DEEPAK MAHESHWARI,J. - (1.) By way of this appeal, the appellant has challenged the judgment and order passed by the Tribunal, whereby the Tribunal has allowed the appeal filed by the assessee for statistical purposes and they have rejected the part of the appeal and added income under Section 69 of the Income Tax Act.
(2.) While admitting the appeal this Court framed the following substantial questions of law :- "1. Whether on the law and in facts and material available on record the Id. ITAT was correct in confirming the addition u/s. 69 of the Act in the hands of the assessee appellant by ignoring the well settled principal of law that the assessee is not required to prove source of source and in holding that the assessee appellant had not sufficiently discharged the primary onus casted upon him 2. Whether addition u/s 69 of the Act, which is a deeming provision, could have been sustained against the assessee appellant merely on the basis of hypothetical assumption and presumption"
(3.) Counsel for the appellant contended that the Tribunal has committed a serious error inasmuch as the amount which was deposited in several accounts on application on behalf of Anil Kumar, Rajendra Singh, Dayal Singh and Puranmal Pareek was tendered from his account. Learned counsel has taken us through the observation of A.O., which reads as under:- "As per information available with the department the Assessee has deposited cash of Rs.17,90,000/- in his saving bank A/c No.1570/1778212742 maintained with Central Bank of India, Ashok Vihar, Sikar." 3.1 He also referred the statement of Anil Kumar and Dayal Singh, whose statements were found to be doubtful by the Tribunal. It was also contended that the agreement Annex.-7 which was part of paper-book wherein all the four persons entered into the agreement and the balance-sheet as on 31.03.2009 has clearly shown the liability of this amount. 3.2 Counsel for the appellant has relied upon following decisions :- 1. CIT Vs. Daulat Ram Rawatmull - [1973] 87 ITR 349 (SC) : "The onus to prove that the apparent is not the real is on the party who claims it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of B, the burden laid on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B. A simple way of discharging the onus and resolving the controversy was to trace the source and origin of the amount and find out its ultimate destination. So far as the source is concerned, there is no material on the record to show that the amount came from the coffers of the respondent-firm or that it was tendered in B Calcutta branch of the Central Bank on behalf of the respondent. As regards the destination of the amount, there is nothing to show that it went to the coffers of the respondent. On the contrary, there was positive evidence that the amount was received by B. It would thus follow that both as regards the source as well as the destination of the amount, the material on the record gave no support to the claim of the department." 2. CIT, Ajmer v. Jai Kumar Bakliwal - [2014] 45 Taxmann.com 203 (Raj.) : "The cash creditors appeared to be from small place and it is quite possible that they may not be in a position to pin pointedly or specifically say about everything but by and large stood to the testimony and were able to explain various issues as per the question and answer reproduced by the Assessing Officer himself in the assessment order. It may be that most of the cash creditors are relatives of the respondent- assessee and heavy burden lay on the respondent-assessee to prove about the cash credit but once all the cash creditors appeared before the Assessing Officer, their statements having been recorded under section 131, then insofar as the respondent-assessee is concerned, the onus, which lay upon him (assessee), in our view, stood discharged as he was able to prove identity of the creditors. Once the amount was advanced by account payee cheque from their respective own bank accounts and were being assessed to income tax, then in our view, capacity of the creditor and genuineness of the transaction stood proved. In so far as the respondent-assessee is concerned, it is correct that he is not required to prove source of the source and if the Assessing Officer had any doubt, then the Assessing Officer, assessing the respondent-assessee, could have sent the information to the Assessing Officer, assessing the cash creditors for appropriate action in their cases but in so far as the respondent- assessee is concerned, in our view, the respondent-assessee has been able to discharge the burden which lay upon him. Certainly, deposit of cash and immediate transfer of cheque or clearance of the cheque within a day or two casts a doubt as the transaction appears to be some what doubtful but suspicion howsoever strong it may be is not sufficient itself. On perusal of the facts in the present case, it is observe that the amounts advanced are not substantial and in most of the cases, the amounts are ranging from 25,000 to 90,000 and in some cases, it is exceeding Rs.1,50,000. On perusal of the facts, it is also apparent that in some of the cases (Uttan Chand Jain, HUF) even the Karta of the HUF and relatives had produced the cash book and their ledger account before the Assessing Officer." 3. Labh Chand Bohra v. ITO - [2010] 189 Taxman 141 (Raj.) : "During the assessment proceedings of the assessee, the Assessing Officer found various amounts credited in the names of various persons in the assessee's books of account. The assessee was asked to produce doubtful creditors. He produced most of them, whose statements were recorded on oath. The Assessing Officer, however, added amount of ten entries to the total income of the assessee by invoking the provisions of section 68. On appeal, the Commissioner (Appeals) confirmed the additions with respect to amounts in the accounts of DS and VK and two ladies. On second appeal, the Tribunal deleted the additions with regard to two ladies. As regards the amounts credited in the accounts of DS and VK, though the Tribunal found that their identity was established; that they had also confirmed the credit by making statements on oath; and that transactions had taken place through bank accounts and through cheques, yet notwithstanding all that, the Tribunal proceeded to consider other circumstances and found that those persons had very meagre income; and that issuance of cheques on the vary day of opening of the bank account without there being ample amount available in the account, in itself, was a proof of ingenuity of the transactions in question. It, therefore, confirmed the additions of the amounts found credited in their accounts.";