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TMI Blog2024 (6) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... creating the legal fiction the phraseology employs the word may and not shall . Thus the unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as held by the Supreme Court in the case of CIT v. Smt. P. K. Noorjahan [ 1997 (1) TMI 6 - SUPREME COURT] Thus, no merit in the appeal and therefore, same deserves to be dismissed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Appellant(s) No. 1 : Mrs Kalpana K Raval (1046) For the Opponent(s) No. 1 : Mr Tej Shah (5743) ORAL ORDER (PER : HONOURABLE MR. JUSTICE NIRAL R. MEHTA) 1. By way of this Tax Appeal under section 260A of the Income Tax Act, 1961 (For short the Act ), Revenue has approached this Court challenging the order dated 11.01.2023 passed by Income Tax Appellate Tribunal, Surat (For short the Tribunal ) in ITA No. 126/SRT/2020 for Assessment Year 2016-2017 by proposing the following questions of law: a) Whether the Tribunal was justified in upholding the deduction of addition caused on account of unexplained cash credit under section 68 of the Act amounting to Rs. 11,57, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other view would be possible, there was no reason to interfere with the impugned order passed by the Tribunals . Further the Hon'ble ITAT Surat in case of Kalubhai A. Dhamelia ITA No. 88/SRT/2018 dtd. 18.09.2018 in case of Damjibhai Varjibhai Gangani ITA 124/SRT/2018 dtd. 18.09.2018 have also taken a view that the repayment of loan/advances constitute evidence regarding genuineness of the impugned loan or advances. The above binding decisions squarely apply to the facts of instant appeal hence the addition u/s. 68 liable to be deleted on this reason. 6. As against that Revenue has approached the Tribunal by way of filing Appeal being ITA NO. 126/SRT/2020 for Assessment Year 2016-2017. The Tribunal by its order dated 11.01.2023 dismissed the appeal of the Revenue observing, inter-alia, as under: 15. We find that the Ld. CIT(A) after considering the submission of assessee further noted that all the advances were repaid by assessee within the same financial year i.e., most of the case within 30 days. The repayment was verified from the ledger account and the bank statement. The Ld. CIT(A) on relying on the decision of Jurisdictional High Court in Ayachi Chandrasekhar Narsangji (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. A bare perusal of the aforesaid details makes it clear that the assessee has refunded the entire deposits either within in a day or in a week in respect of seven transactions. It was refunded in a maximum period of five months in respect of six transactions. Thus, no amount was left at the end of financial year. It is also matter or record that the repayment is not doubted by the assessing officer. The Hon ble Jurisdictional High Court in CIT Vs Ayachi Chandrashekhar Narsangji (2014) 42 taxmann.com 251(Gujrat) held that where Department has accepted repayment of loan in subsequent financial year, no addition was to be made in the current year on account of cash loan. 7. Being aggrieved by the aforesaid, Revenue has approached this Court by way of present Tax Appeal. 8. Heard learned advocate Mr.Karan Sanghani for learned advocate Ms. Kalpana Raval for the appellant and learned advocate Mr. Tej Shah for the respondent. 9. Having considered the submissions advanced by learned advocates for the respective parties and the orders impugned in this appeal, what is evident is that the amount of loan received by the assessee was returned within the same financial year and in most of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete addresses, GIR numbers/permanent accounts numbers and the copies of assessment orders wherever readily available. It has also proved the capacity of the creditors by showing that the amounts were received by the assessee by account payee cheques drawn from bank accounts of the creditors and the assessee is not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source as held by the Bombay High Court in the case of Orient Trading Co. Ltd. v. CIT [1963] 49 ITR 723 . 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. Merely because summons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee -from those creditors as non- genuine in view of the principles laid down by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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