Income—Unexplained cash credit—Assessee filed return of income—During assessment proceeding, AO noted that assessee was running two business concerns viz., M/s. P and M/s. F—In M/s. P, assessee did business and admitted its income as taxable, while in M/s. F, he carried out agricultural operations and claimed its income as an exempt one—AO noticed that out of total purchases made by M/s. P, purchases were made from M/s. F—Assessee had paid excessively to M/s. F vis-a-vis from other parties on specific occasions—AO held that there was clear inflation of purchases and hence treated 10% of assessee’s purchases from M/s. F as an inflated one and disallowed same—AO also observed that an amount was received as a gift from assessee’s father—Primary onus was on assessee to prove that he had received gift from his father and since he had not discharged burden, said amount was added as an unexplained cash credit—CIT(A) dismissed assessee’s appeal—Held, assessee had claimed to have received gift by redemption of loans received back on behalf of assessee’s demised father—However, he could not explain satisfactorily about nature and sources of such credits and genuineness of them—In view of that impugned sum was added to income of assessee and on appeal, CIT(A), after due appreciation of material, sustained addition holding that documents furnished in support of sources towards credits in capital account guised as gift received from demised father were concocted to suit requirements of assessee and do not bear any semblance of truth in it—Assessee could not furnish any material to dislodge findings recorded by lower authorities— There was no reason found to interfere with order of the CIT(A)—Assessee’s appeal dismissed.

K. N. PANNIRSELVAM vs. DEPUTY COMMISSIONER OF INCOME TAX

(2019) 55 CCH 0136 ChenTrib