(1) The revenue has appealed an order from the CIT(A) that provided partial relief to the assessee, Shri Shree Bhagwan Suthar. (2) The CIT(A) deleted additions made under section 68 of Rs. 8,16,584, under expenses of Rs. 1,73,463, and for household expenses of Rs. 34,500. (3) The ITAT upholds the CIT(A)'s order, finding the assessee provided adequate evidence to establish credits and expenses, and the AO made additions without evidence.

1. IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, JODHPUR
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND
SHRI N.K.SAINI, ACCOUNTANT MEMBER
ITA NO. 367/Jodh/2013
(A.Y. 2008-09)
The I.T.O Vs. Shri Shree Bhagwan Suthar
Ward - 1(4) Prop M/s Gobind Handicrafts
Bikaner Village Thukariyasar
Sridungargarh
PAN No. AXEPS 7940 J
(Appellant) (Respondent)
Assessee by : Shri Suresh Ojha
Department by : Shri N.A. Joshi, DR.
Date of Hearing : 28.04.2014
Date of Pronouncement : 13.05.2014
ORDER
PER HARI OM MARATHA, J.M.
This appeal has been filed by the revenue for A.Y
2008-09 against the order of the CIT(A), Bikaner, dated
22.03.2013.

2. 2
2. Briefly stated, the facts of the case are that the assessee is
the proprietor of M/s Govind Handicrafts and derives his income
from the purchase and sale of handicraft items. For A.Y. 2008-09,
he field his Return of Income [ROI] on 30.09.2008, declaring of total
income of Rs. 1,46,340/-. On total sales of the year at Rs.
41,02,525/- he has disclosed gross profit of Rs. 4,09,977/- which
gives gross profit rate of 9.99%, as against shown at Rs. 8.06% in
earlier year on total sales of Rs. 36,75,015/- and gross profit of Rs.
3,16,268/-. The A.O. has computed total income of the assessee
vide order dated 18.11.2010 at Rs. 11,70,888/- after making the
following additions:
(1) disallowance out of expenses claimed Rs. 1,73,464/-
(2) addition u/s 68 of the Act Rs. 8,16,584/-
(3) on account of house hold expenses Rs. 34,500/-
2.1 Aggrieved against the above addition, the assessee went in
first appeal before the ld. CIT(A), who, in turn, has given part
relief, against which the revenue has raised the following grounds:

3. 3
"On the facts and in the circumstances of the case the
Ld. CITA) has erred in :-
i) deleting addition of Rs 8,16,584/- made a/s 68 of
the I.T. Act,1961.
ii) deleting addition of Rs. I,73,463/- made on account
of disallowance out of expenses.
iii) Deleting addition of RS. 34,500/- made on account
of low withdrawals for household expenses."
2.2 We have heard the rival submissions and have carefully
perused the entire material on record.
2.3 Ground No. (i) of this appeal pertains to deletion of an
addition of Rs. 8,16,584/- added u/s 68 of the Act. The facts
apropos this ground are that during the year the following credits
are reflected in the balance sheet of the assessee:
1. Sita Ram Suthar 63222
2. Bhagirath Suthar 202200
3. Smt. Gita Devi Bhuwal 105333
4. Smt. Ganga Devi Suthar 52283
5. Smt. Vidya Devi Saini 271296

4. 4
6. Nand Kumar Suthar 15000
7. Khinwa Ram Suthar 14500
8. Smt. Amrati Devi Suthar 12500
Total Rs. 8,16,584/-
2.4 When called upon to establish the genuinity of these 8 credits,
the assessee produced duly sworn in affidavits of 6 creditors. For
the remaining, the assessee produced confirmation through
affidavits etc. before the ld. CIT(A). After considering the
objection of the A.O., given in his remand report which was called
in relation to the additional evidence, the ld. CIT(A) has admitted
the same but the department has not challenged this aspect before
us. We have found that the creditors, in question, have admitted
their respective credits and have also explained their source(s).
The A.O. has not further examined them. Therefore, as per the
settled position of law in this regard that unless the A.O.
controverts the averments of these affidavits, the version given
therein cannot be rejected. On that reasoning only the ld. CIT(A)
has deleted the impugned addition. To further bolster the above,
we may incorporate the evidence produced by the assessee in
respect of the creditors as under:

5. 5
s. Name of the
Creditors
Evidence filed Evidence File Rs.
No. before the CIT
(A)
1. Sh. Sitaram Suthar Affidavit (Accepted by AO
letter dated 18.7.2011 and
WS to ITO
Copy of Affidavit 63222/-
by I.S. Shekhawat)
Bank Pass Book (WS to ITO
by I.S. Shekhawat)
Acknowledgeme
nt of ITR
Balance Sheet
Balance Sheet (WS to ITO by
IS Shekhawat)
Confirmation of Accounts
(WS to ITO dated 26. 7. 20
10)
2 Smt. Manju Devi
Suthar
Affidavit (Accepted by AO
letter dated 18.7.2011 and
WS to ITO
Copy of Affidavit 52250/-
by I.S. Shekhawat)
Bank Pass Book (WS to ITO
by I.S. Shekhawat)
Acknowledgeme
nt of ITR
ITR Acknowledgement (WS
to ITO by I S Shekhawat)
Balance Sheet (WS to ITO by
I S Shekhawat and AO
accepted in his order at
page No. 2)
Balance Sheet
Confirmation of Accounts
(WS to ITO dated 26. 7. 20
10)
3 Smt Vidya Devi
Saini
Affidavit (Accepted by AO
letter dated 18.7.2011 and
WS to ITO
Copy of Affidavit 271296/-
by I.S. Shekhawat) i
Bank Pass Book (WS to ITO
by I.S. Shekhawat AO
accepted in
his order at page No. 2)
ITR Acknowledgement (WS
to ITO by I S Shekhawat)
Acknowledgeme
nt of ITR
Balance Sheet (WS to ITO by
IS
Balance Sheet

6. 6
Shekhawat)
Confirmation of Accounts
(WS to ITO dated 26.7.2010)
4 Smt. Geeta Devi
Bhuwal
Affidavit (Accepted by AO
letter dated 18.7.2011 and
WS to ITO
Copy of Affidavit 105333/-
by I.S. Shekhawat)
Bank Pass Book (WS to ITO
by
I.S. Shekhawat and AO
accepted
in his order at page No. 2)
ITR acknowledgement (WS
to
Acknowledgeme
nt
ITO by I S Shekhawat) of ITR ,
Balance Sheet (WS to ITO by
IS
Balance Sheet
Shekhawat)
Confirmation of Accounts
(WS
to ITO dated 26.7 .20 10)
5 Smt. Ganga Devi
Suthar
Affidavit (Accepted by AO
letter
Copy of Affidavit 52283/-
dated 18.7,2011 and WS to
ITO
by I.S. Shekhawat)
Bank Pass Book (WS to ITO
by
I.S. Shekhawat)
ITR acknowledgement (WS
to
Acknowledgeme
nt
ITO by I S Shekhawat) of ITR
Balance Sheet (WS to ITO by
IS
Balance Sheet
Shekhawat)
Confirmation of Accounts
(WS
to ITO dated 26 .7 .20 10)

7. 7
6 Sh. Bhagirath
Suthar
Affidavit (Accepted by AO
letter
Copy of Affidavit 202200/-
dated 18.7.2011 WS to ITO
by
I.S. Shekhawat and AO
accepted
in his order at page No. 2)
Bank Pass Book (WS to ITO
by
I.S. Shekhawat and AO
accepted
in his order at page No. 2)
ITR acknowledgement (WS
to
Acknowledgeme
nt
ITO by I S Shekhawat) of ITR
Balance Sheet (WS to ITO by
IS
Balance Sheet
Shekhawat)
Confirmation of Accounts
(WS
to ITO dated 26.7. 20 10)
7 Smt. Geetadevi Confirmation of Accounts
(WS
Affidavit 14500/-
to ITO dated 26. 7 .20 10)
8 Sh. Nandram
Suthar
Confirmation of Accounts
(WS
Affidavit 15000/-
to ITO dated 26.7 .2010)
9 Sh. Khinwa Ram
Suthar
Confirmation of Accounts
(WS
Affidavit 14500/-
to ITO dated 26.7 .2010)
10 Smt. Imrati Devi
Suthar
Confirmation of Accounts
(WS
Affidavit 12500/-
to ITO dated 26.7 .20 10)
11 Sh. Om Prakash
Suthar
Confirmation of Accounts
(WS
Affidavit 13500/-
to ITO dated 26.7.2010)

8. 8
2.5 The above, is the pictograph of evidence produced in respect
of all the creditors, including the one we are concerned with in this
appeal. Resultantly, we confirm the impugned deletion of Rs.
8,16,584/- made u/s 68 of the Act and cannot allow Ground No. (i)
of revenue’s appeal.
3. The Ground No. (ii) is regarding deletion of addition of Rs.
1,73,463/- made on account of disallowance out of expenses. All
these expenses are in relation to the trading activities of the
assessee. The A.O. has not rejected the books of account. So he
cannot disturb the expenses claimed unless any particular expenses
is found to have been wrongly claimed. In this case, the A.O. has
not doubted the receipts etc and have accepted the same, so the
A.O. cannot reject some of the expenses. In this regard, the
judgment of the Hon'ble Jurisdictional High Court in the case of CIT
Vs. Maharaja Shree Ummaid Mills Ltd. [1991] 192 ITR 565 [Raj] is
relevant. Accordingly, we uphold this deletion and dismiss Ground
No. (ii) of revenue’s appeal.

9. 9
4. The Ground No. (iii) is regarding deletion of an addition of Rs.
34,500/- made on account of low household withdrawals. This
addition is based on no material but on wild guess and pure
estimation with reference to the size of the family and the standard
of living. The A.O. has not brought any evidence on record, in this
regard. Therefore, we approve this deletion as well and dismiss
Ground No. (iii) of revenue’s appeal.
5. In the result, the appeal of the revenue stands
allowed.
Order Pronounced in the Court on 13th
May, 2014.
Sd/- Sd/-
(N.K.SAINI) [HARI OM MARATHA]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 13th
May, 2014
VL/-

10. 10
Copy to:
The Appellant
The Respondent
The CIT By Order
The CIT(A)
The DR
Assistant Registrar
ITAT, Jodhpur