N.P.GUPTA, J. - (1.) THIS appeal by assessee, is against the judgment of the Tribunal dt. 24th Sept., 2004, affirming the order of learned CIT(A), who in his turn had added a sum of Rs. 1 lac (Rs. 50,000 + Rs. 50,000), in respect of cash credits, in the name of Dharm Sudhir and Vijay Kumar. The appeal was admitted on 17th Oct., 2005, by framing the following substantial questions of law: 1. Whether in view of the findings of the Tribunal, that identity of the creditors Dharm Sudhir and Vijay Kumar is established; that their confirmation has come; that they have also confirmed the credit by making statements on oath and that transactions took place through bank accounts and through cheques, the impugned finding about non -genuineness of the credit is wholly perverse and stands completely vitiated?
(2.) WHETHER the onus to prove source of credit i.e. the origin of the origin was upon the assessee and whether the same can be used against the assessee? Whether the finding of the Tribunal that credits in question were non -genuine stands vitiated being based on mere whims, assumption, conjectures and surmises and not on any relevant or cogent evidence or material? 2. Necessary facts are, that AO issued notice under Section 143(2). In response thereto, cash book and ledger were produced, which were examined on test check basis. So far as present controversy is concerned, it was found, that various amounts were credited in the books of account, in the names of various persons. On dates of hearing, assessee was asked to produce doubtful creditors. The assessee produced most of them, whose statements were recorded on oath. Two lady creditors, being Geeta Bai and Smt. Khama Bai were not produced, but their affidavits were filed, then they were also required to be produced. The learned AO held, that 10 entries totalling to Rs. 2,40,000, being principal amount, and Rs. 7,781 being interest, were required to be added, and were accordingly added to the income of the assessee, invoking the provisions of Section 68 of the IT Act. The assessee filed an appeal to the CIT(A), and the learned CIT(A) considered various judgments cited before him, including those in CIT v. Daulat Ram Rawat Mull : [1973]87ITR349(SC) , CIT v. R.Y. Durlabhji , CIT v. Orissa Corporation (P) Ltd. : [1986]159ITR78(SC) , Dy. CIT v. Rohini Builders : [2002]256ITR360(Guj) and Sarogi Credit Corporation v. CIT : [1976]103ITR344(Patna) , out of which, the judgments in Daulat Ram (supra) and Orissa Corporation's case (supra) are the judgments of Hon'ble Supreme Court, while the judgment in R.Y. Durlabhji (supra) is of this Court, and the later two judgments are of Gujarat and Patna High Courts, respectively. The learned CIT(A) affirmed the additions, with respect to the amounts of Dharm Sudhir and Vijay Kumar, so also entries in the name of Jyoti Devi and Kamla Devi. Rest of the additions were set aside. 3. Aggrieved of this, assessee filed an appeal before the learned Tribunal, and the learned Tribunal deleted the additions made with respect to Jyoti Devi and Kamla Devi, however, affirmed the additions, with respect to the entries relating to Dharm Sudhir and Vijay Kumar, though with regard to the entries of Jyoti Devi and Kamla Devi, it was found, that these two ladies confirmed the payment. Jyoti Devi could not be produced before the AO, and her husband was produced, who had accepted the amount having been deposited, and it was found, that it all depends on peculiar facts of particular case, and therefore the addition was deleted. Regarding Kamla Devi, it was found that the reason for addition, being her capacity to advance, was not found to be justified, and that was also deleted. However, with respect to the entries in respect of Dharm Sudhir and Vijay Kumar, it was found, that their identity is established, their confirmation has come, and they have also confirmed the credit by making a statement on oath, apart from the fact, that the transaction took place through bank, by account payee cheques. Notwithstanding all this, the Tribunal proceeded to consider other circumstances, about the sequence of dates of depositing the amounts in bank, and issuance of cheques, and found that these persons have very meagre income, as discussed in the assessment order, and the order of CIT(A), and that, issuance of cheques on the very day of opening of the bank account, without there being ample amount, available in the account, in itself is a proof of ingenuity of the transactions in questions, therefore, the additions were confirmed.
(3.) ASSAILING the impugned judgment, it is contended by the learned Counsel for the assessee, that once the assessee furnishes explanation, and establishes identity of a person in whose name entry stands, and even when that person is examined, who owns that entry, and confirms the advance, at that the matter ends, and it is not contemplated by Section 68, that assessee should still further satisfy the creditworthiness of the lender i.e. to establish, source of the source, much less to prove in negative about want of genuineness, and since the learned Tribunal has confirmed the additions, only because, in view of the Tribunal, the assessee has failed to establish source of the source, the order proceeds on basically a wrong approach, and is vitiated. Reliance has been placed on the judgment of this Court, in Late Mangilal Agarwal through LRs v. Asstt. CIT (2007) 208 CTR (Raj) 159 and Mehta Parikh and Co. v. CIT (1956) 30 ITR 181 and also placed reliance on another judgment of Hon'ble Supreme Court in Omar Salay Mohamed Sait v. CIT : [1959]37ITR151(SC) apart from reiterating reliance on the judgments in Daulat Ram's case (supra), Credit Corporation's case (supra), Orissa Corporation's case (supra), and Rohini Builder's case (supra). On the other hand, learned Counsel for Revenue relied upon the judgment of this Court in CIT v. R.S. Rathore and CIT v. Kishorilal Santoshilal (199b) 129 CTR (Raj) 450 : (1995) 216 ITR 9 and submitted, that in order to determine whether any addition is to be made under Section 68 or not, six conditions are required to be considered, as mentioned in Kishorilal's case (supra), which include, that if the explanation is not supported by any documentary or other evidence, then the deeming fiction created by Section 68 can be invoked.;