TaxTMI 
TaxTMI 
2016 (11) TMI 536
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....3A of the Income Tax Act [Act] was conducted at the business premises of assessee on 11-10-2007. Assessee made disclosure to the tune of Rs. 30,03,071/-. Assessee explained that an amount of Rs. 7,30,000/- was disclosed for AY. 2007-08 and Rs. 11,50,250/- for AY. 2008-09. The balance amount of Rs. 11,22,821/- was not disclosed as assessee was able to explain the stock availability in the business premises. AO in the course of assessment, enquired about the purchase of stock. Assessee furnished credit purchase bills from M/s. Shree Subham Jewellers, Secunderabad, M/s. Nakoda Silver Palace, Hyderabad and M/s. Shagun Jewellers, Delhi. AO accepted the credit bills from the local purchases but doubted the purchase from M/s. Shagun Jewellers, Del....
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.... erred by upholding the addition of Rs. 8,06,161/- on the grounds of not believing the Credit purchases even though purchases are genuine and consequently unexplained investments in gold and silver stock. 3. The Learned CIT(A) erred in confirming the addition made by assessing officer of Rs. 12,23,000 /- being the amount of loans received from 1) Omprakash Sirvi Rs. 3,50,000/- 2) Kanaram Sirvi Rs. 3,75,000/- and 3) Mahesh Bank Rs. 4,98,000/- even though the loans are genuine and the creditors have creditworthiness and sufficient sources and having filed the confirmations and other proofs and as such there is unexplained investment in girvi items. 4. The Learned CIT(A) erred in upholding the addition made by the assessing officer of Rs....
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....i was in fact cleared, as can be seen from the certificate of bank, if not in Delhi but in Chennai. It was his contention that assessee has credit purchases to the tune of Rs. 8,06,161/- and also loans from various persons including from Mahesh Bank to prove the creditworthiness. It was his submission that assessee has furnished necessary evidences in support of the contentions. 5. Ld. DR however, submitted that assessee has furnished a bill in the name of M/s. Shagun Jewellers, Delhi, whereas amount was paid in Chennai. So, the same was disbelieved by the AO. In addition the creditworthiness of various creditors are not proved. He supported the orders of AO and CIT(A). 6. We have considered the rival contentions and perused the documents....
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....owards credit purchases is not sustainable. Accordingly, the grounds of assessee on this issue are allowed. 7. Coming to the credits given by Shri Omprakash Sirvi, Shri Kanaram Sirvi and loan from Mahesh Bank, there is no dispute with the fact that Shri Omprakash Sirvi and Karanam Sirvi are assessees on record. They have their own sources of income and have been filing returns. Not only that they have confirmed the advancing of moneys. They are also having Permanent Account Numbers (PAN) and assessees on record. Being the family members, they must have utilized funds in the business. Therefore, the creditworthiness of these two people cannot be doubted. In addition, AO also doubted the loan from Mahesh Bank to an extent of Rs. 4,98,000/-. ....
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....or which assessee explained that he has obtained Rs. 3,50,000/- from his father-in-law, Mr. Ratanlal Panwar and Mr. Sohan from Rajastan. Assessee also claimed credit from the loan funds and business funds to an extent of Rs. 8,50,000/- which was given by the AO. AO however, doubted the loans from father-in-law and Mr. Sohan, who has given Rs. 1,50,000/- and Rs. 2 Lakhs respectively. AO disbelieved the confirmation letters as they are not regularly assessed to income tax and also not having enough sources to advance the loans. Before the Ld.CIT(A) also assessee contested the same. Ld.CIT(A) did not agree with assessee's contentions by stating as under: 'By merely stating that they have capacity to lend, the creditworthiness does not get es....