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TMI Blog2020 (12) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... annels are relied upon to establish the genuineness of the so called transaction, which banking channels can be used even for fake transactions of circulating one's own unaccounted money in fake names. Neither any written contract nor any identity of the Creditor, having been established in the present case, we cannot find any fault with the findings concurrently rendered by the three authorities below, that the said addition deserves to be made under Section 68 - . Merely because other two loan transactions, with two other persons was believed to be genuine and additions were set aside, that is not a sufficient ground to hold that a similar treatment should have been given with respect to the alleged loan transaction of M/s.AR.Com also. Decided against the assessee. - Tax Case (Appeal) No.630 of 2017 And CMP No.15965 of 2017 - - - Dated:- 30-11-2020 - Hon'ble Dr. Justice Vineet Kothari And Hon'ble Mr. Justice M.S. Ramesh For the Appellant : Mr.K.G.Raghunath For the Respondent : Mr.T.Ravi Kumar Senior Standing Counsel JUDGMENT DR. VINEET KOTHARI, J. The present Tax Case Appeal has been filed by the Assessee Mr.C.V.Ravi, aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count payee cheques drawn from bank accounts of the creditors and the assessee was not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source. 3.1.On the contrary, the Id. D.R. Relied on the judgment of CIT Vs. P.Mohanakala in [2007] 291 ITR 278 (SC) wherein held that: Reversing the decision of the High Court, that the findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequences. The High Court misdirected itself and erred in disturbing the concurrent findings of fact. The Id. D.R submitted that the assessee has not discharged the burden cast upon the assessee regarding identity of the parties, genuineness of the transactions and capacity of the lenders to advance the amount to the assessee. According to the ld. D.R the entire addition was made by the AO to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2.55 Crores. Remaining amount of loan i.e., ₹ 1.25 Crores which were repaid by way of sale of shares by the assessee which was only during the financial years relevant to Asst Years 2010-11 and 2011-12. 3.3.Thus, as far this year is concerned, the repayment of loan of ₹ 2.55 crores stands unexplained since the said sum is stated to be repaid in the same year. On the remaining amount of ₹ 1.25 crores, the said amount is not figuring as loan in the books of C.V. Ravi as he had stated that he did not maintain books of accounts. Further it was also clearly proved that the assessee was also not in a position to prove the source for the said loan viz., M/s.A.R. Com. It is also pertinent to mention that a separate OD account was opened with Oriental Bank of Commerce by M/s.Sri Aurobindo Finance Hire Purchase Ltd., to settle the loan amount of ₹ 2.15 crores during the financial year 2008-09 and the entire amount of ₹ 2.15 crores given by Oriental Bank of Commerce was squared off by Sanguine Media Ltd., and Term Deposit Closure Proceeds of ₹ 2 crores in the same year. The OD account starts from 12.10.2008 and on 28.10.2008 there was closure pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of M/s.AR.Com. In such circumstances, we are not in a position to disturb the findings of the lower authorities in respect of credit in the name of M/s.AR.Com. Accordingly, the addition of ₹ 3.05 crores in the name of M/s.AR.Com to be considered as unexplained credit in the hands of the assessee, the addition sustained by the Ld. CIT (A) is justified. Hence, this ground raised by the assessee stands rejected. 3.6.Coming to the credit in the name of M/s.MSG Associates for ₹ 50 lakhs and of Mr.Bharat Chandan for ₹ 25 lakhs, it was stated by the AO in his Remand Report that the identity of these two parties are proved by filing confirmation letters. The contention of the ld.D.R is that the assessee has not repaid the loan, but repayment by the third party. In our opinion, when the AO himself given in the remand report that assessee had produced the confirmation letters and credit worthiness of these parties, were also proved through bank accounts, it is not appropriate on the part of the Departmental Representative to argue contrary to the Remand Report submitted by the AO before the Ld. CIT (A), which is produced by the Ld. CIT (A) in para 8.2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)M/s.A.R.Com ₹ 3,05,00,000/- on 04-09-2008 (2)M/s.Bharath ₹ 25,00,000/- on 04-09-2008 (3)M/s.MSG Associates ₹ 50,00,000/- on 04-09-2008 Total ₹ 3,80,00,000/- Q.8. Please state the purpose for which the above loans have been taken? Ans: M/s.Sanguine Media Limited, came with a Rights Issue in September 2008, SEBI fixed the price at ₹ 23 for the 10 rupees share. To subscribe the promote share of 16.50 lakhs of shares the above loans have been taken and utilized. Q.9.Please furnish the full details of the above loan transactions, such as present address of the above persons, details of interest, repayment, mode of receipt etc? Ans: The above loan amounts have been received through banking channels. At present, I do not remember the addresses of Mr.Bharat and M/s.MSG Associates. The same will be furnished tomorrow. The address is of M/s.AR.Com is not known to me. Q.10.What is the balance amount payable to M/s.A.R.Com? Ans: There is no balance amount to be paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above amount of ₹ 3.05 crores as income in my hands. I undertake to pay the taxes on the above amount within a week's time. 4. The learned Senior Standing Counsel for the Revenue further submitted that though the said statement was later on retracted by the Assessee, but the time gap between the such retraction and the said statement is more than one year. The next statement, which was recorded by the Assessing Authority, in which the said retraction was made and which was relied upon by the learned counsel for the Assessee also is of dated 20.12.2011, which too is quoted in the Inspector's report dated 09.12.2011 and the same is again extracted below for ready reference: In continuation assessment proceedings summon u/s. 131 of the Income-Tax Act, 1961 dated 20-12-2011 was issued to the assessee. The copy of Sworn statement deposed by the assessee on 01.02.2010, the copies of Inspectors enquiry report furnished in respect of M/s.AR.Com and its partners Mr.ASRATH and Mr.Mohamed Kasim were shown to the assessee. The copies were perused by the assessee and sworn statement was recorded u/s.131 of the Income-Tax from him. Copy of the sworn statement is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, from whom he has alleged to have been taken ₹ 3.5 Crores as loan itself was enough to draw an adverse inference against the Assessee and the belated retraction, at a much later stage was of little help to the Assessee. If at all the original statement was recorded by the Assessing Authority, under duress of coercion, the Assessee could have retracted the same at the earliest available opportunity, after such statement was recorded. Taking a period of more than one year and again except such retraction of statement, in the course of second round of recording statements under Section 131 of the Act only, retraction of such statement, without adducing any cogent evidence to establish the identity of the said Creditor and genuineness of the alleged loan transaction, the Assessee seems to have done nothing to establish the genuineness of the entire loan transaction. It is not even believable that from a person, from whom the loan of ₹ 3 Crores is taken, is not even known to the Assessee and only the banking channels are relied upon to establish the genuineness of the so called transaction, which banking channels can be used even for fake transactions of circulating one ..... X X X X Extracts X X X X X X X X Extracts X X X X
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