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TMI Blog2019 (12) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 39,38,000. Therefore assessee cannot be accused of furnishing inaccurate particulars of income or concealing income to that extent. Therefore, imposition of penalty on the addition and the corresponding interest thereon deserves to be deleted. - ITA no. 3970/Mum/2014, ITA no. 3146/Mum/2015 - - - Dated:- 6-12-2019 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER For the Appellant : Shri Vinod Kumar For the Respondent : Shri Madhur Agarwal ORDER PER SAKTIJIT DEY. J.M. The aforesaid appeals filed by the assessee are against two separate orders passed by the learned Commissioner of Income Tax (Appeals) 32/37, Mumbai, for the assessment year 2003 04. 2. While one of these appeals arise out of quantum proceedings, the other one is against penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 (for short the Act ). ITA no.3970/Mum./2014 Quantum Appeal 3. The dispute in the present appeal is confined to the addition of ₹ 34,98,000, as unexplained cash credit under section 68 of the Act. 4. Before we proceed to decide the merits of the issue raised in the appeal, it is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other 11 parties, who either did not reply to the notice issued under section 133(6) of the Act or such notices could not be served on them due to their unavailability in the given address, the Assessing Officer observed that such loan amount aggregating to ₹ 27.83 lakh cannot be held to be genuine. After perusing the remand report and the submissions of the assessee, learned Commissioner (Appeals) sustained the addition of ₹ 34.98 lakh, thereby, deleting the balance amount of ₹ 11.50 lakh out of the addition made by the Assessing Officer. Being aggrieved, the assessee is in appeal before us. 7. The learned Authorised Representative submitted, the assessee has been able to establish the identity of the creditors as in respect of most of the 22 creditors notice issued under section 133(6) of the Act, except four parties, were served, though, in some cases reply was not received. The learned Authorised Representative submitted, in the present appeal, the assessee is only contesting the addition of ₹ 27.83 lakh representing the loan taken from 11 creditors which learned Commissioner (Appeals) has confirmed. He submitted, in respect of the balance loan amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Departmental Representative relying upon the observations of the Assessing Officer in the remand report as well as the observations of the learned Commissioner (Appeals) submitted, during the assessment proceedings, the assessee did not file even a single confirmation from the creditors. He submitted, only before learned Commissioner (Appeals), the assessee filed confirmations from 22 creditors which were sent for verification of the Assessing Officer. He submitted, in response to the summons/notices issued under section 133(6) of the Act, some of the creditors confirmed of having given loan to the assessee. On the basis of such confirmation, the Assessing Officer accepted such loan amount to be genuine. However, the Assessing Officer treated those unsecured loan to be non genuine where the notices issued under section 133(6) of the Act, though, served were not responded to or could not be served. Thus, he submitted, due to non compliance to the summons/notices issued by the Assessing Officer, neither the genuineness of the loan transaction could be verified nor their creditworthiness could be ascertained. Therefore, the addition to that extent was rightly sustained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r unavailability in the given address or due to incorrect address. In respect of other parties, though, notices issued under section 133(6) of the Act were served, however, no reply was received from them confirming the loan transaction. It is the case of the assessee that since he has already furnished the confirmations of the creditors along with PAN, loan availed from them cannot be treated as non genuine. In our view, mere filing of confirmations will not establish either the genuineness of the loan transaction or the creditworthiness of the parties. Therefore, the Assessing Officer has to verify factually whether the creditors/lenders have creditworthiness to advance loan. It is a fact on record that the enquiry conducted by the Assessing Officer to verify the genuineness of loan transaction and the creditworthiness of the creditors become fruitless as the summons/notices issued to the concerned creditors were either not responded to or could not be served. The assessee was also unable to produce the concerned parties before the Departmental Authorities at any stage to prove the genuineness of the loan transaction or the creditworthiness of the lenders. In such circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount added back under section 68 of the Act. Grounds are partly allowed. 11. In the result, appeal is partly allowed. ITA no.3146/Mum./2015 12. This appeal by the assessee is against imposition of penalty under section 271(1)(c) of the Act. 13. As discussed in the earlier part of the order, alleging lack of any supporting evidence including confirmation filed by the assessee, the Assessing Officer added back the unsecured loan of ₹ 46,53,000, as unexplained cash credit under section 68 of the Act along with the interest paid thereon amounting to ₹ 28,18,785. While contesting the aforesaid addition before the first appellate authority, the assessee gained partial relief as learned Commissioner (Appeals) deleted the addition to the extent of ₹ 11,55,000. On the basis of addition made on account of unexplained cash credit, the Assessing Officer had initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately passed an order on 28th December 2007, imposing penalty of ₹ 22,42,436. The assessee challenged the penalty imposed under section 271(1)(c) of the Act before the first appellate authority. 14. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee by deleting the amount of ₹ 1,64,500. Thus, from the aforesaid facts it becomes clear that only in respect of loan amount of ₹ 7,15,000, the assessee has not been able to furnish any information including confirmation at any stage right up to the Tribunal. However, in respect of the balance amount, the assessee did furnish confirmations from the lenders, though, a part of such loan amount has been sustained as the concerned lenders did not furnish their reply to the notices issued under section 133(6) of the Act by the Assessing Officer. The non cooperation of the lenders in the enquiry conducted may be for various reasons. While confirming the addition in the quantum proceedings, one has to look at whether the ingredients of section 68 of the Act are established or not. Once the Appellate Authority on the basis of facts on record concludes that either the identity of the creditor or the genuineness of the loan transaction or the creditworthiness of the creditors are not established, addition can be made under section 68 of the Act. The aforesaid finding has to be on the basis of facts/evidences brought on record during assessment proceeding. However, impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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