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TMI Blog2018 (9) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Koushlendra Tiwari, Sr. DR ORDER Per Amit Shukla, J. M. The aforesaid appeal has been filed by the assessee against impugned order dated 19.12.2017, passed by Ld. CIT (Appeals), Meerut for the quantum of assessment passed u/s 143(3)/147 for the assessment year 2009-10. In the grounds of appeal, assessee is mainly aggrieved by addition of ₹ 19 lacs made u/s 68 on account of unsecured loans taken from five persons. 2. The facts in brief are that assessee is engaged in the business of sale and purchase of properties. Ld. AO on the perusal of the balance sheet noted that assessee has taken unsecured loans for sums aggregating to ₹ 43,50,443/-. After calling for the assessee's explanation alongwith the documentary evidences to prove the genuineness of the loan, the Ld. AO noted that in case of five persons the assessee could not prove the cash credit appearing in the books of accounts of the assessee satisfactorily. The relevant discussions of the AO qua these creditors are as under:- Shri Dev Raj Singh : Amount of ₹ 4,00,000/- has been shown as unsecured loan from this person. Nothing has been filed, which could explain the identity and creditworthiness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49,525/-. In absence of the copy of bank statement of this person, genuineness of transaction can also not be ascertained. The assessee could not produce this person for examination. In these circumstances, the creditworthiness of this person and genuineness of transaction made with the assessee is not established and the amount of ₹ 5,00,000/- claimed as unsecured loan from this person remains unexplained cash credit appearing in the Books of Accounts of the assessee for the purpose of section 69 of the Income Tax Act, 1961. Shri Inder Pal Singh : In the confirmation filed by the assessee amount of ₹ 4,81,361/- has been shown as Inder Pal Singh Capital A/c amt. trf. However, from the partner capital account, it is found that this person is not one of the partners of the assessee firm. From the ITR for AY 2009-10, it is found that the income shown is only ₹ 1,87,886/-. In absence of the copy of bank statement of this person, genuineness of transaction can also not be ascertained. The assessee could not produce this person for examination. In these circumstances, the creditworthiness of this person and genuineness of transaction made with the assessee is not esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd partly before CIT(A). After submitting all those evidences, no inquiry whatsoever has been done by the department and addition has been made. With regard to each and every creditor the Ld. Counsel had submitted as under:- I. SAVITASINGH: ₹ 3.00 Lacs • PAN Number, Complete Address, Copy of Income Tax return indicating Sale of 1and of ₹ 62.50 Lacs, Copy of confirmation, Copy of Bank statements, Copy of ledger account were submitted. No cash was deposited before making payment to assessee in the bank account of Lender. This amount was returned on 26.11.2010 through account payee cheque. II. D K JAIN AND SONS (HUF) JAIN: ₹ 5.00 Lacs • PAN Number, Complete Address, Copy of Income Tax return, TDS deducted, Copy of confirmation, Copy of ledger account, Bank Statements were submitted during the course of assessment/appeal proceedings. • No cash was deposited before making payment to assessee in the account of Lender. This amount was returned on 10.10.2009 through account payee cheque along with interest after deducting TDS. III. DHANPAL SINGH TOMAR: ₹ 2.00 Lacs • PAN Number, Complete Address, Copy of Income Tax return indicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.) Ltd.; ii) [2012] 25 taxmann.com.426(Ahmedabad-Trib) in the ITAT Ahmedabad Bench D Sarjan Corporation vs. Assistance Commissioner of Income-tax; iii) Hon'ble Gujarat High Court in the case of DCIT vs. Rohini Builders (356 ITR). iv) The Hon'ble Gauhati High Court in the case of Nemi Chand Kothari vs. CIT. 6. On the other hand, Ld. DR strongly relied upon the orders of authorities below and submitted that the Ld. CIT (A) has examined all the evidences and has given a categorical finding that these creditors where neither produced nor their creditworthiness could be examined. Hence, in absence of creditworthiness being proved, the additions have rightly been made. He further submitted that, returning of loan does not make the credit as genuine, because assessee had to satisfy the entire source of the credit appearing in the books of account by proving the creditworthiness and genuineness of the transaction which here in this case the Ld. CIT (A) has given a finding that both these limbs have not been satisfied. 7. We have heard the rival submissions and perused the relevant finding given in the impugned orders as well as material placed on record. Here in this case, the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank account of the lender that no cash was deposited before making the payment to the assessee. Ld. CIT(A) had observed that the bank account in the name of D.K. Jain & Sons, HUF for which no clarification is given and the bank statement extract is of 1 page only reflect transaction from 13.12.2008 to 7.1.2009 and from this he inferred that this party did not have the capacity and creditworthiness to given the loan. On perusal of the entire material placed before us, we find that this party has given the confirmation alongwith his income tax return and bank statement. The said bank statement reveals that there was a sufficient balance before giving the loan to the assessee and no cash has been deposited in the bank account. The assessee has also enclosed the copy of account for the period 1.4.2008 to 31.3.2010 to show that the said amount has been returned back through cheque. Thus, in wake of such evidences, the source stands proved and the reasoning given by the Ld. CIT (A) cannot be held. Accordingly, the same is directed to be deleted. iii) Dhanpal Tomar ₹ 2 lacs; 10. For this lender the assessee has given the PAN number alongwith copy of income tax return, copy of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the interest and after deducting TDS. Since transaction has been carried out through banking channel and interest has been paid after deducting TDS, it cannot be held that the loan transaction is not genuine. Therefore, we are deleting this addition also made on account of this lender. (v) Dharmendra Rana - ₹ 5 lacs; 12. Assessee has submitted that this person got paralyzed in 2014 and is unable to hear or speak. It was impossible for the assessee to produce all the documents from the said person, especially after lapse of substantial time after the transaction of loan and repayment. However, to prima facie prove the genuineness the assessee has produced ledger account to show that the amount was taken only for a short period i.e., it was taken on 7.3.2009 and was returned back on 16.4.2009. Both these transactions were through account payee cheque. Apart from that PAN, copy of confirmation, copy of ledger account was filed during the course of the appellate proceedings. Ld. CIT (A) has confirmed this amount on the ground that bank statement of this said person has been produced and there is no copy of ITR. Once the assessee has given the circumstances in which some of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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