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TMI Blog2020 (4) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... application for charitable purposes or otherwise. In view of this, the addition made by the Assessing Officer in respect of alleged loans received from remaining four persons at Serial No. 2, 6, 10 and 16 as given on the chart forming part of the order of CIT(A) amounting to ₹ 85,88,616/- is confirmed. Revenue's Ground is partly allowed. - ITA No. 717/CHD/2019 (Assessment Year : 2012-13) - - - Dated:- 29-1-2020 - SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by: Shri Rohit Goel, CA Revenue by: Shri Chandrajit Singh, CIT DR ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the Revenue against the order dated 15.2.2019 of the Commissioner of Income Tax (Appeals), Panchkula [hereinafter referred to as CIT (A) ]. 2. The Revenue in this appeal has taken the following grounds of appeal:- 1. That on the facts in the circumstances of the case, the Id. CIT (Appeals) has erred in law in allowing the appeal of the assessee by deleting the additions of ₹ 9,10,37,838/- made by the AO after proper verifications. 2. That on the facts in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, the Assessing Officer noted that that an amount of ₹ 5,89,04,330/- was shown by the assessee as Corpus Fund received during the year. The assessee was asked to furnish the names and addresses of the persons alongwith the amount of donation from whom the sum of ₹ 5,89,04,330/- was received. The assessee submitted the names of the persons who made the corpus donations by cheque. However, no details like address, PAN etc. have been submitted for verification. As regard to cash donations, the assessee has merely submitted the corpus donation account as appearing in his own books of account. Even name of the persons who had given cash donations in corpus was not mentioned. The Assessing Officer asked the assessee to provide identity of the donors, their creditworthiness and mode of transaction but the assessee had only provided a list of donors with no address, no creditworthiness. The Assessing Officer observed that only providing of list of donors would not establish the genuineness of the transactions. He held that the assessee was not able to prove the genuineness of the donations. Accordingly, the Assessing Officer made addition of ₹ 5,89,04,300/- to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the donation received from the persons who were not called and the persons who were called and accepted the fact of giving donation, cannot be said to be not genuine. As regards the persons who had come and denied before the Assessing Officer the fact of giving donation, we observe that certain fallacies were pointed out by the assessee before the lower authorities, which have not been dealt with by either the Assessing Officer or the learned CIT (Appeals). Further, cross examination of these persons was specifically asked by the assessee, which was not provided to it. In this view, the addition even on these accounts cannot be made. 6. The Ld. CIT(A) while relying upon the above decision of the Tribunal further observed that for the year under consideration, the assessee had submitted the list of corpus donors with names and addresses and the amount received which was not taken into cognizance by the Assessing Officer. The Ld. CIT(A) has further noted that out of the impugned sum, an amount of ₹ 2.48 corers was received through cheques. He has further observed that since the receipts were allowed as corpus funds contributed in assessee s own c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the lenders and the genuineness of the transactions. The relevant part of the order of the CIT(A), for the sake of ready reference, is reproduced as under:- In response to the above remand report, in rejoinder the AR of the appellant has further furnished his explanation with regard to the ten creditors which is being reproduced and discussed, taking into account the documentary evidences filed, as below: 1. Sh. Gurinder Pal Singh - Deposit of ₹ 13,50,000/-. It is submitted that as per the comments of AO as well as the Ld. DCIT; the aforesaid person had submitted his confirmation as well as copies of his PAN Card and Aadhar Card. Since he was a NRI working in UAE at the time of giving the aforesaid loan; he did not file his ITR. Here we would like to draw your kind attention towards the case of Krishan Chand Joginder Paul v. ACIT [2001] 114 Taxman 127 (Chd.)(Mag.) wherein the Hon'ble bench held that for purposes of cash credits, the assessee was required to prove three things, viz., identity of the creditor, creditworthiness of the creditor and the genuineness of the transactions. In this case, all the above parameters are fulfilled hence the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made through Bank Transfers, especially considering the fact that the appellant has offered the explanation regarding the same alongwith documentary evidences, which the AO has not been able to rebutt. Therefore, addition is not required to be made on account of this creditor. 3. Sh. Sandeep Jain - ₹ 10,00,000/-. The amount has been listed under the heading unverified by the Ld. DCIT for the reasons best known to him. The AO had written that only confirmation was needed which was allegedly not filed before him hence he added back the aforesaid sum. The confirmation was resubmitted before the Ld. DCIT but he marked the aforesaid amount as unverifiable. Since the three point test for escaping additions u/s 68 was passed by the assessee; the above additions may also be deleted. It is noted that the appellant has provided confirmation, ITR and copy of bank statement in respect of this creditor which the AO seems to have ignored. Therefore, the genuineness of the transaction as well as the credit worthiness of the creditor has been sufficiently explained. Therefore, the addition of ₹ 10,00,000/- is not required to be made on this account. 4. Sh. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has submitted a copy of sale deed which shows that the lender, Sh. Satpal Singh, had sold the penthouse at Thane for a total consideration of ₹ 67,00,000/- on 30.12.2011, out of which ₹ 56,00,000/- was received by the lender vide demand draft dated 28.12.2011. The said amount is shown to have been lent to the appellant just a few days later on 03.01.2012. Further, the appellant has filed a copy of letter issued to the lender by the Income Tax Officer, Ward-4, Yamunanagar, calling for information u/s 133(6) about the sale of said flat. It is also observed that the said amount of ₹ 56,00,000/- has been transferred through bank transfer vide RTGS No.UTIBH12003017624. In view of above, it is seen that the appellant has provided sufficient documentary evidence to prove the genuineness of the unsecured loan received by it. Therefore, addition is not required to be made on account of this creditor. 6. Sh. Smartypal Singh - ₹ 4,00,000/-. The amount has been listed under the heading unverified by the Ld. DCIT for the reasons best known to him. The AO had written that confirmation and ITR was needed which was allegedly not filed before him hence he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is amount of ₹ 25,247/- is the interest (after deducting TDS) on the loan and filed copy of ledger account. The explanation submitted by the appellant has merit and therefore the entire loan outstanding of ₹ 20,25,447/- in respect of this creditor is treated as explained. Therefore, addition is not required to be made on account of this creditor. 9. Smt. Sunita Mangla - ₹ 19,475/-. The assessee took a loan of ₹ 15.00 Lakhs from above person on interest on 17.02.2012. This amount of ₹ 19,475/- is the interest (after TDS). The Ld. DCIT failed to consider the same and termed the same as unverifiable. I find that the Assessing Officer has accepted the loan of ₹ 15 lakhs as genuine but not accepted the amount of ₹ 19,475/-. The appellant has clarified that this amount of ₹ 19,475/- is the interest (after deducting TDS) on the loan and filed copy of ledger account. The explanation submitted by the appellant has merit and therefore the entire loan outstanding of ₹ 15,19,475/- in respect of this creditor is treated as explained. Therefore, addition is not required to be made on account of this creditor. 10. H.P. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Sh. Gurinder Pal Singh ₹ 13,50,000/- 6 Sh. Sanjeev Kumar ₹ 27,09,449/- 10 Sh. Subhash Chand ₹ 6,47,484/- 16 M/s H.P. Shree Laxmi Oils ₹ 38,81,683/- Total ₹ 85,88,616/- Therefore, the above unsecured loans totaling ₹ 85,88,616/- are held to be unexplained and the action of the AO in holding these loans as unexplained is upheld in respect of the above four creditors. Therefore, the addition on account of unexplained loans of an amount of ₹ 5,90,23,698/- (6,76,12,314 - 85,88,616) is deleted. The ground of appeal No. 2 is partly allowed. 9. We find that the Ld. CIT(A) has elaborately discussed the evidences produced in respect of 6 persons as detailed at S.Nos. 3,5,7, 8, 12 14 . The Ld. DR could not point out any discrepancy in the findings of the CIT(A) on this issue. In view of this, there is no merit in Ground No.2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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