Shri Dilipkumar S.Manmani, Baroda V. The Income tax Officer,Ward-1, Dahod

ITA 3391/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9626 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-10-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Business income; Source of fund
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MAHAVIR SINGH, JUDICIAL MEMBER) ITA.NO.3391/AHD/2008 [ASSTT. YEAR : 2005-2006] DILIPKUMAR S. MAMNANI C/O. MANISH SHAH & ASSOCIATES 101/38, RACE COURSE CIRCLE BARODA. VS. ITO, WARD-1 DAHOD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BANDISH SOPARKAR REVENUE BY : SHRI K. MADHUSUDAN O R D E R G.D. AGARWAL, VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V I, BARODA DATED 01.08.2008 ARISING OUT OF THE ORDER OF THE ASSESSIN G OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. GROUND NOS.1 AND 2 OF THE ASSESSEES APPEAL READ AS UNDER: 1. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON THE FACTS OF THE APPELLANT'S CASE IN MAKING ADDITION OF RS.98 ,645/- ON THE ERRONEOUS PLEA THAT PURCHASES MADE BY THE APPELLANT IS BOGUS. THE APPELLANT MOST HUMBLY SUBMIT THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW NO PART OF THE PURCHASES MAD E BY HIM IS BOGUS. IN VIEW THEREOF, THE APPELLANT MOST HUMBLY SUBMITS THAT THE ADDITION MADE BY THE LEARNED INCOME TAX OFFICER REQUIRES TO BE DELETED AND PRAYS THAT HON'BLE TRIBUNAL BE PLEASED TO HOLD SO N OW. 2. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT'S CASE IN ADDITION OF RS.2,21,821/- U /S.41(1) OF THE ACT ON THE ERRONEOUS PLEA THAT THE LIABILITY IN QUESTION D OES NOT EXIT. THE APPELLANT MOST HUMBLY SUBMIT THAT ON THE FACTS AND CIRCUMSTANCES ITA.NO.3391/AHD/2008 -2- OF THE CASE AND IN LAW NO SUCH LIABILITY IS DISALLO WABLE U/S. 41(1) OF THE ACT. IN VIEW THEREOF, THE APPELLANT MOST HUMBLY SUBMIT S THAT THE ADDITION MADE BY THE LEARNED INCOME TAX OFFICER REQUIRES TO BE DELETED AND PRAYS THAT HON'BLE TRIBUNAL BE PLEASED TO HOLD SO NOW. 3. WE HAVE HEARD BOTH THE PARTIES AND WE WOULD LIKE TO ADJUDICATE GROUND NO.2 FIRST. THE FACTS RELATING TO THE GROUND NO.2 ARE THAT THE AO MADE THE ADDITION OF RS.4,70,466/- FOR CESSATION OF TRADING LIABILITY UNDER SECTION 41(1). HOWEVER, THE CIT(A) SUSTAINED THE ADDITION OF RS.2, 21,821/- AS UNDER: I) NEELAM FOOTWEAR : RS.1,98,879/-; II) LUCKY CHAPPAL : RS.1,08,908/- III) P.P. PLASTICS : RS. 12,679/- RS.3,20,466/- SET OFF GIVEN FOR ADDITION CONFIRMED IN RESPECT OF BOGUS PURCHASE : RS. 98,645/- RS.2,21,821/- 4. IN RESPECT OF NEELAM FOOTWEAR, IT IS SUBMITTED B Y THE LEARNED COUNSEL THAT ALL THE PAYMENTS MADE BY THE ASSESSEE WERE BY CHEQUES. NO CASH PAYMENT WAS MADE BY THE ASSESSEE AND IT IS THE NEELAM FOOTW EAR, WHO HAS SHOWN BOGUS RECEIPT. IN RESPECT OF LUCKY CHAPPAL, IT IS STATED BY THE LEARNED COUNSEL THAT THE STATEMENT SUBMITTED BY THE ABOVE PARTY IS ONLY A PI ECE OF PAPER AND NOT A PROPER ACCOUNT WHICH CONTAINS MANY DISCREPANCIES. HOWEVER, THE LEARNED COUNSEL DID NOT CONTEST THE ADDITION OF RS.12,679/- IN ACCOUNTS OF P.P. PLASTICS, BECAUSE THE MAJOR ADDITION IN THIS ACCOUNT WAS DELE TED BY THE CIT(A). 5. THE LEARNED DR, ON THE OTHER HAND, POINTED OUT T HAT THE AO AS WELL AS THE CIT(A) HAVE RECORDED THE SPECIFIC FINDING IN RE SPECT OF THE ABOVE TWO PERSONS AND FROM THOSE FACTUAL FINDING WHICH HAS NO T BEEN CONTROVERTED BY THE ASSESSEE, IT IS EVIDENT THAT THE LIABILITY SHOWN IN THE ASSESSEES BOOKS OF ACCOUNTS IS MORE THAN THE ACTUAL LIABILITY. THEREF ORE, THE AO HAS RIGHTLY TREATED IT AS THE CESSATION OF LIABILITY. ITA.NO.3391/AHD/2008 -3- 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T WITH REGARD TO NEELAM FOOTWEAR, THE AO RECORDED THE FOLLOWING FINDING: INFORMATION U/S.133(6) OF THE ACT, WAS CALLED FOR F ROM THIS PURCHASE CREDITOR OF THE ASSESSEE AND THE SAME WAS COMPARED WITH THE COPY OF ACCOUNT OF THIS CREDITOR AS APPEARING IN THE BOOKS OF ASSESSEE. THIS CREDITOR HAS SHOWN THE FOLLOWING CASH RECEIPTS AGAI NST THE SALES TO THE ASSESSEE. DATE AMOUNT 13/08/2004 20000 16/09/2004 20000 30/09/2004 20000 12/10/2004 20000 27/10/2004 20000 23/02/2005 20000 24/02/2005 20000 26/02/2005 10000 TOTAL RS.1,50,000/- BUT THE ASSESSEE HAS NOT SHOWN THE ABOVE PAYMENTS T O THIS CREDITOR. THE ASSESSEE HAS SHOWN PURCHASE RETURN OF RS.21,444/- T O THIS CREDITOR BUT THE CREDITOR HAS NOT SHOWN ANY SUCH RETURN FROM THE ASSESSEE. THE ASSESSEE HAS SHOWN PAYMENTS OF RS.846484/- INCLUDIN G PURCHASE RETURN OF RS.21,444/- TO THIS PARTY WHEREAS THIS CREDITOR HAS SHOWN RECEIPTS OF RS.1073286/- INCLUDING THE ABOVE CASH RECEIPTS OF R S.1,50,000/-. THE ASSESSEE HAS SHOWN PAYABLE CLOSING BALANCE OF RS.44 7402/- IN RESPECT OF THIS CREDITOR WHEREAS THE CREDITOR SHOWS RECEIVABLE CLOSING BALANCE OF RS.248523/- FROM THE ASSESSEE. FROM THE ABOVE, IT IS EVIDENT THAT THE AO HAS CALLE D FOR THE INFORMATION UNDER SECTION 133(6) OF THE ACT FROM THE CREDITOR OF THE ASSESSEE AND ON THE BASIS OF THE INFORMATION SUPPLIED BY THE NEELAM FOOTWEAR, IT WAS FOUND THAT THE NEELAM FOOTWEAR HAS SHOWN CREDITS IN THE ACCOUNTS O F THE ASSESSEE WHICH HAS NOT BEEN DEBITED IN THE ASSESSEES BOOKS OF ACCOUNT S. THE TOTAL CREDIT DURING THE YEAR SHOWN BY THE ABOVE PARTY WAS RS.10,73,286/ - WHILE THE ASSESSEE HAS SHOWN THE PAYMENT OF ONLY RS.8,46,484/-. AS PER TH E ASSESSEE THE AMOUNT PAYABLE TO HIM WAS RS.4,47,402/- WHILE AS PER THE C REDITOR, THE AMOUNT RECEIVABLE FROM THE ASSESSEE WAS ONLY RS.2,48,523/- . THAT WHEN THE NEELAM ITA.NO.3391/AHD/2008 -4- FOOTWEAR HAS CONFIRMED IN WRITING THAT THEY HAD TO RECEIVE ONLY RS.2,48,523/- FROM THE ASSESSEE, THEN THEIR RIGHT TO CLAIM THE AM OUNT FROM THE ASSESSEE IS RESTRICTED TO RS.2,48,523/-. AS PER THE ASSESSEE, T HE LIABILITY AS ON THAT DATE IS RS.4,47,402/-, WHICH IS MORE BY A SUM OF RS.1,98,78 9/- (RS.4,47,402/- MINUS RS.2,48,523/-). IT IS CONTENDED BY THE LEARNED COU NSEL THAT IT HAS NOT MADE CERTAIN PAYMENTS WHICH IS CREDITED BY THE NEELAM FO OTWEAR. HOWEVER, AS PER THE HUMAN PROBABILITY, IT IS UNBELIEVABLE THAT ANY CREDITOR WOULD CREDIT THE ACCOUNT OF DEBTOR WITHOUT RECEIVING AMOUNT FROM THE DEBTOR. IF HE DOES SO, HIS RIGHT TO RECEIVE THE AMOUNT FROM THE DEBTOR WOULD C EASE BECAUSE HE CAN CLAIM ONLY THE AMOUNT SHOWN IN HIS BOOKS OF ACCOUNTS AS R ECEIVABLE FROM OTHER PARTY. THEREFORE, WHEN AS PER THE CREDITOR, THE LIABILITY OF THE ASSESSEE IS ONLY RS.2,48,523/-, THE ASSESSEE IS LEGALLY NOT LIABLE F OR PAYING MORE THAN THAT AMOUNT. ACCORDINGLY THERE IS CESSATION OF LIABILIT Y OF RS.1,98,789/-. WE THEREFORE UPHOLD THE FINDINGS OF THE LOWER AUTHORIT IES IN THIS RESPECT. 7. REGARDING LUCKY CHAPPAL, THE AO HAS RECORDING TH E FOLLOWING FINDINGS: INFORMATION U/S.133(6) OF THE ACT WAS CALLED FOR F ROM THIS PURCHASE CREDITOR OF THE ASSESSEE AND THE SAME WAS COMPARED WITH THE COPY OF ACCOUNT OF THIS CREDITOR AS APPEARING IN THE BOOKS OF THE ASSESSEE. THIS CREDITOR HAS SHOWN CASH CREDIT RECEIPT OF RS.10,000 /- ON 01/06/2004 FROM THE ASSESSEE WHEREAS THE ASSESSEE DOES NOT SHO W ANY SUCH PAYMENT TO THIS PARTY. THIS CREDITOR HAS SQUARED UP THE AC COUNTS OF THE ASSESSEE IN ITS BOOKS SHOWING TOTAL OF RS.101942/- WHEREAS T HE ASSESSEE HAS SHOWN PAYABLE CLOSING BALANCE OF RS.108908/- IN RES PECT OF THIS CREDITOR. IN THIS CASE ALSO, THE AO CALLED FOR THE INFORMATIO N FROM LUCKY CHAPPAL I.E. CREDITOR OF THE ASSESSEE. AS PER THE LUCKY CHAPPAL , THE ACCOUNT OF THE ASSESSEE IN THEIR BOOKS OF ACCOUNTS IS SQUARED UP AND THERE IS NO DEBIT BALANCE IN THE ACCOUNT OF THE ASSESSEE AS ON 31-3-2005. THUS, THE Y ARE NOT ENTITLED TO CLAIM ANY AMOUNT FROM THE ASSESSEE WHILE AS PER THE ASSES SEE, THERE IS A CREDIT BALANCE OF LUCKY CHAPPAL AS ON 31-3-2005 AMOUNTING TO RS.1,08,908/-. THAT WHEN AS PER THE LUCKY CHAPPAL, AS ON 31-3-2005, THE ASSESSEE IS NOT LIABLE TO ITA.NO.3391/AHD/2008 -5- PAY ANY AMOUNT TO THEM, THEN THE ENTIRE LIABILITY S HOWN BY THE ASSESSEE IN THEIR BOOKS OF ACCOUNTS AS PAYABLE TO THE LUCKY CHAPPAL H AS CEASED. WE THEREFORE UPHOLD THE FINDING OF THE LOWER AUTHORITIES IN RESP ECT OF LUCKY CHAPPAL ALSO. 8. THE ASSESSEE HAS NOT PRESSED THE ADDITION OF RS. 12,679/- IN RESPECT OF P.P. PLASTICS BECAUSE THE MAJOR ADDITION MADE BY TH E AO IS DELETED BY THE LEARNED CIT(A). ACCORDINGLY, GROUND NO.2 OF THE AS SESSEES APPEAL IS REJECTED. 9. NOW WE TAKE UP GROUND NO.1 OF THE ASSESSEES APP EAL. THAT BEFORE THE CIT(A) IT WAS ALTERNATIVELY CONTEND ED ON BEHALF OF THE ASSESSEE THAT WHATEVER ADDITION CONFIRMED FOR BOGUS PURCHASE, THE SAME SHOULD BE SET OFF AGAINST THE ADDITION SUSTAINED FOR THE C ESSATION OF LIABILITY UNDER SECTION 41(1) OF THE ACT. THE CIT(A) ACCEPTED THE ASSESSEES CONTENTION AND FROM THE ADDITION SUSTAINED BY HIM IN RESPECT OF TH E CESSATION OF LIABILITY, HE GAVE SET OFF OF THE ADDITION CONFIRMED FOR BOGUS PU RCHASES. THE REVENUE HAS ACCEPTED THE ORDER OF THE CIT(A). WHILE ADJUDICATI NG GROUND NO.2 OF ASSESSEES APPEAL, WE HAVE ALREADY UPHELD ORDER OF THE CIT(A) IN THIS REGARD. ONCE THE SET OFF OF ADDITION FOR BOGUS PURCHASE IS ALLOWED AGAINST THE ADDITION UNDER SECTION 41(1), CHALLENGE TO THE ADDITION FOR BOGUS PURCHASE AMOUNTING TO RS.98,645/- IS ONLY ACADEMIC NEEDS NO ADJUDICATION. 10. THE GROUND NO.3 OF THE ASSESSEE READS AS UNDER: 3. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT'S CASE IN MAKING ADDITION OF RS. 4,06 ,400/- ON THE ERRONEOUS PLEA THAT IT IS UNEXPLAINED CASH CREDIT. THE APPELLANT MOST HUMBLY SUBMITS THAT THE ADDITIO N MADE BY THE LEARNED INCOME TAX OFFICER IS BAD IN LAW AND ON THE FACTS A ND CIRCUMSTANCES OF HIS CASE. THE APPELLANT FURTHER SUBMITS THAT THE SA ID ADDITION HAS BEEN MADE MERELY ON PRESUMPTION, WITHOUT VERIFYING THE G ENUINE AND SOURCES OF THE DEPOSITORS. THE APPELLANT STATES THAT NO PAR T OF DEPOSITS RECEIVED IS UNEXPLAINED, AS THE SAME HOVE BEEN RAISED FROM GENU INE PARTIES HAVING THEIR INDEPENDENT SOURCES OF INCOME. ITA.NO.3391/AHD/2008 -6- IN VIEW OF THE ABOVE, THE APPELLANT MOST HUMBLY SUB MITS THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE NO ADDITION CON BE MA DE U/S 68 OF THE ACT AND PRAYS THAT HON'BLE TRIBUNAL BE PLEASED TO HOLD SO NOW AND DELETE ADDITION MADE. 11. THE AO MADE THE ADDITION OF RS.4,06,400/- BEING THE CREDIT IN ACCOUNT OF THE FOLLOWING PARTIES: I) SHRI ASHOKUMAR D. MAMNANI RS.2,00,000/- II) SMT. KANTABEN D. MAMNANI RS. 98,880/- III) SHRI PRAKASH V. MAMNANI RS. 53,760/- IV) SHRI VINODKUMAR R. MAMNANI RS. 53,760/- RS.4,06,400/- 12. WE HAVE HEARD BOTH THE PARTIES IN RESPECT OF EA CH OF THE ABOVE CREDITORS AND OUR FINDINGS IN THIS REGARD ARE AS UNDER: 12.1 SHRI ASHOKKUMAR D. MAMNANI OF RS.2,00,000/-:- THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO RECORDED THE STATEME NT OF SHRI ASHOKUMAR MAMNANI. FROM HIS STATEMENT, IT IS FOUND THAT HE HA S NOT ASSESSED TO TAX. HE WAS DOING A JOB IN A SHOP KNOWN AS M/S.MAHALAXMI PR OVISION. HIS MONTHLY SALARY WAS RS.2,5000/- PER MONTH. THOUGH HE HAS CL AIMED THAT IN ADDITION TO JOB AT MAHALAXMI PROVISION, HE WAS ALSO ENGAGED IN THE BUSINESS OF SELLING OF PAPAD AND POWDER FROM WHICH HE WAS EARNING RS.5,000/-. HOWEVER, NO EVIDENCE IN SUPPORT OF SUCH BUSINESS WAS PRODUCED B EFORE THE AO OR BEFORE US. EVEN OTHERWISE, IT LOOKS IMPROBABLE THAT PERSONS WH O IS DOING FULL TIME JOB IN A PROVISION STORE, WAS ALSO DOING THE BUSINESS OF SEL LING OF PAPAD AND POWDER ON PART TIME BASIS AND WAS EARNING BUSINESS INCOME DOU BLE THAN HIS SALARY. HE DID NOT SUBMIT HIS BANK ACCOUNT ALSO. 12.2 CONSIDERING TOTALITY OF FACTS, THE AO HELD THA T CREDIT-WORTHINESS OF SHRI ASHOKKUMAR MAMNANI IS NOT ESTABLISHED. AT THE TIME OF HEARING BEFORE US, THE ONLY ARGUMENT ADVANCED IN THIS RESPECT WAS THAT THE AMOUNT WAS RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. HOWEVER, MERELY BECA USE THE AMOUNT WAS ITA.NO.3391/AHD/2008 -7- RECEIVED BY ACCOUNT PAYEE CHEQUE, WOULD NOT BE SUFF ICIENT TO DISCHARGE THE ONUS OF PROVING THE CASH CREDIT. IT IS SETTLED LA W THAT ONUS IS UPON THE ASSESSEE TO PROVE THE CASH CREDIT AND TO DISCHARGE SUCH ONUS , THE ASSESSEE HAS TO ESTABLISH THE IDENTITY OF THE CREDITOR, CREDIT-WORT HINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. IN THIS CASE, CRED IT-WORTHINESS OF THE CREDITOR WAS NOT AT ALL ESTABLISHED. IN VIEW OF THE ABOVE, WE UPHOLD THE ADDITION OF RS.2,00,000/- BEING UNEXPLAINED CREDIT IN THE ACCOU NT OF SHRI ASHOKKUMAR D. MAMNANI. 12.3 SMT.KANTABEN DILIPKUMAR MAMNANI OF RS.98,880/- : THERE WAS A CREDIT OF RS.1,50,000/- IN THE ACCOUNT OF SMT.KANTABEN. O N APPEAL, THE CIT(A) ACCEPTED THE CREDIT TO THE EXTENT OF RS.66,000/- WH ICH WAS CLAIMED TO BE FROM SALE OF PROPERTY AND SUSTAINED THE BALANCE ADDITION OF RS.98,880/-. AT THE TIME OF HEARING BEFORE US, IT WAS STATED BY THE LEARNED COUNSEL THAT THE SUM OF RS.74,235/- WAS RECEIVED FROM THE MATURITY OF SAVIN G BANK ACCOUNT. THE ASSESSEE HAS FURNISHED BEFORE US THE COPY OF THE BA NK ACCOUNT OF SMT.KANTABEN IN WHICH THE SUM OF RS.74,235/- WAS SHOWN AS TRANSF ER FROM ANOTHER BANK ACCOUNT. COPY OF OTHER BANK ACCOUNT IS ALSO FURNIS HED FROM WHICH WE FIND THAT THE CREDITOR DEPOSITED CASH OF RS.5000/- TO RS.6000 /- PER MONTH SINCE SEPTEMBER, 2003. THE SAID BANK ACCOUNT WAS CLOSED O N 10 TH SEPTEMBER, 2004 AND TRANSFERRED TO ANOTHER BANK ACCOUNT FROM WHICH THE LOAN WAS GIVEN TO THE ASSESSEE IN SEPTEMBER, 2004. AFTER CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT SO FAR ASSESSEE IS CONCERNED, HE HAS E XPLAINED SOURCE OF SMT. KANTA BEN TO THE EXTENT OF RS.74,235/-. IF THE AO WANTED TO EXAMINE SOURCE OF SMT.KANTABEN FOR DEPOSIT OF RS.5,000/- PER MONTH IN HER BANK ACCOUNT, THAT HE CAN ENQUIRE IN THE CASE OF SMT.KANTABEN, BUT SO FAR THE ASSESSEE IS CONCERNED, HE IS LIABLE TO EXPLAIN ONLY THE AMOUNT PAID TO HIM . THIS AMOUNT HAD COME FROM CLOSURE OF BANK ACCOUNT NO.21250 WITH THE DAHO D URBAN CO-OPERATIVE BANK LTD. NOW, THE DIFFERENCE REMAINS LESS THAN RS .15,000/-WHICH IS CASH DEPOSITED IN CREDITORS BANK ACCOUNT NO.6419 IN JUL Y, 2004,WHICH IS ALSO TWO MONTHS PRIOR TO THE AMOUNT GIVEN TO THE ASSESSEE. W E, THEREFORE, HOLD THAT THE ITA.NO.3391/AHD/2008 -8- ASSESSEE HAS BEEN ABLE TO ESTABLISH THE CREDIT-WORT HINESS OF SHRI KANTABEN. IT MAY ALSO BE MENTIONED THAT SHE APPEARED BEFORE THE AO AND HAS CONFIRMED HAVING GIVEN THE AMOUNT TO THE ASSESSEE. IN VIEW O F THE ABOVE, WE DIRECT THAT THE ADDITION SUSTAINED BY THE CIT(A) OF RS.98,880/- BE DELETED. 12.4 SHRI PRAKASH V. MAMNANI AND SHRI VINODKUMAR R. MAMNANI : IN RESPECT OF ABOVE TWO PERSONS, IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT THERE WAS NO LOAN TAKEN FROM THE ABOVE PERSONS, BUT IT WAS ONLY THE CREDIT OF SALARY IN THEIR ACCOUNT. THE CREDIT WAS ONLY BY WA Y OF JOURNAL ENTRIES AND THERE WAS NO INCOMING OF THE CASH. THAT WHEN THERE WAS N O BORROWING BY CHEQUE OR CASH, THERE CANNOT BE ANY ADDITION FOR UNEXPLAINED CASH CREDIT UNDER SECTION 68. HE ALSO POINTED OUT THAT BOTH THE ABOVE PERSON S APPEARED BEFORE THE AO AND CONFIRMED THAT THEIR SALARY REMAINED DEPOSITED WITH THE ASSESSEE. THE AO DID NOT ACCEPT THEIR EXPLANATION ON THE GROUND THAT THEY HAVE NOT BEEN ABLE TO EXPLAIN THE SOURCE OF THEIR HOUSEHOLD EXPENDITURE. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT BOTH THE ABOVE PERSONS ARE LIV ING IN A JOINT FAMILY AND IT WAS EXPLAINED BY THEM THAT THE HOUSEHOLD EXPENDITUR E WAS MET BY THEIR FATHER. IN ANY CASE, IF A CREDITOR IS UNABLE TO EXPLAIN THE SOURCE OF HIS HOUSEHOLD EXPENDITURE, THE SAME IS TO BE EXAMINED IN HIS CASE , BUT FOR HIS FAILURE TO EXPLAIN THE SOURCE OF HOUSEHOLD EXPENDITURE, THE CR EDIT IN HIS ACCOUNT CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT. 13. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE CREDIT WORTHINES S OF BOTH THE ABOVE CREDITORS WAS NOT ESTABLISHED. 14. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF T HE SIDES AND PERUSED MATERIAL PLACED BEFORE US. BOTH THE ABOVE CREDITOR S APPEARED BEFORE THE AO AND CONFIRMED THAT THEY ARE EMPLOYEES OF THE ASSESS EE AND THEY HAVE NOT WITHDRAWN SALARY RECEIVABLE BY THEM. THE AO HAS NO T DISPUTED THAT THEY ARE ASSESSEES EMPLOYEE AND THE GENUINENESS OF THE SALA RY PAID IS NOT DISPUTED. ITA.NO.3391/AHD/2008 -9- THEREFORE, SO FAR AS CREDIT IN THEIR ACCOUNT IS CON CERNED, THE SAME IS DULY EXPLAINED BEING SALARY PAYABLE TO THEM. NOW QUESTI ON OF THEIR HOUSEHOLD EXPENDITURE IS CONCERNED, IN OUR OPINION, IT IS TO BE EXAMINED IN THEIR CASE AND NOT IN THE CASE OF THE ASSESSEE. THOUGH BOTH OF TH EM HAVE EXPLAINED THAT THE HOUSEHOLD EXPENDITURE WAS BEING MET BY THEIR PARENT S, BUT WHETHER SUCH EXPLANATION WITH REGARD TO THE HOUSEHOLD EXPENDITUR E IS SATISFACTORY OR NOT IS TO BE CONSIDERED IN THEIR CASE AND NOT IN THE CASE OF THE ASSESSEE. IN THE ASSESSEES CASE LIMITED DISPUTE IS WITH REGARD TO THE EXPLANAT ION OF THE CREDIT IN THE ACCOUNTS OF THE ABOVE TWO PERSONS. THE CREDIT WAS FOR THE SALARY AND INTEREST ARE NOT IN DISPUTE. THEREFORE, WE ARE OF THE OPINI ON THAT ADDITION FOR UNEXPLAINED CREDIT IN THE ACCOUNT OF SHRI PRAKASH M AMNANI AND SHRI VINODKUMAR MAMNANI WAS NOT JUSTIFIED, THE SAME IS D ELETED. 15. THE GROUND NO.4 OF THE ASSESSEE READS AS UNDER: 4. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LOW AND ON FACTS OF THE APPELLANT'S CASE IN MAKING ADDITION OF RS.20 ,000/- ON HOUSEHOLD EXPENSES ON THE ERRONEOUS PLEA THAT HOUSE HOLD EXPENSE SHOWN IN BOOKS IS ON LOWER SIDE. THE APPELLANT MOST HUMBLY SUBMITS THAT THE WITHDRA WALS MADE FOR HOUSEHOLD EXPENSES IS SUFFICIENT LOOKING TO THE SIZ E OF FAMILY, PLACE OF RESIDENCE ETC. IN VIEW THEREOF, THE APPELLANT MOST HUMBLY SUBMITS THAT THE ADDITION MADE BY THE LEARNED INCOME TAX OFFICER REQUIRES TO BE DELETED AND PRAYS THAT HON'BLE TRIBUNAL BE PLEASED TO HOLD SO N OW. 16. THE AO HAS NOTED THAT THE ASSESSEE HAS SHOWN TH E WITHDRAWAL FOR HOUSEHOLD EXPENDITURE AT RS.5000/- PER MONTH ONLY. THE ASSESSEES FAMILY IS CONSISTED OF FOUR PERSONS I.E. THE ASSESSEES WIFE AND TWO SCHOOL GOING CHILDREN. CONSIDERING THESE FACTS, THE AO MADE THE ADDITION O F RS.20,000/- FOR LOW WITHDRAWAL FOR HOUSE EXPENDITURE. 17. AT THE TIME OF HEARING BEFORE US, THE LEARNED C OUNSEL COULD NOT JUSTIFY THAT HOW WITH A MEAGRE SUM OF RS.5000/- PER MONTH T HE ASSESSEE COULD MEET ITA.NO.3391/AHD/2008 -10- HIS HOUSEHOLD EXPENDITURE, ESPECIALLY WHEN HIS TWO DAUGHTERS WERE STUDYING. IN FACT NO SPECIFIC ARGUMENTS WERE RAISED AGAINST T HIS ADDITION BY THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE, WE UPHOLD THE OR DER OF THE CIT(A) ON THIS GROUND AND REJECT THE GROUND NO.4 OF THE ASSESSEES APPEAL. 18. GROUND NO.5 OF THE ASSESSEES APPEAL READS AS U NDER: 5. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT'S CASE IN MAKING ADDITION OF RS.1,457 /- ON THE ERRONEOUS PLEA THAT THE APPELLANT HAS EARNED SUCH PROFIT ON U NACCOUNTED PURCHASES OF RS.45,545/- THE APPELLANT MOST HUMBLY SUBMITS THAT NO SUCH ADDI TION CAN BE MADE AS THE APPELLANT HAS NOT MADE ANY SUCH UNACCOUNTED PURCHASES. IN VIEW THEREOF, THE APPELLANT MOST HUMBLY SUBMITS THAT THE ADDITION MODE BY THE LEARNED INCOME TAX OFFICER REQUIRES TO BE DELETED AND PRAYS THAT HON'BLE TRIBUNAL BE PLEASED TO HOLD SO N OW 19. AT THE TIME OF HEARING BEFORE US, IT WAS SUBMIT TED BY THE LEARNED COUNSEL THAT THE GROUND NO.5 IS CONSEQUENTIAL TO THE GROUND NO.1 BECAUSE THE AO MADE THE ADDITION IN RESPECT OF PROFIT FROM UNACCOUNTED PURCHASE OF RS.45,545/-. SINCE WE HAVE ALREADY SUSTAINED THE FINDINGS OF THE CIT(A) WITH REGARD TO THE UNACCOUNTED PURCHASE, WE UPHOLD THE ADDITION OF RS. 1,457/- MADE BY THE AO IN THIS REGARD. ACCORDINGLY, THE GROUND NO.5 OF THE A SSESSEES APPEAL IS ALSO REJECTED. 20. IN RESULT, THE ASSSESSEES APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 15 TH OCTOBER, 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 15-10-2010 ITA.NO.3391/AHD/2008 -11- COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD