9911796707
TMI Blog2021 (6) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... t : Mr. T.Banusekar, C.A For the Respondent : Ms.R.Anita, JCIT ORDER PER G.MANJUNATHA, AM: This appeal filed by the assessee is directed against the order of the learned CIT(A)-9, Chennai dated 15.06.2017 and pertains to assessment year 2009-10. 2. The assessee has raised the following grounds of appeal:- 1. For that the order of Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case to the extent prejudicial to the interest of the appellant and at any rate is opposed to the principles of equity, natural justice and fair play. 2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 3. For that the Commissioner of Income Tax (Appeals) erred in upholding the disallowance of unsecured loans of ₹ 3,26,00,000/- from C.K.Exports (Prop Prema U Mehta), Mehta Motors General Finance Co (Prop C Umedmal HUF) and Swastik Trading Corporation. 4. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the unsecured loans are genuine and the disallowance of the same is not warranted in the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the assessee before learned CIT(A) are that unsecured loans received from M/s. C.K. Exports, M/s. Mehta Motors General Finance Company and M/s. Swastic Trading Corporation are genuine transactions, which are routed through proper banking channels. Further, creditors have established source of income to explain loans given to the assessee. The Assessing Officer has ignored all the evidences filed by the assessee and made additions on suspicious ground without bringing on record any evidence to prove that unsecured loans received from above concerns are unaccounted income of the assessee. 5. The learned CIT(A), after considering relevant submissions of the assessee and also relied on various judicial precedents including the decision of Hon'ble Supreme Court in the case of M/s. Kachwala Gems Vs. JCIT (2006) 206 CTR (SC) 585 held that payment by account payee cheque is not sufficient to establish genuineness of transactions. What is relevant to see is transactions are passed the test of genuineness in real sense, that means the assessee should prove beyond doubt the nature of credits and source for such credits. In this case, it is admitted fact that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, but the perusal of the assessment order shows that Shri. Rajendrakumar, AR of the appellant appeared and it is only after discussing the issues with him that the order was passed. Even during the appeal proceedings, the appellant had sufficient opportunity to explain its case, therefore the ground regarding opportunity for rebuttal was not granted is not acceptable. In view of the above, the addition of ₹ 3,26,00,000/- is hereby confirmed. 6. The learned A.R for the assessee submitted that the learned CIT(A) has erred in confirming additions made towards unsecured loan received from M/s. C.K.Exports, M/s. Mehta Motors General Finance Company and M/s. Swastic Trading Corporation, without appreciating the fact that unsecured loans are genuine which are supported by necessary evidences. The AR for the assessee referring to paper book filed by the assessee submitted that the assessee has filed ledger account copies of loan creditors along with bank statements and established that all transactions are routed through proper banking channel . The assessee has also explained source of income for unsecured loans, as per which a sum of ₹ 1,75,00,000/- received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain whether transactions of unsecured loans received from three companies are genuine transactions which pass test of ingredients provided u/s.68 of the Act or not, one has to understand provisions of section 68 of the Act. The provisions of section 68 of the Act deals with cases where any sum found credited in books of account of the assessee for any previous year for which the assessee fails to establish identity, genuineness of transactions and creditworthiness of parties, then said sum found in the books of account of the assessee shall be treated as income of that year. Therefore, to come out of shadow of provisions of section 68 of the Act, one has to prove identity of the creditor, genuineness of transaction and creditworthiness of parties. Once initial burden of proving all three ingredients are discharged, then burden shifts to the Revenue to prove otherwise that the said unsecured loans are unaccounted income of the assessee. 9. In this legal background, if you examine facts of this case, we find that the assessee has received a sum of ₹ 1,75,00,000/- from M/s. Mehta Motors General Finance Company, a proprietary concern of Mr. Umed Mehta (HUF). The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 by filing various details including financial statement of creditors, their bank statements and confirmation letters to prove transactions. Once an assessee discharged its burden, then burden shifts to Assessing Officer to prove otherwise that said transaction was nothing but undisclosed income of the assessee. In this case, the Assessing Officer has not brought on record any evidence to prove that said sum was undisclosed income of the assessee. Therefore, we are of the considered view that the Assessing Officer was completely erred in making additions towards unsecured loans received from three companies of assessee group. We further noted that the Hon'ble Supreme Court in the case of CIT Vs. Lovely Exports (2008) 216 CTR 198 has clearly held that once initial burden of identity was proved, then the Assessing Officer is at liberty to proceed on the creditors in accordance with law, but said sum cannot be treated as unexplained credit of the assessee. A similar view has been expressed by the Hon'ble Supreme Court in the case of M/s. Steller Investments Ltd. 115 taxmann.com 99(SC). 10. Insofar as case law relied on by the learned CIT(A) in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
