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TMI Blog2020 (2) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-. The source of the funds for purchase of property was unsecured loans taken from various related and unrelated parties who credited this sum in the HDFC Bank Account Number xxx24233 of the assessee. All these loans were given interest free to the assessee, except one party named M/s Ranjitgarh Finance Company Pvt. Ltd. which made an interest provision at 9% per annum. The total loan was in a sum of Rs. 10,20,45,840/- from the following parties : Party Loan Given Rakesh Kapoor 6,98,45,840 Rakesh Kapoor HUF 1,37,00,000 BRK Infotech & Developers Pvt. Ltd., 50,00,000 Isha Kapoor 60,00,000 RanjitGarh Finance Co. Pvt. Ltd., 75,00,000 Total : 10,20,45,840 2.1. The case was examined for huge unsecured loans received by assessee for purchase of a residential property. The A.O. noted from the details on record that the amounts credited by these parties were highly disproportionate to their returned income. The A.O. has taken the figure of 03 parties for providing loans for last 05 years. The A.O. also noted that while assessee's income is only Rs. 30 Lakhs, but, she had made investment of Rs. 11.65 Crores, taken from loan and it is not replied as to how she is goi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord to prove genuineness of the loans, the documents filed on record are bank statements as well as returns filed by the creditors along with their PAN, balance-sheet or statement of assets of the creditors, confirmation from all the creditors. All the amounts are taken by way of banking channel which were recorded in the books of account of the creditors. Therefore, no addition could be made against the assessee. It was explained that 04 concerns are related to the assessee, therefore, no interest is paid and to one party interest is paid. The Ld. CIT(A), however, did not accept the contention of assessee and dismissed the appeal of the assessee. 4. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that assessee has produced documentary evidences on record to prove identity of the creditors, their creditworthiness and genuineness of the transaction in the matter. The assessee produced confirmation of account from all the creditors, their bank statements, their computation of income, details of source of funds received by them and statement of financial assets. Copies of the same are filed in the paper book details of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us upon assessee to prove genuine credit have not been discharged by assessee. The Ld. D.R. submitted that assessee has no source to return the loan amount from known source of income, therefore, addition was correctly made. 6 We have considered the rival submissions and perused the material on record. The assessee explained that loan amount was taken from 05 parties for purchase of property, out of which, 04 creditors are family members and related concern of the assessee Shri Rakesh Kapoor, creditor, is the husband of the assessee, Rakesh Kapoor HUF is family HUF in which husband of the assessee is Karta, Creditor M/s. BRK Infotech & Developers Pvt. Ltd., is a family company in which husband of the assessee is Director and Creditor Ms. Isha Kapoor is daughter-in-law of the assessee. The assessee filed confirmation of accounts from all these creditors supported by ITR, PAN, bank statements and computation of income, statement of financial assets and details and source of funds received by them. Mostly, the bank statements reveal their source of deposits are particularly their matured FDRs and sale of properties etc. All these creditors are having sufficient funds in their Bank ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h would prima facie discharge the burden of the assessee in proving the identity of shareholders, genuineness of the transaction and creditworthiness of the shareholders, thereafter in case such evidence is to be discarded or it is proved that it has "created" evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under s.68; AO failed to carry his suspicion to logical conclusion by further investigation and therefore addition under s.68 was not sustainable." 6.1. Decision of Hon'ble jurisdictional High Court in the case of CIT vs. WinstralPetrochemicals P. Ltd., 330 ITR 603, in which it was held as under : "Dismissing the appeal, that it had not been disputed that the share application money was received by the assessee-company by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the applicant companies were duly incorporated, were issued PAN cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loan confirmations giving full addresses, GIR numbers/ permanent account numbers, etc., of all the depositors. The Assessing Officer, however, issued summons to some of the creditors and also conducted inquiries about the genuineness or otherwise of the loans taken by the assessee. After considering the evidence, the Assessing Officer made an addition of Rs. 12,85,000 to the returned income of the assessee. This was confirmed by the Commissioner of Income-tax (Appeals). On further appeal to Tribunal the Tribunal held that the phraseology of section 68 of the Income-tax Act, 1961, was clear, that the Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year, that the legislative mandate is not in terms of the words "shall be charged to income-tax as the income of the assessee of that previous year", that the un-satisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as income of the assessee. The Tribunal found that the assessee had discharged the initial onus which lay on it in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer held that a sum of Rs. 8,35,000 was not genuine and added it as income of the assessee. The Tribunal affirmed this. On appeal : Held, that out of the three requirements, the first two, namely, the identity of the creditors and their creditworthiness had been established. In respect of the genuineness of the transactions, as far as the assessee was concerned he had proved that the entire amount involved was received by way of account payee cheques. The Assessing Officer had accepted them as genuine on the part of the creditors, but in the case of the assessee he held them not genuine. There were as many as twelve creditors and the allegations as regards opening of the bank accounts within a particular period was in the case of five creditors only. No inference could have been drawn that these were fake transactions. Admittedly there was no other evidence or material in support of the finding of the Tribunal that the cash credits were not genuine. The order of the Tribunal was not justified." 6.7. Considering the above discussion in the light of totality of the facts and evidences on record, it is clear that assessee produced sufficient documentary evidences on re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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