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2015 (3) TMI 443 - AT - Income TaxUnexplained deposit - unaccounted loan receipts - Held that - So far as Shri Ravindra Shamrao Tambolkar is concerned he has confirmed that he has given the loan to the assessee. He has also explained the source.He confirmed that he has given the personal loan to the assesse of ₹ 3,00,000/- and out of that he has received back ₹ 2,50,000/- during the period October/November, 2007. In the case of this person, he has not stated that he was having any agricultural income but at the same time as per the statement given by the said Shri Ravindra Shamrao Tambolkar on oath before the Assessing Officer, it is seen that he has sufficient funds with him to lend sum of ₹ 3,00,000/- to the assessee. Thus delete the addition in respect of Shri Ravindra Shamrao Tambolkar of ₹ 3,00,000/-. - Decided in favour of assessee. In respect of Shri Revansidheswar Swamiji he has also stated in the clear terms that he has given the loan to the assessee but there is no record. He produced the record of the agricultural activities. It is claimed by him that he has 45 Acres of agricultural land and 10 Acres of agricultural land is irrigated. He also produced the sample receipts of the sale of TUR only the name of mentioned as Basavlingeshwhar Math. He also produced the sample sale of bills of sale of sugarcane to the Sidhheswar S.S.K. Solapur. It is true that he has not assessed to tax but if a person having substantial agricultural income but he is not having the non-agricultural income or non-agricultural income is below the non-taxable limit inference can be drawn that he is not capable to giving any loan as claimed. Thus there is a creditworthiness in respect of amount of ₹ 5,00,000/- given to the assessee. - addition deleted. - Decided in favour of assessee. In respect of Shri Pandurang Babu Shinde it is true that he has not assessed to tax but he has appeared before the Assessing Officer and confirmed that he has given the hand loan to the assessee. He also explained that the source of the said hand loan is from the agricultural activities. He also produced 7/12 extract of the agricultural land to demonstrate that in fact he is owner of agriculture land. He also claimed that he is taking crops like sugarcane, maize, jowar, harbhara etc. He also stated that he sales agricultural produce. Merely because he is not assessed to tax but the data on record suggest that he is otherwise capable to give the loan to the assessee and then why he should be rejected on the reason of his creditworthiness. We, accordingly, delete the addition of ₹ 3,00,000/- - Decided in favour of assessee. In respect of Shri Irrappa Rajappa Konapure, the Assessing Officer has noted that he is also agriculturalist and owner of 4.5 Acre agricultural land which was irrigated. He also cultivated and takes the sunflower and jowar and sales his agricultural produce. He has also stated that he has 5 buffalos and two cows from which he sales the milk to villages. He also confirmed that he has given ₹ 3,00,000/- to the assessee from time to time during the period May 2006 to November 2006 in cash. He also filed the confirmation letter. As per the facts noted by the Assessing Officer in our opinion the identity and genuineness cannot be doubted. So far as the creditworthiness is concerned he has explained the source of his income, thus his source is sufficient to lend some of ₹ 3,00,000/- to the assessee. - Decided in favour of assessee. In respect of Shri Gurrappa Saibanna Iranar is concerned, he is old person and he is not assessed to tax. As noted by the AO as per his statement he is owner of 8 Acre agricultural land. He is also produced 7/12 extract of all his agricultural lands. The said person also explained where as he sales the agricultural produce. He also confirmed that he has given the loan to the assessee. It appears that there is some contradictions in his statement in respect of annual income but so far as the identity and genuineness are concerned that cannot be doubted the only aspect to be considered is to creditworthiness. It is clear that he has given ₹ 3,00,000/- to the assessee but in our opinion as per the statement recorded that may not support his claim of giving ₹ 3,00,000/- to the assessee. After considering the figures of the income, in the interest of justice, we hold that to the extent of ₹ 2,00,000/- he has established his creditworthiness. We, accordingly, sustain the addition to extend of ₹ 1,00,000/- - Decided partly in favour of assessee. In respect of Shri Basavraj Ambadas More, we find that he is the owner of 6.5 Acre agricultural land which is irrigated. He confirmed that he has given the loan to the assessee. As per the facts on record and statement of the said person identity and genuineness cannot be doubted. It is also stated by him that he takes the agricultural produce in the form of grapes. He also produced documentary evidence in the form of sales bills of the dry grapes. Giving our anxious consideration to statement of the said person as well as the documentary evidence, we hold that the assessee has established identity, genuineness and creditworthiness of the said person. -Decided in favour of assessee. In respect of Sou Taramati S. Jadhav. Admittedly, the said loan creditor did not appear before the Assessing Officer. Admittedly, the assessee had filed only 7/12 extract to demonstrate that she is owner of land. It is claimed that she has paid ₹ 3,00,000/- to the assessee. In our opinion in this case, the identity, genuineness and creditworthiness are not proved. We, accordingly, confirm the addition. Decided against assessee.
Issues Involved:
1. Legality of the CIT(A)'s order. 2. Confirmation of additions as unexplained deposits. Detailed Analysis: 1. Legality of the CIT(A)'s Order: The appellant challenged the legality of the CIT(A)'s order dated 04-11-2013, arguing that it was "Bad in Law." However, the judgment does not delve into this issue separately, focusing instead on the substantive issue of unexplained deposits. 2. Confirmation of Additions as Unexplained Deposits: The primary issue revolves around the confirmation of additions amounting to Rs. 23,50,000/- as unexplained deposits in the assessee's bank account. The Assessing Officer (AO) had questioned the source of these deposits, which the assessee claimed were loans from close friends for starting a civil construction business post-retirement. - Verification of Loan Creditors: The AO summoned the loan creditors for verification. Out of seven, six appeared and confirmed giving loans in cash. The AO, however, doubted their creditworthiness and the genuineness of the transactions due to lack of proper documentation and banking channels. - Shri Ravindra Shamrao Tambolkar: The AO doubted his creditworthiness despite his confirmation of the loan, citing his limited income sources. However, the Tribunal found his explanation credible, considering his retirement benefits and confirmed the deletion of Rs. 3,00,000/- addition. - Shri Revansidheswar Swamiji: Despite not being assessed to tax, he demonstrated ownership of agricultural land and provided sale receipts of agricultural produce. The Tribunal accepted his creditworthiness and deleted the addition of Rs. 5,00,000/-. - Shri Pandurang Babu Shinde: He confirmed the loan and provided evidence of agricultural income. The Tribunal found his explanation sufficient, leading to the deletion of Rs. 3,00,000/- addition. - Shri Irrappa Rajappa Konapure: He confirmed the loan and provided proof of agricultural activities and income. The Tribunal accepted his creditworthiness and deleted the addition of Rs. 3,00,000/-. - Shri Gurrappa Saibanna Iranar: Despite some contradictions in his statement, he provided evidence of agricultural income. The Tribunal partially accepted his creditworthiness, sustaining an addition of Rs. 1,00,000/- and deleting Rs. 2,00,000/-. - Shri Basavraj Ambadas More: He confirmed the loan and provided evidence of agricultural income from grapes. The Tribunal accepted his creditworthiness and deleted the addition of Rs. 5,00,000/-. - Sou Taramati S. Jadhav: She did not appear before the AO, and only a 7/12 extract was provided. The Tribunal found that her identity, genuineness, and creditworthiness were not proven, thus confirming the addition of Rs. 3,00,000/-. Conclusion: The Tribunal partly allowed the appeal, deleting additions to the extent of Rs. 19,50,000/- out of Rs. 23,50,000/-, based on the satisfactory explanation and evidence provided by the assessee for most of the loan creditors. The judgment emphasized the importance of establishing identity, genuineness, and creditworthiness in such cases. Result: The assessee's appeal was partly allowed, with the final pronouncement made in open Court on 25-02-2015.
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