Shri Mani Ram, SRIGANGANAGAR V. AO, SRIGANGANAGAR

ITA 527/JODH/2010

• Counselvise Citation: 52723314 RSA 2010
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R H GOEL
• Assessee Lawyers: VIKAS CHHABRA
• Keywords: Unexplained cash credit; Gift; Salary income; Source of fund; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NOS. 527/JU/2010 A.Y: 2007-08 SHRI MANI RAM VS. INCOME-TAX OFFICER P/O M/S MANI RAM RAMESHWAR LAL WARD 1 98, NEW DHAN MANDI SRIGANGANAGAR SRIGANGANAGAR PAN NO. AAZPG 6159 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIKAS CHHABRA DEPARTMENT BY : SHRI R.H. GOEL - DR DATE OF HEARING : 29.10.2013 DATE OF PRONOUNCEMENT : 28.11.2013 ORDER PER HARI OM MARATHA, J.M. THIS IS A RECALLED MATTER. THE APPELLATE TRIBUNAL HAS RECALLED ITS ORDER DATED 9.9.2011 WITH A VIEW TO DE CIDE GROUND NO. 1 OF THE APPEAL VIDE ITS ORDER DATED 6.6 .2013 PASSED IN MA NO. 5/JU/2011 FOR A.Y. 2007-08. 2 2. GROUND NO. 1 OF THIS APPEAL READS AS UNDER: THAT THE ADDITIONS MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) FOR RS. 27,85,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT, 196 1 IS QUITE AGAINST THE LAW AND FACT BOTH AND LIKE TO BE SET ASIDE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. F ACTS APROPOS THIS GROUND ARE THAT THE ASSESSEE DERIVED H IS INCOME FROM SALARY BEING A PARTNER IN THE FIRM. HE IS THE PROPRIETOR OF M/S MANI RAM RAMESHWAR LAL, SRIGANGAN AGAR AND THE ASSESSEE ALSO DERIVED INCOME FROM INTEREST ON DEPOSITS. THE A.O. HAS MADE ADDITION OF RS. 27,85, 000/- U/S 68 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REF ERRED TO AS 'THE ACT', FOR SHORT]. ACCORDING TO THE A.O. , DURING THE YEAR, THE ASSESSEE CONTINUED TO BE A GRAIN MERCHANT/COMMISSION AGENT [ADATIA]. HE FOUND THAT THE ASSESSEE HAD TAKEN UNSECURED LOAN FROM VARIOUS PERS ONS AND WHEN ASKED TO DO SO, HE COULD NOT FURNISH SATIS FACTORY 3 EXPLANATION REGARDING THEM. THE DETAILS OF THESE UNSECURED LOANS CAN BE DESCRIBED BY TAKING FROM THE ORDERS OF THE AUTHORITIES BELOW AS UNDER: 1. SHRI JAGDISH PRASAD S/O SHRI PANNA RAM : THE SA ID CREDITOR HAD DEPOSITED A SUM OF RS.4,37,000/- BY CHEQUE ON 06.07.2006. AS PER THE BANK STATEMENT OF THE SAID CREDITOR FURNISHED, A SUM OF RS. 1,37,000/- WAS FOUND TO BE ON ACCOUNT OF TRANSFER ENTRY AND RS. 3,00,000/- WAS FOUND TO H AVE BEEN DEPOSITED IN CASH. IN HIS STATEMENT RECORDED ON 25 .11.2009 THE CREDITOR EXPLAINED THE SOURCE OF CASH DEPOSIT O F RS.3,00,000/- ON ACCOUNT OF SALE OF AGRICULTURAL PR ODUCE BUT COULD NOT GIVE ANY EVIDENCE OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER RELEVANT DETAIL. HOWEVER, IN THE AFFIDAVIT DATED 20.04.2006 THE SOURCE OF RS.3,00,00 0/- WAS STATED TO BE OUT OF WITHDRAWALS MADE ON 20.04.2006 FROM THE ASSESSEE FIRM ITSELF. THERE BEING A DIFFERENCE IN T HE EXPLANATION GIVEN IN THE STATEMENT AND THE AFFIDAVI T AND ALSO THE ABSENCE OF SATISFACTORY DETAILS REGARDING SOURC E OF RS. 3,00,000/- THE IMPUGNED SUM WAS ADDED TO THE TOTAL INCOME. 2. HANUMAN PRASAD S/O SHRI SAHI RAM : THE SAID CRE DITOR HAD DEPOSITED A SUM OF RS.5,72,600/- ON 20.06.2006 AND RS.3,00,000/- ON 12.03.2007 BY CHEQUE. BEFORE ISSUA NCE OF CHEQUE OF RS.5,72,600/- THERE WAS CASH DEPOSIT OF 4 RS.3,00,000/- AND RS.1,00,000/- IN THE BANK ACCOUNT OF THE CREDITOR. LIKEWISE, BEFORE ISSUANCE OF RS.3,00,000/ - THERE WAS CASH DEPOSIT OF EQUIVALENT AMOUNT ON THE SAME DATE. THE SAID CREDITOR COULD NOT BE PRODUCED FOR EXAMINATION DESP ITE BEING ASKED TO BE PRODUCED INSTEAD ONLY AN AFFIDAVIT WAS FURNISHED. THE AO FOUND THAT THE SOURCE OF CASH DEPOSITS BEFOR E THE ISSUANCE OF CHEQUE COULD NOT BE EXPLAINED BY THE AS SESSEE OR THE CREDITOR BECAUSE OF WHICH THE SUM OF RS.7,00,00 0/- WAS ADDED TO THE TOTAL INCOME. 3. JODHA SINGH S/C SHRI MAHINDER SINGH : THE SAID CREDITOR HAD DEPOSITED A SUM OF RS.2,75,000/- ON 22.12.2006 BY C HEQUE. BEFORE ISSUANCE OF CHEQUE OF RS.2,75,000/- THERE WA S CASH DEPOSIT OF RS.2,75,000/- IN THE BANK ACCOUNT OF THE CREDITOR. IN HIS STATEMENT RECORDED ON 29.10.2009 THE CREDITO R EXPLAINED THE SOURCE OF CASH DEPOSIT OF RS.2,75,000 /- ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE BUT COULD N OT GIVE ANY EVIDENCE OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER RELEVANT DETAIL. HOWEVER, IN THE AFFIDAVIT DA TED 16.09.2009 THE SOURCE OF RS.2,75,000/- WAS STATED T O BE OUT OF WITHDRAWAL OF RS.1,75,000/- ON 20.09.2006 AND RS .80,000/- ON 20.06.2006 FROM THE ASSESSEE FIRM ITSELF. THERE BEING A DIFFERENCE IN THE EXPLANATION GIVEN IN THE STATEMEN T AND THE AFFIDAVIT AND ALSO THE ABSENCE OF SATISFACTORY DETA ILS REGARDING SOURCE OF RS.2,75,000/- THE IMPUGNED SUM WAS ADDED TO THE TOTAL INCOME. 5 4. KRISHAN LAL S/O THAKAR RAM : THE SAID CREDITOR HAD DEPOSITED A SUM OF RS.3,75,000/- ON 20.06.2006 BY CHEQUE. BEF ORE ISSUANCE OF CHEQUE OF RS.3,75,000/- THERE WAS CASH DEPOSIT OF RS.3,10,000/- IN THE BANK ACCOUNT OF THE CREDITOR. IN HIS STATEMENT RECORDED ON 29.I0.2009 THE CREDITOR EXPLA INED THE SOURCE OF CASH DEPOSIT OF RS.3,75,000/- ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE BUT COULD NOT GIVE ANY EVIDENC E OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER REL EVANT DETAIL. HOWEVER, IN THE AFFIDAVIT ATTESTED ON 16.0 9 .2009 NOTHING WAS EXPLAINED REGARDING THE SOURCE OF CASH DEPOSIT OF RS.3,10,000/-. THERE BEING A DIFFERENCE IN THE EXPL ANATION GIVEN IN THE STATEMENT AND THE AFFIDAVIT AND ALSO T HE ABSENCE OF SATISFACTORY DETAILS REGARDING SOURCE OF RS.3,10 ,000/- THE IMPUGNED SUM WAS ADDED TO THE TOTAL INCOME. A FURT HER OPPORTUNITY VIDE LETTER DATED 10.12.2009 WAS GIVEN TO THE ASSESSEE AS TO WHY THE CASH DEPOSIT SHOULD NOT BE T REATED AS THE ASSESSEE'S OWN INCOME AND ADDED TO THE TOTAL IN COME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TI LL 18.12.2009 NO EXPLANATION IN RESPECT OF THIS SHOW C AUSE WAS FURNISHED BY THE ASSESSEE. ACCORDINGLY, RS.3,10,000 /- WAS ADDED TO THE TOTAL INCOME. 5. RANJEET SINGH S/O SHYOKARAN : THE SAID CREDITOR HAD DEPOSITED A SUM OF RS.2,00,000/- ON 20.06.2006 BY CHEQUE. BEF ORE ISSUANCE OF CHEQUE OF RS.2,00,000/- THERE WAS CASH DEPOSIT OF RS.2,01,500/- IN THE BANK ACCOUNT OF THE CREDITOR. IN HIS 6 STATEMENT RECORDED ON 25.11.2009, THE CREDITOR EXPL AINED THE SOURCE OF CASH DEPOSIT OF RS.2,01,500/- ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE BUT COULD NOT GIVE ANY EVIDENC E OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER REL EVANT DETAIL. ON THE ISSUE OF THE BANK ACCOUNT BEING IN THE NAME OF SHRI SHYOKARAN THE CREDITOR STATED THAT HIS FATHER WAS HANDICAPPED AND HE ONLY USED TO SIGN THE CHEQUES. H E COULD NOT PRODUCE ANY EVIDENCE REGARDING THE HANDICAP OF HIS FATHER NOR ANY AUTHORIZATION FOR ISSUANCE OF CHEQUE. HOWE VER, IN THE AFFIDAVIT ATTESTED ON 16.09.2009 THE SOURCE OF CASH DEPOSIT WAS EXPLAINED TO BE SALE OF AGRICULTURAL PR ODUCE AND THAT THE CASH WAS DEPOSITED BECAUSE THE ASSESSEE RE FUSED TO ACCEPT CASH. A FURTHER OPPORTUNITY VIDE LETTER DATE D 10.12.2009 WAS GIVEN TO THE ASSESSEE AS TO WHY THE CASH DEPOSIT SHOULD NOT BE TREATED AS THE ASSESSEE'S OWN INCOME AND ADDED TO THE TOTAL INCOME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TILL 18.12.2009 NO EXPLAN ATION IN RESPECT OF THIS SHOW CAUSE WAS FURNISHED BY THE ASS ESSEE. ACCORDINGLY, RS. 2,00,000/- WAS ADDED TO THE TOTAL INCOME. 6. JASWINDER SINGH S/O SHRI DHARAM SINGH : THE SAI D CREDITOR HAD DEPOSITED A SUM OF RS.3,65,000/- BY CHEQUE ON 20.06 .2006. AS PER THE BANK STATEMENT OF THE SAID CREDITOR FURN ISHED, A SUM OF RS.1,67,641/- WAS FOUND TO BE ON ACCOUNT OF TRANSFER ENTRY AND RS.2,00,000/- WAS FOUND TO HAVE BEEN DEPO SITED IN CASH. IN HIS STATEMENT RECORDED ON 25.11.2009 THE C REDITOR 7 EXPLAINED THE SOURCE OF CASH DEPOSIT OF RS.2,00,000 /- ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE BUT COULD N OT GIVE ANY EVIDENCE OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER RELEVANT DETAIL. A FURTHER OPPORTUNITY VIDE L ETTER DATED 10.12.2009 WAS GIVEN TO THE ASSESSEE AS TO WHY THE CASH DEPOSIT SHOULD NOT BE TREATED AS THE ASSESSEE'S OWN INCOME AND ADDED TO THE TOTAL INCOME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TILL 18.12.2009 NO EXPLAN ATION IN RESPECT OF THIS SHOW CAUSE WAS FURNISHED BY THE ASS ESSEE. ACCORDINGLY, RS.2,00,000/- WAS ADDED TO THE TOTAL I NCOME. 7. JAS KARAN SINGH S/O SHRI DULA SINGH : THE SAID CREDITOR HAD DEPOSITED A SUM OF RS.2,70,000/- ON 20.06.2006 BY C HEQUE. BEFORE ISSUANCE OF CHEQUE OF RS.2,70,000/- THERE WA S CASH DEPOSIT OF RS.2,00,000/- IN THE BANK ACCOUNT OF THE CREDITOR. IN HIS STATEMENT RECORDED ON 24.11.2009 THE CREDITO R EXPLAINED THE SOURCE OF CASH DEPOSIT OF RS.2,00,000 /- ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE BUT COULD N OT GIVE ANY EVIDENCE OF THE NATURE OF CROPS SOLD, TO WHOM SOLD OR ANY OTHER RELEVANT DETAIL. HOWEVER, IN THE AFFIDAVIT AT TESTED ON 16.09.2009 THE SOURCE OF TAX DEPOSIT WAS EXPLAINED TO BE SALE OF AGRICULTURAL PRODUCE AND THAT THE CASH WAS DEPOS ITED BECAUSE THE ASSESSEE REFUSED TO ACCEPT CASH. IT WAS ALSO STATED THAT THE CREDITOR HAD WITHDRAWN RS.4,00,000/ - ON 18.09 .2006 FROM THE ASSESSEE FIRM. THERE BEING A D IFFERENCE IN THE EXPLANATION GIVEN IN THE STATEMENT AND THE A FFIDAVIT 8 AND ALSO THE ABSENCE OF SATISFACTORY DETAILS REGARD ING SOURCE OF RS.2,00,000/- THE IMPUGNED SUM WAS ADDED TO THE TOTAL INCOME. A FURTHER OPPORTUNITY VIDE LETTER DATED 10. 12.2009 WAS GIVEN TO THE ASSESSEE AS TO WHY THE CASH DEPOSI T SHOULD NOT BE TREATED AS THE ASSESSEE'S OWN INCOME AND ADD ED TO THE TOTAL INCOME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TILL 18.12.2009 NO EXPLANATION IN RESPE CT OF THIS SHOW CAUSE WAS FURNISHED BY THE ASSESSEE. ACCORDING LY, RS.2,00,000/- WAS ADDED TO THE TOTAL INCOME. 8. KALU SINGH S/O MANI RAM : THE SAID CREDITOR HAD DEPOSITED A SUM OF RS.3,50,000/- ON 21.12.2007 BY CHEQUE. AFTER ISSUANCE OF CHEQUE OF RS.3,50,000/- THERE WAS CASH DEPOSIT O F RS.3,50,000/- IN THE BANK ACCOUNT OF THE CREDITOR. THE SAID CREDITOR COULD NOT BE PRODUCED FOR EXAMINATION DESP ITE BEING ASKED TO BE PRODUCED INSTEAD ONLY AN AFFIDAVIT WAS FURNISHED. THE AO FOUND THAT THE SOURCE OF CASH DEPOSITS BEFOR E THE ISSUANCE OF CHEQUES COULD NOT BE EXPLAINED BY THE A SSESSEE OR THE CREDITOR BECAUSE OF WHICH THE SUM OF RS.3,50,00 0/- WAS ADDED TO THE TOTAL INCOME. A FURTHER OPPORTUNITY VI DE LETTER DATED 10.12.2009 WAS GIVEN TO THE ASSESSEE AS TO WH Y THE CASH DEPOSIT SHOULD NOT BE TREATED AS THE ASSESSEE'S OWN INCOME AND ADDED TO THE TOTAL INCOME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TILL 18.12.2009 NO EXPLAN ATION IN RESPECT OF THIS SHOW CAUSE WAS FURNISHED BY THE ASS ESSEE. ACCORDINGLY, RS.3,50,000/- WAS ADDED TO THE TOTAL I NCOME. 9 9. JAGROOP SINGH S/O SHRI SANTA SINGH : THE SAID C REDITOR HAD DEPOSITED A SUM OF RS.2,50,000/- ON 22.12.2006 BY C HEQUE. BEFORE ISSUANCE OF CHEQUE OF R-S.2,50,000/- THERE - WAS CASH DEPOSIT OF RS.2,50,000/- IN THE BANK ACCOUNT OF THE CREDITOR. THE SAID CREDITOR COULD NOT BE PRODUCED FOR EXAMINA TION DESPITE BEING ASKED TO BE PRODUCED. THE AO FOUND TH AT THE SOURCE OF CASH DEPOSITS BEFORE THE ISSUANCE OF CHEQ UE COULD NOT BE EXPLAINED BY THE ASSESSEE OR THE CREDITOR BE CAUSE OF WHICH THE SUM OF RS.2,50,000/- WAS ADDED TO THE TOT AL INCOME. A FURTHER OPPORTUNITY VIDE LETTER DATED 10. 12.2009 WAS GIVEN TO THE ASSESSEE AS TO WHY THE CASH DEPOSI T SHOULD NOT BE TREATED AS THE ASSESSEE'S OWN INCOME AND ADD ED TO THE TOTAL INCOME AND THAT THE INTEREST PAID SHOULD NOT BE DISALLOWED. TILL 18.12.2009 NO EXPLANATION IN RESPE CT OF THIS SHOW CAUSE WAS FURNISHED BY THE ASSESSEE. ACCORDING LY, RS.2,50,000/- WAS ADDED TO THE TOTAL INCOME. THE A.O. ALSO FOUND THAT THE EXPLANATION FURNISHED ON BEHALF OF THE ASSESSEE ARE SIMPLY GENERAL IN NATURE AND ARE NOT CONVINCING ONES. ACCORDING TO HIM, SATISFACTOR Y EXPLANATION REGARDING THE SOURCE OF CASH DEPOSITS M ADE IN BANK ACCOUNTS OF THE CREDITORS WHEREFROM THE CHEQUE S WERE ISSUED TO THE ASSESSEE HAS NOT BEEN FURNISHED. BY MAKING OTHER OBSERVATIONS THAT MOST OF THE DEPOSITS IN THE 10 BANK OF CASH CREDITS WERE ON A SINGLE DATE 20.6.200 6 AND THAT THESE WERE IN THE SAME BANK ACCOUNT OPENED WIT H PUNJAB NATIONAL BANK, KRISHI UPAJ MANDI SAMITI, SRIGANGANAGAR. ACCORDINGLY, THE A.O. REJECTED THE CREDIT WORTHINESS OF THE CREDITORS AND SO ALSO THE GENUINE NESS OF THE TRANSACTIONS AND ADDED THE ENTIRE AMOUNT, NAMEL Y, RS. 27,85,000/- U/S 68 OF THE ACT. THE CASE OF THE ASS ESSEE IS THAT ALL THE CASH CREDITORS ARE REALLY CREDIT WORTH Y, HAVING ENOUGH AGRICULTURAL LAND. THE ASSESSEE PRODUCED CO PIES OF BANK ACCOUNTS, BANK STATEMENTS, CONFIRMATIONS OF TH E CREDITORS IN THE FORM OF AFFIDAVITS. ALL THESE ARGU MENTS WERE ALSO REPEATED BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED ABOUT THE NATURE OF SOURCE OF THESE SUMS AND THAT THE ASSESSEE COULD NOT EXPLAIN THE GENUINITY OF THE TRANSACTIONS BY EXPLAINING THE SOU RCE OF THE SOURCE. HE HAS OBSERVED THAT MERE FURNISHING OF PARTICULARS OR MERE FACT OF PAYMENT THROUGH ACCOUNT PAYEE CHEQUES CANNOT BE TREATED AS A SATISFACTORY EXPLANA TION AND DISCHARGE OF THE BURDEN CAST UPON THE ASSESSEE. ALMOST WITH SIMILAR REASONING, HE HAS ALSO REJECTED THE 11 CLAIM OF THE ASSESSEE. BEFORE THE APPELLATE TRIBUN AL, SIMILAR ARGUMENTS HAVE BEEN SUBMITTED BY BOTH THE PARTIES. WHAT THE LD. A.R. SHRI VIKAS CHHABRA HAS Y ELLED, VEHEMENTLY ARGUED AND CLAMOURED TO THE CRESCENDO IS THAT THE ABBREVIATION CP] HAS BEEN WRONGLY INTERPRETED AND MISUNDERSTOOD BY THE AUTHORITIES BELOW MEANING AS CHEQUE PURCHASE. ACCORDING TO THE LD. A.R., THIS HAS MADE THE ENTIRE DIFFERENCE IN ARRIVING AT THEIR CON CLUSIONS. ACCORDING TO THE LD. A.R., THE WORD ABBREVIATED FOR M CP MEANS THAT IT IS A CASH PAYMENT. TO SUPPORT THIS VERSION A CERTIFICATE ISSUED BY THE BANK DATED 19.10.201 HA S ALSO BEEN PRODUCED. HE FURTHER ARGUED THAT TO PROVE LAN D HOLDINGS, THE ASSESSEE HAD PURCHASED LAND PASS BOOK S. BUT THE A.O. HAS SIMPLY IGNORED THEM INCLUDING THE LD. CIT(A). PROOF OF LAND HOLDINGS IN THE FORM OF REVENUE DOCUM ENTS HAVE AGAIN BEEN PRODUCED BEFORE US. ON THE OTHER H AND, THE LD. D.R. HAS SUPPORTED THE ORDERS OF THE AUTHOR ITIES BELOW. 12 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND AFTE R GOING THROUGH THE COPY OF BANK ACCOUNT, WE ARE CONV INCED THAT IN CASE CP IS UNDERSTOOD AS CASH PAYMENT, THEN THE VERSION OF THE ASSESSEE BECOMES FRUITFUL AND CA NNOT BE EASILY IGNORED. FOR PROVING CASH CREDITS, THE ASSE SSEE IS REQUIRED TO ESTABLISH THE IDENTITY OF THE CASH CRED ITS WHICH, IN OUR OPINION IS NOT IN DOUBT AND IN DISPUT ED IN THE GIVEN GAMUT OF FACTS OF THIS CASE. THE ASSESSEE IS ALSO REQUIRED TO PROVE THE CREDIT WORTHINESS AND GENUINI TY OF THE TRANSACTIONS. THE TRANSACTIONS ARE GENUINE BEC AUSE ALL THE PAYMENTS ARE MENTIONED IN THE BANK ACCOUNT. TH E CREDIT WORTHINESS OF THE CASH CREDITORS HAS NOT BEE N DISPUTED IN THE MANNER IT SHOULD BE DISPUTED BY THE DEPARTMENT BY DISPROVING THE SAME. THE PROOF OF THE SOURCE OF EARNING OF THE CASH CREDITS IS AVAILABLE ON RECORD BY MEANS OF AFFIDAVITS FILED BY THE CASH CREDITORS. UNLESS SOME ADVERSE MATERIAL IS GATHERED AND BROUGHT ON RE CORD BY THE A.O. TO CONTRADICT THE STATEMENT MADE BY THE DEPONENT, AN AFFIDAVIT AND ITS CONTENTS REMAIN UNCHALLENGED. IN THIS CASE, TOTAL AMOUNT OF CASH C REDITS IS 13 RS. 16,36,700/- DEPOSITED BY 92 PARTIES. IN FACT, ALL THE DEPOSITS WERE MADE IN CASH AND NO AMOUNT HAS BEEN DEPOSITED THROUGH CHEQUES. OUT OF THE 92 PARTIES, 30 PERSONS HAVE FILED THEIR AFFIDAVITS AND 55 PERSONS WERE PRODUCED IN PERSON BEFORE THE A.O EITHER IN ORIGINA L ASSESSMENT PROCEEDINGS OR DURING REMAND PROCEEDINGS . OUT OF 92 PERSONS, ONE PERSON IS STATED TO HAVE LEF T THE CITY AND ONE PERSON HAS DIED AND ONLY THREE CREDITO RS REMAINED UNPROVED ON RECORD. IN THE GIVEN FACTUAL SCENARIO, JUSTICE DEMANDS THAT, AT BEST, THE CASH C REDITS QUA ONE PERSON WHO HAS LEFT THE CITY AND THE THREE PERSONS IN WHOSE CASE NO EVIDENCE HAS BEEN GIVEN CAN BE SUS TAINED U/S 68 OF THE ACT. REGARDING ONE PERSON WHO HAS DI ED, A FAVOURABLE STAND HAS TO BE TAKEN BECAUSE MOST OF TH E PARTIES HAVE FILED THEIR CONFIRMATIONS. THERE IS N O PROOF ON RECORD THAT HE IS THE ASSESSEE WHO DEPOSITED THE CASH IN ACCOUNTS OF THE CREDITORS AND THE MONEY OF THE A SSESSEE HAS TRAVELLED BACK TO THE ASSESSEE. SUSPICION OF TH E A.O., HOWSOEVER STRONG IT MAY BE, IT CANNOT BE MADE A BAS IS FOR MAKING ADDITIONS. WE WOULD LIKE TO EXTRACT THE LEG AL 14 POSITION ELABORATELY DISCUSSED IN ONE OF THE ORDERS OF THIS BENCH IN THE CASE OF SAMPAT AUTOMOBILES AS BELOW: WE WOULD NOT (NOW) LIKE TO DISCUSS THE LAW RELATIN G TO SUCH CASH CREDITS IN THE LIGHT OF THE NUMEROUS JUDI CIAL PRONOUNCEMENTS RENDERED BY VARIOUS COURTS INCLUDING THE HON'BLE APEX COURT. TO UNDERSTAND THE REQUIREMENTS OF THE LAW TO PROVE THE GENUINITY OF A CASH CREDIT, WE WOULD REPRODUCE THE SECTION. 68 OF THE ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT' FOR SHORT). SECTION 68 : 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR.' 7. THE SUBJECT OF CASH CREDIT HAS ASSUMED OMINOUS OVERTURES, OVER THE YEARS. THIS SUBJECT HAS BEEN ON E OF THE MAJOR AREAS OF LITIGATION IN TAXATION. TO UNDER STAND THIS SUBJECT ONE NEEDS TO KNOW ABOUT THE ALPHA AND THE OMEGA OF THE LAW RELATING TO CASH CREDITS, STARTING WITH ITS LEGISLATIVE HISTORY UPTO ITS DEVELOPMENT IN THI S CYBER 15 ERA, STEP BY STEP, IN ORDER TO UNDERSTAND THIS SUBJ ECT THREADBARE. 8. THE PROVISION RELATING TO CASH CREDIT WAS BROUGH T ON THE STATUTE BOOK FOR THE FIRST TIME IN THE IT ACT, 1961, BY ACT NO. 43 OF 1961, AS SECTION 68. THERE WAS NO SUCH PROVISION CORRESPONDING TO THE ABOVE IN THE IT ACT, 1922. IT WOULD BE PERTINENT TO MENTION THAT SECTION . 6.8 IS A NEW SECTION, WHICH IS A CULMINATION OF A SERIE S OF JUDICIAL PRONOUNCEMENTS UNDER THE PROVISIONS OF THE OLD ACT OF 1922, ON THE ISSUES RELATING TO CASH CREDIT. 9. THIS SECTION CAN BE COMPREHENDED IN A BETTER WAY BY DIVIDING IT INTO THE FOLLOWING INGREDIENTS (PARTS) : (A) WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE; (B) MAINTAINED FOR ANY PREVIOUS YEAR; (C) AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT IT S NATURE AND SOURCE; OR (D) THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE AO, SATISFACTORY; THEN (E) THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TA X, AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR , IN RELATION TO WHICH IT IS SO FOUND TO HAVE BEEN CREDI TED. 16 10. THUS, IT IS CLEAR FROM THE ABOVE THAT THE INITI AL CATCHWORDS OF THIS SECTION ARE : (A) WHERE ANY SUM IS FOUND CREDITED; (B) IN THE BOOKS OF THE ACCOUNT OF THE ASSESSEE. 11. SECTION 68 COMES INTO PLAY IMMEDIATELY WHEN AN ENTRY RELATING TO A SUM IS FOUND TO HAVE BEEN CREDI TED IN THE BOOKS KEPT BY THE ASSESSEE. MEANING THEREBY, THAT THE CONDITION-PRECEDENT TO APPLY THIS SECTION IS THE EXISTENCE OF BOOKS AND THE RECORDING OF A SUM, AS C ASH CREDIT THEREIN. THEREAFTER, THE SATISFACTION OF THE AO WITH REGARD TO GENUINITY OF THE CASH CREDIT IN QUES TION ARISES. IN CASE, HE DOUBTS THE RELEVANT ENTRY, AFTE R MAKING POSSIBLE ENQUIRY(IES), THE AO IS SATISFIED T HAT THE ENTRIES ARE NOT GENUINE, HE IS VESTED WITH THE POWER TO ADD THE SAID SUM IN THE TOTAL INCOME OF THE ASSE SSEE REPRESENTED BY SUCH CASH CREDIT ENTRIES, AS THE INC OME OF THE ASSESSEE FROM OTHER SOURCES. THUS, THE SATISFACTION OF THE AO IS THE BASIS OF INVOCATION O F HIS POWERS UNDER SECTION 68. HOWEVER, SUCH SATISFACTION MUST NOT BE ILLUSORY AND IMAGINATIVE BUT MUST BE BA SED ON VALID AND LEGITIMATE REASON(S). THE AO IS REQUIR ED TO MAKE A PROPER ENQUIRY OF ALL MATERIALS, WHICH ARE PLACED BEFORE HIM OR OVER WHICH HE HAS A COMMAND. THUS, THE INQUIRY ENVISAGED UNDER SECTION. 68 IS AN ENQUIRY, WHICH IS REASONABLE AND JUST. THIS IS A QU ASI- 17 JUDICIAL ENQUIRY AND NOT AN ARBITRARY ONE. THIS ENQ UIRY SHOULD NOT BE BASED ON TERROREM BUT SHOULD BE BASED ON REASONS. THE ENQUIRY MUST BE BASED ON LOGIC AND NOT ON MAGIC. IN A NUTSHELL, THE ENQUIRY SHOULD BE OBJECTI VE AND NOT A SUBJECTIVE ONE. 12. REGARDING THE BOOKS OF THE ACCOUNT, MUCH' HAS B EEN SAID BY VARIOUS AUTHORITIES, FORUMS AND THE COURTS. BUT, THE 'BOOKS', AS ORDINARILY UNDERSTOOD TO MEAN IS A COLLECTION OF SHEETS OF PAPERS OR OTHER, MATERIAL, WHICH MAY BE BLANK, WRITTEN OR PRINTED, FASTENED OR BOUND TOGETHER AS TO FORM A MATERIAL WHOLE. THEREFORE, LO OSE SHEETS OR SCRAPS OF PAPERS CANNOT BE TERMED AS 'BOO K' BECAUSE THEY CAN EASILY BE DETACHED AND REPLACED. SECTION. 34 OF THE EVIDENCE ACT, 1872, PROVIDES THA T ENTRIES IN A BOOK OF ACCOUNT-, WHICH IS REGULARLY K EPT AND MAINTAINED IN THE ORDINARY COURSE OF BUSINESS, ARE RELEVANT, WHENEVER THEY REFER TO A MATTER INTO WHIC H THE COURT HAS TO ENQUIRE, BUT SUCH STATEMENTS SHALL NOT BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY UNLESS ESTABLISHED AS PER LAW. 13. IT IS A, WELL-SETTLED PRINCIPLE OF LAW THAT WHE N A PERSON (LITIGANT) CLAIMS A FACT TO BE TRUE, THIS IS HE WHO HAS TO PROVE THAT FACT. IN OTHER WORDS, WHEN A PERS ON WANTS THE COURT TO BELIEVE THAT A FACT IS TRUE, A PRELIMINARY ONUS IS CAST UPON HIM TO PRIMA FACIE PR OVE 18 THAT FACT. THIS ONUS IS SAID TO HAVE BEEN DISCHARGE D IN CASE HE (THE ASSESSEE) ESTABLISHES HIS CLAIM PRIMA FACIE. THEREAFTER, THE ONUS MAY OR MAY NOT SHIFT ON THE OT HER PARTY DEPENDING UPON VARIOUS FACTORS, WHICH WILL BE DISCUSSED IN LATTER PARAS. IT FOLLOWS FROM THE ABOV E, AS A NATURAL COROLLARY, THAT EVEN CORRECT AND AUTHENTIC ENTRY IN THE BOOKS OF ACCOUNTS CANNOT WITHOUT INDEPENDENT EVIDENCE OF ITS TRUSTWORTHINESS CAN BE, IPSO FACTO, ACCEPTED AS CORRECT. 14. THEREFORE, A PASS BOOK OF A BANK CANNOT BE TREA TED AS A BOOK OF ACCOUNT OF THE ASSESSEE BECAUSE THIS I S PROVIDED BY THE BANKER, WHICH IS GIVEN TO ITS CUSTO MER AND IS ONLY A COPY OF THE CUSTOMER'S ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK. THE BANK DOES NOT ACT AS AN AGENT OF THE CUSTOMER NOR CAN IT BE SAID THAT THE B ANKER MAINTAINS THE PASS BOOK UNDER THE INSTRUCTIONS OF T HE CUSTOMER (THE ASSESSEE). THEREFORE, A CASH CREDIT S HOWN IN ASSESSEE'S PASS BOOK RELEVANT TO A PARTICULAR PR EVIOUS YEAR, BUT NOT REPRESENTED IN THE CASH BOOK MAINTAIN ED BY THE ASSESSEE, DOES NOT ATTRACT THE PROVISIONS OF SECTION 68. HOWEVER, IT MAY BE A SUBJECT-MATTER OF SECTION 69, WHICH PERTAINS TO UNEXPLAINED INVESTMEN T. 15. LIKEWISE, THE BOOKS OF A FIRM CANNOT BE SAID TO BE THE BOOKS OF THE PARTNER OF THE FIRM. IN CASE OF A FIRM, IF CASH CREDITS ARE FOUND IN THE PARTNERS ACCOUNT, IN THE 19 BOOKS OF A FIRM AND IF NO EVIDENCE OR MATERIAL IS PRODUCED TO INDICATE THAT THEY ARE THE PROFITS OF T HE FIRM, THEN, SUCH SUM CANNOT BE ASSESSED IN THE HAND S OF THE FIRM BUT SHALL BE ASSESSED IN THE HANDS OF INDI VIDUAL PARTNERS OF THE SAID FIRM. 16. THE SECTION. 68 IS A CHARGING SECTION AND IT AP PLIES WHEN THE ASSESSEE'S EXPLANATION WITH REGARD TO CASH CREDIT IS REJECTED AS BEING UNSATISFACTORY AND ALSO WHERE THE ASSESSEE DOES NOT TENDER ANY EXPLANATION IN THA T RESPECT. THE AO HAS TO STATE AS TO HOW HE HAS FORME D HIS OPINION THAT THE EXPLANATION IS UNSATISFACTORY. 17. AS HAS BEEN STATED IN THE BEGINNING THAT SECTIO N 68 HAS GAINED GREAT IMPORTANCE OVER THE YEARS, THE REASON(S) FOR THE SAME ARE THAT SOME UNSCRUPULOUS ASSESSEE(S) USE THIS METHOD, I.E., OF CASH CREDIT, AS A DEVICE TO CHANNELISE BLACK MONEY INTO WHITE MONEY. THE GOVERNMENT NEEDS FUNDS FOR VARIOUS PURPOSES LIKE MAINTENANCE OF LAW AND ORDER, DEFENCE, SOCIAL/HEALT H SERVICES, ETC. AND IT RAISES FUNDS FROM VARIOUS SOU RCES INCLUDING TAXATION. JUSTICE HOLMES OF U.S. SUPREME COURT HAS LONG AGO RIGHTLY SAID THAT TAX IS THE PRI CE, WHICH WE PAY FOR A CIVILISED SOCIETY. IT IS THE 'CU PIDITY OF THE TAX PAYER AND THE STUPIDITY OF THE TAX COLLECTO R', WHICH RESULTS IN EITHER THE LOSS OF TAXES OR HARASS MENT OF THE TAXPAYER. BUT, ALL THE CASH CREDITS CANNOT B E 20 CHRISTENED AS DUBIOUS BECAUSE THE ASSESSEE(S) HAVE TO TAKE DEPOSITS IN THE REGULAR COURSE OF THEIR BUSINE SS(ES) AND SUCH CASH CREDITS CAN DEFINITELY BE GENUINE ONE . THEREFORE, WHEN THIS METHOD IS (MIS)USED, IT BECOME S THE DUTY OF THE LEGISLATURE TO NIP THESE TYPES OF ACTIVITIES BY ENACTING A PROVISION OF LAW. THIS PRO VISION WAS BROUGHT ON THE STATUTE IN THE FORM OF SECTION 6 8. BY THIS PROVISION, A THIN LINE HAS BEEN DRAWN BETWEEN THE GENUINE AND NON-GENUINE TRANSACTION. OVER THE YEARS VARIOUS COURTS HAVE DRAWN THEIR RECEPTIVE 'LINES' I N THE GIVEN FACTS OF THEIR RESPECTIVE CASES. BUT, IT WOUL D NOT BE OUT OF PLACE TO MENTION THAT THERE CANNOT BE STRAIGHT-JACKET FORMULA, WHICH CAN FIT INTO THE FAC TS OF A GIVEN CASE AND WHEREBY IT CAN BE DECIDED WHETHER A CREDIT IS GENUINE OR NOT. IT DEPENDS ON THE FACTS A ND CIRCUMSTANCES OF A GIVEN CASE AND THE COURT(S) DEAL ING WITH THE SAME HAS TO FIND OUT THE TRUE COLOUR OF TH E IMPUGNED TRANSACTION. 18. THE VARIOUS COURTS HAVE GIVEN THEIR VERDICTS WI TH REGARD TO THE GENUINITY OR INGENUINITY OF THE CASH CREDITS INVOLVED IN THE CASES THEY WERE DEALING WIT H IN THEIR OWN WAY. THE GIST OF MOST OF SUCH DECISIONS I S THAT THE ONUS TO ESTABLISH THE IDENTITY AND THE CREDITWORTHINESS OF THE CREDITOR(S) AND THE GENUINI TY OF THE TRANSACTION(S) OF A CASH CREDIT IN QUESTION, IS CAST UPON THE ASSESSEE. THE CASE OF CIT V. PRECISION FINANCE 21 (P) LTD. , IN WHICH IT HAS BEEN HELD THAT BY NOW IT IS A TRITE LAW THAT THE ONUS TO PROVE THE ABOVE THREE INGREDIENTS IS CAST UPON THE ASSESSEE AND AGAIN THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SHANKAR INDUSTRIES V. WHICH IS A LEADING DECISION O N THIS SUBJECT AND INVARIABLY RELIED BY THE DEPARTMENT ALSO REQUIRES T HE ASSESSEE TO PROVE THE ABOVE THREE INGREDIENTS. 19. THE CASE OF ROSHAN DI HATTI V. CIT IS ALSO OFTE N RELIED BY THE REVENUE TO PLEAD THAT IT IS THE ASSES SEE WHO WANTS THE DEPARTMENT TO ACCEPT A CLAIM WITH REGARD THE GENUINITY OF A CASH CREDIT, HAS TO PROVE THE SAME IN ALL CONDITIONS. BUT AGAIN, THIS DECISION IS MISREAD IN THE SENSE AS IF THE HON'BLE APEX COURT H AS HELD IN THIS CASE THAT THE ONUS TO PROVE THE CREDITWORTHINESS OF THE CREDITOR IS TO BE PROVED TO THE HILT AND THE DEPARTMENT IS NEVER REQUIRED TO PROVE THE INGENUINITY OF SUCH CASH CREDIT EVEN IN CASE THE AS SESSEE HAS ESTABLISHED IT PRIMA FACIE. 20. THESE DECISIONS ARE MOST OF THE TIMES THAN NOT ARE MISREAD TO MEAN THAT A VERY HARD AND NEVER SHIFTING AND NEVER DISCHARGEABLE ONUS IS CAST UPON THE ASSESSEE TO PROVE THEIR CASH CREDITS. IT HAS BEEN PLEADED BY TH E DEPARTMENT, IN CASES WHERE THE DEPOSIT IS THROUGH ACCOUNT PAYEE CHEQUE AND THE PARTICULARS OF THE 22 CREDITOR ARE FURNISHED EVEN THEN THE IMPUGNED CREDI T DOES NOT STAND PROVED. FOR THAT MATTER, RELIANCE IS PLACED ON THE DECISION OF HON'BLE CALCUTTA HIGH COU RT IN THE CASE OF PRECESSION FINANCE (P) LTD. (SUPRA), WH EREIN IT HAS BEEN HELD THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON-GENU INE TRANSACTION AS GENUINE. MANY A TIMES, THIS LIMITED RATIO OF THE ABOVE DECISION IS APPLIED TO REBUT THE ARGUM ENT OF THE ASSESSEE THAT THE DEPOSIT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. BUT, THEY LOOSE SIGHT OF FACT THAT THE ABOVE DECISION WAS RENDERED UNDER ENTIRELY DISTINGUISHABLE FACTS. IN THE ABOVE CASE, THE IDENTITY OF THE CASH CREDITORS WAS NOT AT ALL ESTAB LISHED. UNFORTUNATELY, THE RATIO OF VARIOUS DECISIONS IS US ED TO SUIT THEIR REQUIREMENTS IN PIECEMEAL. IT IS WELL-SE TTLED LAW TO APPLY A DECISION ON A GIVEN FACT OF A PARTIC ULAR CASE; IT HAS TO BE APPLIED IN ITS ENTIRETY AND WITH OUT READING IT OUT OF CONTEXT. LIKEWISE, THE DECISION O F HON'BLE SUPREME COURT IN THE CASE OF ROSHAN DI HATT I (SUPRA) WHERE IT HAS BEEN HELD AS UNDER : 'THE LAW IS WELL-SETTLED THAT THE ONUS OF PROVING T HE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVE D BY AN ASSESSEE IS ON HIM. IF HE DISPUTES THE LIABIL ITY FOR TAX, IT IS FOR HIM TO SHOW EITHER THAT THE RECEIPT WAS NOT INCOME OR THAT IF IT WAS, IT WAS EXEMPT FROM TAXATION UNDER THE PROVISIONS OF THE ACT. IN THE AB SENCE 23 OF SUCH PROOF, THE REVENUE IS ENTITLED TO TREAT IT AS TAXABLE INCOME. TO PUT IT DIFFERENTLY, WHERE THE NA TURE AND SOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OF OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN TO THE REVENUE TO HOLD THA T IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LI ES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE.' 21. THE HON'BLE SUPREME COURT HAS NOT GIVEN A VERDI CT THAT THE BURDEN WHICH IS INITIALLY CAST ON THE ASSE SSEE TO PRIMA FACIE ESTABLISH THE RELEVANT CASH CREDIT BY ESTABLISHING THE IDENTITY, THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINITY OF THE TRANSACTION NEVER SHIFTS ON THE DEPARTMENT. THE HON'BLE APEX COURT IN THE ABOVE DECISION HAS HELD THAT IN CASE THE ABOVE THRE E REQUIREMENTS ARE NOT ESTABLISHED BY THE ASSESSEE, I N THAT CASE NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. OTHERWISE ALSO, THE FACTS OF THAT CASE ARE VERY PEC ULIAR. 22. THE VARIOUS OTHER DECISIONS SHALL BE DISCUSSED HEREINAFTER BUT BEFORE THAT IT CAN BE SAFELY STATED THAT THE DECISIONS OF THE COURTS RENDERED IN THE CONTEXT OF SECTION 68 ARE ONLY GUIDELINES, WHICH CAN BE PROPER LY APPLIED TO THE GIVEN FACTS OF A PARTICULAR CASE AND THESE DO HELP TO SOME EXTENT TO ARRIVE AT A JUST DECISION . BUT, 24 NONE OF THE ABOVE DECISIONS CAN COMPLETELY HELP IN DECIDING A PARTICULAR TRANSACTION OF DEPOSIT BECAUS E THE FACTS OF TWO CASES ARE NEVER EXACTLY IDENTICAL. IT IS ONLY THAT COURT WHO IS DEALING WITH THE GIVEN FACTS OF A CASE, WHO HAS TO WINNOW THE CHAFF FROM THE GRAIN AFTER TA KING GUIDANCE FROM THE AVAILABLE PRECEDENTS. 23. MORE OFTEN THAN NOT, THE DECISIONS INCLUDING TH E ABOVE ARE INTERPRETED IN THE SENSE THAT THE ASSESSE E IS DUTY-BOUND TO PROVE THE SOURCE OF THE SOURCE OF THE DEPOSIT. WHEN THE SOURCE OF THE SOURCE IS DEMANDED BY THE COURTS, INVARIABLY, THE COUNSEL APPEARING FOR T HE ASSESSEE EXCLAIMS THAT, CAN A BEGGAR BE A CHOOSER A ND CAN AN ASSESSEE WHO HAS TO TAKE LOAN FROM A CREDITO R CAN ASK FOR THE SOURCE OF HIS AMOUNT WHICH IS BEING GIVEN AS A LOAN. THIS QUERY OF THE COUNSEL SOUNDS SENSIBLE. NO COURT EVER HAS GIVEN A DECISION THAT S OURCE OF THE SOURCE HAS TO BE PROVED BY THE ASSESSEE, IN THAT WAY. BUT SOMETIMES, IN ORDER TO DEMAND PROOF OF CREDITWORTHINESS OF THE CREDITOR, THE INTENSITY OF THE REQUIRED PROOF IS STRETCHED TOO FAR TO MEAN THAT TH E CREDITWORTHINESS OF THE CREDITOR CAN BE ESTABLISHED ONLY AND ONLY WHEN THE SOURCE OF THE SOURCE IS ALSO PROV ED. WITH DUE RESPECT, IT IS OBSERVED THAT THIS CAN NEVE R BE THE INTENTION OF ANY PIECE OF LEGISLATION NOR OF AN Y PRECEDENT FOR THAT MATTER. WHAT IS REQUIRED IS THE PROOF OF CREDITWORTHINESS OF THE CREDITOR WHICH CAN BE DO NE 25 BY VARIOUS OTHER METHODS AND NOT DIRECTLY BY DEMAND ING THE PROOF OF THE SOURCE OF THE SOURCE DIRECTLY. THI S IS A REALITY OF LIFE THAT NO LOANEE CAN EVER ASK THE LOA NER TO EXPLAIN THE SOURCE OF HIS SOURCE BEFORE HE GIVES A LOAN TO HIM. THEREFORE, TO DEMAND THE PROOF OF THE GENUINITY OF THE SOURCE OF THE SOURCE WILL BE LIKE DEMANDING THE PROOF OF IMPOSSIBLE. 24. LET IT BE MENTIONED THAT A DEPOSIT, THROUGH ACC OUNT PAYEE CHEQUE IS A VERY GOOD PIECE OF EVIDENCE TOWAR DS ESTABLISHING THE GENUINITY OF A TRANSACTION. BUT, I N CASE THE IDENTITY OF THE DEPOSITOR ITSELF IS NOT PROVED ON RECORD, HOW THE CLAIM OF THE ASSESSEE CAN BE ACCEPT ED AS GENUINE. BUT, AT THE SAME TIME, THE ASSESSEE CAN PROVE THE CASH CREDIT ONLY BY PROVING THAT THE PAYM ENT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, WHE N THE IDENTITY OF THE DEPOSITOR IS VERY MUCH ESTABLIS HED OR IS OBVIOUS AND AS SUCH, NOT DOUBTED BY THE DEPARTME NT. IN THAT EVENTUALITY, A PAYMENT HAVING BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE BECOMES SACROSANCT. TH IS IS WHAT EXACTLY HAS BEEN STATED BY THE HON'BLE CALC UTTA HIGH COURT. 25. UNFORTUNATELY, THE DECISIONS ARE READ IN A HURR Y AND IN ISOLATION BECAUSE WE ARE LIVING IN A FAST MOVING SOCIETY. ONLY THE HEAD NOTES OF A DECISION WHICH AR E USUALLY DRAFTED BY PUBLISHERS, ETC., ACCORDING TO T HEIR 26 UNDERSTANDING OF THE MATTER, ARE PERUSED BY CONCERN ED PERSONS, WHICH MANY A TIMES CARRY WRONG MEANING OF A DECISION. THE DECISION HAS TO BE READ IN ITS ENTIRE TY TO ARRIVE AT A CORRECT RATIO DESCENDAI. 26. THE DECISION IN THE PRECESION (P) LTD. (SUPRA) IS ALWAYS RELIED TO DENY THE CLAIM OF THE ASSESSEE THA T THE PAYMENT THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN HELD AS NOT A SACROSANCT AND IT CANNOT ESTABLISH THE TRANSACTION AS GENUINE. 27. WITH DUE RESPECT, IT IS STATED THAT THIS IS NOT THE GIST OF THE ABOVE DECISION. THE DECISION HAS TO BE READ IN ITS ENTIRETY, ALONG WITH THE FACTS OF THE GIVEN CASE. 28. IT IS IN THE BACKGROUND OF THE ABOVE FACTS, IT WAS HELD BY THE HON'BLE CALCUTTA HIGH COURT AS ABOVE. 29. THIS DECISION IS VERY MUCH IN THE LINE OF VARIO US OTHER DECISIONS ON THE SUBJECT AND DOES NOT GIVE AN Y DIFFERENT FINDING FROM THE OTHERS. 30. FOR A CASH CREDIT, TWO PARTIES ARE REQUIRED. TH E ONE IS THE ASSESSEE AND THE OTHER IS THE CASH CREDITOR. NO ONE CAN DEPOSIT HIS OWN MONEY WITH HIMSELF. IN ORDE R TO GET BENEFIT OF SECTION 68 OF THE ACT, ANOTHER PERSO N SHOULD HAVE DEPOSITED A SUM OF MONEY WITH THE ASSESSEE. THIS 'ANOTHER PERSON' CANNOT BE A FICTITI OUS PERSON BUT HE SHOULD BE A REAL PERSON, WHO CAN BE A LSO 27 A LEGAL JURISTIC PERSON, WHICH ARE PERMITTED UNDER THE IT ACT. THE OTHER PERSON SHOULD HAVE DEPOSITED HIS 'OWN MONEY' AND NOT THE MONEY OF THE ASSESSEE. THEREFORE , A MAXIM IS CREATED THAT IF THE REAL PERSON DEPOSITS H IS OWN MONEY WITH THE ASSESSEE, THE DEPOSIT IS GENUINE AND NOTHING ELSE. IN A SENSE, ALL THE THREE INGREDI ENTS WHICH HAVE BEEN OVERALL ACCEPTED GENERALLY, I.E., T HE IDENTITY, THE CREDITWORTHINESS AND THE GENUINITY AR E DIFFERENT PARTS OF ONLY ONE INGREDIENT, I.E., THE GENUINITY OF A CASH CREDIT. IF THE MONEY IS DEPOSIT ED BY THE SELF IN THE NAME OF OTHERS, IT CANNOT BE SAID T O BE A CASH CREDIT AT ALL. IF THE MONEY IS STATED TO BE DE POSITED IN THE NAME OF A PERSON, WHO DOES NOT EXIST AT ALL, IT CANNOT BE A CASH CREDIT. IF NO MONEY IS DEPOSITED B UT ONLY ENTRY IS PASSED IN THE BOOKS OF THE ACCOUNT, I T IS NOT A CASH CREDIT AT ALL. THEREFORE, WHAT IS NECESS ARY TO ESTABLISH TO PROVE A CASH CREDIT UNDER SECTION 68 O F THE ACT IS THAT ANY OTHER PERSON OTHER THAN THE ASSESSE E MUST HAVE GIVEN OR DEPOSITED MONEY(S) WORTH WITH ASSESSEE OUT OF HIS OWN MONEY. 31. IN THE LIGHT OF ABOVE DISCUSSION, IT CAN EASILY BE STATED THAT A PRUDENT MAN CAN QUICKLY FIND OUT FROM THE GIVEN FACTS OF THE CASE AS TO WHETHER THE CASH CRED IT IN QUESTION IS GENUINE OR NOT. 28 32. AS HAS BEEN STATED ABOVE, THE CUPIDITY OF THE T AX PAYER AND THE STUPIDITY OF THE TAX COLLECTOR ARE TH E MAIN SOURCES OF TAX EVASION. TO UNDERSTAND CUPIDITY , THE FOLLOWING STORY WOULD HELP A LOT. THERE WAS A P ERSON IN THE ANCIENT TIMES WHO LIVED IN A HUTMENT OF SHEPHERDS NEARBY A SEA. HE WAS VERY CUPID AND WOULD CHEAT HIS FELLOW BY ONE WAY OR THE OTHER. ALL THE INHABITANTS AT LAST GOT FED UP WITH HIS NEFARIOUS ACTIVITIES. ULTIMATELY, A PANCHAYAT WAS CALLED AND THE PANCHAYAT CONDEMNED HIM TO DEATH. IN THEIR CLAN, TH E MODE OF CONDEMNING IS VERY NAVAL. THE CONDEMNED PERSON WAS STATED (SERVED) DURING THE DAY WITH DRIN K AND DINE AND WAS TIDE (TIED) WITH A TREE NEARBY A SEASHORE COVERING HIS FACE WITH SOME CANVASS CLOTHS . AFTER THE DAWN, THE VILLAGERS WOULD COME IN INEBRIA TED CONDITION AND BEATING THE DRUMS AND SIGNING THE SON GS IN A PROCESSION. THEREAFTER, SOME YOUNG MEN WOULD UNTIE HIS HANDS AND THROW HIM IN THE SEA AFTER TYIN G A HEAVY STONE WITH HIS LEGS. 33. DURING THE DAY TIME, A YOUNG SHEPHERD CAN (CAME ) AROUND ALONG WITH HIS BIG HERD OF SHEEP. HE WAS NOT AWARE OF WHAT WAS HAPPENING WITH THE CONDEMNED MAN. THE YOUNG SHEPHERD ENQUIRED FROM THE CONDEMNED PERSON AS TO WHAT HAS HAPPENED WITH HIM. AFTER INQUIRING SOMETHING FROM THE YOUNG SHEPHERD, THE PRISONER REPLIED THAT THE VILLAGERS WANT TO GIVE HI M A 29 LOT OF MONEY AFTER THE SUNSET, BUT HE IS NOT GREEDY . HE THEREAFTER ENQUIRED FROM THE YOUNG SHEPHERD IN CASE YOU WANT MONEY YOU CAN COME IN MY PLACE. THE YOUNG SHEPHERD WITHOUT THINKING MUCH READILY AGREED TO SW AP. THE PRISONER WENT AWAY WITH THE HERD OF SHEEP AND T HE VILLAGERS THREW THE POOR, YOUNG SHEPHERD AFTER ATTACHING A BIG BOULDER WITH HIS LEGS IN THE DEEP S EA. THE NEXT MORNING, THE NAUGHTY MAN CAME TOWARDS THE VILLAGE PLAYING ON THE FLUTE ALONG WITH THE BIG HER D OF SHEEP. WHEN THE VILLAGERS ENQUIRED FROM HIM HE NARRATED THAT THE GOD OF SEA HAS GIVEN HIM ALL THIS FORTUNE AND HAS ALSO ASKED HIM TO TELL HIS FELLOW VILLAGERS THAT HE IS WAITING TO GIVE WHATEVER THEY DEMANDED FROM HIM. WITHOUT THINKING EVEN FOR A SPUR OF MOMENT ALL THE YOUNG VILLAGERS RAN TOWARDS SEA A ND JUMPED INTO THE DEEP SEA. OBVIOUSLY, ALL OF THEM WE RE DEAD AND THE CUPID PERSON PLAYED THE TRICK WHICH CO ULD BEFOOL THE WHOLE SOCIETY AND ENDED UP IN GAIN TO HIMSELF AND LOSS TO SOCIETY IN GENERAL. 34. THIS IS HOW AH UNSCRUPULOUS TAXPAYER CAN PLAY T RICKS AS WERE PLAYED BY THE ABOVE NAUGHTY MAN. 35. NOW, THE STUPIDITY OF A TAX COLLECTOR CAN BE EXPLAINED BY THE FOLLOWING LITTLE SHORT STORY. 36. IN THE CAMPUS OF UNIVERSITY OF PARIS, THE CAPIT AL OF FRANCE, MR. T WAS GIVING A LECTURE TO THE STUDENTS OF 30 PHILOSOPHY. MR. X WAS THE HEAD OF THE DEPARTMENT OF PHILOSOPHY. ALL OF SUDDEN, MR. X POSED A QUESTION, 'CAN YOU TELL AS TO WHO IS THE GREATEST MAN IN THIS WORL D ?' THE STUDENTS NAMED SOMEONE OR THE OTHER ACCORDING T O AS THEY THOUGHT OF THEM. BUT, MR. X REPLIED QUICKLY THAT NONE OF THEM WAS CORRECT BECAUSE 'MR. X' IS THAT MA N. WHEN THE STUDENTS EXCLAIMED! HE STARTED PROVING THI S FACT THEN AND THERE. 37. MR. X INVITED THE ATTENTION OF THE STUDENTS AT THE GLOBE OF THE UNIVERSE WHICH WAS PLACED IN THE CLASS ROOM. HE SAID (ASKED) IN THIS MAP OF THE WORLD, WHI CH COUNTRY WAS THE BEST. THE STUDENTS REPLIED, NATURAL LY, THE FRANCE, BECAUSE THEY ALL BELONGED TO THAT COUNT RY. MR. X TOLD THEM FORGET ABOUT ALL OTHER PARTS OF THE WORLD AND TELL WHAT CITY IS THE BEST IN FRANCE. ALL REPLIED IN ONE VOICE THAT IT WAS PARIS. THEREAFTER, HE ASKED THEM TO TELL THE BEST PLACE IN PARIS. THE PLA CE WHERE A PERSON RESIDES MOST OF THE TIME AND HAS CHO SEN HIMSELF TO LIVE THERE WOULD NATURALLY LIKE THE BEST . THEREFORE, ALL OF THEM YELLED, IT WAS THE CAMPUS. THEREAFTER, HE INQUIRED ABOUT THE DEPARTMENT, WHICH WAS BEST IN THE WHOLE CAMPUS. FOR THE SAME REASON, ALL OF THEM SCREAMED TO TELL, THE DEPARTMENT OF PHILOSOPHY. THEREAFTER, THE LAST QUESTION WAS WHO I S THE HEAD OF THE DEPARTMENT. MR. X WAS THE HEAD OF THE 31 DEPARTMENT AND LIKE THIS HE PROVED HIMSELF TO BE. T HE BEST IN THE WORLD. 38. THIS IS A VERY SHORT STORY BUT CONTAINS VOLUMES OF KNOWLEDGE, WHICH IS BEING IMPARTED THROUGH IT. IF T HE TAXMAN BEHAVES IN THE ABOVE MANNER, HE CAN PROVE WHATEVER HE WANTS TO PROVE AND IT WOULD ON THE VERY FACE OF IT WOULD SEEM AS IF IT IS THE BEST SOLUTION . BUT, THIS TYPE OF REASONING IS NOT REQUIRED WHILE DEALIN G WITH CERTAIN IMPORTANT QUESTIONS OF FACTS. 39. A COMBINED GIST OF ABOVE STORY IS THAT THERE CA NNOT BE ANY FIXED RULE OR A STRAIGHT-JACKET OR A CHEMICA L FORMULA, WHICH CAN BE SAID TO BE A SURE-SHOT TEST T O JUDGE THE GENUINITY OF A CASH CREDIT. THIS STORY TE LLS THAT AN UNSCRUPULOUS OR DISHONEST ASSESSEE WHO HAS NO RESPECT FOR LAW CAN PLAY ANY TRICKS TO EVADE PAYMEN T OF TAX AND CAN RELATE CONCOCTED STORIES WHICH SEEMS TO BE PLAUSIBLE AND REASONABLE ON THE FACE OF ITS. THEREF ORE, IT IS FOR THE TAXMAN TO DISCERN THE TRUTH IN THE GI VEN FACTS AND THE CIRCUMSTANCES OF THAT CASE. AT THE SA ME TIME, THE TAXMAN HAS TO ACT AS AN ORDINARY PRUDENT MAN INSTEAD OF POSING AS A SUPER HUMAN BEING AND TRYING TO PROVE HIMSELF AS A NUMERO UNO. HE HAS TO STRIKE A BALANCE WHILE CONDUCTING HIMSELF WITH THE TAXPAYERS , BY REMEMBERING THE TAXPAYER IS A RESPECTABLE CITIZEN A ND HE CONTRIBUTES A LOT TOWARDS THE COFFERS OF THE 32 GOVERNMENT, WHO IN TURN UTILISE THIS FUND FOR THE BENEFIT AND THE WELFARE OF THE PEOPLE AT LARGE. THEREFORE, THE TASK OF A TAXMAN IS VERY IMPORTANT BECAUSE HE HAS TO WALK ON AN EDGE OF A RAZOR AND AT THE SAME TIME HE HAS TO MAINTAIN A BALANCE BETWEEN WHAT IS RIGHT AND WHAT IS WRONG. HE HAS TO FOLLOW THE LA WS OF THE LAND BEFORE HE CAN PREACH THE TAXPAYER TO ABIDE BY THE LAW. THE TAXMAN HAS TO CONDUCT HIMSELF IN A WAY WHICH IS FRIENDLY TO THE TAXPAYER BY SHOWING THAT H E IS NOT AN ENEMY BUT A FRIEND. THIS FRIENDLY MANNER, IF ADOPTED BY THE TAXMAN, SHOULD ALSO BE SHOWN TO BE S O OVERTLY AS WELL AS COVERTLY. ALL THE PRECEDENTS SIM PLY GUIDE THE DECISION-MAKER IN A GIVEN FACTS OF A PART ICULAR CASE AND IT IS HE WHO HAS TO APPLY HIS JUDICIAL MIN D WITH ALL THE PRUDENCE AT HIS COMMAND TO DECIDE THAT CASE . MORE OFTEN THAN NOT THE RATIO OF A DECISION IS FOLL OWED ONLY BY ADOPTING ITS LETTERS. THE DECISION HAS TO B E FOLLOWED BOTH IN ITS LETTER AS WELL AS THE SPIRIT. THE SPIRIT OF A DECISION IS ITS SOUL. YES, TO FOLLOW TH E LETTER ONLY IS NOT THAT HARMFUL, BUT THE UNFORTUNATE PART OF IT IS THAT THE LETTERS ARE TORN OUT OF CONTEXT FROM A GIVEN JUDGMENT AND THE SAME ARE PUT WHERE THEY DO NOT FIT . IN THIS MELEE, THE REAL MEANING OF A DECISION IS LO ST. THE MOST USEFUL PRECEDENTS ARE USUALLY LOST WHEN ONLY F ROM AN EXCERPT OF A DECISION, ENTIRELY DIFFERENT MEANIN GS ARE DRAWN BY DIFFERENT PEOPLE. IN THIS REGARD, THE 33 EXAMPLES OF THE FAMOUS DECISIONS IN THE CASES OF CI T V. STELLER INVESTMENT LTD. AND CIT V. SOPHIA FINANCE L TD. (1994) 205 ITR 98 (DEL)(FB), THE RATIOS OF WHICH WE RE CONSIDERED FOR A LONG TIME TO BE DIVERGENT, BUT WHE N THESE WERE METICULOUSLY EXAMINED, IT WAS FOUND THAT THE RATIOS WERE IDENTICAL IN BOTH THESE CASES. THIS CONFUSION AROSE BECAUSE OF WRONG INFERENCES HAVING BEEN DRAWN FROM THE HEADNOTES OF THESE CASES. IN TH E CASE OF SOPHIA FINANCE (SUPRA), THE FULL BENCH OF H ON'BLE DELHI HIGH COURT HAD GIVEN THE FINDING THAT THE EXISTENCE OF SHAREHOLDERS IS MUST AND TO THAT EXTEN T ENQUIRY COULD BE MADE IN THE BEGINNING. IN CASE, TH E SHAREHOLDERS DO NOT FOUND TO EXIST AT ALL, THAT SOM E CAN BE ADDED UNDER SECTION 68 OF THE ACT. IN THE CASE O F STELLAR INVESTMENT (SUPRA), THE FACTS REGARDING THE EXISTENCE OF THE SHAREHOLDERS STOOD EXPLAINED IN TH E VERY BEGINNING AND THE HON'BLE JUDGES CONSTITUTING THE DOUBLE BENCH GAVE A FINDING ONLY THEREAFTER. THEREF ORE, THE DECISIONS OF BOTH THE ABOVE CASES ARE EXACTLY IDENTICAL BUT THE HEADNOTES OF BOTH THESE DECISIONS CREATED HAVOC FOR QUITE LONG TIME. 40. WHEN THE HON'BLE JUDGES OF THE PATNA HIGH COURT IN THE CASE OF ADDL. CIT V. HANUMAN AGARWAL HELD THAT IT CAN NEVER BE WITHIN THE EXCLUSIVE KNOWLEDGE OF DEBT OR TO KNOW THE SOURCES OF INCOME OF THE CREDITOR, ONCE HE IS SUPPLIED THE CREDITS THAT HE WANTS, HE IS SATISF IED. 34 ONCE, HE HAS FURNISHED THE TRUE IDENTITY, THE CORRE CT ADDRESS AND THE CORRECT GIR NUMBER OF THE CREDITOR, HE FULFILS HIS OBLIGATIONS UNDER THE ACT. THE ASSESSEE IS NOT SUPPOSED TO KNOW THE CAPACITY OF THE MONEY-LENDER O R THE CASH CREDITOR. THIS FACT IS WITHIN THE EXCLUSIV E DOMAIN OF THE CREDITOR. IT IS FOR THAT SPECIFIC PUR POSE THAT SECTION. 131 OF THE ACT HAS BEEN INTRODUCED SO THAT IN CASE OF ANY SUSPICION, THE ITO OR THE AUTHORITIE S CONCERN MAY EXERCISE THE POWER OF A CIVIL COURT UND ER THAT PROVISION AND CALL UPON THE CREDITOR CONCERNED TO PROVE HIS CAPACITY TO PAY AND THE GENUINENESS OF TH E TRANSACTION. ONCE, THE ITO IS SATISFIED THAT THE CR EDITOR IS NOT TELLING THE TRUTH, IT HAS BEEN LEFT OPEN TO THE ASSESSEE TO DISCHARGE HIS SUBSEQUENT ONUS OF PROVIN G THE GENUINENESS OF THE TRANSACTION AND THE CAPACITY OF THE CREDITOR TO PAY, BY CROSS-EXAMINING HIM. 41. HON'BLE JUDGES OF THE CALCUTTA HIGH COURT IN TH E CASE OF C. KANT & CO. V. CIT HAVE HELD THAT IN THE CASE OF CASH CREDIT ENTRY IT IS NECESSARY FOR THE ASSESS EE TO PROVE NOT ONLY THE IDENTITY OF THE CREDITORS BUT AL SO TO PROVE THE CAPACITY OF THE CREDITORS TO ADVANCE THE MONEY AND THE GENUINENESS OF THE TRANSACTION. IF TH IS CASE IS READ IN ITS ENTIRETY IT WOULD BE CLEARLY RE VEALED THAT THE JUDGES DID NOT WANT THE ASSESSEE TO DO AN IMPOSSIBLE ACT. IN THE LIGHT OF THE GIVEN FACTS OF THAT CASE IT WAS HELD THAT IT WAS A QUESTION OF FACT WHE THER 35 THE ONUS TO PROVE THE CAPACITY HAS BEEN DISCHARGED IN A PARTICULAR CASE OR NOT. IN THAT CASE, THE ASSESSEE WAS NOT ABLE TO DISCHARGE EVEN THE PRELIMINARY ONUS CAS T ON HIM, IN THIS REGARD. BUT, IF ONE GOES BY THE HEADNO TE OR A LIMITED FINDING OF THE ABOVE CALCUTTA CASE, HE WO ULD BE MISLED. THEREFORE, BOTH THE DECISIONS HAVE ALMOS T THE IDENTICAL RATIO BUT THE MISREADING OF THE TWO CREATES CONFUSION. THUS, IT IS ALWAYS A FACTUAL MAT RIX OF A GIVEN CASE, WHICH HAS TO DECIDE THE FATE OF GIVEN CASH CREDIT. THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PERSON WHO CLAIMS IT TO BE SO, IT WA S MANDATED BY THE HON'BLE APEX GOURT AS BACK AS IN TH E YEAR 1973 BY DECIDING A CASE OF CIT V. DAULATRAM RAWATMULL . THE QUERY OF THE LEGAL PRACTITIONER THA T IS IT POSSIBLE TO ASK THE PROOF OF THE CAPACITY OF THE LENDER IS VERY MUCH REAL AND APPARENT AND THE ANSWER TO IT IS ONLY AND ONLY BIG 'NO'. ANY OR EVERY DECISION WHICH ORDAINS THE PROOF OF THE CAPACITY OF THE DEPOSITOR, LENDER OR THE CREDITOR, CAN NEVER MEAN TO ASK FOR T HEIR DIRECT CAPACITY TO ADVANCE, AS HAS BEEN SOMETIME TA KEN TO MEAN. 42. IN THE LIGHT OF ALL THESE OBSERVATIONS, LET IT BE STATED THAT THERE MAY BE CASES WHERE ALL THE ABOVESTATED INGREDIENTS OF SECTION 68 AS ESTABLISHE D BY THE PLETHORA OF JUDICIAL PRONOUNCEMENTS, ARE PROVED BY THE ASSESSEE, NEVERTHELESS, THE CREDIT MAY NOT BE 36 GENUINE. FOR EXAMPLE, IF THE ASSESSEE HAS CREATED A GENUINE FIRM WITH DIFFERENT IDENTITY WITH THE HELP OF CERTAIN STRANGERS, BUT THIS FACT WAS OBSCURED FROM THE DEPARTMENT OR IT REMAINED OVERLOOKED ANYHOW, AND TH E ASSESSEE HAS PROVED THAT HE RECEIVED DEPOSIT/CASH CREDIT THROUGH ACCOUNT PAYEE CHEQUE, THAT OTHER FIR M OR ASSESSEE IS ASSESSED TO TAX AND ALSO HAD PAYING CAP ACITY AND TRANSACTION IS ALSO ESTABLISHED TO BE GENUINE, CAN IT BE A VALID CASH CREDIT. THE ANSWER IS 'NO'. WHAT FO LLOWS FROM THE ABOVE IS THAT IT IS THE OVERALL COMMONSENS E AND AVERAGE PRUDENCE OF THE TAXMAN, WHO IS DEALING WITH THE FACTS OF A PARTICULAR CASE, WHICH CAN DECI DE THE GENUINITY OF THE TRANSACTION, OF COURSE, WHICH INCL UDES ALL THE ABOVE THREE INGREDIENTS. IN THE SAME MANNER , THERE MAY BE CASES, WHERE THE DEPOSIT WAS NOT THROU GH ACCOUNT PAYEE CHEQUE, NO CONFIRMATION WAS EVEN FILE D, BUT THE ENTRIES ARE FOUND RECORDED BOTH IN THE BOOK S OF THE CREDITOR AND THE ASSESSEE, AND BOTH OF THEM ARE ASSESSED WITH THE SAME AO, WHO IS HAVING COMMAND OVER THE RECORDS OF BOTH OF THEM, HE CAN IMMEDIATEL Y ACCEPT THE CASH CREDIT, AS GENUINE. THERE IS NO NEE D TO EVEN ASK FOR ANY EVIDENCE, IN THIS REGARD, ANY FURT HER, FOR THAT MATTER. THAT IS WHY UNLIMITED POWERS HAVE BEEN GIVEN BY THE PRECINCTS OF THIS SECTION AND OTH ER SECTIONS OF THIS ACT TO ASCERTAIN THE VERACITY OF A FACT. 37 43. IN A NUTSHELL, IT CAN BE STATED THAT THE AO HAS TO FIND OUT AS TO WHETHER THE DEPOSIT/GIFT/CASH CREDIT IS A RESULT OF ANY COLLUSION, IS A RESULT OF ANY DUBIOUS DEVICE EMPLOYED BY THE ASSESSEE, IS A RESULT OF ANY SUBTER FUGE, WHICH IS AIMED AT EVASION OF TAX. THEREFORE, EVEN T HE CASH CREDITS BY NEAR AND DEAR RELATIVES AND THE PAR TNERS OF THE FIRM CAN BE GENUINE. THESE ARE TO BE DOUBTED TO A CERTAIN LIMIT AND THEREAFTER THE DOUBTS SHOULD NO T BE PERENNIAL. 5. ADVERTING TO THE FACTS OF THE CASE IN QUESTION E XCEPT FOR THE FOUR CASH CREDITS MENTIONED HEREIN ABOVE, T HE REMAINING ADDITION HAS TO BE DELETED FROM THE HANDS OF THE ASSESSEE. GROUND NO. 1 OF THIS APPEAL IS PARTLY AL LOWED. 6. BEFORE PARTING, WE MAY STATE THAT THIS ORDER SHA LL BE TREATED AS A PART AND PARCEL OF THE ORIGINAL ORDER DATED 19.9.2011 38 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 28 TH NOVEMBER, 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH NOVEMBER, 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR