9911796707
TMI Blog2022 (3) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue and dismiss Ground No.1 of the Revenue s appeal. Addition treating the capital introduced by the partners of the assessee-firm as unexplained cash credits under Section 68 - HELD THAT:- Respectfully following this decision of Hon ble jurisdictional High Court in the case of PCIT Vs. Vaishnodevi Refoils Solvex [ 2018 (1) TMI 861 - GUJARAT HIGH COURT] we uphold the impugned order of the learned CIT(A) deleting the addition made by the Assessing Officer by treating the capital introduced by the partners of the assessee-firm as unexplained cash credits under Section 68 of the Act. Ground No.2 of the Revenue s appeal is accordingly dismissed. Disallowance under Section 40A(3) - assessee has made certain payments exceeding ₹ 20,000/-, in a single entry in cash , on account of purchase of diesel - HELD THAT:- Nothing on record to establish that the payments in question against the purchase of diesel were made by the assessee in cash to the suppliers who ordinarily was carrying on his business in such village or town which on the date of payment was not served by any bank. As a matter of fact, all these payments aggregating to ₹ 4,72,176/- were made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the assessee on the said loans. He, therefore, issued a notice requiring the assessee to show-cause as to why the unsecured loans to the extent of ₹ 37,00,000/- should not be treated as unexplained cash credits and the amount of such loans should not be added as income of the assessee under Section 68 of the Act. In reply, written submission was filed by the assessee on 15.12.2017 stating, inter alia, as under:- During this year, we had obtained a unsecured loans from 10 Parties the necessary explanation, confirmation and source was already submitted to you at the time of asst. Proceedings and the same was duly verified by you, your attention is invited Para 2(1) it was stated by you that while examination the submitted details and documents it is notice that credit worthiness are unproved. The basic requirements of the assessee to extent of onus of the assessee are as under as per section 68 of the income tax: (1) Proof of Identity of Creditors (2) Genuiness of Transaction (3) Capacity of Creditors to advance the money. In our case the condition no.1 and no.2 is fulfilled by us in all manners and no any adverse remarks pointed out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all the parties, it is seen that they are advancing sums of money to the assessee but the source of income is not clear. They have deposited fund in their accounts but there is no explanation of the source of deposits. Their creditworthiness is simply not proved. All are advancing huge sums of money but details are not available of their income savings and expenditures. Thus the creditworthiness and the genuineness of transactions are all in doubt.... C. An analysis of the above facts shows that none of those individuals' parties had the financial strength to lend such sums of money to the assessee, that too without interest and without a loan agreement The mere establishing of their identity and the fact that the amounts had been transferred through cheque payments did not by itself mean that the transactions were genuine. The identity, creditworthiness and the genuineness are all in doubt. Moreover, that these amounts have been advanced to the assessee without any explanation as to their relationship with the assessee, the reason for the payment of such amounts, as also whether any repayments have, in fact, been made. 5. The addition of ₹ 32,00,000/- m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THE ASSESSEE HAS GIVEN ITR ON RECORD AND BASED ON SOURCE OF INCOME AND BANK STATEMENT, IT IS VERIFIED THAT MONEY IS RECEIVED FROM BANK 6 R.S. ENTERPRISE (PROP: RANJANBEN RAMESHBHAI CHEKALIYA) ADD: 91, MACHICHUNAGAR, CINZOL DASKROI, AHMEDABAD-382445 ATKPC5963F 800000.00 THE ASSESSEE HAS GIVEN PAN AND ITR AND IT IS VERIFIED THAT BUSINESS INCOME IS SHOWN. MONEY IS RECEIVED VIA BANKING CHANNELS. 7 SHANTABEN MOHANLAL PATEL, ADD: 80, PANKAJ SOC., NR. ANJALI BUS STOP, ANJALI CHAR RASTA, PALDI, AHMEDABAD-380022 AEKPP0275L 400000.00 THE ASSESSEE HAS GIVEN PAN AND ITR ON RECORD AND THE SOURCE OF INCOME SHOWN IS BUSINESS AND OTHER SOURCES. MONEY IS RECEIVED VIA BANKING CHANNELS. 8 SHWETA ASHISHBHAI PATEL, ADD: 16, BASHIDHAR SOC. NR. BANSHIDHAR GARDEN, VASNA, AHMEDABAD 380007 RWEPP2123E 100000.00 THE ASSESSEE HAS GIVEN PAN AND ITR ON RECORD AND SOURCE OF INCOME IS SHOWN. MONEY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly pointed out by the learned Counsel for the assessee from the details given on page No.2 of the assessment order, specific observations were made by the Assessing Officer on the deposits found to be made in the bank accounts of the concerned loan creditors which clearly proves that the bank statements of the loan creditors were duly furnished by the assessee before the Assessing Officer. The learned DR has also contended that a very small amount of income was declared by all the loan creditors in their returns of income and going by this pattern, the genuineness of the loans become doubtful as rightly held by the Assessing Officer. However, this aspect of the matter alone, in our opinion, cannot disprove the unsecured loans in question received by the assessee; the genuineness of which was duly established by the assessee by filing the confirmation letters, PANs, Income-Tax Returns, bank statements etc. of the concerned loan creditors as rightly held by the learned CIT(A) by relying on the decision of Hon ble jurisdictional High Court in the case of Ranchhod Jivabhai Nakhava (supra) and Rohini Builders (supra). The primary onus that lay on the assessee to establish the identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on account of unsecured loans. 10. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. Although the learned DR has reiterated the submissions made in support of the issue raised in Ground No.1, it is observed that this issue is squarely covered in favour of the assessee by the decision of Hon ble Gujarat High Court in the case of PCIT vs. Vaishnodevi Refoils Solvex, [2018] 253 Taxman 135 (Guj.), wherein it was held that when the assessee-firm had furnished details with regard to source of capital introduced by its partners and the partners had also confirmed such contribution, it could be concluded that the assessee-firm had duly discharged the onus cast upon it. It was held that if at all the Assessing Officer was not convinced about the creditworthiness of the partners who had made the capital contribution, enquiry had to be made at the end of the partner and not against the firm. Respectfully following this decision of Hon ble jurisdictional High Court in the case of PCIT Vs. Vaishnodevi Refoils Solvex (supra), we uphold the impugned order of the learned CIT(A) deleting the addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deductible in computing the taxable income . Requirement apply to payments made for goods purchase on credit press note date 02/05/1969 issue by ministry of finance . We have to further state that section 40A(3) money spend on purchase of stock in trade also amount to expenditure. We have cover support is in u/s 6DD(J) of the Income Tax Act. We have to state that we had proved (a) genuineness of the transaction (b) identity of the payee is satisfied. Further the payment was made covered by exception circumstances of rule 6DD where the above stated twin conditions were satisfied. The provision of Section 40A(3) and Rule 6DD(i) have been incorporated in the Act in order to check the incurring of bogus and fictitious expenses to non-existing parties, in our case this type of situation is not done. Legal submission supported case law: (a) Avtarsingh sons v/s C1T (1992) 61 Taxman 142 (Punj. Haryana) (b) CIT v/s Chaudhary Co. (1996) 84 Taxman 495 (Allahabad) (c) CIT v/s Punjab Boot House Ltd (1998) 142 Taxman 770 (MP) (d) Basu Distributors (P) Ltd v/s ACIT (2012) 19 Taxman.com 111 (Delhi) (e) Anupam Tele Services v/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance made by the Assessing Officer by relying on CBDT Circular No.220 dated 31.05.1997, there is nothing brought on record by the assessee to establish that the concerned seller of diesel had refused to accept the payments from the assessee by way of crossed-cheque or crossed-draft. There is also nothing on record to establish that the payments in question against the purchase of diesel were made by the assessee in cash to the suppliers who ordinarily was carrying on his business in such village or town which on the date of payment was not served by any bank. As a matter of fact, all these payments aggregating to ₹ 4,72,176/- were made by the assessee against the purchase of diesel regularly made throughout the year, apparently from one party, and there is nothing on record to show that the said party always refused to accept the payment by crossed-cheque or crossed draft or that the said party was carrying on the business of sale of diesel in a village or town which was not served by the bank. We, therefore, set aside the impugned order of the learned CIT(A) giving relief to the assessee on this issue and restore the disallowance made by the Assessing Officer under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
