Deputy Commissioner of Income Tax (Assessment) Vs. Anil Kumar. (Anil Kumar V. Dy. Cit (Asstt.)). - Court Judgment

Excerpt:
- divorce by mutual consent personal presence of parties exempted power of attorney to dissolve the marriage the special power of attorney in favour of one mr. lal babu tiwari was executed by the petitioner (husband) to appear before the court and testify about the contents of the petition. the petitioner has signed the petition before indian consulate high commission of india in uk under section 3(2) of the diplomatic and consular officers (oaths and fees) act, 1947 under which the documents do not require any further evidence.[para 3] if both the parties, by way of affidavits or through counsel, state that they are married, and are able to produce proof of the marriage and that they have been living separately and have not been able to live together for the prescribed period, then there can be no reason as to why the court should not record its satisfaction as envisaged under section 13-b(2) of hindu marriage act, despite the fact that parties had not appeared in person and pass a decree for divorce.[para 6] where the parties are living far away from the jurisdiction of the court competent to dissolve the marriage, the parties after filing their affidavits can appoint attorneys to act on their behalf. attorney is competent to act on behalf of the principal on the basis of power of attorney executed by the principal. the courts have been allowing attorneys to file the petition, to withdraw the petition, to carry on proceedings in the court on behalf of their principal in all other cases. the attorney can also act in matrimonial cases as per instructions of their principle. the court can take necessary precautions to prevent frauds being perpetuated on it but unless the court smells some kind of fraud being played with it, the court should normally recognize the act of the attorneys. i therefore allow this petition. the order of the trial court insisting on the personal appearance of the parties is set aside.[para 8] - 50,000 ignoring the fact that the assessed failed to prove the genuineness of the loan to the satisfaction of ao and ignoring the decision of allahabad high court in the case of nanak chand laxman das vs .cit [1983]140itr151(all) .the facts relating to this issue are that a sum of rs. however, the ao was not satisfied with this evidence. it is also borne out from his statement as well as from the confirmatory letter filed that it is being assessed for tax by d ward, agra under gir no. in view of the observations of honble supreme court and the honble patna high court, we are of the opinion that the assessed had proved the genuineness of the transaction as well as the creditworthiness of the creditor. however, the ao was not satisfied with this explanationn. the suspicion howsoever strong it may be cannot be the basis of rejection of assessees claim unless it is supported by material on record.orderj. p. bengra, j.m. :there is an appeal by revenue and cross-appeal and cross-objection by assessed against single order of the cit(a) pertaining to asst. yr. 1987-88. since all these matters arise out of a single order, for the sake of convenience these matters are being disposed of by a consolidated order.2. the appeal of the department is barred by limitation for 18 days. however, an application has been given by department for condensation of delay stating that formerly assessed was being assessed by dy. cit, spl range, agra and the same was completed by dy. cit(a), spl. range, subsequently. the jurisdiction over these cases were transferred to the asstt. cit, inv. circle, agra by cit, agra. as the assessment in these cases were completed by the dy. cit, spl. range, agra, the cit(a) sent the batch of appellate orders to dy. cit, spl. range, agra instead of sending the batch to dy. cit, spl. range, agra who is holding the jurisdiction over the asstt. cit, inv. circle i. there was sufficient change within the staff of dy. cit, spl. range, agra. shri a. chatterjee, dy. cit(a) was transferred to delhi and the new dy. cit joined in the month of may. the inspector who was looking after the batch of orders was relieved from the charge. on account of these reasons, the present appeal escaped attention of the dy. cit, spl. range as the same was transferred to dy. cit, range i, agra. there is delay of 18 days which may kindly be condoned. the assessed filed objection against the condensation application. however, at the time of argument, the matter of condensation of delay was not seriously agitated. having heard both the parties, we find that the delay in filing the appeals is fully explained and there is reasonable cause for filing the appeals late by 18 days. thereforee, the delay in filing the appeals is hereby condoned and the appeal is admitted for hearing.3. the grievance of revenue in its appeal is that the cit(a) erred in deleting the addition of rs. 50,000 ignoring the fact that the assessed failed to prove the genuineness of the loan to the satisfaction of ao and ignoring the decision of allahabad high court in the case of nanak chand laxman das vs . cit : [1983]140itr151(all) . the facts relating to this issue are that a sum of rs. 50,000 was shown in the books of accounts of assessed as loan received by cheque no. 804622 dt. 19th february, 1987 drawn on his account in state bank of india by sunil kumar, proprietor of m/s goyal agencies, agra which was credited in assessees saving bank account. the ao called upon the assessed to prove the genuineness of the deposit. in order to prove the genuineness of the loan, the assessed filed a confirmatory letter from the creditor showing source of income from dalal business links carried on since 1982 and he has also mentioned his gir no. 825-d, ito, agra. it was also submitted that in case of doubt, the creditor may be summoned and examined under s. 131. the assessed paid back the amount of loan along with the interest of rs. 625 through a bank draft no. 228067, dt. 18th march, 1987 drawn on union bank of india. however, the ao was not satisfied with this evidence. so, he summoned shri sunil kumar and examined him under s. 131 on 21st november, 1989. in his examination, he found that he is not maintaining any account for his business. thereforee, he could not state his investment therein. he has studied up to 9th class till 1980 and did not take any security and executed no document for advancing the loan. however, he observed that in his bank account in question, there was an opening balance of rs. 1,053 in january, 1987 and then deposit of rs. 486 by cash in january, 1987 and transaction relating to rs. 50,000 in cash in february, 1987. there was withdrawal of rs. 46,000 by cheque in january, 1987. however, for deposit, he could not give source of receipt of money and for withdrawal as to what was done of the withdrawn amount. thus, he held that he did only hawala business and his creditworthiness was doubtful. in view of these observations, he held that genuineness of the loan is not proved. so, he added same in the hands of the assessee. when the matter came up before the cit(a), he deleted this addition observing that the burden which laid upon the assessed to prove the identity of the creditor, the genuineness of the transaction and the capacity of the creditor has been proved and discharged by the assessee. the department is aggrieved. the learned departmental representative relied on the order of the ito and further pointed out from the account of m/s goyal agencies that as on 1st january, 1987, the balance was rs. 1,053. on 30th january, 1987, a sum of rs. 46,620 was deposited in cash. for the source of the deposit of rs. 46,620, there is no explanationn of the creditor though subsequently he had given explanationn in his statement that on 31st january, 1987 he has withdrawn rs. 46,000 by a cheque and after added the savings to his withdrawn amount of rs. 46,000, he made a cash deposit of rs. 50,000 on 19th february, 1987. from there, he has made a deposit of rs. 50,000 after withdrawal from his account. however, the fact remains that the assessed could not give any explanationn about deposit of rs. 46,620 as on 30th january, 1987. thereforee, the ao was right in holding that he has merely a name lender and he has given no amount for deposit as a loan. reliance was placed on the decision of nanak chand laxman das vs. cit (supra) and cit vs . s. c. gupta : [1975]100itr244(all) . it is also pointed out that the creditor in his statement has stated that he has collected money solely. as against this, the learned assessees counsel submitted that the ao has ignored the fact that creditor was running an old bank account even prior to the date of search taken place at the premises of kanhaiya lal on 24th february, 1987. the creditor has not only acknowledged the loan but also his statement before the ao recorded under s. 131, he has confirmed the deposits made with the assessee. the amount given by way of cheque and deposited in the assessees bank account and the same was repeated by the assessed through bank draft no. 228067 on 18th march, 1987 drawn on union bank of india with interest rs. 625.he was assessed to tax in d ward with ito, agra. his gir no. was 825/d. in this way, his identity, source of income, position of adequate balance in his bank account on the date of advancement loan were amply established and proved. the assessed proved the genuineness of the creditor, receipt of loan and its repayment. so the legal and factual burden which lay upon the assessed had been discharged. the ao has not brought any material on record to prove his allegation that the creditor was engaged in the hawala business. a perusal of the statement of the creditor would go to show that as on the date, he had source of commission income from various mills such as manimekalai textile, erode, sriram textile, erode, sardar hosiar mills, tripura, e.s.t. money textile, madurai. there was sufficient balance as on the date when he has withdrawn rs. 50,000 to make the deposit with the assessee. in this way, the cit had rightly deleted the additions made on surmises and conjectures by the ao. in this connection, our attention was invited to the paper book pp. 67 to 77. it is also pointed out that when the creditor is being assessed in d ward, ito, agra and that has been checked by the ao (sic - but) no action has been taken against him. in case the deposit made was not genuine, certainly action would have been taken to add that amount in the hands of creditor. reliance was placed on the decision of cit vs . orissa corporation (p) ltd. : [1986]159itr78(sc) , asstt. cit vs . bahri bros. (p) ltd. : [1985]154itr244(patna) , asstt. cit vs . hanuman agarwal in : [1985]151itr150(patna) and in cit vs . shamsuddin manzoor haque : [1988]172itr696(all) . the learned assessees counsel also distinguished the facts of the case of nanak chand laxman das (supra) with the facts of the present case and also the decision of cit vs. s. c. gupta (supra). we have considered the rival submission and have gone through the material available on record. in this case, the identity of the creditor is not in dispute. the department disposed the genuineness of the transaction and the capacity of the creditor. so far as the capacity of the creditor is concerned, the creditor appeared before the ao. he had given statement about source of income as commission from various firms. beside this, he has also placed a copy of the account showing deposit and withdrawals which is also enumerated in the order of the cit(a). a perusal of the statement with this account would go to show that the creditor has sufficient source to make deposit with the assessee. it is also borne out from his statement as well as from the confirmatory letter filed that it is being assessed for tax by d ward, agra under gir no. 825/d, ito, agra. in case there is any thing about the source of deposit made with the assessee, he could have been caught there itself and action would have been taken against him in his individual case. however, we find that no action has been taken against the creditor. thereforee, from the evidence of record, it is proved that the amount deposited with the assessed was returned back by a bank draft along with the interest. so, the genuineness of the transaction is also proved by the evidence and statement of the creditor. in view of the evidence on record we are of the opinion that the burden which lay upon the assessed stood discharged. now, the burden shifted on the department to show material or evidence on record to disprove the evidence produced by the assessee. we do not find any material on record to make a different view in the matter. in the case of hanuman agarwal (supra), the honble patna high court has observed that where the creditor has given gir no. and have filed the confirmatory letter and also produced evidence to prove the genuineness of the transaction, the burden which lay upon the assessed stands discharged and the onus shifts on the department to prove otherwise. in the case of cit vs. orissa corporation ltd. (supra), the supreme court has observed that where in the case the assessed has given the names and address of the alleged creditors and it was in knowledge of the revenue that they are it assessees and gir no. were also given if the revenue did not examine the source of income of alleged creditors, the assessed could not be held responsible and he cannot do anything more than this. in view of the observations of honble supreme court and the honble patna high court, we are of the opinion that the assessed had proved the genuineness of the transaction as well as the creditworthiness of the creditor. thereforee, the cit(a) has rightly deleted the addition. so far as the decision relied upon by the departmental representative is concerned, we find that the facts of the case of nanak chand laxman das (supra) is different from the facts of the present case. the ratio laid down in a case depends upon the facts and circumstances of a case which cannot be mechanically applied to the facts of other case where the facts are similar. in our view, the facts are distinguishable. we do not find no any substance in the argument of the departmental representative.4. in assessees appeal, the first grievance relates to an addition of rs. 21,000 as income from the sources of the assessee. the assessed had shown receipt of rs. 21,000 as gift from mohan lal aggarwal, r/o 9/56, moti katra, agra by way of account payee crossed cheque on donors s.b. account no. 2217 in canara bank, agra. this deposit was made in february and march, 1987. the ao required the assessed to prove the genuineness of the deposit. it was explained that this sum was received by way of gift from mohan lal aggarwal. in order to prove the genuineness of the gift, the assessed filed confirmatory letter and affidavit from sh. mohan lal acknowledging the gift in which he has also given bank account from where the amount was given to the assessee. it was also shown that he has a regular source of income from preparing account books and from interest. however, the ao was not satisfied with this explanationn. thereforee, he held that the gift is not genuine on the following grounds :(1) the donor could not have purchased the gifted amount standing regular source of income. there was a credit balance of rs. 634 in donors account on 28th july, 1986 and thereafter there was small credits in the account and then on 8th january, 1987, rs. 21,000 was deposited in cash.thus it was concluded that it was only a managed gift and not a genuine one because the donor was not in a position to give his own money and on the date of gift as he had no sufficient funds to give this amount.5. aggrieved by that order, the assessed filed an appeal before the cit(a). the cit(a) confirmed the addition observing as under :'i have considered the facts. i find that the donor admitted to have given the gift. gift-tax assessment stood completed. the donor had a running account in the bank wherefrom after making the deposit he had issued the account payee cheque. it appears that no action has taken in the hands of the donor in respect of the credit at all found explained. however, it is also true that creditworthiness of the creditor has remained unexplained. it is not proved from where he had collected the money to deposit in the books. hence, the addition made by the ao is confirmed.'6. the assessed is aggrieved. the learned assessees counsel submitted that in order to prove genuineness of the gift, assessed had produced evidence to show that the amount was received by account payee cheque. there was sufficient credit balance in donors bank account which was old and was running before the date of search. the donor was identifiable and was assessed to gift-tax. the gift was duly managed (sic) by the donor by his certificate and affidavit and also in his statement recorded by the ao. he has shown definite source of income. the statement was also recorded by the ao confirming giving of amount by way of gift. the evidence relating to it is production by the assessed at pp. 121 to 130 of the paper book. the assessed fully discharged the burden to prove the genuineness of the gift. the ao has not brought any material on record to prove that it was a so-called managed gift, for which onus of proving the same lies upon the department. the decision of nanak chand laxman das (supra) do not apply to the facts of the present case. reliance was placed on the decision of the tribunal in the case of d. c. jain vs . ito , wherein tribunal held that the ito was not justified in rejecting the gift received by the assessed without proving any material on record to show that gift was bogus. reliance was also placed on the decision of cit vs. samsuddin mansoor haque (supra), wherein it is held that gift received by cheque and gift-tax being paid, is genuine. as against the learned departmental representative relied on the order of the cit(a) and also placed reliance on the decision of cit vs. s. c. gupta (supra), cit vs . precision finance (p) ltd. : [1994]208itr465(cal) and pomini (p) ltd. vs . cit : [1986]160itr477(guj) . we have considered the rival submission and have gone through the material available on record. in this case we find that the assessed had shown a gift from sh. mohan lal agarwal. the gift was received by account payee cross cheque drawn on his s.b. account no. 22107 in canara bank, agra. the assessed had filed copy of gift-tax, dt. 29th february, 1988 showing payment of gift. he has filed a confirmatory letter and affidavit. on assessees instance the donor was examined under s. 131. from his statement it is clear that he has confirmed making of gift in favor of assessee. in his statement he has also mentioned that he had regular source of income from preparing account books and from interest. the gifted amount was deposited in the s.b. account. all these evidence on record show that the burden which lay upon the assessed to prove the genuineness of the gift is discharged. now the burden shifts on the department to show material that the gift made was bogus and ingenuine. no material had been brought on record to prove this except raising suspicion that the donor has no permanent source of income. the suspicion howsoever strong it may be cannot be the basis of rejection of assessees claim unless it is supported by material on record. it is worthy to note that the identity of the donor, the genuineness of the gift and the capacity of the donor is proved by the assessee. simply because there is suspicion about the source of income, the evidence cannot be discarded. in our view, we are of the opinion that the evidence provided by the assessed prove the genuineness of the gift and the burden which lay upon the assessed has been discharged. we, thereforee, hold that the gift of rs. 20,000 appearing in the books of the assessed is genuine gift. we set aside the order of the cit(a) on this ground and delete the addition.7. the next grievance in the appeal is that cit erred in sustaining an addition of rs. 15,000 on account of low withdrawals for household expenses. the assessed had shown withdrawal of rs. 6,000 for household expenses. the ao took into consideration the status of family and cost of living and was of the view that rs. 6,000 withdrawal for household expenses is insufficient to meet the kitchen expenses. thereforee, he added a sum of rs. 15,000 on account of low withdrawals taking the household expenses at rs. 21,000. this was confirmed by the cit(a). the assessed counsel submitted that sh. kanhaiya lal, anil kumar, sunil kumar and their children are living jointly. thereforee the withdrawal made by all the persons should be considered together. in this connection, the assessees counsel relied on the withdrawals made in earlier years giving as follows :asst. yr.kanahiyalalsunil kumaranil kumartotal1985-867,3004,8005,00017,0001986-879,0506,4006,40021,8501987-889,3006,2006,40021,900in view of above total lumpsum estimated, in round figures, an ad hoc basis addition of rs. 52,000 made as under is unjustified :sh. kanahiya lalrs. 20,000sh. anil kumarrs. 175,000sh. sunil kumarrs. 17,0008. it is submitted that in case of kanahiya lal additions were made of rs. 20,000. the cit(a) reduced it to rs. 10,000. in the case of sunil kumar, he has confirmed addition of rs. 17,000. it is pointed out that assessed is partner of 50 per cent share in the partnership concern anu petha store where additions were made in the trading result. even if any addition is required to be made for low household expenses, the assessed should be given benefit of telescoping the same. in this connection, reliance was placed on the decision of cit vs . kulvinder kaur & ors. in : [1980]121itr914(delhi) and ananth ram veerasinghaia & co. vs . cit : [1980]123itr457(sc) . as against this, departmental representative relied on the order of the cit(a). we have considered the rival submission and have gone through the material on record. as per the assessees chart, it is clear that additions were sustained in the hands of kanahiya lal to the extent of rs. 10,000 and on the hands of sunil kumar to the extent of rs. 17,000. keeping in view the extent of family of sunil kumar which is much less than the family of anil kumar, we are of the opinion that the household expenses shown at rs. 6,000 is very low. thereforee, the addition of rs. 15,000 towards household expenses was genuine. since we have upheld the addition in the trading account of firm anu petha store where assessed is partner of 50 per cent share this will take care of low household expenses to the extent of assessees share. in view of the decision of honble supreme court and the decision of delhi high court cited above, the benefit of telescoping of addition shall be given to the assessed against the additions sustained in the trading results. in view of this, we direct the ito to give relief to this extent and accordingly compute the low household expenses, if any.9. in view of our discussion, the departmental appeal is hereby dismissed whereas the appeal of the assessed is partly allowed. the learned assessees counsel did not press the cross-objection and hence this is dismissed as withdrawn.

Judgment:
ORDER

J. P. BENGRA, J.M. :

There is an appeal by Revenue and cross-appeal and cross-objection by assessed against single order of the CIT(A) pertaining to asst. yr. 1987-88. Since all these matters arise out of a single order, for the sake of convenience these matters are being disposed of by a consolidated order.

2. The appeal of the Department is barred by limitation for 18 days. However, an application has been given by Department for condensation of delay stating that formerly assessed was being assessed by Dy. CIT, Spl Range, Agra and the same was completed by Dy. CIT(A), Spl. Range, subsequently. The jurisdiction over these cases were transferred to the Asstt. CIT, Inv. Circle, Agra by CIT, Agra. As the assessment in these cases were completed by the Dy. CIT, Spl. Range, Agra, the CIT(A) sent the batch of appellate orders to Dy. CIT, Spl. Range, Agra instead of sending the batch to Dy. CIT, Spl. Range, Agra who is holding the jurisdiction over the Asstt. CIT, Inv. Circle I. There was sufficient change within the staff of Dy. CIT, Spl. Range, Agra. Shri A. Chatterjee, Dy. CIT(A) was transferred to Delhi and the new Dy. CIT joined in the month of May. The Inspector who was looking after the batch of orders was relieved from the charge. On account of these reasons, the present appeal escaped attention of the Dy. CIT, Spl. Range as the same was transferred to Dy. CIT, Range I, Agra. There is delay of 18 days which may kindly be condoned. The assessed filed objection against the condensation application. However, at the time of argument, the matter of condensation of delay was not seriously agitated. Having heard both the parties, we find that the delay in filing the appeals is fully explained and there is reasonable cause for filing the appeals late by 18 days. thereforee, the delay in filing the appeals is hereby condoned and the appeal is admitted for hearing.

3. The grievance of Revenue in its appeal is that the CIT(A) erred in deleting the addition of Rs. 50,000 ignoring the fact that the assessed failed to prove the genuineness of the loan to the satisfaction of AO and ignoring the decision of Allahabad High Court in the case of Nanak Chand Laxman Das vs . CIT : [1983]140ITR151(All) . The facts relating to this issue are that a sum of Rs. 50,000 was shown in the books of accounts of assessed as loan received by cheque No. 804622 dt. 19th February, 1987 drawn on his account in State Bank of India by Sunil Kumar, proprietor of M/s Goyal Agencies, Agra which was credited in assessees saving bank account. The AO called upon the assessed to prove the genuineness of the deposit. In order to prove the genuineness of the loan, the assessed filed a confirmatory letter from the creditor showing source of income from dalal business links carried on since 1982 and he has also mentioned his GIR No. 825-D, ITO, Agra. It was also submitted that in case of doubt, the creditor may be summoned and examined under s. 131. The assessed paid back the amount of loan along with the interest of Rs. 625 through a bank draft No. 228067, dt. 18th March, 1987 drawn on Union Bank of India. However, the AO was not satisfied with this evidence. So, he summoned Shri Sunil Kumar and examined him under s. 131 on 21st November, 1989. In his examination, he found that he is not maintaining any account for his business. thereforee, he could not state his investment therein. He has studied up to 9th Class till 1980 and did not take any security and executed no document for advancing the loan. However, he observed that in his bank account in question, there was an opening balance of Rs. 1,053 in January, 1987 and then deposit of Rs. 486 by cash in January, 1987 and transaction relating to Rs. 50,000 in cash in February, 1987. There was withdrawal of Rs. 46,000 by cheque in January, 1987. However, for deposit, he could not give source of receipt of money and for withdrawal as to what was done of the withdrawn amount. Thus, he held that he did only hawala business and his creditworthiness was doubtful. In view of these observations, he held that genuineness of the loan is not proved. So, he added same in the hands of the assessee. When the matter came up before the CIT(A), he deleted this addition observing that the burden which laid upon the assessed to prove the identity of the creditor, the genuineness of the transaction and the capacity of the creditor has been proved and discharged by the assessee. The Department is aggrieved. The learned Departmental Representative relied on the order of the ITO and further pointed out from the account of M/s Goyal Agencies that as on 1st January, 1987, the balance was Rs. 1,053. On 30th January, 1987, a sum of Rs. 46,620 was deposited in cash. For the source of the deposit of Rs. 46,620, there is no Explanationn of the creditor though subsequently he had given Explanationn in his statement that on 31st January, 1987 he has withdrawn Rs. 46,000 by a cheque and after added the savings to his withdrawn amount of Rs. 46,000, he made a cash deposit of Rs. 50,000 on 19th February, 1987. From there, he has made a deposit of Rs. 50,000 after withdrawal from his account. However, the fact remains that the assessed could not give any Explanationn about deposit of Rs. 46,620 as on 30th January, 1987. thereforee, the AO was right in holding that he has merely a name lender and he has given no amount for deposit as a loan. Reliance was placed on the decision of Nanak Chand Laxman Das vs. CIT (supra) and CIT vs . S. C. Gupta : [1975]100ITR244(All) . It is also pointed out that the creditor in his statement has stated that he has collected money solely. As against this, the learned assessees counsel submitted that the AO has ignored the fact that creditor was running an old bank account even prior to the date of search taken place at the premises of Kanhaiya Lal on 24th February, 1987. The creditor has not only acknowledged the loan but also his statement before the AO recorded under s. 131, he has confirmed the deposits made with the assessee. The amount given by way of cheque and deposited in the assessees bank account and the same was repeated by the assessed through bank draft No. 228067 on 18th March, 1987 drawn on Union Bank of India with interest Rs. 625.

He was assessed to tax in D Ward with ITO, Agra. His GIR No. was 825/D. In this way, his identity, source of income, position of adequate balance in his bank account on the date of advancement loan were amply established and proved. The assessed proved the genuineness of the creditor, receipt of loan and its repayment. So the legal and factual burden which lay upon the assessed had been discharged. The AO has not brought any material on record to prove his allegation that the creditor was engaged in the hawala business. A perusal of the statement of the creditor would go to show that as on the date, he had source of commission income from various mills such as Manimekalai Textile, Erode, Sriram Textile, Erode, Sardar Hosiar Mills, Tripura, E.S.T. Money Textile, Madurai. There was sufficient balance as on the date when he has withdrawn Rs. 50,000 to make the deposit with the assessee. In this way, the CIT had rightly deleted the additions made on surmises and conjectures by the AO. In this connection, our attention was invited to the paper book pp. 67 to 77. It is also pointed out that when the creditor is being assessed in D Ward, ITO, Agra and that has been checked by the AO (sic - but) no action has been taken against him. In case the deposit made was not genuine, certainly action would have been taken to add that amount in the hands of creditor. Reliance was placed on the decision of CIT vs . Orissa Corporation (P) Ltd. : [1986]159ITR78(SC) , Asstt. CIT vs . Bahri Bros. (P) Ltd. : [1985]154ITR244(Patna) , Asstt. CIT vs . Hanuman Agarwal in : [1985]151ITR150(Patna) and in CIT vs . Shamsuddin Manzoor Haque : [1988]172ITR696(All) . The learned assessees counsel also distinguished the facts of the case of Nanak Chand Laxman Das (supra) with the facts of the present case and also the decision of CIT vs. S. C. Gupta (supra). We have considered the rival submission and have gone through the material available on record. In this case, the identity of the creditor is not in dispute. The Department disposed the genuineness of the transaction and the capacity of the creditor. So far as the capacity of the creditor is concerned, the creditor appeared before the AO. He had given statement about source of income as commission from various firms. Beside this, he has also placed a copy of the account showing deposit and withdrawals which is also enumerated in the order of the CIT(A). A perusal of the statement with this account would go to show that the creditor has sufficient source to make deposit with the assessee. It is also borne out from his statement as well as from the confirmatory letter filed that it is being assessed for tax by D Ward, Agra under GIR No. 825/D, ITO, Agra. In case there is any thing about the source of deposit made with the assessee, he could have been caught there itself and action would have been taken against him in his individual case. However, we find that no action has been taken against the creditor. thereforee, from the evidence of record, it is proved that the amount deposited with the assessed was returned back by a bank draft Along with the interest. So, the genuineness of the transaction is also proved by the evidence and statement of the creditor. In view of the evidence on record we are of the opinion that the burden which lay upon the assessed stood discharged. Now, the burden shifted on the Department to show material or evidence on record to disprove the evidence produced by the assessee. We do not find any material on record to make a different view in the matter. In the case of Hanuman Agarwal (supra), the Honble Patna High Court has observed that where the creditor has given GIR No. and have filed the confirmatory letter and also produced evidence to prove the genuineness of the transaction, the burden which lay upon the assessed stands discharged and the onus shifts on the Department to prove otherwise. In the case of CIT vs. Orissa Corporation Ltd. (supra), the Supreme Court has observed that where in the case the assessed has given the names and address of the alleged creditors and it was in knowledge of the Revenue that they are IT assessees and GIR No. were also given if the Revenue did not examine the source of income of alleged creditors, the assessed could not be held responsible and he cannot do anything more than this. In view of the observations of Honble Supreme Court and the Honble Patna High Court, we are of the opinion that the assessed had proved the genuineness of the transaction as well as the creditworthiness of the creditor. thereforee, the CIT(A) has rightly deleted the addition. So far as the decision relied upon by the Departmental Representative is concerned, we find that the facts of the case of Nanak Chand Laxman Das (supra) is different from the facts of the present case. The ratio laid down in a case depends upon the facts and circumstances of a case which cannot be mechanically applied to the facts of other case where the facts are similar. In our view, the facts are distinguishable. We do not find no any substance in the argument of the Departmental Representative.

4. In assessees appeal, the first grievance relates to an addition of Rs. 21,000 as income from the sources of the assessee. The assessed had shown receipt of Rs. 21,000 as gift from Mohan Lal Aggarwal, r/o 9/56, Moti Katra, Agra by way of account payee crossed cheque on donors S.B. account No. 2217 in Canara Bank, Agra. This deposit was made in February and March, 1987. The AO required the assessed to prove the genuineness of the deposit. It was explained that this sum was received by way of gift from Mohan Lal Aggarwal. In order to prove the genuineness of the gift, the assessed filed confirmatory letter and affidavit from Sh. Mohan Lal acknowledging the gift in which he has also given bank account from where the amount was given to the assessee. It was also shown that he has a regular source of income from preparing account books and from interest. However, the AO was not satisfied with this Explanationn. thereforee, he held that the gift is not genuine on the following grounds :

(1) The donor could not have purchased the gifted amount standing regular source of income. There was a credit balance of Rs. 634 in donors account on 28th July, 1986 and thereafter there was small credits in the account and then on 8th January, 1987, Rs. 21,000 was deposited in cash.

Thus it was concluded that it was only a managed gift and not a genuine one because the donor was not in a position to give his own money and on the date of gift as he had no sufficient funds to give this amount.

5. Aggrieved by that order, the assessed filed an appeal before the CIT(A). The CIT(A) confirmed the addition observing as under :

'I have considered the facts. I find that the donor admitted to have given the gift. Gift-tax assessment stood completed. The donor had a running account in the bank wherefrom after making the deposit he had issued the account payee cheque. It appears that no action has taken in the hands of the donor in respect of the credit at all found explained. However, it is also true that creditworthiness of the creditor has remained unexplained. It is not proved from where he had collected the money to deposit in the books. Hence, the addition made by the AO is confirmed.'

6. The assessed is aggrieved. The learned assessees counsel submitted that in order to prove genuineness of the gift, assessed had produced evidence to show that the amount was received by account payee cheque. There was sufficient credit balance in donors bank account which was old and was running before the date of search. The donor was identifiable and was assessed to gift-tax. The gift was duly managed (sic) by the donor by his certificate and affidavit and also in his statement recorded by the AO. He has shown definite source of income. The statement was also recorded by the AO confirming giving of amount by way of gift. The evidence relating to it is production by the assessed at pp. 121 to 130 of the paper book. The assessed fully discharged the burden to prove the genuineness of the gift. The AO has not brought any material on record to prove that it was a so-called managed gift, for which onus of proving the same lies upon the Department. The decision of Nanak Chand Laxman Das (supra) do not apply to the facts of the present case. Reliance was placed on the decision of the Tribunal in the case of D. C. Jain vs . ITO , wherein Tribunal held that the ITO was not justified in rejecting the gift received by the assessed without proving any material on record to show that gift was bogus. Reliance was also placed on the decision of CIT vs. Samsuddin Mansoor Haque (supra), wherein it is held that gift received by cheque and gift-tax being paid, is genuine. As against the learned Departmental Representative relied on the order of the CIT(A) and also placed reliance on the decision of CIT vs. S. C. Gupta (supra), CIT vs . Precision Finance (P) Ltd. : [1994]208ITR465(Cal) and Pomini (P) Ltd. vs . CIT : [1986]160ITR477(Guj) . We have considered the rival submission and have gone through the material available on record. In this case we find that the assessed had shown a gift from Sh. Mohan Lal Agarwal. The gift was received by account payee cross cheque drawn on his S.B. account No. 22107 in Canara Bank, Agra. The assessed had filed copy of gift-tax, dt. 29th February, 1988 showing payment of gift. He has filed a confirmatory letter and affidavit. On assessees instance the donor was examined under s. 131. From his statement it is clear that he has confirmed making of gift in favor of assessee. In his statement he has also mentioned that he had regular source of income from preparing account books and from interest. The gifted amount was deposited in the S.B. account. All these evidence on record show that the burden which lay upon the assessed to prove the genuineness of the gift is discharged. Now the burden shifts on the Department to show material that the gift made was bogus and ingenuine. No material had been brought on record to prove this except raising suspicion that the donor has no permanent source of income. The suspicion howsoever strong it may be cannot be the basis of rejection of assessees claim unless it is supported by material on record. It is worthy to note that the identity of the donor, the genuineness of the gift and the capacity of the donor is proved by the assessee. Simply because there is suspicion about the source of income, the evidence cannot be discarded. In our view, we are of the opinion that the evidence provided by the assessed prove the genuineness of the gift and the burden which lay upon the assessed has been discharged. We, thereforee, hold that the gift of Rs. 20,000 appearing in the books of the assessed is genuine gift. We set aside the order of the CIT(A) on this ground and delete the addition.

7. The next grievance in the appeal is that CIT erred in sustaining an addition of Rs. 15,000 on account of low withdrawals for household expenses. The assessed had shown withdrawal of Rs. 6,000 for household expenses. The AO took into consideration the status of family and cost of living and was of the view that Rs. 6,000 withdrawal for household expenses is insufficient to meet the kitchen expenses. thereforee, he added a sum of Rs. 15,000 on account of low withdrawals taking the household expenses at Rs. 21,000. This was confirmed by the CIT(A). The assessed counsel submitted that Sh. Kanhaiya Lal, Anil Kumar, Sunil Kumar and their children are living jointly. thereforee the withdrawal made by all the persons should be considered together. In this connection, the assessees counsel relied on the withdrawals made in earlier years giving as follows :

Asst. yr.

Kanahiyalal

Sunil Kumar

Anil Kumar

Total

1985-86

7,300

4,800

5,000

17,000

1986-87

9,050

6,400

6,400

21,850

1987-88

9,300

6,200

6,400

21,900

In view of above total lumpsum estimated, in round figures, an ad hoc basis addition of Rs. 52,000 made as under is unjustified :

Sh. Kanahiya Lal

Rs. 20,000

Sh. Anil Kumar

Rs. 175,000

Sh. Sunil Kumar

Rs. 17,000

8. It is submitted that in case of Kanahiya Lal additions were made of Rs. 20,000. The CIT(A) reduced it to Rs. 10,000. In the case of Sunil Kumar, he has confirmed addition of Rs. 17,000. It is pointed out that assessed is partner of 50 per cent share in the partnership concern Anu Petha Store where additions were made in the trading result. Even if any addition is required to be made for low household expenses, the assessed should be given benefit of telescoping the same. In this connection, reliance was placed on the decision of CIT vs . Kulvinder Kaur & Ors. in : [1980]121ITR914(Delhi) and Ananth Ram Veerasinghaia & Co. vs . CIT : [1980]123ITR457(SC) . As against this, Departmental Representative relied on the order of the CIT(A). We have considered the rival submission and have gone through the material on record. As per the assessees chart, it is clear that additions were sustained in the hands of Kanahiya Lal to the extent of Rs. 10,000 and on the hands of Sunil Kumar to the extent of Rs. 17,000. Keeping in view the extent of family of Sunil Kumar which is much less than the family of Anil Kumar, we are of the opinion that the household expenses shown at Rs. 6,000 is very low. thereforee, the addition of Rs. 15,000 towards household expenses was genuine. Since we have upheld the addition in the trading account of firm Anu Petha Store where assessed is partner of 50 per cent share this will take care of low household expenses to the extent of assessees share. In view of the decision of Honble Supreme Court and the decision of Delhi High Court cited above, the benefit of telescoping of addition shall be given to the assessed against the additions sustained in the trading results. In view of this, we direct the ITO to give relief to this extent and accordingly compute the low household expenses, if any.

9. In view of our discussion, the Departmental appeal is hereby dismissed whereas the appeal of the assessed is partly allowed. The learned assessees counsel did not press the cross-objection and hence this is dismissed as withdrawn.