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TMI Blog2023 (5) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... n circumstances their creditworthiness has not been proved by the assessee when specifically called upon by the AO to prove as required under section 68 of the Act. Merely because of the fact that transaction is through banking channel does not absolve the assessee to prove the creditworthiness of the lenders. Financials of any of the creditors have not been brought on record. When such transactions are surrounded by unexplainable facts and suspicious circumstances the onus is on the assessee to explain and to dispel all the suspicious circumstances which the assessee has miserably failed to prove. No doubt income of the lending entities is not the requirement of the law or they should have sufficient balance in their account to lend the loan. But we are of the considered view that when transactions themselves are surrounded by unexplainable and suspicious circumstances, income of the lending parties and their business profile do become a requirement to be explained by the assessee. No income or meager income of the lender itself speaks volume of the creditworthiness of the lenders which is the requirement of section 68 to prove.When the assessee has failed to discharge the onus by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the unsecured loans. 2) Whether on the facts and in circumstances of case and in the law the Ld. CIT(A) erred in deleting the unsecured loans specially so when the AO clearly mentioned in the Remand report that the identity genuineness and creditworthiness were not established by the Ld. CIT(A) erred in entirely deleting the unsecured loans in so far as not restricting the loans of 9 related parties in view of the fact that in Remand proceedings the AO stated that many of the lenders have not furnished the Return of Income and have immediate cash deposit immediately preceding the loan transaction. 3) Whether on the facts and in circumstances of case and in the law the Ld. CIT(A) erred in deleting the unsecured loans and not restricting the same to the lenders who were not having sufficient creditworthiness and not appreciating facts in remand report in so far as not appreciating the fact that the lenders of highly any means will not deposit cash to give loan to the builder and such transactions are beyond the scope of preponderance of probability. 4. Whether facts and the circumstances the Ld. CIT(A) erred in deleting the addition of Rs.74,39,883/- on account of being 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. CIT(A) the assessee and the Revenue have come up before the Tribunal by way of filing present cross appeals. 6. The assessee has not preferred to put in appearance to contest the present cross appeals despite the fact that notices issued were through Registered Post with Acknowledge Due (RPAD) at the given address but not received back served/unserved. Since a period of 30 days has already elapsed assessee is presumed to have been served but not preferred to come present. So the Bench has decided to dispose of these cross appeals on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue. 7. We have heard the Ld. D.R. for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon. Ground No.1 of assessee's appeal bearing ITA No.3291/M/2011 for A.Y. 2013-14 7. The AO has made addition to the tune of Rs.1,25,01,969/- (Rs.23,77,500 + Rs.1,01,21,400) in respect of cash deposit/time deposit by the assessee in its cooperative credit society and IDBI Bank account during the year under consideration under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is hereby upheld and confirmed. Ground of Appeal No. 3 is dismissed." 8. When the assessee has not given the detail viz. name, address and PAN of the person from whom the cash in question was received along with confirmation neither before the AO nor before the Ld. CIT(A) nor the assessee has come up before the Tribunal to furnish any such detail, the identity and creditworthiness of the depositor has not been proved nor the genuineness of the transaction is proved as required under section 68 of the Act, we find no illegality or perversity in the impugned findings returned by the Ld. CIT(A). So ground No.1 raised by the assessee in its appeal is hereby dismissed. Ground No.1, 2 & 3 of Revenue's appeal bearing ITA No.3293/M/2022 for A.Y. 2013-14 9. On failure of the assessee to furnish any detail qua unsecured loan of Rs.19,762,025/- despite issuing numerous notices, the AO made addition thereof under section 68 of the Act being the unexplained credit. However, the Ld. CIT(A) after entertaining additional evidence deleted the addition made by the AO under section 68 of the Act. 10. Undisputedly during the year under consideration the assessee has claimed to have taken uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has failed to bring on record any documentary evidence to support the creditworthiness of the lenders which is evident from the bank statement which does not reflect all the loans and lenders have not been filing any regular income tax return nor it is case of the assessee that the lenders are into the business of money lending, the genuineness of the transactions and creditworthiness of the lenders remained unproved on the file. 13. Undisputedly, the assessee has availed of the unsecured loan of Rs.1,97,62,025/- (however, the AO has wrongly written the total as Rs.1,97,62,025/- which actually is Rs.92,86,843/-) from the nine individuals detailed as under: Sr. No. Names Amount 1. Deepak Rajaram Mhatre 20,74,120 2. GurunathSahdevNatekar 4,01,068 3. Jayashree Shinde 5,16,799 4. Priyanka Sarjerao 2,50,835 5. SachinRamrao Pawar 10,13,747 6. Sarjerao Gaikwad 18,41,747 7. ShailaVardekar 16,24,825 8. SmitaSachin Pawar 10,18,349 9 Vivek. Thorat 5,45,575 1,97,62,025 14. However, without discussing the remand reports the Ld. CIT(A) deleted the addition by returning following findings: "7.8 In view of the facts and respectfully following the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are surrounded by unexplainable and suspicious circumstances, income of the lending parties and their business profile do become a requirement to be explained by the assessee. 19. Moreover, no income or meager income of the lender itself speaks volume of the creditworthiness of the lenders which is the requirement of section 68 to prove. So in these circumstances, we are of the considered view that when the assessee has failed to discharge the onus by proving genuineness of the transactions and creditworthiness of the creditors as required under section 68 of the Act, the impugned deletion made by the Ld. CIT(A) is not sustainable, hence deletion made by the Ld. CIT(A) of Rs.92,86,843/- is set aside and addition made by the AO is restored. So grounds No.1, 2 & 3 of Revenue's appeal are allowed. Grounds No.4 & 5 of Revenue's appeal 20. The Ld. CIT(A) deleted the addition of Rs.74,39,883/- being estimated addition @ 25% of the advance booking receipt on shops/flats by the AO under section 68 of the Act by returning following findings: "9.2 Finding on Ground of Appeal No.4 a) AO has made addition u/s 68 of Rs.74,39,883/- being 25% of Advance Booking amount received of Rs.2,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces received of Rs.2,97,59,530/- totaling of Rs.74,39,883/-. The above facts clearly show that the AO has made double addition from the Advances received for booking of Flats/shops as under: * Addition of Rs.1,25,01,969/- u/s 68 on account of cash received as Advance for booking of flats/shops and deposited in its bank account u/s 68 of Act. * Estimated addition @25% out of Total Advances received on booking of flats/shops to tune of Rs.74,39,883/-. This double addition made by AO u/s 68 in respect of the same amount i.e. Advances received on booking of flats/shops is not sustainable in the eyes of law. d) The Appellant had started a Low Cost Housing flats to be constructed on a plot of land purchased by Appellant in a village near Panvel, Distt. Raigad. Appellant received this amount of Rs.2,97,59,530/- from various persons as Advance booking of low cost housing flats. At the time of applying for conversion of this land from Agricultural to Residential the Appellant was informed that this plot is reserved for a Project called Virar Alibag Corridor Project The Sub Divisional Officer acquired this plot of land with other lands through Direct Acquisition vide privat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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