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TMI Blog2023 (2) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... against all the commercial and residential properties. CIT(A) the assessee submitted that complete evidences were produced. Now before us, assessee went one step ahead by taking plea that such advances were refunded in next assessment year. No reason to interfere with the order of Ld. CIT(A). The ratio of case laws relied by for the assessee are not applicable on the facts of the present case before hand as the assessee has taken different stand before different authorities and that too without discharging his onus during the assessment proceedings. Moreover, entire transactions were shown in cash. This ground No.1 of assessee is dismissed. Unexplained transaction of loan - addition of loan transaction from three persons as assessee failed to prove the identity, creditworthiness and genuineness of such transactions by furnish required details - HELD THAT:- On perusal of detailed furnished by assessee we find that assessee has received loan from Meenaben on 02.09.2011 and 08.09.2011 by way of transfer through banking channel. Similarly, loan from Shivabhai Rajani was received by assessee on 17.02.2012 and loan was repaid to Meena V Andani on 23.05.2015 and 25.03.2015 throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. Commissioner of Income-tax (Appeals)-3 Surat [for short to as Ld. CIT(A) ] dated 11.09.2017 for the assessment year 2012-13, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of Income Tax Act, 1961 (hereinafter referred to as the Act for the sake of brevity) on 23.03.2015. The assessee has raised the following grounds of appeal:- 1. That the CIT(A) erred in confirming unexplained cash credit of Rs.21,72,500/- which may kindly be deleted. 2. That the CIT(A) erred in observing that there is no double taxation by again imposing penalty u/s 269SS on addition of unexplained cash credit. 3. That the CIT(A) erred in confirming addition u/s 68 on account of unsecured loan of Rs.8,00,000/- which may kindly be deleted. 4. That the CIT(A) erred in not refuting that the assessee has duly discharged his onus by placing various evidence before AO to justify these two loans of Rs.5,00,000/- Rs.3,00,000/-. 5. That the CIT(A) erred in confirming disallowance of interest expenses of Rs.2,17,224/- holding it not for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in actual both the properties are also same. The Assessing Officer took his view that how the assessee would receive the advance from two persons against the same property. Further the assessee has taken advance against all his residential property. The Assessing Officer further noted that, in fact, ultimately no property was actually sold by assessee and in next year all advances were returned back. Thus, the theory of advance is an after-thought and assessee failed to provide any documentary evidence and the identity of those persons from whom such advances were taken and the capacity to make such advance of those persons were not shown. One of the purchasers appears to be real brother of assessee and another sister-in-law (Bhabhi) of assessee, which is unrealistic in our society. Further assessee failed to explain any reason as to why advances were shown as unsecured loan in the balance-sheet. On the basis of such observation, the Assessing Officer treated such advances / unsecured loan of Rs.21,72,500/- as not genuine and make addition on account of unexplained cash credits. 4. The Assessing Officer further noted that assessee has also shown unsecured loan of Rs.11,62,720/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and have right to enter into agreement for sale of such property. Thus, the transaction was genuineness and assessee filed copy of income tax return. The assessee produced income tax return with conformation and satakhat was given subsequently by hand. If the Assessing Officer has any doubt he could have called for the purchaser but no such action was initiated on the part by Assessing Officer. For advance of Rs.5.00 lakh from Himmat Kotadiya against plot no.113-34, Miranagar, the assessee stated that the Assessing Officer was presumed that residential property cannot be sold for an amount of Rs.5.00 lakh and there is a contradiction in the Assessing Officer. The assessee filed income tax return of purchaser and confirmation and satakhat were also filed subsequently. No investigation was carried out by Assessing Officer. For advance of Rs.6.10 lakh and Rs.6.12 lakh from Chhaganbhai Ramoliya and Shardaben Ramoliya against plot no.344, Narthan, the assessee stated that such advances are genuine for a single plot, that two purchasers are very common. From the appearance of surname Ramoliya the Assessing Officer presumed that they are brother and Bhabhi of assessee and such presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the addition made by Assessing Officer was confirmed. 10. On the addition of unsecured loan, from three landers the Ld. CIT(A) held that Assessing Officer made the additions of three loans for the reasons that assessee has not furnished confirmation of income tax return and bank statement. On the other hand, the assessee claimed that such evidences were furnished vide letter dated 13.03.2015 before Assessing Officer and copy of such letter is filed before the office of Income-tax, which bears the stamp of office of Income-tax and signature of person who received such document on 13.03.2015. By referring such letter, Ld.AR for the assessee shown that confirmation of income tax return and bank statement of lenders and that Assessing Officer has not refuted such document in the assessment order. The Ld. CIT(A) on perusal of such details held that before him, copy of income tax return and balance-sheet of Deepak Desani is filed, wherein the loan given to assessee is reflected in his balance-sheet. Thus, the loan taken from Deepak Desani is established and Ld. CIT(A) accordingly directed the Assessing Officer to delete the addition of loan taken from Deepak Desani of Rs.3,62,720/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eness of ownership of assessee. No show cause notice was issued to assessee to explain such discrepancy. The assessee has discharged his onus by filing required documentary evidence. Similar cash loan of Rs.5.00 lakh from Himamat S. Kotadiya for sale of property No.133 Miranagar. The assessee furnished copy of satakhat / agreement with income tax return, PAN and ledger account confirmation produced before lower authorities. Similarly, assessee also received loan from Chhaganbhai Ramoliya and Shardaben Ramoliya of Rs.6.10 lakh and Rs.6.12 lakh respectively, such advances were received against sale of property at Block No.344, Narthan. Copy of satakhat / agreement with income tax return, PAN, ledger of confirmations was produced. The Ld. AR of the assessee submits that assessee also discharged his onus in proving the identity, creditworthiness and genuineness of such transactions of advance from both Chhaganbhai Ramoliya and Shardaben Ramoliya. The Assessing Officer has not investigated the same. The Ld. AR for the assessee submits that assessee repaid the deposit / loan advance in subsequent assessment year i.e. in 2013-14 of Rs.4.50 lakh was repaid to Vishal Sakhiya on 28.02.2013 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to substantiate such advances against all residential and commercial properties. Thus, assessee further failed to explain during assessment proceedings, whether ultimately any property was sold or any satakhat /agreement was cancelled on subsequent date or not. Now, assessee has taken a new plea that all the advances were repaid in the next year and no such plea was raised before Assessing Officer. Thus, the story cropped up by the assessee is a make-believe story and the addition made by the Assessing Officer and subsequently confirmed by Ld. CIT(A) is liable to be upheld. 16. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. As recorded above, the Assessing Officer made addition of Rs.21,72,500/-, which was allegedly received against the sale of commercial as well as residential properties -one of the property against. The Assessing Officer while making such addition in para-8.3 of assessment order specifically recorded that assessee failed to establish whether any property was finally sold to any persons from whom the advance was received or if not what was reason for cancellation. No satakhat / agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan. The assessee vide his reply dated 13.03.2015 furnished income tax return, PAN, computation of income, profit and loss account, bank statement confirmation of Meenaben V Andani. The assessee also furnished similar documents PAN, and bank statement of Shivabhai Rajani and explained that loans were received from account payee cheque. The lenders were having sufficient balance in their accounts, such unsecured loans were shown by the assessee as well as lender in their balance-sheet. The assessee has discharged his onus by furnishing all requisites details. The Assessing Officer has not verified such documents. The Ld. CIT(A) confirmed the action of Assessing Officer without proper appreciation of fact in first appellate stage. The Ld. AR of the assessee submits that loan of both the lenders were repaid on 25.03.2015, copy of ledger account highlighting the entries of repayment through cheque, is filed. The Assessing Officer has not investigated the fact either by issuing notice under section 133(6) or 131 of the Act to the lenders. Once the assessee has discharged his onus by furnishing required details, the onus shifts on the assessing officer. The assessing officer made additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that assessee has received loan from Meenaben on 02.09.2011 and 08.09.2011 by way of transfer through banking channel. Similarly, loan from Shivabhai Rajani was received by assessee on 17.02.2012 and loan was repaid to Meena V Andani on 23.05.2015 and 25.03.2015 through banking channel RTGS process. The relevant entry in the bank statement of assessee of Federal Bank is available at page-110 of paper book filed by the assessee. We find that repaid of loan had been accepted by Revenue in subsequent assessment year, so no addition loan in the year under consideration can be added as has been held by Hon'ble jurisdictional High Court in the case of CIT vs. Ayachi Chandrasekhar Narsangji [2014] 42 taxmann.com 251 (Guj). 21. We further find that though Assessing Officer held that no details were furnished to substantiate the transaction of loan. However, before Ld. CIT(A) the assessee furnished detailed of loan transaction as has been recorded in para-5.2.2 of his order. However, no investigation of assessee carried out either by Ld. CIT(A) or through office of Assessing Officer. Therefore, in absence of any adverse evidence, the disallowance of loan when the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has introduced such expenses just to reduce his taxable income. The Ld. CIT(A) upheld the action of Assessing Officer by holding that he is not in a position to give definite findings regarding genuineness and allow ability of expenses, though, we find that Ld. CIT(A) himself recorded that no doubt the commission agent of LIC and he is bound to incur expenses in soliciting business. He is no doubt required to pursue the customers on phone as well as by meeting them. He may also be held to keep an office and staff to assist the assessee . We find that despite recording such findings, Ld. CIT(A) further noted that claim of rent and salary has to be established that details filed before the Assessing Officer are sketchy and did not convince the Assessing Officer. The Ld. CIT(A) further recorded that Assessing Officer has not made any rudimentary effort to examine such expense like depreciation, telephone bills, office rent etc. We find that finding of Ld. CIT(A) is a contradictory, once it is accepted for soliciting assessees business and required office and staff to assist him, though it may not have been fully substantiated by assessee, yet the entire disallowance of expenses wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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