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TMI Blog2024 (3) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition under section 68 in the subsequent previous year i.e. the year under consideration. Accordingly we hold that the AO is not correct in making addition which pertains to the loan obtained during earlier years. Loans taken during the year under consideration - We notice that the assessee has submitted before the CIT(A), the PAN, the statement of accounts of proprietary concern, capital account, personal balance sheet etc in the case of Smt Nikita V Daveand PAN, confirmations, Income Tax returns, statement of income, bank statements etc. for the others. The assessee has also furnished ledger accounts and bank statements to substantiate that all the loans have been repaid subsequently through banking channel. AO it is noticed that, in the remand report has not given any adverse finding with regard to the various documents submitted by the assessee as additional evidence, but has stated that the credit worthiness and genuineness are not substantiated for want of some more documents. It is also relevant to mention that the assessee has repaid the part of the loan during the year under consideration and the balance in subsequent financial years. Considering all AO is not correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such authority for genuineness of the claim of the appellant. 2. The assessee is an individual carrying on the business as a manufacturer of aluminium ingots, allied metals and scrap in wastage steel under the name and style of M/s Vidhi Industries as Proprietor. The assessee filed the return of income for A.Y. 2012-13 on 25/09/2012 declaring total income of Rs. 15,27,319. The return was processed under section 143(1) under the Income-tax Act, 1961 (in short, the Act ). The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer noticed from the balance-sheet of the assessee that the assessee has outstanding unsecured loans to the tune o Rs. 79,44,162/-. The Assessing Officer added the entire amount of unsecured loan as income under section 68 of the Act for the reason that the assessee has not furnished any details / explanations with regard to the identity of the loan creditors, creditworthiness and the genuineness of the transactions. The Assessing Officer also disallowed the interest paid to the tune of Rs. 13,633/- for same reason that the loan is not genuine. 3. Aggrieved, the assessee filed further appeal before the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant has not proved the identity, creditworthiness and genuineness of the loan transactions with supporting evidences. Though the appellant has claimed that the most of the loans have been repaid by cheque, the appellant has not established the creditworthiness of the loan transactions with supporting evidences either before AO during assessment or remand report proceedings or during the appellate proceedings, hence on the basis of repayment of loans by cheque subsequently cannot prove the creditworthiness of the loan giving parties. I find from the remand report that the loan transactions of Rs. 23,24,000/- was not actually loan transaction but the same was on account of contract amount to be received from the appellant by the said party which is erroneously claimed by the appellant as unsecured loan. Similarly in respect of loan of Rs. 7,00,000/-, during the course of the inquiry u/s 131, the said party had admitted that the cash of Rs. 7 lakh was given to him the by appellant for depositing in bank account and thereafter the same was given to the appellant by cheque. This clearly shows that the appellant had introduced his own unaccounted money in the books of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yadav the ld AR submitted that the Shri.Ranjit K Yadav is business creditor to whom the assessee has given a contract and the advance given against the said contract is reflected as laon. The ld AR further submitted that on completion of contract, the amount is adjusted and settled by making balance payments. Therefore the ld AR argued that the addition is not sustaining. With regard to statement of Shri Umesh Bagwale ld AR submitted that the same is obtained under coercion and that the assessee has submitted the loan confirmation from the said party. The ld AR also submitted that the entire transactions are routed through banking channel and therefore there is no merit in the statement that cash was involved in the transaction. The ld AR also pointed out that the discrepancy noticed in the audit report with regard to balance as on 31.03.2011 has no relevance and that the same is a clerical error on the part of auditor for which a letter has been submitted admitting the same. 5. The Ld.DR, on the other hand, relied on the order of the lower authorities. 6. We heard the parties and perused the material on record. The Assessing Officer, during the course of assessment found that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly we hold that the Assessing Officer is not correct in making addition which pertains to the loan obtained during earlier years. 9. With regard to the loans taken during the year under consideration we notice that the assessee has submitted before the CIT(A), the PAN, the statement of accounts of proprietary concern, capital account, personal balance sheet etc (page 157 to 261 of the paper book) in the case of Smt Nikita V Dave, and PAN, confirmations, Income Tax returns, statement of income, bank statements etc for the others. The assessee has also furnished ledger accounts and bank statements to substantiate that all the loans have been repaid subsequently through banking channel. The Assessing Officer, it is noticed that, in the remand report has not given any adverse finding with regard to the various documents submitted by the assessee as additional evidence, but has stated that the credit worthiness and genuineness are not substantiated for want of some more documents. It is also relevant to mention that the assessee has repaid the part of the loan during the year under consideration and the balance in subsequent financial years. Considering the fact and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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