- (1.) THIS appeal is directed against the order of the Tribunal. The following questions are raised in this appeal: 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining addition on account of cash credits of Rs. 1,05,000, without considering the evidence on record and on the basis of presumption and assumption ?' 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining two additions on account of unexplained cash credits of Rs. 1,05,000 and the tradition addition, without applying a principle of telescoping to cover up addition of cash credit from trading addition, being a settled proposition of law and goes to the root of the case?' 'Whether, on the facts and in the circumstances of the case, the Tribunal has rightly refused to interfere to decide the ground of telescoping only on the ground that it does not arise from the order of CIT(A), irrespective of the fact that ground was raised before CIT(A), and duly mentioned in the memo of appeal ?' 'Whether, the Tribunal has rightly declined to interfere to decided the ground of telescoping to cover up addition of cash credit of Rs. 1,05,000 from tradition addition on the ground that it does not arise from the order of CIT(A), irrespective of the fact that ground is settled and legal one and may be decided at any stage ?' 'Whether, the Tribunal can refuse to decide any legal ground/plea, only on the ground that it does not arise, from the order of CIT(A)?'
(2.) A search and seizure operation was carried out at the premises of the appellant on 23rd Dec., 1988. During the course of search, certain books of account and other documents were found and they were seized. The appellant filed the income -tax return on 2nd May, 1990, for the asst. yr. 1989 -90 declaring an income of Rs. 2,16,246. In response to this, notices were issued under Section 143(2) and 142(1) of the IT Act, 1961. The AO found discrepancy in the form of shortage of stock, seizure of documents disclosing sales outside the books. The AO after giving due opportunity of hearing, rejected the book results and estimated the sales at Rs. 66,000,00 as against Rs. 61,76,450 and applied G.P. rate at 16 per cent for estimating trading addition of Rs. 3,06,679 and addition of Rs. 2,79,764 was made on account of shortage of stock. Further, an addition of Rs. 1,05,000 has been made on account of cash credits which was found not genuine. In appeal before the CIT(A), the CIT(A) has allowed the appeal in part by reducing the trading addition on sale of mobile oil at the rate of 6 per cent on sales of Rs. 11,19,189. Before CIT(A), the assessee has also taken the ground that Rs. 1,05,000 added on account of cash credits may be deleted as addition has been already made on account of shortfall in stock and on account of trading addition. The Tribunal has considered the fact that the creditors were not produced and they are not having any means and they are not man of means, therefore, additions made by the authorities will however sustain. Heard learned counsel for the parties.
(3.) THE cases relied by learned counsel for the appellant were not related with the search. In the case in hand, it is a case of search, where various documents were found during search and on the basis of those documents, the book results were rejected and G.P. rate was estimated. In addition to that the AO has also noticed 3 cash credits. The creditors are Mool Chand Jagetia Rs. 50,000, Urmila Jain Rs. 35,000 and Smt. Pramila Sharma Rs. 20,000. They filed confirmation certificates but they were not produced. The record reveals that Mool Chand Jagetia was not a man of means. The onus was on assessee to discharge that he was a man of means to allow the cash credit. There should be identification of the creditor and he should be a person of means. Therefore, we find no justification to interfere with addition on account of cash credit shown in the name of Mool Chand Jagetia as he did not have the capacity to advance Rs. 56,000. The assessee also claimed that Urmila Jain is an assessee and her GIR No. U -701 has been given. When she is an income -tax assessee, it cannot be said that she is not a man of means, therefore, the addition of Rs. 35,000 on account of cash credit in the name of Smt. Urmila Jain appears to be erroneous. But in case of Smt. Pramila Sharma except filing the confirmation certificate, the assessee has not shown that she is a man of means, therefore, for the reasons given in the case of Mool Chand Jagetia, we do not find any justification to interfere in case of addition of Rs. 20,000 shown as cash credit in the name of Smt. Pramila Sharma. ;