TaxTMI 
TaxTMI 
2016 (9) TMI 499
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.... neither based on proper appreciation of facts and circumstances of the case and nor is in accordance with law. 1.3 That the learned Commissioner of Income Tax (Appeals) has overlooked relevant evidence placed on record and, drawn factually incorrect and legally unsustainable inferences based on irrelevant and extraneous consideration and thus, addition sustained is wholly unwarranted and not in accordance with law. 2 That the learned Commissioner of Income Tax (Appeals) Hisar has further erred both in law and on facts in upholding addition of Rs. 5,49,000/- representing loans received by the assessee and, held to be unexplained cash credit u/s 68 of the Act. 2.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that unsecured loans aggregating to Rs. 5,49,000/- had been received by account payee cheques from identifiable parties who had duly confirmed that loans had been advanced to the appellant and as such, addition so sustained is invalid and untenable. 2.2 That the learned Commissioner of Income Tax (Appeals) has further failed to appreciate that inability of the assessee to explain source of source cannot be a basis to confirm addition U/S....
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....nt and extraneous consideration and thus, addition sustained is wholly unwarranted and not in accordance with law. To support his contention, he relied upon the following case laws and stated that the issue in dispute stands squarely covered by the said decisions and therefore, the addition in dispute may be deleted. a) CIT vs. Daulat Ram Rawatmull 87 ITR 349 (SC) b) CIT vs. Diamond Products Ltd. 177 Taxman 331 (Del.) c) CIT vs. Real Time Marketing (P) Ltd. 306 ITR 35 (Del.) d) ITA No. 1583/Del/2011 AY 1996-97 dated 11.5.2013 in the case of DCIT vs. Rainee Singh following judgments. i) 264 ITR 254 Page. 261 to 266 (Gau.) Nemichand Kothari vs. CIT ii) 220 CTR 622 (Raj) Aravali Trading Co. vs. ITO e) 256 ITR 360 (Guj) DCIT vs. Rohini Builders f) 219 CTR 571 (Raj.) Labh Chand Bohra vs. ITO g) 103 ITR 344 (Pat.) Saraogi Credit Corporation vs. CIT h) 151 ITR 150 (Pat.). Addl. CIT vs. Hanuman Aggarwal i) 154 ITR 244 (Pat.) Addl. CIT vs. Bahri Bros. (P) Ltd. j) 59 ITR 632 (Assam) Tolaram Daga vs. CIT k) 361 ITR 220 (Del) CIT vs. Kamdhenu Steel & Alloys Ltd. 6.1 As regards addition of Rs. 5,49,000/- representing loans received by the assessee and, held to be unexplained cas....
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....od of 10 months is abnormal. Further, both the authorities below observed that Shri Balwant Singh Pannu had no means and source to advance Rs. 16 lacs for the purchase of property worth of Rs. 1 Crore which is a wrong presumption. However, the person concerned was an Executive in the Land Mortgage Bank who retired in 2004 and was practicing in the Punjab and Haryana High Court since then. Further he also owned 20 acres of Agricultural Land against which he has also availed Kisan Credit Card Limit of Rs. 5,00,000/- from nationalized bank. In my view, Shri Balwant Singh Pannu was a person was of sufficient creditworthiness and was in a position to advance an amount of Rs. 16,00,000/- as an advance for purchase of the property situated at Sector 51, Gurgaon. Hence, the finding of the learned CIT(A) is factually not correct. It is also noted that Rs. 16,00,000/- was received by the assessee as an advance against property situated at Sector 51, Gurgaon from Sh. Balwant Singh Pannu in pursuance of an Agreement to sell dated 12.10.2009 as is evident from cash flow statement of the assessee for financial year 2009-10. However, the Ld. CIT(A) has upheld the addition on the basis that no evi....
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....editors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source as held by the Bombay High Court in the case of Orient Trading Co. Ltd. v. CIT [1963] 49 ITR 723. The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques. Merely because summons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation [1986] 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness....
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....ey. According to us, the assessee appears to be correct on this aspect. We feel that something more which was necessary and required to be done by the AO was not done. The AO failed to carry his suspicious to logical conclusion by further investigation. After the registered letters sent to the investing company had been received back undelivered, toe AO presumed that these companies did not exist at the given address. No doubt, if the companies are not existing, i.e., they have only paper existence, one can draw the conclusion that he assessee had not been able to disclose the source of amount received and presumption under s. 68 of the Act for the purpose of addition of amount at the hands of the assessee. But, it has to be conclusively established that the company is non-existence. 15 The AO did not bother to find out from the office of the Registrar of Companies the addresses of those companies from where the registered letter received back undelivered. If the address was same at which the letter was sent or the Inspector visited and no change in address was communicated, perhaps it may have been one factor. In support of the conclusion which the AO wanted to arrive at, that by....