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TMI Blog2019 (1) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... eness of the transaction. In response, the assessee filed the copy of ledger account and bank statement of the lender. The AO noticed that there was a deposit entry on the same date just prior to issuance of the cheque. He also observed that the assessee did not produce the lender and explain the deposit entry in the bank account of the lender. The AO, therefore, made the disallowance of Rs. 10,00,000/- u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as the Act). A reference was made to the following decisions of the Hon'ble Supreme court: * Sumati Dayal Vs CIT 214 ITR 801 (SC) * McDowell and Co. Vs CIT 154 ITR 148 (SC) * Cochin State Power & Light Corporation Ltd. Vs State of Kerala [AIR 1965 SC 1688, 1691] * Vinod Krishna Kaul Vs Union of India [JT 1995 (9) SC 205, 208] 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: "It is respectfully submitted that the assessee company has opening balance of sum borrowed from M/s. Shashank Financial Services (P) Ltd (hereinafter referred to as 'SFSPL') amounting to Rs. 57,85,186/- as on 01.04.2009. During the AY 2010-11, assessee company has repaid sums of Rs. 2,85,186/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion dated 13.12.2012, and 25.03.2013 are enclosed vide Annexure-3, and 4 respectively. Despite, submitting the above mentioned details, which clearly proves the genuineness of the transaction, Ld. AO asked us to personally present director of 'SFSPL' in his office. Accordingly, we requested Mr. Yogesh Singhal, director of 'SFSPL' to appear before the Ld. AO and to explain the said transaction of Rs, 10,00,000/- to the Ld. AO. He agreed for the same, but unfortunately he met with a serious accident on 24.03.2013, in which he suffered serious head injury. The said fact can also be verified from local news paper1 Dainik Jagran', dated 25.03.20)3, which covered this incidence of accident (copy of 'Dainik Jagran' news paper is enclosed vide Annexure -5). Further, copy of report of MMG district hospital, Ghaziabad, in which Mr. Yogesh Singhal was admitted for first aid is also been enclosed vide Anaexure-6. Therefore, despite best efforts, unfortunately Mr. Yogesh Singhal, director of 'SFSPL' could not appear before the Ld.AO, these facts were also properly brought to the notice of the Ld. AO (copy of our submission dated 25.03 2013 is enclosed vide Annexure -4). In the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. At page no. 3 of the assessment order, Ld. AO has given reference to the judgment of Hon'ble Supreme Court in the case of Sumati Dayal vs CIT (214 ITR 801), wherein it is held that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. In this connection, we humbly submit that, during the assessment proceedings, the assessee company has furnished all the proofs, which it could furnish to prove the genuineness of the said transaction of Rs. 10,00,000/- i.e. balance conformation, lender's bank account, balance sheet of the lender etc. etc., except personal presence of the Director due to his accident. Just due to the fact that the assessee company could not make available to the director of its lender, Ld. AO made an addition of Rs. 10,00,009/- without appreciating the details submitted before him and totally ignoring the fact of the accident of the said director. Therefore, in the captioned case, the Ld, AO totally failed to appreciate the surrounding circumstances to find out the reality and made addition with a predetermined mind." 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything to prove that share applicants were not creditworthy. In the present case, the A.O. has brought on record the bank A/c of creditor and the return of income of creditor (submitted by the assessee) which prove that creditor lacks creditworthiness. Facts of the case of Ranchhod Jivabhai Nakhava (supra) cited by the appellant are distinguishable. In that case the court had observed inconsistencies in statements of creditors whereas in the present case, the assessee does not want to avail of the opportunity of producing the creditor for examination, who allegedly had met an accident during assessment stage. Therefore, this case does not help me case of the appellant. 5.2 In facts and circumstances of the case, I hold that the appellant has failed to discharge the onus cast upon him u/s 68 of proving creditworthiness of the creditor and genuineness of the transaction. Therefore, the addition made by the A.O. u/s 68 is sustained and ground of appeal is rejected." 7. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee furnished all the documents relating to the ide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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