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TMI Blog2024 (11) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... ining to the said transaction and in view of the fact that the said transaction is duly supported by the bank statement, such a doubt appears to be merely a pretext to doubt the transaction by the assessee without any substantial material being brought on record. In any case, the Revenue has not denied the submission of the assessee that the loan was ultimately repaid on 24/02/2014, i.e. in the year under consideration itself. Thus, we are of the considered view that in the present case, the assessee has discharged the initial onus of proving the identity and creditworthiness of the loan lenders and the genuineness of the transaction. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition. Disallowance of transport and hiring charges and reduction of disallowance on account of wage and labour charges - CIT(A) deleted addition - HELD THAT:-It is evident from the record that the AO neither controvert any of these details furnished by the assessee nor examined the parties to whom payment was made despite the availability of PAN details and only on the basis that bills and vouchers have not been presented in respect of material and transport/hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in deleting the addition made u/s. 68 of the Income Tax Act,1961 of Rs. 3,18,48,400/- ignoring the fact that the assessee has failed to prove the capacity, creditworthiness of the loan givers parties and genuineness of the said loans and therefore the A.O. rightly treated the same as unexplained cash credit u/s. 68 of the Act.? 2. Whether on the facts and circumstances of the case and in Law, Ld. CIT(A) has erred in deleting the addition made u/s. 68 of the Income Tax Act, 1961 ignoring the fact that assessee failed to produce two said parties for verification of loan taken along with desired documentary evidences to establish the creditworthiness of parties? 3. Whether on the facts and circumstances of the case and in Law, Ld. CIT(A) has erred in deleting disallowance of 10% of Transport and Hiring charges of Rs. 1,13,90,636/- and reducing disallowance under 'Wage and labour charges ofRs.2,77,75,470/- from @ 10% to 2% ignoring the fact that assessee has failed to produce bills and vouchers related to these expenses? 3. The issue arising in grounds no. 1 and 2, raised in Revenue s appeal, pertains to the addition made on account of the loan received by the assessee during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amesh were given the opportunity about the dealings they had with the assessee, so as to prove their identity, creditworthiness and genuineness, but both only filed the submissions in Tapal. The AO held that both persons have shown a total income of INR 10 lakh, and thus the same doesn t prove the creditworthiness to lend loans of INR 1,45,00,000 and INR 1,73,48,400 to the assessee. Thus, the AO treated the aforesaid loan as unexplained as the assessee failed to prove the identity and creditworthiness of the loan lender and the genuineness of the transaction. Accordingly, the AO made an addition of INR 3,18,48,400 under section 68 of the Act in respect of the loan received by the assessee from Mr. Mahesh Purohit and Mr. Ramesh Purohit. 5. The learned CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue and deleted the addition of INR 3,18,40,400 made under section 68 of the Act, by observing as under: 4.3 I have considered the facts of the case before me. It is seen that during the assessment proceedings, the appellant has furnished (i) copy of confirmation of the parties (ii) copy of Acknowledgment of Return of income (iii) copy of bank statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 34- 43, we find that both parties have acknowledged the grant of loan to the assessee and also acknowledged the repayment of the same on 22/02/2014. We find that the aforesaid transaction of loan and repayment of same is duly substantiated with the bank account statement of Mr. Mahesh Purohit and Ramesh Purohit maintained with Vijaya Bank, Borivali, Mumbai. From the perusal of the aforesaid bank account statement, we further find that these parties had sufficient bank balance to advance the loan to the assessee and there is no cash deposit prior to providing the funds to the assessee. As per the assessee, Mr. Mahesh Purohit and Mr. Ramesh Purohit are partners in M/s Raj Purohit Construction, which is also in the business of execution of civil work contracts. Since the alleged parties are engaged in a similar line of business, therefore they agreed to initially fund the assessee for maintaining a deposit with MCGM in relation to invitation of tenders for the requisite work orders. However, after a short span of around 10 months, due to some unsuitable factors, the potential business plan did not fructify and thereafter, the assessee immediately repaid the funds to the alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction is duly supported by the bank statement, such a doubt appears to be merely a pretext to doubt the transaction by the assessee without any substantial material being brought on record. In any case, the Revenue has not denied the submission of the assessee that the loan was ultimately repaid on 24/02/2014, i.e. in the year under consideration itself. Thus, we are of the considered view that in the present case, the assessee has discharged the initial onus of proving the identity and creditworthiness of the loan lenders and the genuineness of the transaction. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition of INR 3,18,48,400 made under section 68 of the Act. As a result, the impugned order on this issue is upheld and grounds no.1 and 2, raised in assessee s appeal, are dismissed. 9. The issue arising in ground no. 3, raised in Revenue s appeal, pertains to the deletion of disallowance on account of transport and hiring charges and reduction of disallowance on account of wage and labour charges. 10. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case pertaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the perusal of the details of material, transport and hiring charges, forming part of the paper book on page 28, we find that the assessee has provided the names of parties to whom transport charges have been paid along with their PAN no. As regards the parties to whom the contract/hiring charges have been paid, the assessee has mentioned the name of the parties and the amount of TDS deducted while making the payment. As regards the balance payment of INR 42,150, we find that the same has been referred to as the miscellaneous charges for which no details have been provided by the assessee. It is evident from the record that the AO neither controvert any of these details furnished by the assessee nor examined the parties to whom payment was made despite the availability of PAN details and only on the basis that bills and vouchers have not been presented in respect of material and transport/hiring charges made the disallowance. It is further pertinent to note that the disallowance was only restricted to 10% of the expenditure and the entire expenditure of INR 1,13,90,636 as claimed by the assessee was not disallowed. At this stage, it is also relevant to note that in the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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