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TMI Blog2024 (9) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... n it is not justified to doubt the source and specially when the matter pertains to a charitable and religious society whose funds are to be used for public utility only. We are of the considered view that the assessee being a charitable and registered society is not disputed by the AO. The AO has also not disputed the nature of work of public utility of the assessee including construction and maintenance of cremation ground and the construction of temple by the society for public welfare. It appears that the AO was driven more by suspicion out of Mr. Grover s association with Gupta brothers. AO himself observes that the wife of Mr. Sanjay Grover was not aware of the donations in that case reliance on her statement was not justified. It is unjust to draw any inference about the credibility of a donor only on the basis of his monthly expenses or the money remitted to family. AO had alleged Sh. Sanjay Grover was conduit on merely on the basis of statement of the wife about monthly expenses or income as reported. We are of considered view that the deceased cannot be said to be conduit in the absence of any corroborative evidence surfacing during the search from the premises of the fam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs. 10,99,94,330/- in AY 2016-17 u/s 68 of IT Act considering these amounts as unexplained cash credits. Aggrieved, Revenue is in appeal before the Tribunal. 2.2 However, for the purpose of disposal of appeals before us, as we refer facts for AY 2016-17 we find that, an undertaking of Sh. Sanjay Grover was seized from the premises of the assessee. The contents of this under taking dated 08.09.2016 have been reproduced by the AO in the assessment order para 3 and 4 and sum and substance of this is that Late Sh. Sanjay Grover Aged about-56 years had deposed that by various transactions he had given a loan to the society in the period 17.01.2015 to 08.02.2016 of total Rs. 226744330/-. He had deposed in affidavit that loan was given for the purpose of construction of temple at Lal Das Baba Road, Near Municipal Colony, Saharanpur and that the same stands converted into donation on 08.09.2016 and the said society is no more under liability for repayment of the above loan. The AO issued notice u/s. 142 (1) for enquiring the source of donation / loans and proof of identity, creditworthiness and genuineness of the transaction. The AO records that the assessee filed reply but the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney from Late Sanjay Grover has been offered for taxation as taxable income. The sum of money was earlier received as a loan. It was submitted that due to terminal ailment of Mr. Grover, it is not wholly out of context to mention or disbelieve that a person may not, as his last Will foreclose his right to receive back the money which is to be spent for the benefit of public at large and wholly on account of charitable and philanthropic considerations. It was submitted that during the course of search, documents corroborating the above fact has been found and recovered. It is impossible for an Assessee to have, but for the actual state of affairs to be such, maintained such documentation and which is subsequently recovered in search. Then it was submitted that there is discrepancy in the Statement relied upon by Revenue. 6. The AO was not satisfied with the response and held as follows:- The reply of the assessee has been duly considered. In the reply, assessee is not able to prove the creditworthiness of the lender Late Shri Sanjay Grover. He is giving so many irrelevant fact and explanation which are not acceptable. (1) Assessee in his reply dated 17.12.2019 has himself stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited in the books of the assessee and the assessee does not offer satisfactory explanation, such sum credited may be charged to tax. In this case the assessee is in India and the bank account in which the said sum has been credited is in India, hence, the onus lies on the assessee to prove its genuineness whatever be the source of credit. (vi) The assessee has also cited certain case laws in his submission but the facts of the present case are distinguishable. In the cited case laws, it has been held that if donation has been accounted for in income and expenditure account, it cannot be taxed u/s 68 again. In this case the sum originally taken is loan and not donation. (vii) Further, the assessee has failed to furnish evidences to prove the financial worthiness of M/s. Global Corporation LLC Dubai and bank account of this company and its reliable financial statements. In view of the above facts, it is held that Late Shri Sanjay Grover was just a name lender and his name and bank account have been used for routing unaccounted money to the assessee's bank account. It may be pertinent to mention here that Shri Anil Gupta and Shri Atul Gupta of Gupta family are among the truste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through cheques hence genuineness of the transaction cannot be questioned is not acceptable. In this connection, the decision of the Hon'ble Kolkata High Court 208 ITR 465 (CAL) vs. Precision Finance Pvt. Ltd. can be cited wherein it was held that mere transaction through cheque is not sufficient. The Hon'ble Supreme Court had held that in the case of credits in the name of third party, it is the duly of the assessee to prove identity of creditor, capacity of the creditor to advance money and genuine of transaction (1977) 107 ITR 938 Roshan De Hatti Vs CIT(SC) 5 On facts and circumstances of the case and in law, the CIT(A) erred in observing that section 68 of 1.T. Act, 1961 states that any sum found credited in the books of the assessee and the assessee does not offer satisfactory explanation, such sum credited may be charged to tax. In this case the assessee is in India and the bank account in which the said sum has been credited is in India, hence, the onus lies on the assessee to prove its genuineness whatever be the source of credit. 6. On facts and circumstances of the case and in law, the CIT(A) erred in observing that it is clear that Late Sri Sanjay Grover was jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Sharanpur. This detail was given to the AO also which has been relied now by the CIT(A). There is no doubt funds in the Dubai account have been transferred from Global Corporation LLC account and the assessee had provided the proof of identity and genuineness of the transactions by submitting bank statements. Thus, as far as the creditworthiness of Mr. Grover is concerned the certificate of transactions between Sanjay Grover and Global Corporation LLC and financial statement of M/s. Global Corporation LLC have filed which have not been disputed by the AO. Thus the following findings of CIT(A) have to be upheld:- 7.7 In these circumstances, it is, therefore, apparent that first receipts of funds were abroad and therefore income, if any, has accrued/received by Sanjay Grover abroad. Once an income has been received abroad, its subsequent transfer to India is money and not income. There is direct flow of funds from Sanjay Grover's account to Trust without there being anyone in between. In the case of non-resident all income which accrues or arises outside India would not be taxable in India. Admittedly Sh. Sanjay Grover was not working in India, has sources of Income at Dubai o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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