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TMI Blog2017 (11) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed. We therefore set-aside the order of the CIT(A) and direct the Assessing Officer to allow the expenses. The first ground raised by the assessee is accordingly allowed. Disallowing the unsecured loan - Held that:- Assessee has filed certain details to establish the identity and creditworthiness of the creditor and genuineness of the transactions. However, the above details according to the Assessing Officer are not sufficient to prove the loan transactions in terms of section 68 of the I.T. Act. Further, the Assessing Officer has neither summoned the above parties nor asked the assessee to produce them before him for his examination. For accepting any cash credit/loan transactions as genuine, the onus is always on the assessee to substantiate with evidence to the satisfaction of the Assessing Officer regarding the identity and creditworthiness of the loan creditors and genuineness of the transactions. In the instant case, although certain details were filed these were not properly appreciated by the Assessing Officer nor did he issue summons u/s 131 or called for information u/s 133(6). Considering all we deem it proper to restore the issue to the file of the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation amounting to ₹ 2,43,139/- and accordingly made addition of ₹ 12,05,421/- to the total income of the assessee. 4. In appeal, ld. CIT(A) sustained the addition made by the Assessing Officer. While doing so, he observed that the assessee has received small commission only twice for which no TDS was deducted and no details were mentioned in the copy of bill regarding services rendered by the assessee for which commission was paid to them. According to him, the assessee has virtually done no business activity and has claimed huge expenses. Further, the assessee before him could not prove if there is ongoing business activity. He accordingly upheld the action of the Assessing Officer. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 6. Ld. counsel for the assessee strongly objected to the order of the CIT(A). He submitted that if the payer does not deduct TDS, the character of income cannot change. Referring to page 104 of Paper Book, ld. counsel for the assessee submitted that no disallowance has been made in the assessment order passed u/s 143(3) for assessment year 2008-09 under identical circumstances. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009. This otherwise indicates that the assessee has done some business. Further, the Assessing Officer has computed the income of the assessee as income from business and not income from other sources. We further find the major amount of the administrative expenses relates to the rent and selling and managerial remuneration etc.. Merely because there is meager business the same, in our opinion, cannot be a ground to disallow the various expenses incurred by the assessee. It is not the case of the Assessing Officer that such expenses are bogus or not genuine. He has merely disallowed the same on the ground that the assessee has not done any business during the year. As mentioned earlier the Assessing Officer himself has mentioned in the body of the assessment order that the assessee has done trading of fabric in the month of February and March, 2009. Considering the totality of facts of the case, we are of the considered opinion that the expenses claimed by the assessee under the head administrative and selling expenses and the depreciation cannot be disallowed. We therefore set-aside the order of the CIT(A) and direct the Assessing Officer to allow the expenses. The first ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable opportunity to the assessee to explain the nature and source of transaction has made the addition. Various decisions were brought to the notice of the CIT(A) for the proposition that the addition made by the Assessing Officer amounting to ₹ 1,05,00,000/- is not justified. 12.1 However, ld. CIT(A) was not satisfied with the arguments advanced by the assessee and upheld the addition made by the Assessing Officer by observing as under :- 4.1 I have considered the ground raised in appeal and the facts of the case. I have also considered the submission filed by the AR of the appellant. 4.2 The appellant has raised ground against the addition of ₹ 1,00,05,000/- made on account of unproven unsecured loan. The Assessing Officer has disallowed the amount holding that genuineness of the loan and capacity to prove the creditworthiness of the persons is not proved. The appellant submitted that the said amount of ₹ 1,00,05,000/- includes ₹ 25,00,000/- from Tanvir Ur Rehman, ₹ 5,00,000/- from TKS Projects Pvt. Ltd., ₹ 75,00,000/- from DD Township Ltd. However it is evident that there is nothing to prove the genuineness of the said l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had furnished all the relevant material, in such an eventually no addition can be made u/s 68 of the I.T. Act. Referring to the decision of the Hon ble Delhi High Court in the case of CIT vs. D. K. Garg vide ITA 115/2005 order dated 04.08.2017, ld. counsel for the assessee drew the attention of the Bench to para 14 of the order and submitted that the Hon'ble High Court in the said decision has held that where the assessee discharges the initial onus of establishing the identity and creditworthiness of the credit provider and the genuineness of the transactions, be it one of loan or subscribing to share capital, the onus shifts to the Revenue to show the contrary. Where the Assessing Officer fails to make such an enquiry, a Court might delete the additions made by the Assessing Officer. 16. Referring to the decision of the Hon ble Delhi High Court in the case of Pr.CIT vs. Softline Creations Pvt. Ltd. vide ITA 504/2016 order dated 31.08.2016, he submitted that the Hon'ble High Court in the said decision has held that where the assessee has provided the PAN Numbers of the share applicants to highlight their identity as well as produced the affidavits of the Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returned unserved, however, the assessee still managed to secure documents such as their income-tax returns as well as bank account particulars, in such circumstances, the Assessing Officer was justified in drawing adverse inference and adding amount in question to assessee s taxable income u/s 68 of the I.T. Act. 21. Referring to the decision of Hon ble Delhi High Court in the case of CIT vs. Frostair (P.) Ltd. reported in 26 taxmann.com 11, ld. DR submitted that the Hon'ble High Court in the said decision has held that where details furnished by assessee about share applicants were incorrect, addition u/s 68 was proper. 22. Referring to the decision of Hon ble Delhi High Court in the case of CIT vs. N. R. Portfolio Pvt. Ltd. reported in 263 CTR 456, ld. DR submitted that the Hon'ble High Court in the said decision has held that if Assessing Officer doubts the documents produced by assessee, the onus shifts on assessee to further substantiate the facts or produce the share applicant in proceeding. 23. Referring to the decision of Hon ble Delhi High Court in the case of CIT vs. Empire Builtech (P.) Ltd. reported in 366 ITR 110, ld. DR submitted that the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loans. 28. Referring to the decision of Hon ble Delhi High Court in the case of Sanraj Engineering Pvt. Ltd. vs. CIT vide ITA 79/2016, ld. DR submitted that the Hon'ble High Court in the said decision has held that the addition made u/s 68 on account of unsecured loans was justified, where initial onus of proving the creditworthiness of the lenders was not discharged by the assessee. 29. Referring to the decision of Hon ble Allahabad High Court in the case of Naresh Chandra Jain vs. CIT vide ITA No.335 of 2009, ld. DR submitted that the Hon'ble High Court in the said decision has held that the Tribunal was justified in holding that amount of loan received by assessee was unexplained income u/s 68 in as much as identity, genuineness, creditworthiness of the transaction is not proved. 30. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer made addition of ₹ 25,00,000/- being loan received from Shri Tanvir Ur Rahman on the ground that the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said company is not enclosed in the Paper Book from the confirmation filed. Thus, a perusal of the Paper Book shows that the assessee has filed certain details to establish the identity and creditworthiness of the creditor and genuineness of the transactions. However, the above details according to the Assessing Officer are not sufficient to prove the loan transactions in terms of section 68 of the I.T. Act. Further, the Assessing Officer has neither summoned the above parties nor asked the assessee to produce them before him for his examination. For accepting any cash credit/loan transactions as genuine, the onus is always on the assessee to substantiate with evidence to the satisfaction of the Assessing Officer regarding the identity and creditworthiness of the loan creditors and genuineness of the transactions. In the instant case, although certain details were filed these were not properly appreciated by the Assessing Officer nor did he issue summons u/s 131 or called for information u/s 133(6) of the I.T. Act. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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