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TMI Blog2019 (6) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited as on 31.03.2010 was found showing a loan of Rs. 86,87,139/- received from the assessee. Since the said loan was not reflected in the personal file of the assessee, notice under section 148 was issued by the Assessing Officer on 11.04.2012. The assessee, however, did not file his return of income in response to the said notice. Thereafter a notice under section 142(1) was issued by the Assessing Officer requiring the assessee to explain the source of funds utilized for giving a loan of Rs. 86,87,139/- to M/s. Winner Garments Pvt. Limited. The assessee, however, failed to offer any explanation regarding the nature and source of funds utilized for giving the said loan. The Assessing Officer, therefore, treated the said loan given by the assessee to M/s. Winner Garments Pvt. Limited as unexplained investment of the assessee and an addition of Rs. 86,87,139/- was made by him to the total income of the assessee under section 69 in the assessment completed under section 147/143(3) vide an order dated 18.09.2012. 3. Against the order passed by the Assessing Officer under section 147/143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging, inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2014 but no one compiled even though the summons had been served to the respective person. Giving him further opportunity of being heard Summon u/s 131 was once again issued on 15.01.2015 to appear on 27.01.2015. None appeared. However on 02.02.2015 Shri Sk. Sultan appeared in the Chamber of the undersigned. Keeping in view the remand proceedings and giving the assessee one more opportunity a statement was taken u/s 131. Sk. Sultan stated that he had given advance to the tune of Rs. 7,00,000/- for purchasing two shops at the premises which Shri Sujauddin Molla was promoting. The payments were made in cash and the details were Rs. 2 lakhs on 2010, Rs. 3 lakhs on 2011 and Rs. 2 lakhs on 2012. He was also asked to produce evidences in respect of the payment. The incumbent stated that "since Sujauddin Molla is my wife's brother all transaction is in good faith and I have no evidences to show to you." Sk. Sultan was also asked to show his creditworthiness. He stated that he earns around Rs. 21,000/- and has a wife, 2 daughters, 2 sons and his mother residing with him. He does not hold any bank account. (c) Sk. Aminul Haque Vill. Bishuhara, P.O. Buita, Budge Budge, South 24 Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o brothers living with him. (g) Fulendu Chokroborty: ViII. xusumoaia P.O. Padna Hoogly 712148 Summon u/s 131 was issued to him on 25.09.2014 but no one complied even though the summons had been served to the respective person giving him further opportunity of being heard. Summons u/s 131 was once again issued on 15.01.2015. Even after the Summon being served the incumbent failed to appear and explain the source and mode of payment in respect of the loan given to the assessee Sujauddin Molla. As per the written submission given by Shri Falguni Mukherjee, (son of Shova Mukherjee) Smt. Shova Mukherjee expired on 20.05.2013 but she had given an advence of Rs. 40,00,000/- for booking a flat of 4000 sq.ft: but now he has no interest and wanted the money back. But however it is surprising to note that there is no agreement in respect of the payment which as per the incumbent was once again made in cash". When remand report submitted by the Assessing Officer giving his adverse comments in respect of explanation offered by the assessee regarding source of funds utilized for giving loan to M/s. Winner Garments Pvt. Limited was confronted by the ld. CIT(Appeals) to the assessee, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 09.01.2010. Further, the creditor stated that he is not an Income Tax assessee the source was not explained. No proof was produced before the A.O. in support of the amount paid to Sujauddin Molla. His total income was of Rs. 21,000/- and he has to take care of her mother, wife, 2 daughters, 2 sons and his income would be hardly sufficient to meet the family needs and there is no room to make savings to the extent of Rs. 7,00,000/- to give as interest free advance to the appellant. Therefore, I agree with the A.O. that the advance in the name of Sk. Sultan is a bogus loan and Sk. Sultan is not having the credit worthiness to advance such an amount and the agreement made by the appellant was an afterthought. Therefore, the addition of Rs. 7,00,000/- is confirmed. (b) Sk. Aminul Haque - Rs. 3,40,000 In the remand report the A.O. stated that the creditor is not having credit worthiness to given an advance of Rs. 3,40,000. As per the remand report, creditor has appeared before the A.C. and confirmed the advance given to the appellant. As per his statement the entire advance was paid in cash. There was no evidence for the payment. However, the appellant has filed copy of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them have stated that there was no proof for the payment made. Whereas surprisingly the appellant has furnished the copies of agreements which clearly shows that the agreements were made subsequently to create an evidence for the source of investment made in M/s. Winner Garments Pvt. Ltd. The appellant has neither started the proposed construction of the building nor repaid the advance. The creditors also inspite of having no means not demanding the amount. Mere confirmations without proving the credit worthiness cannot establish the genuineness of the advance. From the details filed, it is seen that the creditors had either nil or negligible income. It is well established that loan credits from parties, who are of no means cannot be accepted as genuine. In the case of CIT -vs.- Precision Finance (P,) Ltd. Hon'be Calcutta High court also took the following view :- 'It is for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. In our view, on the facts of this case, the Tribunal did not take Into account all these ingredients which have to be satisfied by the assessee. Mere furnishing of the particulars is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings and confirmed of having given the advances to the assessee. He contended that the source of funds utilized by the assessee for giving loan to M/s. Winner Garments Pvt. Limited thus was duly established by the assessee on evidence and there was no reason for the authorities below to reject the same on the ground that creditworthiness of the concerned creditors was not established. Relying on the decision of the Hon'ble Madhya Pradesh High Court in the case of CIT -vs.- Metachem Industries (245 ITR 160), he contended that if at all the creditworthiness of the concerned parties was not established as held by the authorities below, the addition should have been made in the hands of the said parties and not in the hands of the assessee. 8. The ld. D.R., on the other hand, submitted that investment in the form of loan given to M/s. Winner Garments Pvt. Limited was made by the assessee as found during the course of survey and since the assessee failed to explain the source of funds utilized for making the said investment, the addition under section 69 was rightly made to the total income of the assessee by treating the said investment as unexplained. As regards the claim of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings, only four of the seven parties appeared before the Assessing Officer for examination/verification and as found by the Assessing Officer, they were not having capacity or creditworthiness to give the advances to the assessee in cash as claimed. It is observed that specific adverse findings/observations were recorded by the Assessing Officer in the remand report as well as by the ld. CIT(Appeals) in his impugned order to doubt or dispute the claim made by the assessee of having received the advances in question in cash from the concerned seven parties. At the time of hearing before us, the ld. Counsel for the assessee has not been able to bring anything on record to rebut or controvert these adverse findings recorded by the Assessing Officer as well as by the ld. CIT(Appeals). He has only harped on the documentary evidence filed by the assessee in the form of sale agreements and the confirmations of the four creditors as made before the Assessing Officer during the course of remand proceedings. However, as already noted by us, various discrepancies and anomalies were pointed out by the authorities below to show that the documentary evidence filed by the assessee in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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