TaxTMI 
TaxTMI 
2015 (9) TMI 1171
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....redit of Rs. 4,25,000/- in the books of account outstanding as on 31.3.2005 as unsecured loan in the name of Shri Susheel Shukla. During the course of assessment proceedings, the Assessing Officer required the assessee to prove the genuineness of the transaction. In this regard, the assessee submitted that the amount was obtained from NRE account of the lender maintained with Centurion Bank of Punjab. A photocopy of the bank account was produced before the Assessing Officer. On perusal of the bank account, the Assessing Officer noticed that the said lender had a nil balance as on 1.4.2004. An amount of Rs. 4,48,829/- was credited on 18.5.2004 under the narration "By Bill", out of which an amount of Rs. 4,25,000/- was given to the assessee on the same day and a sum of Rs. 20,000/- was drawn through bearer cheque on 21.5.2004. There was no deposit in the said bank account thereafter till 30.3.2007 and the closing balance remained below Rs. 4000/- throughout the subsequent period of about three years. Therefore, the Assessing Officer opined that the assessee failed to discharge the onus to prove the capacity of the lender to advance the loan. Further, the assessee could not produce an....
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.... is no evidence at all which shows the sources of his income or his ability or capacity to advance the impugned amount. When this aspect was confronted to the learned counsel for the assessee during the course of hearing, it was stated that this specific requirement was not addressed to by the lower authorities. In any case, according to the assessee, the amount having been advanced from a NRE account, wherein the remittance has come from abroad, the same sufficiently discharged the onus cast on the assessee. 4. In pursuant to the order of the Tribunal dated 11.9.2009, the Assessing Officer vide his letter dated 26.8.2010 asked the assessee to furnish necessary evidence regarding the financial capacity of the lender and the genuineness of the transaction. The Assessing Officer asked the assessee to furnish the following documents : (i) Copy of the Income Tax Return of the lender for the relevant Assessment Year i.e. 2005-06. (ii) Details of the sources of income of the lender. (iii) Copy of the bank accounts of the lender in the country of his residence. (iv) Evidence regarding remittances into the NRE account. (v) Complete books of account for the relevant year. ....
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.... the identity of the lender. Now, the case of the Revenue is that the assessee failed to prove the financial capacity (creditworthiness) of the lender and genuineness of the transaction. In this case, the assessee had submitted a certificate from the Manager of HDFC Bank, Limited, Near Nirankari Bhawan, Jagadhri Road, Yamunanagar (Centurion Bank of Punjab merged into HDFC Bank Limited). The bank has certified that Shri Susheel Shukla S/o Shri Sudama Shukla, holder of NRE Account No. 77SB1351960 had transferred Rs. 4,25,000/- through cheque No. 295291 to the SB Account No. 02101000161760 of Shri Gulshan Kumar Verma S/o Shri Angrej Lal from his NRE Account on 18.5.2004. The bank has also certified that the Centurion Bank of Punjab merged into HDFC Bank Ltd. The assessee has also produced a bank statement of Centurion Bank of Punjab before the authorities below to demonstrate that Shri Susheel Shukla has transferred Rs. 4,25,000/- vide cheque No. 295291 to Shri Gulshan Verma. The assessee has also produced confirmation letter in the form of affidavit of Shri Susheel Shukla s/o Shri Sudama Shukla duly attested by Mr. Thomas Breen, Notary Public State of Maryland, wherein Shri Susheel S....
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....bjection of the Revenue is that in the said affidavit the lender has not disclosed his source of income. The lower authorities have admitted this fact that the lender was residing in U.S.A. The assessee has furnished a photocopy of passport of Shri Susheel Shukla. There is no dispute that the signature on passport and affidavit is that of Shri Susheel Shukla. Keeping in view that the transactions are through banking channels and there is no material on record to prove the contrary, I have no hesitation in holding that the assessee had discharged the burden of proving the genuineness of the cash credit. Under the law, the amount of Rs. 4,25,000/- cannot be treated as the income from undisclosed sources of the assessee, when there is neither direct nor circumstantial evidence on record to hold that the said amount actually belonged to or was owned by the assessee. As regards the creditworthiness of the lender, I may point here that the Assessing Officer admitted that the assessee had submitted a copy of I.T.R. filed in U.S.A. by Shri Susheel Shukla for the period 1.1.2004 to 31.12.2004 relevant to assessment year 2004, wherein annual income of 22,201 U.S. Dollar had been declared. A ....