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TMI Blog2024 (6) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... m them through account payee cheques. The confirmation copies of refund of advances are available at pages 27-30 of the paper book and the all these persons are income tax assessee having PAN. It may be noted that opening balances are reflected in the audited balance sheet of the company from year to year. As imperative to mention that AO had the powers u/s 133(6) to call these four persons to enquire into the matter and also recording the matter but it has not been done by the AO.We have also seen from the records that assessee vide his letter dated 19-12-2016 made a specific request to the AO to issue to these persons but it was not done. Assessee has discharged his burden of proof by the submitting the PAN and confirmation of the persons to whom advances have been given. As decided in Orissa Corporation Pvt. Ltd., [ 1986 (3) TMI 3 - SUPREME COURT] Without issuing summons u/s 131 to a party who filed confirmation, no adverse inference can be drawn by the AO. In the light of the facts and circumstances of the case addition made by the AO and sustained by the CIT(A) deserves to be deleted. Assessee appeal allowed. - SHRI SANDEEP GOSAIN, JM SHRI RATHOD KAMLESH JAYANTBHAI, AM For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from:-1) Shri Kamal Kumar Kanstiya 4,30,000/- 30.04.2012 ii) Smt. Raj Kumari Kanstiya 4,00,000/- 30.04.2012 iii) Smt. Nayan Tara Chordia 3,50,000/- 30.04.2012 iv) Shri Umraomal Chordia 6,21,000/- 30.04.2012 . 1.1. That the ld. AO grossly erred in not considering the fact that to all these four persons loans and advances were given by the company. Earlier amount has been given to them by company received back through account payee cheques to 30-04-2012,Rs. 4,30,000/- from Kamal Kumar Kanstiya, Rs. 4,00,000/- from Smt Raj Kumari Kanastiya, Rs. .3,50,000/- from Smt. Nayan Tara Chordia and Rs. 6,21,000/- from Umraomal Chordia. Their detailed confirmation copies of accounts has been given, all are income tax assessee provided their PAN Nos. 1.2 That the ld.AO grossly erred in not considering the fact that these Kamal Kumar Kanstiya, Smt Raj Kumari Kanastiya, Smt. Nayan Tara Chordia and Umraomal Chordia are not creditors of the company but persons to whom loans and advances were given in earlier yearssss. The amount given earlier received back through account payee cheques. 1.3. That the Id. Assessing Officer grossly erred in not considering the facts that the company has not explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is the same which is under scrutiny. Thus, the assessee has deliberately acted to produce such parties for examination for the reasons best known by him. The plea of assessee that before giving loan/ advances of Rs. 18,01,000/- on 30.04.2012 he received back immediate amount from the above parties as debtors. I have gone through the detail of debtors filed in balance sheet as on 31.03.2012 where an amount of Rs. 5,53,325/- was shown in as 'Trade receivable' in the books of the assessee. Therefore, it cannot be said that the assessee received back amount immediately from debtors. Further, the above persons belong to family members of the assessee which they can be produced or obtained requisite details from them. It is the case of facts that the assessee advanced loan of Rs. 18,01,000/- on 30.04.2012 and prior to its bank account was credited by Rs. 4,30,000/, 4,00,000/-, Rs. 3,50,000/- and Rs. 6,21,000/- on 30.04.2012 but the assessee failed to explain the nature of these credit entries and business relevancy thereto. Moreover, the assessee failed to file copy of bank statements, copy of capital account and balance sheet of the above four persons/parties. Thus, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has failed to give any cogent explanation viz-a-viz the source of loan advanced to Sh. Vaibhav Chordia. The case laws cited by the appellant are on different facts and not applicable on the facts of the present case. In view of the above, I do not find any reason to differ with the addition made by the AO and the addition of Rs. 18,01,000/- is upheld and the Ground of Appeal No. 1 to 1.3 is treated as dismissed. 3.3 Being aggrieved by the order of the ld. CIT(A), the assessee carried the matter before this Bench with the prayer to delete the addition confirmed by the ld. CIT(A) for which the ld. AR of the assessee filed the following written submission. 1. assessee is a Private Limited Company register under the Companies Act. The business of the assessee is providing safety deposit services and vaults services. Basic service of the income is locker rent from customers and interest on bank deposit. 2. That proceedings u/s. 148 of the Act were initiated on the ground that the assessee appellant has given a Loan Advance (wrongly referred as debtors) of Rs. 18,01,000/- to its Director Shri Vaibhav Chordia and the source of the same is not explained. Subsequently the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- from the abovesaid parties and also recovered Rs. 8,46,289/- from one the lender Mehta Book Distributers. However, addition of Rs. 1801000/- was made out of Rs. 2647000/- given to its Director Shri Vaibhav Chordia. 9. That further CIT(A) erred in confirming the addition on the ground that assessee appellant company has not given any cogent explanation of the source of loan and advances to Shri Vaibhav Chordia. 10. We wish to place reliance upon: a. Hon'ble Jurisdictional Rajasthan High Court in Labh Chand Bohra v. ITO (2010) 189 Taxman 141 (Raj.) has held: So far as capacity of the lender is concerned, in our view, on the face of the judgment of Hon'ble Supreme Court, in Daulat Ram Rawat Mull's case (supra), and other judgments, capacity of the lender to advance money to the assessee, was not a matter which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. b. Hon'ble Jurisdictional Rajasthan High Court in Aravali Trading Co. v. ITO (2010) 187 Taxman 338 (Raj.) has held: Whether once existence of persons in whose names credits are found in books of assessee is proved and such persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Jurisdictional Rajasthan High Court in CIT v. Deen Dayal Choudhary (DBITA 58/2015 dated 15.07.2016) has held: In our view, the facts on record clearly prove that the assessee did prove from where he has received the credits and once the assessee disclosed identity of a person who has advanced money, the amount is advanced by bank transactions, the cash creditor is assessed to income tax, then the burden laid down on the assessee is duly discharged and onus then shifts on the AO. f. Hon'ble ITAT Bangalore Bench in Suraj Stones Corporation Ltd. v. ITO (2021 (2) TMI 741 dated 18.02.2021) has held: Income from undisclosed sources - money deposited in the bank account - HELD THAT:- It is clear from the orders of the revenue authorities that they not made any reference to the documentary evidence filed by the assessee. The case of the Revenue appears to be that M/s. Sneha International was rotating cash by transferring funds to various entities. M/s. Sneha International received cash and thereafter transfered funds to M/s. Sherawali Corporation and M/s. Venkata Industries who in turn transferred funds to the Assessee in the form of RTGS bank Transfer. The claim of the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Kaur Bajwa v. ITO (2021 (9) TMI 1114 dated 23.07.2021) has held: Addition u/s 69A - additions made in appellant's capital account - As per assessee it already stood disclosed in the books of accounts - HELD THAT:- In the instant case the entries relating to the advances received from Shri Hardev Singh and his son Shri Maninder Singh Sahi from Canada were recorded in the books of accounts and the assessee also explained that this amount was received as an advance for making the investment in the property by the said persons and the assessee was engaged in the property business. A.O. therefore was not justified in invoking the provisions of Section 69A of the Act particularly when the entries were recorded in the books of accounts maintained by the assessee and the explanation relating to the purpose of receiving the advances was given, identity of the person from whom amount was received, was not in doubt, the entries were through banking channel and it is not the case of the A.O. that the assessee went to Canada then put his money in the account of the depositor i.e; Shri Hardev Singh and Shri Maninder Singh Sahi which was remitted back, therefore, the addition made by the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income is locker rent from customers and interest on bank deposit. The proceedings u/s. 148 of the Act were initiated on the ground that the assessee asessee had given a Loan Advance (wrongly referred as debtors) of Rs. 18,01,000/- to its Director Shri Vaibhav Chordia and the source of the same is not explained. Subsequently the Assessing Officer made an addition of Rs. 18,01,000/- in the hands of the company. It is noticed from the available record that the assesse had given advanced to the above mentioned persons which was received back from them through account payee cheques. The confirmation copies of refund of advances are available at pages 27-30 of the paper book and the all these persons are income tax assessee having PAN. It may be noted that opening balances are reflected in the audited balance sheet of the company from year to year. It is also imperative to mention that AO had the powers u/s 133(6) to call these four persons to enquire into the matter and also recording the matter but it has not been done by the AO.We have also seen from the records that the ld. AR of the assessee vide his letter dated 19-12-2016 made a specific request to the AO to issue to these per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Stones Corporation Ltd. vs ITO, ward 6(1), Jaipur (ITA No.52/Bang/2020 dated 18-02- 2021) is squarely applicable in the case whose concluding para in this case is mentioned as under:- 9. I have carefully considered the rival submissions. It is clear from the orders of the revenue authorities that they not made any reference to the documentary evidence filed by the assessee. The case of the Revenue appears to be that M/s. Sneha International was rotating cash by transferring funds to various entities. M/s. Sneha International received cash and thereafter transfered funds to M/s. Sherawali Corporation and M/s. Venkata Industries who in tum transferred funds to the Assessee in the form of RTGS bank Transfer. The claim of the Assessee was that the receipts by the Assessee from the aforesaid two parties was for sale of shares of a company by name Mag Impex Ltd., was not disbelieved either by the AO or the CIT(A). As far as the assessee is concerned, he has filed confirmation of Sherawali Corporation and Venkata Industries. Copies of which are at pages 32 and 33 of the Paper Book. The CIT(A) has ignored this confirmation on the ground that the signature of the confirming parties were bar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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