TaxTMI 
TaxTMI 
2012 (1) TMI 283
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....here is a violation of Rule 46A(1) of the I. Tax Rules." 3. The first issue for consideration relates to deleting the addition of Rs. 74,45,000/- made by the Assessing Officer under sec. 68 of the Act. The facts of the case stated in brief are that during the year under consideration the assessee received unsecured loans of Rs. 74,45,000/- from the following persons:- 1. Smt. Krishna Devi Rs.16,00,000/- 2. Smt. Pankhuri Aggarwal Rs.21,70,000/- 3. Shri Rohit Gupta Rs. 7,40,000/- 4. Shri Ram Kishore HUF Rs. 9,00,000/- 5. Shri Mohit Gupta Rs.20,35,000/- The AO required the assessee to establish identity of creditors, genuineness of transactions and creditworthiness of creditors in respect of above mentioned persons. The assessee filed confirmations, copies of accounts, copies of acknowledgement of returns of income for Assessment Year 2007- 08 and copies of bank statements in respect of the creditors. The Assessing Officer issued summons under sec. 131 to Smt. Krishna Devi, Pankhuri Aggarwal and Sh. Mohit Gupta. In response thereto, Smt. Krishna Devi, Pankhuri Aggarwal and Shri Mohit Gupta atten....
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.... These details are borne out from submissions dated 12.3.2009 as filed by assessee before Assessing Officer during assessment proceedings, vide point no. 13, inter-alia stating as "The chart containing the details of unsecured loans taken during the relevant period is enclosed in the prescribed format as per point no 20 of the questionnaire...". The random attempt by the Assessing Officer in making the additions pertaining to select unsecured loans where similar pattern of evidence is on record for all the parties / lenders besides being inconsistent, in my view is also not in conformity with the legal position on the subject and therefore the same becomes untenable in law. 7.2 Be that as it may, as regards additions for loans obtained by assessee from Mr. Ram Kishore HUF (Rs. 9,00,000) and Rohit Gupta (Rs. 7,40,000), where same have been completely identified as genuine on part of the assessee / appellant, by tendering their (lender's) bank statements (from where assessee got the loan by account payee cheque) and ITR's copy along with their confirmed account statement, which has not been disproved by the Assessing Officer, as there is no further enquiry on the same either....
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.... 7.4 Accordingly addition made by Assessing Officer on account of alleged unexplained cash credits being unsecured loans taken from aforesaid lenders, is hereby deleted in its entirety. Therefore, grounds of appeal no. 2 & 3 are allowed in full. (Relief: Rs. 74,45,000/-)" 5. Before us, the learned Sr. Departmental Representative submitted that the assessee has not discharged primary onus. The Assessing Officer issued summons under sec. 131 in three cases. The cash creditors are family members of the assessee. They have given general reply in respect of specific enquiries made by the AO. It was also submitted that on perusal of bank statements, it can be seen that the amounts have been credited in their accounts from common bank as is seen from the cheque numbers. Therefore, the funds have been transferred in their accounts from a common fund. The onus was on the assessee to prove the capacity of the creditors. He placed reliance on the decision of Hon'ble Rajasthan High Court in the case of Kamal Motors vs. CIT, 131 Taxman 155 (Raj.). The learned Sr. DR therefore, submitted that the issue may be set aside to the file of the AO for verification of the fact about the source o....
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....both the parties and gone through the material available on record. We have gone through the order of the learned CIT(A) carefully. The learned CIT(A) after examining the facts has come to the conclusion that in their statements recorded on oath, no adverse comment was made by any of the lenders as far as loan given to the assessee is concerned. Three parties to whom summons were issued appeared before the AO, filed their statements of affairs, income-tax details and explanation as to their source of lending etc. Smt. Krishna Devi, Ms Pankhuri Aggarwal and Shri Mohit Gupta are assessed to tax and they are family members of the assessee. Since the creditors have given confirmation, proved their identity and creditworthiness, in our considered view, no addition can be made under sec. 68 of the Act. As regard the addition in case of Shri Ram Kishore HUF and Shri Rohit Gupta, the AO has made addition without bringing material on record. Therefore, the addition made in respect of loans received from them is without application of mind and contrary material available on record. Accordingly, we do not find any infirmity in the order of the CIT(A) deleting the addition. 8. The next issu....