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TMI Blog2014 (5) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... e should not result in addition of Rupees more than two crores. Non service of notices issued by the AO was the starting point to investigate the matter further. But, the AO chose to stop there and ignored the documentary evidences produced by the assessee. In these circumstan -ces, we are of the opinion that the order of the FAA does not suffer from any legal infirmity - Decided in favour of assessee Addition u/s. 68 - unexplained unsecured loans - establish the capacity, genuineness and proper identity of creditors - Held that:- Two of the creditors not only had appeared before the AO, but had also admitted of giving loan to the assessee. AO has not pointed out any abnormality in their statements. In these circumstances, there was no reason to make addition for the sums appearing in their names. From the order of the FAA it is clear that Shantiben Shah and Charmi A Mehta had capacity of advancing loans to the assessee and they were regular tax payees. Thus, FAA has conclusively proved that identity of the creditors, genuineness of the transaction and capacity to advancing loan cannot be doubted. - Decided in favour of assessee - ITA No.971/Mum/2011 - - - Dated:- 7-5-2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, that the parties were not available on the addresses given by the assessee, that he did not produce the parties for examination, that he did not provide basic details about the vehicles etc. 2. 2. In appeal, it was submitted that the AO had wrongly disallowed the genuine expenditure merely on the basis of unserved notices ignoring the decisive factors like actual performance of transportation work, lifting of waste, proper TDS payment through Account Payee Cheque, proper addresses and confirmation of account with PAN. that the Gross Receipts from MCGM on account of supply of vehicles for refuse for the financial year was ₹ 4, 67, 62, 320/-, that as against this the assessee had spent on account of Transport Charges (Refuse Vehicle Payments) to the tune of ₹ 2, 82, 82, 030/-, that payment was made to twelve parties as under : Akbarali ₹ 35, 88, 420/- Doulat Y Wadangle ₹ 29, 30, 920/- Janath D Mullen ₹ 11, 08, 600/- Premchand Y Wadangle ₹ 33, 60, 290/- Viren Apai Kalam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the transport expenditure were to be disallowed then it would lead to absurdity of the conclusion that such work had been done without vehicle or transporter. 2. 3. Before us, Departmental Representative(DR) submitted that none of the twelve contractors has appeared before the AO, that letters issued to them came back, that genuineness of payment could not be verified in absence of the contractors. Authorised Representative(AR) submitted that assessee had filed confirmation letters from all the twelve contractors, that TDS was deducted and deposited in the government account, that proof of TDS was produced before the AO, that all the vehicles were registered with the RTO, that as per the contract given by the Municipal Corporation vehicles were to be registered with State Transport Authorities, that no disallowance was made in the year 2005-06 and 2006-07 for the payments made to the contractors, that the payments were made by cheques, that AO had disallowed the entire expenditure claimed by the assessee, that GP shown by the assessee in earlier years was accepted by the department, that GP, as a result of addition, would be at 53%. He referred to page 37 and 49 of the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Shantihen S. Shah ₹ 9, 75, 000/- 6 Charmv A. Mehta ₹ 3. 00, 000/- 3. 1. In appeal it was contended that all the six parties were genuine, capable of giving loans and they were regular income-tax payees, that the assessee had produced some of the creditors for personal verification before the AO, that all the required details; like copy of Pan Card, copy of return of income balance sheet with all the annexures, copy of Bank a/c ;were furnished for scrutiny of the AO, that he had not established as to how all these genuine parties were bogus-one, that assessee had received all the loans through banking channel, that there was no evidence that before issue of cheque there was a cash deposit in the bank accounts of the creditors, that the Xerox copy of return of income copy of balance sheet, copy of bank statement of all the creditors in the form of paper book was handed over. 3. 2. FAA, after considering the submissions of the assessee and the assessment order held that the AO had merely doubted the veracity of banking accounts of the creditors wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the hands of the assessee, that the creditor had given details and evidences, that merely on the basis of statement that his hank account was operated by his father genuineness of loan could not he doubted. With regard to loan appearing in the name of Shantiben S. Shah, FAA held that the findings of the AO was baseless because the return of income and other details submitted by her had been accepted by the AO, there was no corroboration of fact that Shantiben Shah was not genuine person or not capable of giving such loan, that she was regularly filing return of income from time to time and she was having genuine source of interest income from the bank and other parties, that there was a opening capital of ₹ 19, 42, 095/- out of such corroborated funds she had given loan of ₹ 9, 75, 000/-and same was duly reflected in her balance sheet, that it was baseless to presume otherwise by referring the deposits of money in bank account without establishing furthermore about the in - genuineness of the transactions or incapability of giving such loan. In the case of Charmi A. Mehta, FAA held that her loan could not be doubted because it was very visible from the bank acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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