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TMI Blog2022 (5) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act i.e, by not summoning the respective lenders despite specific requests of the assessee, the same we are afraid does not find favor with us. As is discernible from the records, the assessee had failed to place on record any documentary evidences which would substantiate the veracity of the loan transactions in question and would suffice to conclude that the primary onus that was cast upon it to substantiate the authenticity of the loan transactions was duly discharged by him. As a matter of fact, the assessee had been taking shifting stands before the lower authorities and had tried to shift the burden of proving the authenticity of the loan transactions upon the department. Now when the assessee before us had failed to discharge the primary onus that was cast upon it as regards proving the nature and source of the loan transactions in question, therefore, the raising of a request by him, and that too for the very first time in the course of the proceedings before the CIT (Appeals) did not merit acceptance. If the assessee in the course of the assessment proceedings would have placed on record any material which would have evidenced the authenticity of the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. 6. That the appellant craves leave, to urge, add amend, alter, enlarge, modify, substantiate and delete any of the ground or grounds and to adduce fresh evidence at the time of the hearing of the appeal. 2. Controversy involved in the present appeal lies in a narrow compass i.e, as to whether or not the CIT(Appeals) is right in law and on facts of the case in sustaining the addition of Rs.20,70,000/- u/s.68 of the Act?. 3. Succinctly stated, the Assessing Officer in the course of assessment proceeding observed that the assessee had during the year claimed to have raised unsecured loans of Rs. 20,70,000/- from two persons, viz. (i) M/s. Seema R. Mutreja : Rs.2,50,000/-; (ii) Shri Anil Dengwani : Rs.18,20,000/-. As the assessee during the course of assessment proceedings failed to substantiate the identity and creditworthiness of the lenders as well as the genuineness of the loan transactions in question, therefore, the Assessing Officer held the same as unexplained cash credits u/s. 68 of the Act. 4. Aggrieved, the assessee carried the matter in appeal before the CIT (Appeals), but without any success in so far treating of the aforesaid loans in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of copy of relevant bank statement. 2. Shri Anil Dengewani Rs.18,20,000/- (i) The assessee could not provide the address except PAN. Further, no reply was furnished by him in response to the notice u/s.133(6) of the I.T. Act, 1961. Hence his identity was not established. (ii) His creditworthiness was also not proved as no details of his return of income, capital account etc were furnished. (iii) Genuineness of the said transactions was also not provided beyond doubt due to non submission of copy of the relevant bank statement. 8. On appeal, the assessee for the very first time filed before the CIT(A) the PAN No. of Ms. Seema R Mutreja (supra). It was the claim of the assessee that as the respective amounts in question were borrowed from the market, therefore, the requisite documentary evidence substantiating the authenticity of the loan transactions in question i.e, copies of the returns of income, capital accounts of the lenders etc. could not be furnished. It was the claim of the assessee before the CIT(Appeals), that as he was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were furnished to the AO wherein relevant entries were clearly highlighted and hence it was argued that the transactions were made through banking channels. The appellant relied upon the following decisions of the hon'ble Courts: i. CIT vs. Metachem Industries 245 ITR 160 (MP) ii. Nemichand Kothari Vs CIT and another 264 1TR 254 (Gauhati). iii. Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation (P) Ltd. 159 ITR 78 (SC). 2.2 I have gone through the grounds of appeal, gone through the submission of the appellant and read the findings of the AO in the order. During the assessment proceedings, the AO required the appellant to furnish necessary documentary evidences in respect of the loans taken from the persons. From the given PAN number in the case of Shri Anil Dengwani i.e. Pan NO.ACTPD1251D the AO searched the details from the ITD system and the notice u/s.133(6) of the Act was issued to Anil Dengwani on the address against the above mentioned PAN requiring him to file the confirmations of the said loan with other relevant details. No replies whatsoever was furnished by the person. Further no reply on the issue of show cause was furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rala High Court It is clear on the terms of section 68 that the burden is on the assessee to offer a satisfactory explanation about the nature and source lekhan Md. Hanif v. CIT (1958) 34 ITR 669, 673, 674 (MP) affirmed (1963) 50 ITR 1 (SC) CIT v. Krishna Mining Co., (1972) 83 ITR 860 (AP). Observing the of the amount found credited in the books of the assessee. It is also- clear that the mere furnishing of particulars is not enough. The mere fact that the payment was by way of account payee cheque is also not conclusive (ITO v. Diz.a Holding (P) Ltd., (2002) 255 ITR 573, 577 (Ker.) . 2.4 With respect to filing of bank statement the hon'ble Andhra Pradesh High Court in 221 Taxman 143 held that mere filing of bank statement is not enough to establish identity of creditors. The courts have further held : It is necessary for the assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof includes proof of the identity of his creditor, the capacity of such creditor to advance the money and lastly the genuineness of the transaction. These things must be proved prima facie by the assessee and only after the assessee has add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be treated as an unexplained cash credit in his hands. As in the case before us, the assessee had failed to substantiate the identity and creditworthiness of the lenders, as well as prove the genuineness of the loan transactions in question, therefore, we are of the considered view that the Assessing Officer had rightly held the loan transactions in question as unexplained cash credits within the meaning of section 68 of the Act. Before the CIT(Appeals), though the assessee had placed on record PAN No. of one of the lender, viz. Ms. Seema R Mutreja, however, the same in our considered view would not suffice for substantiating the nature and source of the credit appearing against her name in the books of accounts of the assessee. In so far the claim of the Ld. AR that the lower authorities had erred in law in not exercising the power vested with them u/s.131(1) of the Act i.e, by not summoning the respective lenders despite specific requests of the assessee, the same we are afraid does not find favor with us. As is discernible from the records, the assessee had failed to place on record any documentary evidences which would substantiate the veracity of the loan transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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