TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 679
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....n such claim by furnishing :- (i) Confirmations of Advance from Customers with their party ledger, I.T.Return, Profit & Loss and Balance Sheet. (ii) Present address, telephone number, fax number and PAN of the said customers. (iii) Details of transactions with supporting documents when such credit balances started and subsequently adjusted. 4. AO has set out in paragraph 3.2 of his order, the opportunities given to the assessee to explain the receipt of advances from the customers. There were as many as 8 opportunities afforded to the Assessee by the AO in this regard. The AO after referring to the opportunities afforded to the Assessee, observed that the assessee failed to comply with the directions of the AO and accordingly a sum of Rs. 31,42,138/- was added to the total income of the assessee as unexplained credit u/s 68 of the Act. 5. Before CIT(A)the assessee explained that it could not comply with the directions of the AO in the course of assessment proceedings and requested for an opportunity to produce evidences that was called for by the AO. The CIT() allowed opportunities to the assessee to produce such evidence and called upon the AO to examine the evidence and f....
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.... the Tribunal to justify the order of remand. We have already seen that the AO afforded as many as 8 opportunities in the course of assessment proceedings. In these circumstances we are of the view that the request made on behalf of the assesee cannot be accepted. On the evidence on record, we are of the view that the conclusions of the CIT(A) are just and proper and calls for no interference. Accordingly ground no.1 raised by the assessee is dismissed. 10. Ground No.2 raised by the assessee reads as follows :- "2. The CIT(Appeals) erred in making addition of Rs. 100000/- received as unsecured loan as un explained cash credit u/s68 of the income tax act 1961." 11. The assessee during the previous year received unsecured loans totalling Rs. 10,00,000/- from the following three parties :- (a) S.D.Dugar : Rs. 75,000/- (b) Hakimuddin Bemat : Rs.8,00,000/- (c) M.K.Dugar & Sons HUF : Rs.1,25,000/- Rs.10,00,000/- The AO requested the assessee to explain such claim by furnishing - (i) Confirmations of such loans. (ii) The following evidences in support of genuineness of loan and creditworthiness of loan creditors :- (a) Bank statement of Loan Creditors (b) Cash f....
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....ssue of cheque of Rs. 75000/- by the said party. The AO accordingly submitted that the addition made by the AO should be sustained. 15. On a consideration of the remand report of the AO, the CIT(A) was of the view that the genuineness of loan transactions and creditworthiness of loan creditors was not been proved by the Assessee and therefore the explanations offered by the assessee could not be accepted as satisfactory. The CIT(A) therefore held that the sum of Rs. 1000000 credited in the account of the assessee was rightly added to the total income of the assessee firm for the AY 09-10 as unexplained credit u/s 68 of the Act. 16. Before us the ld. Counsel for the assessee submitted that Mr.Hakimuddin Behmat, one of the loan creditors, who had given a sum of Rs. 8,00,000/- had not responded to the summons issued by the AO owing to strained personal relationship. It was submitted by him that the aforesaid party was now willing to extend necessary cooperation. He therefore prayed that one more opportunity may be afforded to the assessee to satisfactorily explain the unsecured loans received from Mr.Hakimuddin Behmat. As far as the other two unsecured loan creditors are concerned ....
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....provision any sum payable by the assessee as interest on any loan or advances from a scheduled bank shall be allowed as a deduction in computing the total income only when such interest is actually paid. The AO further noticed that the assessee had not produced any evidence with regard to the payment of interest but noticed that there was a settlement between the assessee and the bank during the previous year 2010-11 and the assessee obtained benefit of Rs. 3,48,806/- by way of such settlement with the bank and the same was offered to tax as income in that year. The AO also referred to Explanation 3C and 3D to section 43B of the Act which provides that even if interest payable on loans or advances from a scheduled bank is converted into a loan or advance that will not be the actual payment of interest. The AO accordingly added a sum of Rs. 8,86,927/- to the total income of the assessee. 21. On appeal by the assessee CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A) the assessee raised ground no.3 before the Tribunal. 22. At the time of hearing it was pointed out by the ld.counsel for the assessee that the following is the details of the bank transactions in the c....