2013 (12) TMI 1203

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..... read as a whole to see whether the findings are vitiated - The reasons assigned to disbelieve the transaction of loan are not proper. Sri Ram Kumar was maintaining a bank account and payment was made through cheque to the assessee. In the absence of any relation with the partners of the assessee firm, it was not possible for the firm to deposit money in the account of partner in the firm and then get it from him as loan - Decided in favour of assessee.
Hon'ble Prakash Krishna and Hon'ble Ram Surat Ram (Maurya),JJ. For the Petitioner : Rakesh Kumar For the Respondent : S S C, R.K. Upadhyay, ORDER (Delivered by Ram Surat Ram(Maurya), J.) 1. Pursuant to the direction given by this Court on 29.10.1986, the Income Tax Appellate Tribuna .....

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..... stablished. He further found that Sri Ram Kumar was maintaining a bank account and payment to the assessee was made through cheque and the assessee had returned this money to Sri Ram Kumar through bank draft as such creditworthiness of the creditor and genuineness of the transaction has been proved. Since the creditor was having business relation with the assessee as such there was no reason to disbelieve the transaction. On these findings, the appeal was allowed. The Revenue filed a second appeal before the tribunal from the aforesaid order. The Tribunal, by the order dated 14.11.1985, held that although identity of Sri Ram Kumar has been established but his paying capacity was doubtful which shows that it was a fictitious transaction. It .....

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..... ining a bank account and payment was made through cheque to the assessee. In the absence of any relation with the partners of the assessee firm, it was not possible for the firm to deposit money in the account of Sri Ram Kumar and then get it from him as loan. Share capital for starting business by Sri Ram Kumar is not very material to assess the income of Sri Ram Kumar who was deriving income from business as well as through commission. Sri Ram Kumar has stated that as the firm was paying interest at the rate of 15% per annum which was higher than the bank interest as such money was advanced to the firm. Sri Ram Kumar was having business relations with the assessee and he had made payment through cheque as such his money was secured. Findi .....

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