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TMI Blog2013 (11) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,00,000/- by HDFC Bank Ltd, Agra and out of the loan raised from other persons tabulated at page 2 of the assessment order, which includes unexplained cash credits of five persons under challenge in the present appeal. The AO directed the assessee to prove the identity of the creditors, their creditworthiness and genuineness of the transaction and to produce all these persons for examination with proof of their identity and capacity to advance loan. Out of 9 persons (creditors), the assessee produced seven persons and their statements were recorded by the AO. A gist of the same under consideration are as under : (i). Shri Om Prakash Gupta : His statement was recorded and the assessee is his daughter. His source of income is pension as retired on 31.03.1993 from the post of Patwari in Fatehabad Tehsil and receiving pension of Rs.3600/- per month. He also dealt in purchase and sale of buffaloes and also doing some part time job. He is not assessed to tax. He has given loan of Rs.20,000/- on 07.07.2004 by cheques to the assessee and also gave another loan of Rs.30,000/- on 08.07.2004 by cheques. His bank account revealed that before advancing loan of Rs.20,000/- on 07.07.2004, Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was not found to be genuine and addition was accordingly made. (v). Smt. Sunita Barua : She was also not produced before the AO for examination. She has given loan of Rs.20,000/- to the assessee on 10.07.2004 and similarly cash of the equivalent amount was deposited in her bank account on 09.07.2004 and prior to that there was a bank balance in her bank account of Rs.5350/- only. Loan was not considered genuine and source was not explained and addition was accordingly made. 2.1 The ld. CIT(A) confirmed the addition and dismissed the appeal of the assessee. 3. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and submitted that in case of all the five creditors above, affidavits of the creditors or their legal heirs were filed along with bank accounts of the creditors and all are related to the assessee who have given loans to the assessee for purchase of the property. He has submitted that three of the creditors or their legal heirs were produced before the AO, their statements have been recorded in which they have confirmed giving of loans to the assessee as also in the affidavit & copy of confirmation of account. Therefore, the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO for examination, but showed his inability to produce other creditors, which is also clear from the order sheet dated 18.12.2007 (PB-126). Prior to that, the assessee sought time from the AO to produce remaining creditors for examination, but later on did not produce them. The ld. counsel for the assessee explained that due to one or other problem of the remaining creditors on account of medical advice, the depositors have shown their inability to appear before the AO for examination, but it is admitted fact that the assessee did not make any request before the AO for examination of the remaining creditors through the commission and no willingness was shown before the CIT(A) for production of the remaining creditors for examination even at the remand stage in the appellate proceedings. Even during the course of arguments before the Tribunal, the ld. counsel for the assessee did not show his willingness to produce remaining creditors for examination before the AO. It is, therefore, clear that the assessee has failed to produce the remaining creditors for examination by the Revenue Department in order to find out truth in the matter. 9.1 The AO discussed each and every creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly support the findings of the AO that none of the creditors were persons of sufficient means to advance any loan to the assessee. Filing of balance sheets, cash flow statements, cash books etc. have no evidentiary value because according to the remand report filed by the AO, those documents were not filed with the return of income. Moreover, no regular books of account have been maintained by any of the creditors and majority of them have shown estimated income in their returns of income. Therefore, such balance sheet, cash flow statements etc. would not support the contention of the assessee that genuine credits have been received. The order sheet noted by the AO would also show that the assessee has made no efforts to produce the remaining creditors before the AO. Even in the statement of one of the creditors recorded by the AO, Shri Ambhay Maheshwari, he was not able to explain his source of deposit or advancing loan to the assessee through genuine source. It is well settled law that burden is upon the assessee to prove ingredients of section 68 of the Act by proving identity and creditworthiness of the creditors and genuineness of the transactions. The assessee has, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the assessee to prove prima facie the identity of his creditors, the capacity of such creditors to advance the money and lastly the genuineness of the transactions. Only when these things are proved by the assessee prima facie and only after the assessee has adduced evidence to establish the aforesaid facts does the onus shift on to the Department. It is not enough to establish the identity of the creditors. Mere production of the confirmation letters before the Income-tax Officer would not by itself prove that the loans have been obtained from those loan creditors or that they have credit-worthiness. Held, that, in the instant case, the Tribunal misdirected itself in holding that the transactions were genuine simply because some of the transactions were made by cheques. The assessee had failed to prove the credit-worthiness of the alleged lenders. A number of other assessees had also admitted that loans obtained from these bankers against hundis were not genuine and such hundi loans really represented their own concealed income. The assessee had not discharged its burden of proving that the loans in question were genuine." 10.2 Hon'ble Calcutta High Court in the case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he essential ingredients of section 68 of the IT Act. 12. In the case of Rohini Builders and U.M. Shah (supra), the departmental appeal was dismissed finding no substantial question of law because the findings of the Tribunal were based on appreciation of evidence. 12.1 In the case of CIT vs. Orissa Corporation P. Ltd (supra), it was also held that the Revenue did not examine source of income of the said alleged creditors when they were assessed to tax to find out whether they were creditworthy. However, in the present case, the authorities below have specifically found that all the creditors were not men of means and as such, their creditworthiness was not proved at all. Therefore, the decision cited by the ld. counsel for the assessee would not support the case of the assessee. 13. Considering the facts and circumstances of the case in the light of findings of the authorities below, we do not find any irregularity or illegality in the orders of the authorities below. We confirm their findings and dismiss the appeal of the assessee on this ground. Concise grounds Nos. 1 & 2 are, accordingly, dismissed." 4.1 The above decision of the Tribunal has been confirmed by Hon'ble juris ..... X X X X Extracts X X X X X X X X Extracts X X X X
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