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TMI Blog2022 (12) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... editworthiness of creditors. Therefore, we are of the considered view that the AO is erred in making additions towards unsecured loans from 7 parties and thus, we direct the AO to delete the additions made towards loans.Appeal filed by the assessee is allowed. - ITA No.2931/Chny/2019 - - - Dated:- 21-12-2022 - Shri V. Durga Rao, Hon ble Judicial Member And Shri G. Manjunatha, Hon ble Accountant Member For the Appellant : Mr.R.S.Balaji, Adv. For the Respondent : Mr. AR.V.Sreenivasan, Addl.CIT ORDER PER G. MANJUNATHA, AM: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai, dated 23.08.2019, and pertains to assessment year 2013-14. 2. The brief facts of the case are that the assessee is an individual and filed his return of income for the AY 2013-14 on 27.07.2013 declaring total income of Rs.17,83,470/-. During the course of assessment proceedings, the AO noticed that the assessee has received unsecured loans from 8 persons as stated by the AO in Para No.4.5 of his assessment order amounting to Rs.1,17,90,000/-. The assessee was called upon to file necessary evidences including c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce reasonable amount in respect of each member considering the facts of the each person has been taken into account while holding the amount of loan as explained and balance as unexplained as mentioned above. 4.5. From the above facts and circumstances of the case and information gathered during the course of assessment proceedings, statements of above persons recorded, it is clear that the assessee has not been able to fully establish creditworthiness and genuineness of the loan creditors fully. Hence loan amounts obtained from the following persons is treated as unexplained and added back to total income the assessee under the head Income from other sources. S.No. Name of the person Amount Loan amount held as unproved 1 Mrs.NS Lakshmi Rs.20,00,000 Rs.14,00,000 2 Mrs.S.Pongodi Rs.25,00,000 Rs.18,00,000 3 Mrs.S.Thenmozhi Rs.20,00,000 Rs.14,00,000 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments, submitted that they have availed loan against FDR and extended loan to the assessee. Some creditors have availed jewel loans and the same has been credited to their respective bank account. The parties have filed confirmation letters. The AO has accepted the fact that parties have appeared and confirmed the transactions with the assessee. The AO had also accepted part of loan received from creditors, but made additions towards balance amount without assigning any reasons. The Ld.CIT(A) without considering the relevant facts simply confirmed additions made by the AO. Therefore, requested to delete the additions made towards unsecured loans. 5. The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A), submitted that the assessee could not explain source for loans taken from various parties, although, all loans were taken through proper banking channel. It is a well settled principle of law that mere acceptance of loans by cheque is not enough, but what is required to be seen is whether the loan creditors are having sufficient source of income to extend the loans. In this case, the assessee could not explain the loans with necessary evidences. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Bank of Baroda, amounting to Rs.23,72,000/- on 28.02.2013 and the same has been credited to his bank account on 02.03.2013. He had transferred a sum of Rs.25 lakhs to assessee s account. From the above, it is very clear that the creditor has sufficient source of income to give loan to the assessee. Similarly, the assessee has taken a sum of Rs.25 lakhs loan from Mr.NS.Rajasekaran out of FDR loan availed from Karur Vysya Bank, amounting to Rs.24 lakhs. The loan proceeds credited to his bank account on 27.07.2013 and on 01.03.2013, he had transferred a sum of Rs.25 lakhs to the assessee s bank account. From the above, there is no dispute about source of credit and genuineness of transaction. The assessee has taken a sum of Rs.20 lakhs loan from Mr.NS.Thenmozhi. Mr.NS.Thenmozhi availed FDR loan of Rs.15,46,000/- on 28.02.2013 and out of loan proceeds, he has transferred a sum of Rs.20 lakhs on 02.03.2013 through cheque. All evidences are placed on paper book. Similarly, the assessee had taken a sum of Rs.20 lakhs from Mrs.NS.Hamsa. The AO has accepted a sum of Rs.6 lakhs, but made addition for balance amount of Rs.14 lakhs. The assessee explained that Mrs.NS.Hamsa availed FDR fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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