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TMI Blog2024 (2) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Ld. CIT(A) has further, erred in confirming the addition of Rs. 7,83,00,173/- whereas the assessee has received just total loan of Rs. 2,16,29,000/- during the year under consideration from 11 parties mentioned the assessment order. The Ld. CIT has ignored the submission of the assessee on this issue. 4. The Ld. CIT (A) has erred in confirming the addition of Rs. 7,83,00,173/- for which 11 parties has been mentioned in the assessment order and there are no transaction worth of Rs. 7,83,00,173/-. The assessee has submitted that how the figure of addition is work out but not considered by the Ld. CIT(A). The total transaction with all the 11 parties are as under: Opening Balance 1,76,54,037/- Add: received during the year 2,16,29,000/- Add: Interest 38,38,044/- Total 4,31,21,081/- Less: Amount return 9,55,821 TDS 3,79,424 13,25,245/- Closing Balance 4,17,85,836/- How, the figure of Rs. 7,83,00,173/- is arrived by the Ld. AO and how the Ld. CIT(A) has arrived the figure of Rs,7,83,00,173/- to confirm the addition. 5. The Ld. CIT(A) has erred in confirming the addition u/s 68 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g balance as on 31.3.2020 1 Suresh Chaudhri H. No. 11, Abhishek park, OId Valsad Rd. Samroli, Chikli ADNPC8624J 3351772 350000 320000 12.00 % 414558 41456 3754874 2 T John (Thresiamma John) Amrutkunj, Rinchhed Tal, Charbhuja, Rajsamand, ABMPJ8775C 4884565 165000 0 0 12.00 % 758071 75807 7207809 3 Vimal P.K. Kuruvilla 203,, Abhishek apt., OId Valsad Rd. Samroli, Chikli AJSPK9083A 1229191 995500 0 370000 12.00 % 1181329 118133 11877387 4 Hitesh Corporation (H.C. Jain HUF) 303, Kishan Apartment, Desai Vad, Vapi AAEHH1471G 0 100000 0 90000 1200 % 1000000 10000 1000000 5 Lehrulal Jat Junda Railmagra, Rajsamand, Rajasthan ACDPJ0183G 0 250000 0 250000 12.00 % 281096 28110 2502986 6 Babita Vimal Kuruvilla 203,, Abhishek apt., OId Valsad Rd. Samroli, Chikli ANSPK4145R 2806090 322900 0 0 12.00 % 521859 52186 6504763 7 Jagdish Candra M Jat Krishna Complex High School Rd. Simroli, Chikli BDSPJ9650H 238924 260000 0 12.00 % 43814 4381 538357 8 Johnson PK 203,, Abhishek apt., OId Valsad Rd. Samroli, Chikli AGFPJ6247F 2443495 235000 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7.83 crores has been worked out by the Assessing Officer for making addition under Section 68 of the Act. The Assessing Officer in the show cause notice dated 17/03/2022 has mentioned the following figure against all 11 lenders: Particulars Opening balance Interest Amount recd. During the year Amount paid during the year TDS Closing balance Suresh R Chaudhari 3351772 414558 350000 320000 41456 3754874 T John 4884565 758071 1650000 9020 75807 7207809 Vimal P.K. Kuruvilla 1229191 1181329 9955000 370000 118133 11877387 Hitesh Corporation (H.C. Jain HUF) 0 1000000 1000000 Lehrulal Jat Junda 0 281096 2500000 250000 28110 2502986 Babita Vimal Kuruvilla 2806090 521859 3229000 52186 6504763 Jagdish Candra M Jat 238924 43814 260000 4381 538357 Johnson PK 4793495 637317 2435000 2420 63732 7799660 Fiona T Vimal 250000 110000 360000 Akssa Vima 50000 70000 120000 Eva Annu Vimal PK 50000 70000 120000 Total 17654037 3838044 21629000 955821 379424 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Choudhary, confirmation of Rekha S Choudhary about the source of source. The Assessing Officer doubted that Suresh Choudhary has hardly any creditworthiness to the extent of loan amount without verification of document. The assessee submitted that the said creditor furnished reply in response to notice under Section 133(6) of the Act. The said lender was having sufficient balance in his bank account. The assessee is not only proved the source but source of source. For lender/creditor No.2 T. John, wife of assessee, the assessee received Rs. 3.00 lacs, filed confirmation, bank statement, financial statement and confirmation of Vimap P Kuruvilla about the source of source. The Assessing Officer without making verification of documents made a general remark of creditworthiness. Such party has paid tax of Rs. 82,187/- during the year under consideration. The assessee has received a loan of Rs. 3.00 lacs only. The loan was received through banking channel, bank statement was furnished. The assessee prayed that the party's creditworthiness and addition against the loan is unjustified. For lender/creditor No. 3 Vimal P K Kuruvilla, the assessee received loan of Rs. 19.00 lacs. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 1.50 lacs and Rs. 5.06 lacs on 24/04/2019 from various banks which is evident on account of own cheque clearance. On the basis of such contention, the assessee submitted that the said lender has creditworthiness. From lender No. 6, Babita Vimal Kuruvilla, the assessee received loan of Rs. 22.24 lacs, filed her confirmation and financial statement. The assessee also filed confirmation of T. John and Vimal P Kuruvilla to prove the source of source. Copy of which was furnished. The Assessing Officer commented that Babita Vimal Kuruvilla has hardly any creditworthiness and objected against her creditworthiness. The assessee explained that he has taken loan of Rs. 22.24 lacs on seven occasions on different dates as mentioned on different occasions. Out of which Rs. 3.5 lacs on 13/12/2019, the source of source was loan from mother-in-law T. John, second loan of Rs. 5.00 lacs on 17/12/2019, the source of source from loan from husband, third loan of Rs. 1.50 lacs on 18/12/2019 and source of source was loan from mother-in-law T. John, fourth deposit/loan of Rs. 1.19 lacs on 26/12/2019 which was received from husband and fifth loan/deposit of Rs. 50,000/- on 01/01/2020, source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Babita Vimal Kuruvilla who has given loan to lender to prove the source of source. The Assessing Officer doubted the creditworthiness of lender by taking a view that Aksa Vimal during the year has proved the source of source from his mother Babita Vimal Kuruvilla of Rs. 75,000/-. The assessee stated that when source of source is from genuine source which is available on record, nothing adverse can be found and no addition be made under Section 68 of the Act. The assessee again filed confirmation of Babita Vimal Kuruvilla and submitted that the addition is unjustified. For lender No.11 Eva Annu Vimal P K from whom the assessee received loan of Rs. 70,000/- and filed confirmation of account, bank statement and confirmation of Babita Vimal Kuruvilla to prove the source of source. The Assessing Officer doubted his creditworthiness. The assessee contended that the lender has received Rs. 75,000/- from his mother. His source of source is genuine and no addition could be made being unjustified. 7. On the addition of disallowance of purchases under Section 37(1) of the Act of Rs. 1.01 crore, the assessee submitted that the Assessing Officer disallowed the expenses of purchases under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hable on facts. The assessee has failed to produce the tax return of the creditors or any other material to show the creditworthiness. The creditworthiness and genuineness of transaction cannot be said to have been proved to shift the onus on revenue. The stand of assessee that transaction was made through banking channel is not sufficient to prove the genuineness of transactions and creditworthiness of creditors. Identity as well as creditworthiness of creditors must be proved. The ld. CIT(A) quoted the name of Ms. Jasmine Kocher Kapoor and recorded that credit in her bank account is not explained. On the basis of such observation, the ld. CIT(A) confirmed the action of Assessing Officer. 9. On the addition of purchases/non-genuine purchases, the ld. CIT(A) also upheld the addition by referring the decision of Hon'ble Allahabad High Court in the case of Pr.CIT Vs. Meerut Roller Flour Mills (P) Ltd. in Income Tax Appeal No. 284 of 2017. The ld. CIT(A) also held that the assessee failed to substantiate the claim, mere payment is made through banking channel is not sufficient. Further aggrieved, the assessee filed present appeal before this Tribunal. 10. We have heard the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. AR of the assessee submits that the complete details are furnished as per page No. 19 to 35 of paper book. Neither the Assessing Officer nor the ld. CIT(A) made any comment on the evidence furnished by the assessee. The CBDT vide its letter dated 10/01/2018 directed all their Pr. CCIT, CCIT and DGIT (Inv) that if the assessee furnished explanation, the Assessing Officer should examine and if the explanation offered by assessee is not acceptable then order passed by Assessing Officer should be speaking one, bringing all the facts, explanation furnished by assessee in respect of nature and source of credit in the books of account and reason not accepting of such explanation. The ld. AR of the assessee submits that the assessee has discharged his onus by furnishing identity of creditors, creditworthiness and genuineness of transactions. To support his submission, the ld. AR of the assessee relied upon the following decisions: * CIT Vs Ranchhod Jivabhai Nakhwa 21 taxmann.com 159 (Guj) * DCIT Vs. Rohini Builder (2002) 256 ITR 360 (Guj) * Aravali Trading Company Vs ITO (2008) 220 CTR 622 (Raj) * Orient Trading Company Vs CIT (1963) 49 ITR 723 (Bom) * Hindden Forge P Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vealed that the assessee has disclosed amount of unsecured loan of Rs. 7.95 crores. The Assessing Officer tried to verify the identity, creditworthiness and genuineness of transactions of the parties from whom the assessee claimed to have received such unsecured loan. The Assessing Officer prepared a summary of lender in the form of a chart showing names, address, PAN, opening balance as on 01/04/2019, loan taken during this year, repayment during the year, rate of interest, interest paid, TDS made and closing balance. The Assessing Officer by referring each and every lender and the alleged discrepancy with regard to creditworthiness and genuineness of transaction and concluded that all the eleven parties failed the test of creditworthiness and added Rs. 7.83 crores under section 68 of the Act and brought the same under taxation in amended provision of Section 115BBE of the Act. Before the ld. CIT(A), the assessee tried to explain about the creditworthiness of all the lenders. The details of submissions are recorded in para 6 of this order. The ld. CIT(A) on considering the submission with regard to identity, creditworthiness and genuineness of transactions held that creditworthine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT vs. Ranchhod Jivabhai Nakhava in Tax Appeal No.50 of 2011 dated 20.03.2012. We note that Hon'ble Apex Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. 159 ITR 78(SC) held that when assessee furnished their complete address, PAN as well as confirmation and bank details of creditors/lender, the addition should not made in the hands of the assessee. We note that opening balance of the Lenders are not subject to disallowance in the current assessment year under consideration, if the Assessing Officer wanted to disallow the same, he could disallow in the previous assessment year. During the assessment year under consideration, the assessee took fresh loan and to substantiate the genuineness of fresh loan, the assessee submitted confirmation, bank statement, name, address and PAN number, moreover the transactions were through banking channel. On such fresh loan interest has been paid to the lenders, and TDS on interest has been paid hence genuineness of the fresh loan cannot be doubted. We also note that some of the Lenders have been fully repaid during the year under consideration. Once, the repayment is made and accepted by the department no addition fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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