2018 (10) TMI 784 - AT - Income Tax

ITAT upholds CIT(A)'s decision on unsecured loans for 2009-10 assessment year

The ITAT upheld the CIT(A)'s decision to confirm additions on unsecured loans for the assessment year 2009-10. The ITAT found that the assessee failed to ... Addition on account of unsecured loans - addition u/s 68 - Held that:- The transaction appearing in the bank passbook appears to be an accommodation entry and no evidence was filed by the assessee with regard to the credit worthiness of the person. In the case of P.Venkateswara Rao, though the assessee claimed to have earning agricultural income of ₹ 5 lakhs, no evidence was filed by the assessee for earning such huge sum. From the above details, the assessee failed to furnish any evidence with regard to the earning of such huge sums with tangible evidence such as household cards, bank pass book etc.. Since the Ld.AR did not controvert the findings given by the Ld.CIT(A) with reliable evidence, we do not find any reason to interfere with the order of the Ld.CIT(A) and we uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. Issues:Challenge against additions on account of unsecured loans confirmed by CIT(A) for the assessment year 2009-10.Analysis:1. General Grounds (Ground No.1 and 4): These grounds were deemed general in nature and did not require specific adjudication.2. Additions on Unsecured Loans (Ground No.2 & 3): The AO made an addition of Rs. 29.86 lakhs as unexplained income under section 68 of the Income Tax Act, 1961, as the assessee could not produce supporting evidence for a portion of unsecured loans. The CIT(A) deleted Rs. 5 lakhs but confirmed the remaining amount. The CIT(A) independently discussed reasons for confirming additions in each case:a. Credit in the name of Sri Kandula Satyanarayana: The AO disbelieved this creditor due to ATM withdrawals in small amounts. The genuineness of the transaction remained in doubt, leading to the confirmation of the addition.b. Credit in the name of Baby Shyamala: Lack of evidence regarding the creditor's capacity to advance the amount resulted in the confirmation of this addition.c. Credit in the name of Smt. P.Nagamani: While the credit transaction was deemed acceptable, the lack of evidence regarding the creditor's other agricultural income led to the addition confirmation.d. Credit in the name of Sri K.Sirisha Aditya: Lack of supporting evidence for the creditor's claim of advancing the amount from gifts received resulted in the confirmation of this addition.e. Credit in the name of Sri K.V.Siva Satyanarayana: No evidence was provided for the claims made, leading to the confirmation of this addition.f. Credit in the name of Sri P.Radhakrishna: Lack of evidence regarding the creditor's agricultural income and cultivation led to the addition confirmation.g. Credit in the name of Sri Kasireddy Srinivas: Lack of evidence regarding creditworthiness resulted in the confirmation of this addition.h. Credit in the name of Sri Pilli Venkateswara Rao: Lack of evidence regarding the creditor's agricultural income led to the addition confirmation.3. Appeal Hearing: The Ld.AR argued that since confirmations were filed by the assessee and identities were established, no addition should have been made. However, the Ld.DR supported the CIT(A)'s orders.4. Judgment: The ITAT upheld the CIT(A)'s order, stating that the assessee failed to provide evidence regarding the creditors' creditworthiness and capacity to advance such sums. The ITAT highlighted discrepancies in each case, such as withdrawals from ATMs, lack of evidence for claimed sources, and unproven creditworthiness. The lack of tangible evidence led to the dismissal of the appeal.In conclusion, the ITAT affirmed the CIT(A)'s decision to confirm the additions on unsecured loans due to the assessee's failure to provide sufficient evidence, leading to the dismissal of the appeal.