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TMI Blog2023 (8) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided Copies of the Ledger account, confirmation, Bank Details, PAN and Income Tax Return of Smt. Hansaben M. Patel and contra entry and Bank Statements of Smt. Hansaben M. Patel, etc. After considering the above details we are of the considered view the assessee has discharged its initial onus cast upon him u/s. 68 of the Act and the Revenue failed to disprove the above transaction as bogus. It is the case of the assessee that the unsecured loan availed was repaid in the next financial year to the creditor namely Smt. Hansaben M. Patel through cheque payments and the bank statement also filed before the Lower Authorities. Therefore we are of the considered opinion, the provisions of section 68 does not attract in the above transaction and thereby we uphold the order passed by CIT(A) deleting the addition made u/s. 68 of the unsecured loans availed from Smt. Hansaben M. Patel. Decided against revenue. - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Ms. Ur vas hi Sodha n, A.R. For the Revenue : Shri Kamlesh Makwana, CIT-DR And Shri Ashok Kumar Suthar, Sr. D.R. ORDER PER BENCH:- These eight ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation in Paper Book @ Pages 117 118 Loan is fully repaid 6 1254/A/2018 A.Y. 2009-10 Surendra Mangaldas Shah (HUF) Hansaben M. Patel Rs. 13,25,00,000/- Ledger a/c of Hansaben with confirmation in Paper Book @ Pages 116 to 118 Loan is fully repaid 7 457/A/2020 A.Y. 2010-11 Surendra Mangaldas Shah (HUF Hansaben M. Patel Rs. 5,90,00,000/- Ledger a/c of Hansaben with confirmation in Paper Book @ Pages 421 422 Loan is fully repaid 8 477/A/2020 A.Y. 2010-11 Savitaben Mangaldas Trust Hansaben M. Patel Rs. 1,31,46,000/- Mukesh J Shah Rs. 1,55,00,000/- Ledger a/c of Hansaben And Mukesh Jayantilal Shah Attached herewith Both loans are fully repaid 3. Aggrieved against the deletions, the Revenue is in appeal before us raising the following Grounds of Appeal (in ITA No. 945/Ahd/2018 for A.Y. 2009-10) is as follows: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of his claim. 5. The above submission was not accepted by the A.O. since Smt. Hansaben M. Patel has never filed her Return of Income, except only for the AY 2009-10. Even for the AY 2009-10, she has filed Return of Income of Rs. 8,65,250/-. The assessee has not provided computation of income, but submitted only copy of acknowledgement of the Return of Income. Further, on verification of bank statement of Smt. Hansaben M. Patel maintained with Indian Bank, it is seen that there is continues in and out credit and debit entry throughout the year. The sale considerations received of various lands have been immediately or within a day or two was debited from her account. Thus, it can be seen that Smt. Hansaben M. Patel has transferred money to the various concerns of the Asit Shah, JP Infrastructure Pvt. Ltd. and dummy companies of JP Iscon Group like Rachana Finelease Pvt. Ltd., which again proves that Smt. Hansaben M. Patel has worked as an accommodation entry provider and she was used by the assessee for providing accommodation entries to JP Iscon Group. 5.1. In view of these facts, the submission of the assessee that Smt. Hansaben M. Patel owned lands in her own name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Hansaben M. Patel, copy of her I.T. return for AY 2009-10, confirmation from her to prove her identity. The AO called details of bank accounts from various banks as mentioned in the assessment order, through which transactions worth hundreds of crores took place. These facts proved the identity of Smt. Hansaben M. Patel beyond doubt. Moreover, on the sale deeds of plots of land sold worth more than rs. 149 crore during the year, she signed all these sale deeds and her photo is affixed on all these sale deeds. Sale deeds are registered in the office of the Sub-Registrar and seller buyer has to remain present personally for registration of documents. Apart from this, the ITO. Ward.3(3)(2), Ahmedabad made assessment u/s. 144 r.w.s. 147 of the Act in the name of Smt. Hansaben M. Patel vide order dated 23.12.2016 and determined income of Rs.103.02 crore for A.Y. 2009-10 i.e, year under consideration. All these facts proved that the appellant had proved identity of the creditor Smt. Hansaben M Patel beyond doubt. Regarding genuineness of the transaction, there is no doubt that the transaction took place through account payee cheques. There is not a single rupee found deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion cannot dispute any further the transaction which has been accepted to be genuine by co- ordinate Assessing officer having jurisdiction to decide such question. In the case before us the Assessing Officer did not place any material indicating that the loan has been either disbelieved by the Assessing Officer of the lender or it is not reflected in the lenders account. Such being the position, there was no scope of branding the truncation as not worthy of credence ii) In the case of Ranchhod Jivabhai Nakhava in TA No.50 of 2011, the Hon'ble Gujarat High Court held as under :- In our view, once the assessee has established that he has taken money by way of accounts payee cheques from the lenders who are all income tax assessees. whose PAN have been disclosed, the initial burden under Section 68 of the Act was discharged. It further appears that the assessee had also produced confirmation letters given by those lenders. Once the Assessing Officer gets hold of the PAN of the lenders, it was his duty to ascertain from the Assessing Officer of those lenders, whether in their respective return they had shown existence of such amount of money and had further sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition substantial question of law arises appeal of the department dismissed. Apart from the above mentioned judgments of Hon'ble Jurisdictional High Court of Gujarat, Ahmedabad, the appellant's case has been found covered by the following judgments:- i) CIT v/s. Meta Chem Industries 245 ITR 160 (MP) ii) Nemichand Kolhani v/s CIT 264 ITR 254 (Gauhati) iii) Sona Electric Co. v/s. CIT 152 ITR 507 (Delhi) iv) Tam Tam Pedda Guruna Reddy v/s. JCIT 291 ITR 44 (Kar.) Keeping in view the factual discussion and binding judgments of various High Courts, the additions made by the AO are not found factually and legally sustainable, hence, these are deleted. This ground of appeal is allowed. 7. The Ld. D.Rs. appearing for the Revenue supported the orders passed by the Assessing Officer and pleaded that the loan creditor namely Smt. Hansaben M. Patel who has filed her Return of Income showing an income of Rs. 8,65,250 for the Assessment Year 2009- 10 and not paid Short Term Capital Gain on sale of land worth Rs. 149 crores. Notices issues u/s. 133(6) was returned unserved with postal remark Not Known . Therefore the Assessing Officer determined Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO which was deleted by the learned CIT(A). 14.1 At the outset we note that assessee also received share application money for Rs. 3.5 core and 4 crores from each of the party namely, Shri Rameshbhai Thakore and Shri Vinod Sharma which was also treated as unexplained cash credit under section 68 of the Act by the AO on account of lack of proof of identity of party, genuineness of transaction and creditworthiness of the parties. However while dealing with the issue of share application money in the preceding paragraph of this order, we have held that identity of parties, genuineness of transaction and creditworthiness have been established by the assessee. Therefore, the only issue remains whether assessee has given advances to these parties on earlier occasion which has been received back in the year under consideration. In this regard we note that the assessee has submitted ledger copies of both parties for the F.Y. 2008- 09 and 2009-10 which is available on pages 249 to 254 of paper book. On perusal of the same, we find that the assessee as on 28-02-2009 has provided advances to both the parties through cheque which has been received back in the year under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT-A. Thus, the finding of the AO that the creditworthiness of the party was not proved was not based on the cogent reasons. Thus the finding of the AO appears to be arbitrary and non-speaking. 9.5 It is also not out of the place to mention that the shares application money received by the assessee in the year under consideration was refunded in the subsequent year. The repayment of the share application amount by the assessee was duly accepted by the Revenue. In this regard, we find support and guidance from the judgment of Hon ble Gujarat High Court in the case of the CIT Vs. Rohini builders reported in 256 ITR 360 wherein it was held as under: The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques. 9.6 Thus, the entire basis of allegation by the AO that the credit worthiness of the party i.e. share application money was not proved does not hold well in view of above discussion. As the assessee was able to establish the identity of the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Ld. CIT(A) who has deleted the protective addition made in the hands of the assessee herein. More particularly, the provisions of Section 68 as it stood prior to the amendment of the Financial Act, 2013. Thus in our considered view, the grounds raised by the Revenue is devoid of merits and the same is liable to be dismissed. 9. We have given our thoughtful consideration and perused the materials available on record including the Paper Books and compilation of case laws filed by the assessee. In all the above appeals, the unsecured loan given by Smt. Hansaben M. Patel was doubted by the Assessing Officer on the ground that on sale of lands at Sanand District, Ahmedabad for Rs. 149 crores, but she failed to file the computation of Short Term Capital Gain. On completion of the exparte assessment order dated 23-12-2016 in the case of Smt. Hansaben M. Patel, wherein the A.O. determined the Short Term Capital Gain of Rs. 103.02 crores for the Assessment Year 2009-10 the same was also neither paid by Smt. Hansaben M. Patel nor filed any appeal against the assessment order. Thus the sale of the lands and execution of sale deeds by Smt. Hansaben M. Patel was not doubted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traceable. 13.3 In the rejoinder to remand report filed by the appellant on 28-12-2020 the appellant has made counter argument to rebut the observations made by the A.O. in the remand report. The appellant has submitted (i) Copy of PAN Card ((ii) Copies of Sale deed and (iii) Affidavit of Kamal Gohil. In this regards appellant has contended that neither it is proved that these details are bogus nor the AO has not made any adverse comments/observations on details filed by the appellant. 13.4 Appellant has also received loan of Rs. 75,55,000/- from Kamal Gohil. Alike in case of Hansaben Manilal Patel. He has also executed sale deed of land. He has personally appeared before Sub Registrar for execution of sale deed. His copy of PAN Card is also filed by appellant which was available to the AO. Therefore his identity is proved from the above records. 13.5 As contended by appellant that he was in a receipt of Rs. 8,44,69,500/- as confirming party on sale of land is found to be correct and genuine. Therefore there is no question of doubting his credit worthiness. Also transaction done with him by appellant through banking channel and nothing proved adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding having a transactions of sale of land for a worth of Rs. 51.91 Crores. It is also contended that when appellant has submitted vital evidences of land transactions AO has not cross verified Shri Mukesh Jayantilal Shah for his land transactions. It is contended by the appellant that AO has not brought anything adverse on record which proves that documents of land transactions are false or not genuine or are not executed by Shri Mukesh Jayantilal Shah. The registration of land sale is through a robust system which can't be doubted, therefore, in my opinion, no question can be raised for credit worthiness of Shri Mukesh Jayantilal Shah. It is further contended by the appellant that AO of Shri Mukesh Jayantilal Shah has passed his assessment order for the year under consideration and assessed his income at Rs. 6,80,50,635/-. Therefore, his creditworthiness proved on record. AO of assessee Trust has alleged that assessee itself sold all properties and introduced the same in books of accounts of the assessee in the name of Shri Mukesh J. Shah. Before concluding, AO has no material on record to say so and alleged without having any logical basis. In this regards appellant su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Shah, and case laws cited upon by the appellant have been carefully considered. There is no dispute that the loan of Rs. 1,55,00,000/- was obtained by the appellant through account payee cheques. It is established that to prove the genuineness of credit, three ingredients i.e. identity, genuineness of the transactions and creditworthiness of the creditor should be proved. In instant loan transaction from Shri Mukesh Jayantilal Shah identity and genuineness of the transactions are not at all in question. The AO did not find creditworthiness of Shri Mukesh Jayantilal Shah and have made additions. Appellant has submitted total 4(four) documents of land which were sold during A.Y. 2009-10 totaling for Rs. 51,90,90,000/. AO not brought anything adverse on record that these sale deeds are not genuine nor has called upon Shri Mukesh Jayantilal Shah to verify correctness of land transactions. Also he has not offered any opportunity for cross examination of Shri Mukesh Jayantilal Shah. Therefore as far as correctness of the sale transactions is concerned these are found to be correct. Assessment order of Shri Mukesh Jayantilal Shah passed by ITO Ward 5(2)(4), Ahmedabad and has assessed hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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