TaxTMI 
TaxTMI 
2015 (6) TMI 595
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.... his statement recorded. The source of the credits was stated to be his agricultural income from sugarcane produced. The Assessing Officer rejected all these explanations and invoked section 68 of the Act for making the impugned addition. 3. The CIT(A) has affirmed the Assessing Officer's finding in the lower appellate order. We find that the same comprises of the Assessing Officer's opinion, assessee's submissions and the impugned findings contained in the order under challenge as follows: "5 Ground No.l: A.O.'s Arguments: During the year under consideration the assessee has received unsecured loan from Shri Mukesh T. Patel, the said loan received by the assessee in three cheques each of Rs. 1,10,000/-. Shri Mukesh Patel issued three cheques from his three bank accounts which are maintained with The Surat District Co. Op. Bank Ltd., Vav Branch, Surat. In view of the above, the assessee has requested to submit the contra confirmation from Shri Mukesh Patel with necessary material evidences. In this regard, a show cause letter dated 18.11.2010 was issued and served upon the assessee, the contents are reproduced as under:- ''"As you are well aware that time barring ....
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....ough the said details, the submission filed by the assessee is not tenable on the ground that Shri Mukesh Patel issued the aforesaid three cheques from his saving account of The Surat District Co. Op. Bank Ltd., in which he has joint holder. Further, it is noticed that before issuing cheques Shri Mukesh Patel had deposited cash of Rs. 90,000/- on 5.2.2008 and Rs. 45,000/- on 14.3.2008 in account No.375, deposited cash of Rs. 90,000/- on 5.2.2008 and Rs. 55,000/- on 14.3.2008 No.256 and issued in the name of Gaurang K Shah, in account No. 257 he had deposited cash of Rs. 70,000/- on 5.2.2008 and Rs. 10,000/- on 14.3.2008 and this cheque was issued in the name of Ketki G. Shah. Hence, the assessee has received loan of Rs. 2,20,000 from Mukesh Patel in his name and Rs. 1,10,000 in the name of his wife but the assessee has shown totally Rs. 3,30,000/- loan in his books of accounts. For the verification of the genuineness of the loan transaction, a summons was issued on 29.11.2010 to Shri Mukesh T. Patel with a request to attend the office on 2.12.2010 with his sale/purchase bill, various labour charges expenses and other expenditure details in regards his claim of agriculture income.....
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.... in this register tallies with the corresponding details in the receipt issued, as well as with the entries in the cash book." Therefore, in absence of the said register, it is difficult to ascertain the correct total receipt of the assessee throughout door patient as well as indoor patient. The assessee has also not produced any fees receipts which were issued by him for consulting charges as well as his operation charges. Therefore, it is crystal clear that the assessee had suppressed his receipt and the same is introduced by him in his books of account by way of unsecured loan. Therefore, the loan received from Shri Mukesh T. Patel is treated as 'non-genuine' and the same is undisclosed receipt of the assessee came in his account through Shri Mukesh T Patel. Therefore, the unsecured loan received from Shri Mukesh T. Patel is added back to the total income of the assessee of Rs. 2,20,000/- out of total loan of Rs. 3,30,000/-. Moreover, it is found that Shri Mukesh T. Patel issued cheque of Rs. 1,10,000/- from his bank account No.257 in the name of Ketki G Shah which was shown by the assessee as his unsecured loan. It is pertained to note that Smt. Ketki G. Shah, wife o....
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.... letter (Photostat copy of letter dated 25.11.2010 is enclosed). (ii) He has also stated in the letter that he is holding huge amoi agriculture land in village Vav, Taluko Kamrej, Dist, Surat. He had also attached the Photostat copies of Form No.7/12 & 8A to prove the land holding. (iii) He has stated that the above loan is given out of agriculture income of sugarcane sales received from various co-op Societies. (Photostat copies of income certificate received from various sugar cooperative societies were also attached to prove the source of agriculture income). The appellant produced Shri Mukesh T. Patel before the LAO on 29.11.2010 in compliance to the show cause notice dated 18.11.2010 issued by the LAO. During the course of hearing on this date the LAO orally asked few questions to Shri Mukesh T. Patel, regarding the loan given by him to the appellant. Shri Mukesh T. Patel while replying to the LAO'S questions orally confirmed that he has given the loan of Rs. 3,30,000/- to the appellant. The LAO was not satisfied with the submission of appellant, confirmation given orally by Shri Mukesh T. Patel at the office of the LAO and also with the documentary evidences submi....
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....e facts proves that the appellant has not managed his undisclosed / unaccounted income for receiving unsecured loan from his friend Shri Mukesh T. Patel as observed by the LAO in Para 3.3 of the assessment order. In view of the above, your honor will appreciate the fact that the appellant has duly established. (i) The identity of Shri Mukesh T. Patel (Depositor) (ii) Credit worthiness of Shri Mukesh T. Patel and (iii) The genuineness of loan transactions. Decision: Arguments of AO as well as appellant has been considered. There is considerable force in AO's arguments. The most clinching evidence brought on record by AO is that credit worthiness of Shri Mukesh Patel, alleged creditor, has not been proved. The alleged creditor does not have demonstrable sources of income. Also, AO has found defect in books of appellant. Relying on the arguments of AO, this addition on account of unexplained cash credit amounting to Rs. 3,30,000/- is confirmed. Appeal on this ground is dismissed." This leaves the assessee aggrieved. 4. We have heard both sides and gone through the lower authorities' orders. The sole issue in the instant case is of section 68 addition amountin....