TaxTMI 
TaxTMI 
2015 (8) TMI 112
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....ng gift/loans received by the assessee as unexplained. The gifts/loans received by the Assessee were as follows:- AY 2004-05 (1) Gift received from Mr. Tahir Ali - Rs. One lakh. (2) Loan received from Shivanna Siddapur - Rs. One lakh. (3) Loan received from Irshad Ali Khan- Rs. 1.45 lakhs. All the above sums were added as unexplained cash credits u/s. 68 of the Act by the AO, which was confirmed by the CIT(Appeals). AY 2005-06 3. Loan taken by the assessee from Zafrullah Khan of Rs. 1 lakh was treated as unexplained cash credit u/s. 68 by the AO and confirmed by the CIT(Appeals). 4. Originally these appeals were heard by the Tribunal and by an order dated 15.6.2012, the additions made by the revenue authorities as above we....
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.... from the bank account of Tahir Ali with Canara Bank that for the period from 30.10.02 to 6.7.03, there was deposit of Rs. 66,951 and the balance available in his account as on 6.7.03 was Rs. 795. It also transpired that Tahir Ali had availed a bank loan of Rs. 1 lakh on 10.9.03 for business purpose and on 10.3.04 for installation of solar nets in his house. It is in these circumstances that the AO held that the creditworthiness of Mr. Tahir Ali was not established. The Tribunal upheld the conclusions of the AO. 8. Loan received from Shivanna Siddapur - Rs. One lakh: The loan in question was given by cash on 3.11.03. The sworn statement was recorded under section 131 of the I T Act from Shri Shivanna on 26.7.2006. In answer to question N....
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.... deposited, which ultimately was used for payment of cheque of Rs. 1.45 lakhs. It is in these circumstances that the loan was treated as unexplained. AY 2005-06 10. Loan of Rs. 1 lakh taken by the assessee from Zafrullah Khan: As regards this loan, the creditor happens to be the son-in-law of the assessee. He explained that the sum of Rs. 1 lakh was paid out of loan received from his brother-in-law, Mr. Zakir Hussain (son of the Assessee). The assessee had a bank account with Canara Bank, Mandi Mhalla, Mysore. On perusal of this account, the AO found that on 31.12.04, a sum of Rs. 2 lakhs was deposited in his bank account and the next day i.e., on 1.1.05, the same was withdrawn by issuing a cheque of Rs. 1 lakh to Zakir Hussain and a DD ....
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....les confirmation from the creditor and produces the creditor before the AO, and where the creditor confirms giving of loan to the assessee; no addition u/s. 68 could be made in the hands of assessee on the ground that creditor could not satisfactorily explain the source of loan. The Hon'ble Rajasthan High Court held that burden on the assessee does not extend to prove the source of creditor form where he made the advance to the assessee. 13. The ld. DR, on the other hand, submitted that the creditworthiness of the donor/creditors had not been proved by the assessee and in such circumstances, the addition made was justified. According to him, in the present case, the AO has not called upon the assessee to prove the source of source, but o....
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....s in these circumstances that the donor/creditors were called upon to show their capacity to give gift/loans. We are satisfied that the explanation given with regard to capacity of the donor/creditors is unsatisfactory. 16. In the case of Shivanna Siddapur, who gave Rs. 1 lakh as loan and explained that the same was withdrawal from GPF account, it transpired that he was to perform the marriage of daughter at the time of withdrawal from PF account. This circumstance was considered by the revenue authorities as indicating that withdrawal from PF account would not have been used for giving loan to the assessee. In our opinion, this conclusion arrived at by the revenue authorities is correct and calls for no interference. 17. With regard ....