TaxTMI 
TaxTMI 
2013 (9) TMI 338
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.... are no such sub dealers appointed by the assessee nor is there any deposit paid by them to the assessee. He, therefore, confronted the same to the assessee. In absence of any satisfactory explanation from the assessee the AO made addition of Rs.4,29,000/- to the total income of the assessee u/s.68 of the I.T. Act. 4. Before the CIT(A) the assessee submitted that the AO did not give proper opportunity to the assessee to cross examine those sub dealers and drew adverse inferences and conclusions. It was further submitted that an amount of Rs.3,08,000/- was received as sub dealer deposit during F.Y. 2002-03 and Rs.1,21,000/- was received during F.Y. 2003-04 and therefore no addition could have been made during the impugned assessment year. 5. Based on the arguments advanced by the assessee the learned CIT(A) called for a remand report from the AO who reported as under vide his remand report dated 14-06-2010 : " The assessee vide his submissions dt. 14-05-2010 has filed further submissions wherein it is stated that he had received sub-dealers deposits of Rs.3,08,000/- in F.Y. 2002-03 and in the F.Y. 2003-04 Rs.1,21,000/-. However, the addition has been made amoun....
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.... 25/03/2009 861 26/03/2009 827 16/06/2009 833 04/07/2009 839 The sequence of the S.N. of the vouchers vis-a-vis date of payment itself shows discrepancy Voucher No. 854 was issued on 19/03/2009 while voucher No 839 was issued on 04/07/2009. Further, most of the payments were made in cash Taking into consideration the findings of the A0 in his assessment order and the fishy payment vouchers, I am of the considered opinion that the entire transaction i. e. receipt as well as payment is fictitious and concocted. While addition made by AO on account of subdealers receipt u/s.68 of the I.T Act cannot be technically made in the year under consideration, AO is directed to look into the issue in its entirety. I dismiss this ground of the appellant as well". 6.1 Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 7. The learned counsel for the assessee submitted that since the AO in the remand report has accepted the same as genuine and since the sub dealer deposit amount was received during F.Y. 2003-04 and 2004-05 and do not relate to the impugned assessment year, therefore, the learned CIT(A) was not justifi....
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....e bogus. The AO, further noted that even as per the statement of the assessee these funds were utilised for making payment to his Ex-wife as alimony and the same has not been utilised for business purposes and have been utilised for non-business purposes. He, therefore, added the entire amount of Rs.11,99,000/- to the total income of the assessee. 11. Before the CIT(A) it was submitted that all the amounts were received by the assessee by Account Payee Cheque or Demand Draft. The amount of Rs.1,00,000/- received from Sri Giopichand Premchandani was received during F.Y. 1995-96 relevant to A.Y. 2006-07, therefore, the same could not have been added. The assessee enclosed the bank passbook of some of the loan creditors and submitted that the loans have been repaid subsequently. 12. Based on the arguments advanced by the assessee the learned CIT(A) called for a remand report from the AO who submitted that despite issue of summons u/s.131 Smt. Seema Rajkumar Deoyani, Yeomatmal did not appear before him nor any reply was received from her. Therefore, the assessee failed to discharge the onus of proving the existence, credit worthiness and genuineness of the loan obtained from Smt.....
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....to Rs.3,00,000/- as genuine. He submitted that once the AO in the remand report has accepted the credit as genuine the learned CIT(A) should have accepted the same. So far as the loan from Mr. Gopichand Premchandani amounting to Rs.1,00,000/- he submitted that the said loan was obtained during F.Y. 1995-96 and does not relate to this F.Y. and therefore the same should not have been added at all and the learned CIT(A) made a great mistake by confirming the addition of Rs.1,00,000/- being loan obtained from Gopichand Premchandani. He submitted that although the loan creditor Smt. Seema Rajkumar Deoyani, of Yeotmal did not attend the office of the AO, however, she had filed confirmation stating that she had given the loan of Rs.2,00,000/- to the assessee by account payee cheque/DD and the same have been refunded subsequently by account payee cheque/DD. So far as other loan creditors are concerned he submitted that they had appeared before the AO and have confirmed to have given the loan to the assessee. He submitted that all the loans except the loan in the case of Gopichand Premchandani have been repaid during F.Y.2008-09 to 2009-10 by account payee cheques. Therefore, the same shoul....
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....11,99,200/- on account of loan from 7 loan creditors on the ground that the assessee could not substantiate the identity, credit worthiness and the genuineness of the transactions. We find the assessee filed certain details before the CIT(A) who called for a remand report from the AO. From the copy of the remand report we find the AO had accepted the loan of Rs.2 lakhs from Mr. Ashokkumar Nandiram Chandwani and Smt.Komal Sevalram Sewlani, Pachora amounting to Rs.3 lakhs as genuine by observing as under : "Sri Ashokkumar Nandiram Chandwani, Kolhapur : In order to find out the genuineness of the credits, a summons u/s.131 of the I.T. Act was issued on 03-03-2010 requesting the creditors to attend this office on 12-03-2010. The assessee attended this office on 12-03-2010 and his statement has been received on oath. The creditor is a relative of the assessee and the assessee has filed the copies of demand drafts as mentioned below : 1. Bank of Maharastra, Kolhapur D.D.No.811676 Rs.40,000/- 2. United Western Bank, Br. Kolhapur D.D.No.029891 Rs.40,000/- 3. The Central Bank of India, Br. Kolhapur D.D.No.126904 Rs.40,000/- 4. ....
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.... for invoking provisions of section 68 of the Act is that according to the Assessing Officer the assessee has failed to discharge the burden of proving creditworthiness of the creditor. In coming to such inference, it is made out by the Revenue that the creditor during examination by the Assessing Officer did not satisfactorily explain the source of cash deposits in his bank account. Secondly, it has also been pointed out that the creditor M/s Global Marketing did not carry on business during the year and neither was it holding any fixed assets and, therefore, the assessee failed to prove the creditworthiness of the said creditor to give a loan of Rs 8 lakhs to the assessee We have carefully considered the fact-situation in the present case and find that the assessee has prima facie discharged the onus cast on him in terms of section 68 of the Act. In this regard, we have perused the statement of Shri Vinay Setia, partner of M/s Global Marketing recorded by the Assessing Officer, a copy of which has been placed in the Paper Book at pages 4 to 10. In the course of examination, the said partner has explained the sources of his income out of which the amount of Rs 8 lakhs has been adv....
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.... filed to prove the genuineness of the credit in this case. If the genuineness of the credit is doubtful it could have been added in the year of receipt but certainly not during this year. In this view of the matter, we set-aside the order of the CIT(A) on this loan and direct the AO to delete the addition of Rs. 1 lakhs on account of loan obtained from Mr. Gopichand Premchandani. 20. So far as the amount of Rs. 2 lakhs obtained from Sau. Vimla Girdharilal Manmani we find the AO has not given any comment in respect of this creditor in his remand report. Similarly the assessee has also not produced this creditor before the AO. Since the loan creditor was not produced before the AO and the remand report of the AO is also silent on this issue, therefore, we, in the interest of justice deem it proper to restore the issue to the file of the AO with a direction to give one more opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and credit worthiness of this loan creditor and the genuineness of the transaction. 21. So far as the various decisions relied on by the learned counsel we find the same are distinguishable and not applicable....