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TMI Blog2023 (1) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... unsecured loans taken by the assessee from Kalpana Shah and Monali Shah on certain transactions relating to the said loans, not being reflected in their bank accounts, CIT has not arrived a conclusive finding of the error and has only restored the issue to the AO for verification that too when the assessee had clearly demonstrated the anomalies to be non existent. Therefore, with respect to these anomalies noted in the said transactions, there is no error in the order of the AO. Credit-worthiness of the Kalpana Shah not being established - The ledger account of the Kalpana Shah whichwas part of the books of accounts, and part of the record of the assessment also, clearly revealed that entire transaction with her related to amounts transferred to her by the assessee, and subsequently paid back by her to the assessee. Therefore, out of total amount of Rs.31,18,882/- noted by the ld.Pr.CIT to have been received by the assessee from Kalapan Shah, the source of Rs.29,61,194/- can be attributed to the amounts transferred by the assessee to her, which is evident from the copy of the ledger account also. It is only the difference of Rs.1,50,000/- which can be said to be credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment records, and therefore, had found the assessment order to be erroneous causing prejudice to the Revenue leading to initiation of revisionary proceedings under section 263 of the Act. He contended that during revisionary proceedings, the assessee had clarified the anomalies and the ld.Pr.CIT had accepted the said fact also, but thereafter he still held the assessment order to be erroneous and prejudicial to the interest of the Revenue for non-verification of the details filed by the assessee, and also since credit-worthiness of the said two lenders had not been established bythe assessee. He contended that the facts of the transaction revealed that the transaction between the assessee and the said parties was merely transfer of funds from the assessee to the said parties, and back from them; that in net effect, there was hardly any amount which was given by these two persons to the assessee, and therefore, no question of establishing creditworthiness of the assessee. He accordingly contended that the ld.Pr.CIT had not considered the issue in right perspective, and there was no error as such in the order of the AO accepting the genuineness of the said two unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, as rightly pointed out by the ld.counsel for the assessee, the impugned unsecured loan transactions of the assessee from Kalpana Shah and Monali Shah was found to be ingenuine and unverified by the AO noting certain transactions relating to the same not reflected in their respective bank accounts, and also on account of credit-worthiness of Kalpana Shah not being established by way of income-tax return filed for the year. 8. A perusal of the order of the ld.Pr.CIT, however, reveals that the assessee had submitted bank accounts of both these persons and on going through the same, we find that, in the case of Kalpana Shah anomalies with respect to transaction of Rs.22.00 lakhs being the payment made by the assessee to her not being reflected in her bank account as noted by the ld.Pr.CIT, was noted by the Ld.PCIT himself to be an incorrect observation. At para-5 of his order, ld.Pr.CIT noted that with respect to the contentions of the assessee with regard to repayment of Rs.22,00,000/- made to Kalpana S. Shah, which seems prima facie correct. 9. Similarly, with regard to anomaly noted in the case of Monali S. Shah of certain transactions relating to the amount recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the Ld.PCIT had completely ignored these transactions. 12. Now coming to two transactions, which the ld.Pr.CIT noted from the bank statement of Monali Shah with respect to which he had noted narrations in the bank statements did not make it clear that the amounts was transferred to the assessee and the assessee has not informed as to how narration scould be co-related with any of its bank statements, findings of the ld.Pr.CIT in this regard at para-5.1 is as under: 5.1 However, on perusal of aforesaid bank account statement, it is observed that on 15.05.2015 and 29.05.2015, amounts of Rs. 5,00,028/- and Rs.10,00,056/- were transferred with narration of entry as TO TRF TRF TO 85845001829 . The name of assessee or its proprietary concern (Ms/ Shreeji Steel Traders) does not appear against the relevant entries in the bank statement which could establish that the funds were actually debited from the bank account of Monali H. Shah and credited to bank account of assessee or its proprietary concern. Also, on perusal of case records, it is seen that during the course of assessment proceedings, assessee has furnished details of various bank accounts maintained by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to the transaction of Rs.5,00,026/- and Rs.10,00,056/-, we hold, is incorrect. The assessee has clearly revealed these amounts coming into the bank account of the assessee from the account of Monali Shah. The ld.Pr.CIT has made his finding solely on the basis of the bank account of Monali Shah and without looking and considering records before him, which included bank account of the assessee also. A mere comparison of bank account of Monali Shah and the bank account of the assessee could have clearly revealed to the ld.Pr.CIT that the funds transferred from Monali Shah had come to the bank account of the assessee only. Therefore, finding of the error by the ld.CIT(A) with respect to the impugned transactions, relating to Monali Shah, is also, we hold, incorrect. Thus, it is evident that anomaly with respect to the unsecured loans taken by the assessee from Monali Shah and Kalpana Shah relating to certain transactions entered into with them not reflected in their bank accounts, was demonstrated during the revisionary proceedings by the assessee, as duly reflected in the bank statements and with respect to the anomaly in the case of Kalpana Shah, the ld.Pr.CIT found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er ledger account filed before us which was part of the record before the AO also on page no.36. The ld.counsel for the assessee pointed out there from that entire transaction in the name of Kalapana Shah was with respect to transfer of money to her by the assessee, and received back the same from her subsequently only; that thereafter the balance was outstanding related to the opening balance in her account of Rs.22,07,140/- and balance of Rs.1,50,000/- received back from her, amounting in all to outstanding balance of Rs.23,64,828/-. Copy of her ledger account placed before us reproduced at page no.36 hereunder for clarity: 18. He has stated, therefore, that source of amounts received from her was obviously amounts transferred to her by the assessee. He pointed out that even the ld.Pr.CIT had accepted and admitted to this fact that the amounts were transferred to Kalpana Shah, and also received back from her. He has stated that so far the outstanding balance of Rs.23,64,828/- was concerned, Rs.22,07,140/- could be attributed to the opening balance and only the difference of amount of Rs.1.5 lakhs could be attributed as received from Kalpana Shah which was a very minor amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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