom cash was received by

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them and thereafter cash was transferred to the assessee. Thus the Ld AO brought on record that statement of Shroffs and assessee are contradictory, there was various discrepancy in balance shown in assessee's account and Shroffs account, hence AO concluded that assessee failed to prove sources of cash deposit in his bank account. Further the assessee could not offer explanation of keeping huge cash balance and taking cash loans from Shroffs and also could not provide any explanation regarding cash deposited with other bank accounts. Therefore the Ld AO in assessment order made addition of Rs.3,74,66,498 being cash as well as cheque deposits in various bank account.

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submit any bills and vouchers for verification. Therefore the AO adhoc disallowance at 20% and 10% on Salary & Staff Sarbhara and Kasar [discount] expenses at 50% u/s.37[1] of the Act.

6.1. The total disallowances made by the Assessing Officer and the Grounds of Appeal raised by the assessee before this Tribunal is tabulated as below: Sl. IT(ss)/343/A/19 ITA 978/A/19 ITA 977/A/19 No. Grounds of Appeal A.Y.2013-14 A.Y.2014-15 A.Y.2007-08 1 Challenging validity of assessment Not Pressed Not Pressed Not Pressed 2 Addition u/s 69 in respect 3,74,66,498 2,15,00,205 3,17,83,256 of cash deposited and cheque Clering/ transfer 52,97,389 entries in Bank Account 3 Disallowance u/s 36(1)(iii) 11,114 4 Disallowance of business expenses claimed in P&L A/c Municipal Tax -- -- Bad Debt 3,32,019 4,10,591 Salary @ 10% 58,841 1,39,768 Transport, Khedut lodging etc. @ 20% 1,71,844 2,53,464 39,952 Kasar(Discount) @ 50% 2,63,606 5,58,508 1,27,823 1,67,775 8,26,310 13,62,331 5 Disallowance of deductions 77,958 6,815 -- claimed under Chapter VIA 6 Disallowance of 8,347 1,62,364 depreciation 7 Addition u/s.68 2,00,000 8 Unaccounted Sales 15,63,690 -- -- 9 Addition u/s.41(1) of the -- 2,87,000 ---- Act

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“1. The learned Commissioner of Income Tax (Appeals) -7, Ahmedabad ["CIT(A)"] erred in fact and in law in confirming the action of the leamed Deputy Commissioner of Income Tax. Central Circle-2(2), Ahmedabad ["the AO"] in making the additions to the returned income u/s. 153A of the Income Tax Act, 1961 ("the Act") despite the fact that no incriminating material was found during the course of search. Unexplained Investment u/s 69 of Rs. 3,74,66,498: 2 The learned CIT(A) erred in fact and law in confirming the action of the Id. AO in making addition of Rs. 3,74,66,498/- in respect of cash deposited in bank account maintained with Mahila Vikas Co-operative Bank Ltd. by invoking provisions of Section 69 of the Act. 3. The learned CIT(A) erred in fact and law in confirming the action of the Id. AO in invoking section 69 of the Act despite the fact that cash deposit was recorded in the books of account of the Appellant and hence provisions of section 69 were not attracted in the case of the Appellant. 4. The learned CIT(A) erred in fact and law in confirming the action of the Id. AO in making the addition u/s 69 despite the fact that the Appellant had explained the source of cash deposited in the bank account. 5. The learned CIT(A) erred in fact and law in confirming the action of the Id. AO in making the addition u/s 69 without appreciating the facts in proper perspective. 6. The learned CIT(A) erred in fact and law in confirming the action of the Id. AO in holding that no payment could have been made by the Appellant to farmers without appreciating the provisions of The Gujarat Agricultural Market Produce Act, 1963 ("GAMPA").

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challenging the Jurisdiction of assessment, recording the same Ground No.1 is hereby dismissed.

10.1. Ld Counsel submitted that the addition is made in respect of cash deposited and cheque clearing and transfer entries in bank account, which is already disclosed and forming part of the Audited Accounts. In this connection Bank Statements and Balance Sheets are available at pages 20-46 and 16 of the Paper Book. The assessee being a Commission Agent of APMC, as per practice and APMC Rules, in order to protect the interest of the Farmers, when they sell their agricultural produce in auction, they are to be settled immediately with CASH payment. Therefore in order to make cash payment to Farmers, CASH is arranged from Shroffs by giving post dated cheques by the assessee. Whereas the assessee gets the payments from the Buyers of the produces, by including his

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Commission amount at 5 to 7% after completion of Sales. Thus the assessee deposits the Cash/Cheques received from the Buyers in his bank account and also settled the cash received from Shroffs through the PDCs. The above cash transaction is only because of the business expediency in the Auction business and for the main reason to settle the Farmers with CASH immediate after the auction sales. Further the assessee keeps record of inward and outward movement of agricultural produce purchased under Auction as required under APMC Rules [called Kabala Account] and based on which Commission payable to the Agents and Market Fees payable to APMC are determined.

10.2. It is seen that during the assessment proceedings the AO summoned the Shroffs who have confirmed giving cash to the assessee against Post Dated Cheques and also provided contra ledger account of the assessee from their Books of accounts [which are available at pages 107 to 121 of the Paper Book]. Further complete chart of cash/cheque deposits were also filed before CIT[A] as referred on page 25 of his order. The Ld AO at para 1.7.2. of his order accepts that cash deposited in banks pertains to cash taken from Shroffs. However the final reason given by the AO is the assessee being a Commission Agent is not required to give Cash to Farmers and the Shroffs have not given their Source of Cash, which was given to the assessee, that is ‘source of source’ not proved. Ld Counsel further submitted that reasons arrived by the Ld AO are not tenable in law and the requirement to prove source of source was not applicable to the present asst. year 2013-14 since the

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relevant was inserted by Finance Act, 2022 wef 01-04-2023 only, hence entire addition on this count is liable to be deleted.

12.1. It is settled Principle of Law that the disclosure or admission made under section 132(4) of the Act during the search proceeding

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is admissible evidence, but not a conclusive one. Jurisdictional High Court in the case of DCIT -Vs- Narendra Garg & Ashok Garg (AOP) reported in [2016] 72 taxmann.com 355 (Guj) held that where assessee retracted from disclosure made in statement under section 132(4) which was not accepted by Revenue, and if no undisclosed income was found during search, Revenue could not make addition on bare suspicion and presumption by observing as follows:

“Section 69C, read with section 132, of the Income-tax Act, 1961 - Unexplained expenditure (Addition on basis of retracted statement) - Assessment years 1990-91 to 1999-2000 - A search operation was carried out at premises of assessee - Assessee retracted from disclosure made in statement under section 132(4) - Retraction was not accepted by Revenue - Assessing Officer made additions of undisclosed income - In fact, there was no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income during search - Whether Assessing Officer could not proceed on presumption under section 132(4) and there must be something more than bare suspicion to support assessment or addition - Held, yes - Whether Tribunal had rightly reduced additions made by Assessing Officer - Held, yes [Paras 5 and 6][In favour of assessee]

12.2. Respectfully following the above judicial precedent, the asst. years 2013-14 & 2014-15 being abated/pending assessments and the additions are made based only on the Statements recorded of the assessee u/s.132[4] and that of the Shroffs u/s. 131(1A) of the Act, the addition made are without jurisdiction and unsustainable in law, the same are liable to be quashed.

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15.1. In response, the Ld DR could not contravent the above submissions of the assessee. Considering the smallness of the amount of loans given to the staff members and suppliers comparing with the interest free capital available with the assessee, the addition made on this count is liable to deleted. Thus Ground No. 10 is allowed in favour of the assessee.

“11.1 I have carefully considered the Assessment Order and the submission filed by the Appellant. The AO has referred to page No. 216 of Annexure A/41 of impounded material which reflects Profit & Loss Account for AY 2013-14 which shows that income of Appellant is Rs.21.90 lacs on total income of Rs.38.18 lacs whereas page No. 205 of Annexure

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A/41 shows net profit of Rs.3,81,009 after debiting expenditure of Rs.33,95,816 in Kisan Software. On this basis AO has arrived at conclusion that Appellant is inflating the expenditure. On this basis Appellant asked Appellant to justify the expenditure but Appellant has not submitted any vouchers for verification hence A.O. has made addition of Rs. 9,00,544/- as under: Particulars Amount debited in Amount Remarks Profit & Loss Account disallowed Kasar expenses 5,27,213 2,63,606 50% is disallowed Staff salary and 5,88,418 67,842 10% is disallowed staff sarbhara Diesel expenses, 6,82,689 1,36,538 20% is disallowed transportation commission, Khedut loading expenses Bad debt 3,32,019 3,32,019 Municipal tax 65,233 65,233 Bills not submitted Travelling 1,76,530 35,306 20% expenses 11.2 It is observed that Appellant has failed to justify such cxpenditure with bills/vouchers and basis of claiming such expenditure hence he made ad hoc disallowance is Assessment Order. The Appellant has not filed any specific written submission on such disallowance. With regard to disallowance of kasar, AO has observed that Appellant is in the business of commission and he is not involved in trading activities hence Appellant has not established that kasar was debited out of such gross commission. The Appellant has failed to submit bill to bill earning of commission and claim of kasar is not supported by any corroborative evidence hence AO has made reasonable disallowance, which needs to be upheld. It is observed that Appellant has submitted additional evidences only with respect to bad debt disallowed by AO. With regard to disallowance of bad debt of Rs.3,32,019 against commission income of Rs.36,24,988, Appellant has submitted additional evidences being ledger account of bad debt and debtors whose accounts are written off. However, this claim of Appellant cannot be accepted in view of the fact that AO has already held that Appellant is not involved in any credit purchase or credit sale but carrying out only commission business hence there is no question of claiming bad debt in such business. The Appellant has not given any details like bad debt and commission recorded in books of account hence such claim cannot be accepted. The decisions relied upon by Appellant are

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on law but in present case disallowance has been made by AO based upon facts of the case of Appellant hence ratio of such decision is not made applicable in present case. Thus, disallowance of bad debt for Rs.3,93,353 is confirmed. So far as disallowance of municipal tax of Rs. 65,233 is concerned, Appellant has submitted copies of bills along with details of payment from which it is evident that Appellant has made payment of municipal tax for three different Assessment Years. As claim made by Appellant is supported by evidences, disallowance made by AO for Rs. 65,233 is deleted. It is also found that AO has made disallowance of 10% of salary expenses and as per expenditure debited in Profit & Loss Account, 10% of expenditure works out to Rs.58,841 as against addition made for Ra.67,842. Considering this fact, excess addition made by AO for Rs. 9,001 is deleted. Thus, Appellant get relief of Rs. 74,234 out of total addition of Rs. 9,00,544. This ground of appeal is partly allowed.” 16.1. Ld Counsel has no serious arguments on the disallowances made on account of salary at 10% and Diesel, Transport Commission, Khedut lodging, Travelling expenses at 20% in the absence of proper bills and vouchers. But on account of Kasar [Trade] discount and Bad debts he vehemently submitted the Ld. A.O. made an addition of Kasar Expenses of Rs.2,63,606 (i.e 50% of 5,27,213) and explained that Kasar vatav is incurred in the normal course of business while receiving payments, if the customer gives some lesser amount which is very minute as compared to business carried out with them. In the normal trade practice, Commission Agents has to make payment to the Farmers, on behalf of traders/ venders, who comes to the Agents to sell their goods. Sometimes it may happen that Traders/Venders makes lesser payments as compared to amount charged in bill and to retain this type of customers and maintain relationship with customers, the appellant to give them Kasar or Trade Discount and referred to the ledger of Kasar from Page No. 78 to 80 of Paper book.

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16.2. The Ld. A.O has made addition of Bed-Debt of Rs.3,32,019/- on the ground of non-compliance of section 36(2) of Act. Further Ld A.O has observed that "Since the assessee had been Commission Agent and was not found linked with any sale made during the year. In this regard, Ld Counsel submitted that assessee is working as a Commission Agent for purchase and sale of agriculture product like onion and potato. Also assessee has already explained modus operandi of his business and has not violated provision contained in section 36(2) of the Act. Further assessee filed before Ld CIT [A], Ledger of the debtors from the origin, whose bed debt is claimed as fresh evidences as per Rule 46A of the Income Tax Rules, 1962 which can be verified the genuineness of the transaction.

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normal trade practice, Commission Agents have to make payment to the Farmers, on behalf of traders/venders, who comes to the Agents to sell their goods. Sometimes it may happen that Traders/ Venders makes lesser payments as compared to amount charged in bill and to retain this type of customers and maintain relationship with customers, which in our considered opinion is practical business exigencies and without verification of the same, the Ld AO made 50% disallowance which is unsustainable in law, the same are liable to be deleted.

17.1. With regard to disallowance of bad debt of Rs.3,32,019 as against commission income of Rs.36,24,988, the assessee had submitted additional evidences before Ld CIT[A] being Ledger Account of bad debts and debtors whose accounts are written off. But the same was not accepted by Ld CIT[A] since the AO has already held that assessee is not involved in any credit purchase or credit sale but carrying out only commission business, hence there is no question of claiming bad debt in such business. The Assessee explained that commission on full amount of bill is already booked as income, however sometimes lesser amount is received from buyers, which is debited as bad debts. Additional submissions with Ledger account of all debtors from inception was submitted before Ld CIT[A] which is recorded at page 35 of the order of CIT[A] and no adverse comments given by the Ld AO in his Remand Report.

17.2. Jurisdictional High Court in the case of CIT -Vs- Abdul Razak & Co [1982] 136 ITR 825 [Guj] held as follows:

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“The statutory provision relating to the allowance of a bad debt is not exhaustive. A debt becomes bad for purposes of deduction in the computation of total income if facts objectively considered reasonably point to an inference that, having regard to the circumstances of debtor, it has become difficult or impossible of recovery. There are certain well- known types where financing is usually an integral part of assessee's business. For instance, commission agents employed for sale of principal's goods usually make advances to the principal or another person on his behalf. In such cases, if the debt gets bad, it may successfully be claimed as a trading loss. “ 17.3. Further various judicial precedents held that losses incidental to business are allowable as deduction despite there being no specific provision for the same. Some of the important tests laid down by leading judgments as to the allowability of trading losses are as follows:-

A] Business loss is allowable if it is of a non-capital nature and if the same is not only connected with trade but is incidental to trade itself (CIT vs. J.K. cotton Spinning & Weaving Mills Co. (1980) 123 ITR 911 (All.) b] The degree of the risk or its frequency is not of much relevance but its nexus to the nature of business is material (CIT vs. Nainital Bank Ltd. (1965) 55 ITR 707 (SC)] c) The loss for which a deduction is claimed must be one that springs directly from the carrying on of the business and is incidental to it, and any loss sustained by the assessee even if it has some connection with his business (Badridas Daga vs. CIT 34 ITR 10 (SC)] d] If there is a direct and proximate nexus between the business operation and the loss or it is incidental to it, then the loss is deductible, as without the business operation and all that is incidental to it, no profit can be earned (Ramchandar Shivnarayan Vs. CIT (1987) 111 ITR 263 (SC)]. e] The two requisites are (a) the loss is incidental to trade itself, that is to say, there must be a nexus between the loss and the trade which should have been incurred in the course of the trade and (b) the loss should have been incurred by one in the character of a trader and the same should fall

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on him in the said character. [CIT us. K.T.M.S. Mahmood (1969) 74 ITR 100 (Mad.)] f] In CIT vs. D.S. Bist and Sons 243 ITR 179 (Del.) it has been held that where assessee was forced to purchase securities by department with which it did business, the loss was allowable as business deduction.”

17.4. Respectfully following the above judicial precedents, disallowance of bad debt for Rs.3,93,353 made by the lower authorities are hereby deleted.

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not proved by providing the ITR and bank statements. Ld Counsel submitted that the loan received by account payee cheque from Prashant Desai and Bank statement is filed at Page 52 of the Paper Book and stated that the loan was repaid in subsequent year. On verification of the above submission, the addition made u/s. 68 of Rs. 2 lakhs is liable to be deleted.

ITA No.978/Ahd/2019 relating to Asst. Year 2014-15.

23.Ground Nos. 1 to 6 relating to addition made u/s.69 in respect of cash deposit, cheque clearing in bank account are identical [except change in figure of Rs.2,15,00,205] with that of the earlier A.Y. 2013-14. Thus the detailed decision made in paragraphs 12 & 13 of this order will be applicable to Mutatis Mutandi and hence the entire addition on this count is liable to be deleted and Ground Nos.1 to 6 filed by the assessee are hereby allowed.

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count is liable to be deleted and Ground No.7 filed by the assessee is hereby partly allowed.

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27.1. Ld Counsel submitted that this is amount is unsecured loan taken in the asst. year 2008-09 which is reflecting in the balance sheet. The Ld. A.O. has made addition of Rs.2,87,000/- u/s. 41(1) of the Act as unsecured loan from Plash Fashion and Pari Ashish Kanubhai as sundry creditors which is not correct. Whereas the A.O. has himself accepted that from Asst. Years 2008-09 to 2012- 13 it has been shown under the head of unsecured loans in the balance sheets of the assessee. Hence, it is a human error due to which name of the parties was shown as sundry creditors instead of shown under the head ‘unsecured loans’ in the balance sheet. Being unsecured loan from the above parties, it cannot be added to the total income invoking Section 41(1) of the Act. Therefore requested to delete the addition and relied upon Jurisdictional High Court Judgment in the case of Dattatray Poultry Breeding Farm (P.) Ltd.-Vs-ACIT reported in [2019] 104 taxmann.com 366 wherein it was held as follows:

“Where existence of liabilities was doubted, same could have been disallowed in year in which it was claimed or could have been treated as unexplained cash credit in hands of assessee under section 68, but same could not be taxed under section 41(1), inasmuch as if liability itself was not genuine, question of remission or cessation thereof would not arise.”

27.2. We have given our thoughtful consideration and perused the materials available on record. It is an undisputed fact that this unsecured loan is reflecting in the balance sheet of the assessee from the Asst. Year 2008-09 onwards. It is inadvertently the name of the parties was shown as sundry creditors instead of shown under the head unsecured loan in the balance sheet. Since this amount was never claimed and allowed as deduction in any of the

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assessment years, the provisions of section 41(1) will not be applicable to the facts of the present case. Thus the addition made by the Ld AO following Jurisdictional High Court judgment in the case of Dattatray Poultry Breeding Farm (P.) Ltd., the above addition is liable to be deleted. Thus the Ground No. 10 raised by the Assessee is hereby allowed.

IT(SS)A Nos.337/Ahd/2019 & ITA No.976/Ahd/2019 relating to the Asst. Years 2013-14 & 2014-15 in the case of late Smt. Indumati Rugnath Tanna, rep by her legal heir Sri. Saketkumar R Tanna.

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this claim of loss is not acceptable. Ld Counsel submitted that some time unsold and perishable goods of Farmers are taken by the assessee on Commission and then sold to available buyers at lesser price on Commission and the difference is claimed as incidental business loss.

36.1. We have carefully considered the submissions of the assessee but it is found that business loss is claimed only for the present Asst. year 2014-15, for the earlier asst. years no such claim is made by the assessee. In the absence of proof for lesser commission income on sale of perishable goods, the above claim of business loss is not allowable. In the result this Ground No.10 is liable to be dismissed.

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anniverseries, child births, etc as per prevailing customs in their community. Ld Counsel also relied on Delhi High Court judgement in the case of Ashok Chaddha reported in [2011] 14 Taxmann.com 57 [Del] and requested to delete the addition.

“Seation 69A of the Income-tax Act, 1961 Unexplained moneys - Assessment year 2006-07- During a search at assessee's residential premises, 906.900 gms jewellery was found from assessee Assessee explained that he was married 25 years back and jewellery was received by his wife in form of 'stree dhan' or on other occasions such as birth of a child, etc. - Assessing Officer accepted only 400 gms of jewellery as explained and treated 506.900 gms of jewellery as unexplained and, accordingly, made addition under section 69A- Whether collecting jewellery of 906.900 gms by a woman in a married life of 25 years in form of stree dhan or on other occasions is abnormal Held, no Whether therefore, Assessing Officer was unjustified in treating only 400 gms as 'reasonable' and treating remaining jewellery as 'unexplained' - Held, yes - Whether, therefore, addition made was to be deleted - Held, yes [In favour of assessee]”

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38.1. Thus the addition on this count of Rs.16,79,521/- as unexplained investment in Jewellery and Silver Utensils is hereby deleted and Ground No.11 & 12 are allowed.

IT(SS)A No.331/Ahd/2019 and ITA No.975/Ahd/2019 relating to the Asst. Years 2013-14 & 2014-15 in the case of Smt. Ritaben Saketkumar Tanna.

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response to the notice u/s. 153A of the Act. The assessing officer after making various hearings made the disallowances which are subject matter of appeal before us are as follows:

Gr. Ground of appeal 331/A/19 975/A/19 920/A/19 No. A.Y. A.Y. A.Y. 2013-14 2014-15 2007-08 1 Challenging validity of assessment Not Pressed Not Pressed Not Pressed 2 Addition u/s 69 in respect of cash deposited and cheque Clearing/ 17,33,313 1,30,19,817 3,17,83,256 transfer entries in Bank Account [Protective Addition] 3 Disallowance of business expense claimed in P & L A/c.: Kasar(Discount) @ 50% 1,17,622 5,10,530 Salary @ 10% 31,768 2,02,518 Transport comm. @ 20% 19,114 78,922 11,934 Vapsi Exp.(Khedut exp) -- 3,77,600 Municipal Tax -- 7,110 -- 1,68,504 11,76,680 11,934 4 Disallowance of deductions claimed under Chapter VI-A 17,228 3,298 -- 5 Disallowance of Bad Debts 3,93,353 12,88,205 -- 6 Disallowance of Business Loss --- 41,933 --

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identical with that of the A.Y. 2013-14 in the case of Sri. Saket kumar R Tanna. Thus the detailed decision made in paragraphs 12 & 13 of this order will be applicable to Mutatis Mutandi and hence the entire addition on this count is liable to be deleted and Ground Nos.2 to 7 filed by the assessee are hereby allowed.

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assessee during surplus supply of agricultural produce and lesser demand in the market results in loss and sell the produce on much lesser price since perishable nature of goods. This issue is identical with that of the A.Y. 2014-15 in the case of Sri. Saket kumar R Tanna. Thus the detailed decision made in paragraphs in 36 & 36.1 of this order will be applicable to Mutatis Mutandi and in the result this Ground No.10 is liable to be dismissed.

Remaining Assessee Appeal in ITA.No.977/Ahd/2019 by Sri. Saketkumar R Tanna and Revenue Appeals in ITA Nos. 921 & 920/Ahd/2019 in the case of Smt. Ritaben Saket kumar Tanna and Smt. Indumati Rugnath Tanna are against Reopening of Assessment u/s.148 relating to the Asst. Year 2007-08. 50. The Ld AO in the reassessment proceedings held that the cash deposits of Rs.3,17,82,256/= and cheque clearing and transfer entries of Rs.52,97,389 in the bank accounts of the three assessees and their three Firms are unexplained income and added the same substantially in the hands of Sri.Saketkumar R Tanna and also protectively in the hands of Smt. Ritaben Saketkumar Tanna and Smt. Indumati Rugnath Tanna under section 69 of the Act.

50.1. Ld CIT[A] confirmed the substantial addition made in the hands of Sri. Saketkumar R Tanna. Hence assessee is in appeal before us.

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50.2. Ld CIT[A] deleted the protective additions made in the hands of Smt. Ritaben Saketkumar Tanna and Smt. Indumati Rugnath Tanna. Hence Revenue is in appeal before us.