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TMI Blog2022 (6) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure through banking channels though not directly through its bank account but by way of cheques of advances paid by its members, deposited in its account. The Ld.CIT(A) does not dispute these facts. The identity of the loan depositor M/s Makhija Infrastructure, its creditworthiness as being its customers /members money, as also genuineness of the transaction stands duly and satisfactorily established. The assessee onus was only with respect to establishing the aforestated ingredients of the transaction, i.e identity, creditworthiness and genuineness of the transaction. These facts having been admittedly duly established, why the advances of members were so paid to the assessee, is not relevant for the genuineness of the transaction. There may be any number of reason for doing so. The amount advanced by members/customers of Makhija Infrastructure is primarily credited in the Books of Makhija Infrastructure. Any question regarding the genuineness of the sources should impact the nature of the credit in the hands of Makhija Infrastructure. The assessee being forwarded these amounts by Makhija Infrastructure questioning the genuineness of the customers/members tantamounts to que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaining to Assessment Year (A.Y) 2012-13. 2. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of the failure of the assessee to prove the genuineness of unsecured loan taken by it during the year amounting to Rs. 31,75,000/- from the following parties. (i) M/s. Makhija Infrastructure Pvt. Ltd. Rs. 21,00,000/- (ii) Shri Ramesh K Parmar Rs. 10,75,000/- Total Rs. 31,75,000/- 3. The ground raised by the assessee in this regard are as under: 1.1 The order passed u/s.250 on 28.09.2016 for A.Y.2012-13 by CIT(A)-3, Baroda upholding the addition aggregating to Rs.33.75 lakhs as unexplained cash credit u/s.68 by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions. 2.1 The Ld.CIT(A) has grievously erred in law and on facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactorily proved to be genuine and added the same to the income of the assessee u/s 68 of the Act. 7. Before the ld. CIT(A) the assessee had explained that the amount had not come directly from the bank account of M/s. Makhija Infrastructure Pvt. Ltd. but in fact was cheques from the members of the said company against bookings made which was deposited directly in the bank account of the assessee. Necessary documentary evidences substantiating its explanation was also filed by way of entries to this effect in the books of the company, M/s. Makhija Infrastructure Pvt. Ltd., as also in the books of the assessee and it was also contended that the said amount had been repaid by the assesse also. The Ld. CIT(A) however was not convinced with the explanation of the assesse who noted that the explanation was not tenable for the reason that it was not explained as to on what account these amounts were to be received by M/s. Makhija Infrastructure Pvt. Ltd., that the nature of membership of the depositors was also not explained and nor any details vis- -vis their name and complete address and creditworthiness furnished by the assessee. The ld. CIT(A) also noted that no confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. Nauter of membership of the depositors of Makhija Infrastructure Pvt. Ltd. is not explained and also the nature of business transaction of this party with its members is not explained, Why and how they have given the cheques to the appellant instead of Makhija Infrastructure Pvt. Ltd. is also not explained. No any details viz. name, complete addresses, and credit worthiness of these members have been made available by the appellant at the time of assessment proceedings or at the stage of appellate proceedings. No any confirmations from the depositors have been filed by the appellant though the same was required to be filed more particularly in view of the fact that these depositors have directly deposited the amounts in the bank account of the appellant. Merely on the basis that these amounts of Rs. 21,00,000/- were received through cheques by the appellant from the members directly it cannot be said that these transactions of loan were genuine. Considering these facts, it is held that genuineness of transactions and credit worthiness of the lender are not established by the appellant with regard to this loan of Rs. 21,00,000/- and therefore the addition of this amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (i) Amarprit Singh 1,022,962.00 (ii) Gajendra Dhillon 1,363,949.00 (iii) Hitesh Panchal 876,825.00 (iv) Khemo G Khemani 292,275.00 (v) R.K. Parmar 457,897,00 (vi) Sandesh Rane 992,760.00 (vii) Shyam Sundar Das 1,363,950.00 (viii) Sumit Sheoran 663,949.00 (ix) Sunil N. Vyas 1,851,075.00 Total 8,885,642.00 10. Ld. Counsel for the assessee contended that it was clear that the documents filed before the authorities below clearly substantiated the explanation of the assessee that the amounts received by the assessee from M/s. Makhija Infrastructure Pvt. Ltd. related to the amounts given by customers of M/s. Makhija Infrastructure Pvt. Ltd. as booking advance mentioning the names of the parties also from whom it was received. Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of reason for doing so. The amount advanced by members/customers of Makhija Infrastructure is primarily credited in the Books of Makhija Infrastructure. Any question regarding the genuineness of the sources should impact the nature of the credit in the hands of Makhija Infrastructure. The assessee being forwarded these amounts by Makhija Infrastructure questioning the genuineness of the customers/members tantamounts to questioning the source of the source which cannot be the basis for making additions u/s 68 of the Act. 13. In view of the same, the findings of the ld. CIT(A) holding the unsecured loan of Rs. 21,00,000/- to be ingenuine is set aside and we hold that the assessee had sufficiently established the genuineness of the same. The addition made therefore of Rs. 21,00,000/- is directed to be deleted. 14. Ground of appeal of ground no. 3.1 is allowed. 15. As for unsecured loan of Rs. 10.75 lakhs received from one Shri Ramesh Parmar, the A.O. found the explanation of the assessee regarding the genuineness of the same to be not satisfactory for the reason that though the amount had been shown to have been received through banking channels but the creditworthiness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn in cash and thereafter redeposited in another bank account in cash and subsequently given to the assessee as unsecured loan. The assessee had also contended that the M/s. Makhija Infrastructure Pvt. Ltd. had given the amount to Shri Ramesh Parmar on account of development agreement entered into with him for the sale of his land. The ld. CIT(A) found no merit in the contention and explanation of the assessee noting that the fact that there was no nexus established between the amounts withdrawn by the assessee from that received from M/s. Makhija Infrastructure Pvt. Ltd. and further disbelieved the explanation of the assessee that Shri Ramesh Parmer had received money on account of development agreement noting that the same was not plausible as agricultural land owned by Ramesh Parmer could not have been legally sold to M/s. Makhija Infrastructure Pvt. Ltd. and further noting that even otherwise no capital gains had been returned by the assessee. The relevant findings of the ld. CIT(A) in this regard at Para 5.2 of the order is as under: 5.2 With regard to another loan of Rs. 10,75,000/-, it is submitted by the appellant that this loan was taken from Ramesh K. Parrnar and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not established, In other words, no nexus is found to be established between the amount of Rs. 5,27,OOO/- as withdrawn by Shri Ramesh K. Parmar from his bank account after receiving the same through cheque from Makhija Infrastructure Pvt, Ltd. and the amount of Rs. 6,25,000/- as deposited by Shri Ramesh K, Parmar in cash in his another bank account, It is not established by the appellant that the advances have been made by Shri Ramesh K. Parmar only out of amounts received from Makhia Infrastructure Pvt. Ltd. as there is no nexus between the amount received by Shri Ramesh K. Parmar from Makhija Infrastructure Pvt. Ltd, and the amount given as loan to the appellant. It may be mentioned that the AO on page no, 3 (i.e. as per para no, 4.3) of his assessment order has mentioned that on perusal of bank statement of Shri Ramesh K. Parmar it was noticed that just before issuing cheque to the appellant, there was a cash deposit entry of similar amount in such bank account. Some entries as reproduced by the AO on page no, 3 of his assessment order are reproduced hereunder for the sake of reference: Sr. No. Amount Cash Deposit Date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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