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Section 69 of Income Tax Act, 1961—Income From Undisclosed Sources— Additions deleted as all the transactions were carried in normal course of business and creditworthiness and genuineness of the transactions was also proved.
Facts: Assessee has contested the addition of Rs. 1,03,10,000/- on account of introduction of the said amount in the capital account of the assessee treating the same as unexplained income of the assessee. Assessee claimed that out of the aforesaid amount, Rs. 90,75,000/- were received by way of transfer through banking channels from M/s Euro Steels. The source of the amount in the hands of Euro Steels was from receipts in the normal course of business via banking channels. The assessee in this respect filed copy of bank statement of M/s Euro Steels, confirmation in this respect from the said entity.
Held, that AO neither doubted nor called for any further evidence from the assessee to prove the source of deposits in the account of M/s Euro Steels. However, the assessee claimed that the said receipts were in normal course of business of M/s Euro Steels. The assessee furnished all the details before the AO which were required to prove the creditworthiness of M/s Euro Steels and genuineness of the transactions. So far as the creditworthiness of M/s Euro Steels were concerned, the assessee proved that M/s Euro Steels was possessed of sufficient funds to make the impugned advances to the assessee. Even, the AO has not pointed out any defect in the evidence furnished by the assessee in this respect. So far as the identity of the creditor was concerned, there was no doubt raised by the AO in this respect. M/s Euro Steels was as separate concern in which the assessee was partner and the same was duly assessed to the income tax. So far as the genuineness of the transactions was concerned, even in that respect no doubt has been raised by the AO. Admittedly, all the amounts by M/s Euro Steels has been transferred to the assessee through banking channels. However, the ld. CIT(A) has rejected the contentions of the assessee and upheld the additions made by the AO citing different reasons saying that the assessee could not prove the source of numerous deposits in the bank accounts of M/s Euro Steels. However, as observed above, the AO in his remand report has not pointed out any doubt about the source of numerous deposits in the bank accounts of M/s Euro Steels. Further, the assessee has been stating that the source of said deposits in the accounts of M/s Euro Steels was out of its business receipts in normal course. In the remand proceedings neither the AO asked the assessee to furnish further evidences in respect of the source of deposit into the accounts of M/s Euro Steels nor the AO himself called the M/s Euro Steels to prove the source of deposits. Moreover, the AO himself called for the necessary details and documents from the concerned AO which were available in record as per the ITR (Income Tax Return) filed by the M/s Euro Steels and has not rebutted the authenticity of the said documents, hence, in the appellate proceedings, the findings of the CIT(A) upholding the additions made by the AO on this ground cannot be held to be justified. - ROHIT KUMAR JINDAL (HUF) V/s ITO -  81 ITR (TRIB) 469 (ITAT-CHANDIGARH)