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TMI Blog2014 (7) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... pudi’s bank account was confused with the loan account of the company both by AO and CIT(A) - to the extent of addition of unsecured loan, it cannot be sustained on facts. Both Mr. B.P. Jain and Mr. Rajiv Chilakalapudi has explained the sources and are very much assessees on record - In case, the credit worthiness is doubted and source of funds are doubted, the proper course would have been to initiate proceedings in their individual hands as the persons are identified and they have confirmed the amounts which are invested in the company - on the basis of the confirmation and necessary evidence placed on record and also after perusing the remand report by the AO - there have proper sources for the amounts invested in the company –the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee. Like-wise, with a brief discussion in para 4, unsecured loan available at ₹ 2,61,550/- at the end of the year was also brought to tax thereby, assessing the income at ₹ 13,21,263/-. 3. It was contended before the Ld. CIT(A) that assessee has indeed furnished all the relevant information including confirmation letters, bank accounts etc., It was further submitted that most of the share application money is from the sister companies or from the Directors or from relative of director and furnished necessary details again to the Ld. CIT(A). Ld. CIT(A) called for a remand report from the A.O. and after obtaining the remand report, Ld. CIT(A) discussed the unsecured loans in the order and confirmed the same and dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company s account. He also referred to the loan sanction letter from the Citi Bank. With partial withdrawals from the loan account, the outstanding amount as on 31.03.2006 stood at ₹ 2,61,550/-. He referred to the confirmation and explanation with reference to loan amount of ₹ 3 lakhs given by the Director Mr. Rajiv Chilakalapudi to the company. It was his submission that all the amounts are confirmed and both the A.O. and CIT(A) are took the explanations wrongly in confirming the above amount. 6. Learned D.R. however, referred to the remand report of the A.O. and submitted that there is no explanation for the above amounts and accordingly, they were confirmed. 7. We have considered the rival contentions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it may, as far as the unsecured loan of ₹ 2,61,550/- is concerned, an amount of ₹ 3 lakhs advanced by Mr. Rajiv Chilakalapudi to the company was obtained by way of personal loan from Citi Bank and the amount was directly transferred to the company account. Therefore, as far as the unsecured loan was concerned, the source of ₹ 3 lakhs advanced by Mr. Rajiv Chilakalapudi stands explained by way of personal loan obtained from Citi Bank. Therefore, addition of ₹ 2,61,550/- cannot be sustained on the facts. We are of the opinion that the explanation given for various withdrawals by Mr. Rajiv Chilakalapudi s bank account was confused with the loan account of the company both by A.O. and Ld. CIT(A). Therefore, to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share amount or share application amount. This cannot be a share application amount as authorized and issued capital was only ₹ 1 lakh and the amounts are in odd figures, not in multiples of ten which is the face value of each share. Therefore, the account can only be examined as an ordinary cash credit account. 10. Assessee s explanation was that out of the amount confirmed by the Ld. CIT(A), ₹ 5,32,233/- pertain to Mr. Rajiv Chilakalapudi and ₹ 1 lakh to Mr. B.P. Jain. On perusing the confirmation letters and bank accounts including detailed questionnaire issued by A.O. in the course of assessment proceedings, the replies which were furnished on 18.02.2008, 13.03.2010, 11.03.2010, 15.03.2010, 03.06.2010, 04.08.2010, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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