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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 ..... aimed. 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. In the present case, investment in the form of loan given to M/s. Winner Garments Pvt. Limited was found to be made by the assessee in the financial year immediately preceding the assessment year under consideration and since the said investment was not recorded in the books of account of the assessee and the explanation offered by him about the nature and source of the said investment was not found to be satisfactory, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Assessing Officer under section 147/143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging, inter alia, the addition made by the Assessing Officer under section 69. During the course of appellate proceedings before the ld. CIT(Appeals), it was submitted by the assessee that he was having a plot of land situated at Village P.O. Chandannagar, P.S. Maheshtala admeasuring 10 decimal, which was supposed to be developed for commercial and residential purposes. It was submitted that the assessee had received advances from the following seven parties against the sale of the proposed developed property:- Sl. No. Name Amount 1. Sk. Monirul 4,50,000 2. Sk. Sultan 7,00,000 3. Sk. Aminul Haque 3,40,000 4. Hazi Asraf Ali Molla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 ₹ 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 ₹ 2 lakhs on 2010, ₹ 3 lakhs on 2011 and ₹ 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 ₹ 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 Parganas. Summons u/s 131 was issued to him on 25.09.2014 with no compliance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 ₹ 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 submitted on behalf of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t furnished the exact dates of payments whereas as per the agreement tile amount of ₹ 7,00,000/- was supposed to have been paid 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 ₹ 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 ₹ 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 ₹ 7,00,000/- is confirmed. (b) Sk. Aminul Haque - ₹ 3,40,000 In the remand report the A.O. stated that the creditor is not having credit worthiness to given an advance of ₹ 3,40,000. As per the remand report, creditor has appeared before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition made by the AO is confirmed. In the case of Sk. Monirul ₹ 4,50,000/-, Hazi Asraf AIi Molla ₹ 6,50,000/- and Fulendu Chakraborty ₹ 5,50,000/- there was no response from the creditors. The appellant has produced four creditors as discussed above. None of them had means to give such huge advances to the appellant. All of 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.- Precisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 74.90 lacs held to be cash credit, presumably u/s 68 of the I.T. Act, by the ld. CIT(A), may kindly be ordered to be deleted . 7. The ld. Counsel for the assessee submitted that the claim of the assessee of having received advances against sale of property from the concerned seven parties was duly supported by the documentary evidence in the form of sale agreements. He contended that four of the said seven parties appeared before the Assessing officer during the course of remand proceedings 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his explanation that the advances were received by him from seven parties against sale of property and the same were utilized for giving loan to M/s. Winner Garments Pvt. Limited. Although this explanation of the assessee was supported by documentary evidence in the form of sale agreement, there were various discrepancies and anomalies in the claim of the assessee as found by the Assessing Officer during the course of remand proceedings and as specifically recorded by the ld. CIT(Appeals) in his impugned order. During the course of remand proceedings, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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