TaxTMI 
TaxTMI 
2017 (2) TMI 684
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.... of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of AO in charging interest u/s. 234A, 234B, 234C and 234D of the Income Tax Act, 1961. 4. That the appellant craves the leave to add, modify, amend or delete any of the ground of appeal at the time of hearing and all the grounds are without prejudice to each other." 2. The brief facts of the case are that the assessee filed its return of income on 1.10.2013 declaring income of Rs. 12,06,530/-. The case was processed u/s. 143(1) of the I.T. Act, 1961. Subsequently, the case was selected under CASS. Statutory notices u/s. 143(2) of the I.T. Act dated 4.9.2014 was issued. The asessee is engaged in the business of export and works in the name of Grace Fashion Accessories during the year. AO observed that the assessee could not prove his relations/ any other business relation with M/s Lotus Corporation and also could not prove the reason of unsecured loan without any consideration / interest. AO also observed that it is proved that unsecured loan of Rs. 30 lacs taken by the assessee from M/s Lotus Corporation is bogus/ ....
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....tained by AO directly from the bank showing that the above said two RTGS having been made from this bank account; Page No. 34-35 of the Paper Book is the copy of RTGS Report showing the receipt of two RTGS from M/s Lotus Corporation and page no. 27 of the Paper Book which is a copy of assessee's reply in which assessee provided PAN no. of proprietor Vikram Devasi of M/s Lotus Corporation which confirms the identity of the lender. Ld. Counsel of the assessee has stated that the assessee has established that the loan in the question has been received through banking channel and further that proprietor of M/s Lotus Corporation was assessed to tax as was evident from his PAN Number. Hence, he submitted that assessee has established all three ingredients of Section 68 of the I.T. Act, 1961 and requested to delete the addition in dispute by relying upon the following judicial precedents and stated that the issue in dispute stands squarely covered by the decisions and also requested to follow the decisions and addition in dispute may be deleted accordingly. CIT vs. Sh. Raj Kumar Agarwal: ITA No. 179 of 2008 dated 17.11.2009 (Allahabad High Court). CIT vs. Sh. Ram Narain ....
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....ich assessee provided PAN No. of proprietor Vikram Devasi of M/s Lotus Corporation which confirms the identity of the lender. After perusing the aforesaid documents/ evidences, I am of the considered view that the assessee has established that the loan in the question has been received through banking channel and further that proprietor of M/s Lotus Corporation was assessed to tax as was evident from his PAN Number. These evidences established that all three ingredients of Section 68 of the I.T. Act, 1961 are fulfilled thus, the addition in dispute is not sustainable in the eyes of law and needs to be deleted. My aforesaid view is fully supported with the following decisions from which the present issue is squarely covered:- a) CIT vs. Sh. Raj Kumar Agarwal: ITA No. 179 of 2008 dated 17.11.2009 (Allahabad High Court) wherein, the Hon'ble High Court has held that "Once identity is proved, production of the creditor is not the obligation of the assesse and that assessee cannot be compelled to prove the source of the source." b) CIT vs. Sh. Ram Narain Goel 224 ITR 180 (P&H HC) wherein, the Hon'ble High Court has held that "the finding of fact given by the Tribunal is....
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....ch 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 evidence has been furnished by Shri Balwant Singh Pannu regarding advance of Rs. 5,00,000/- each from Sh. Maman and Sh. Udaivir and the source of availability of the cash lying at his home. I find considerable cogency in the assesee's AR contention that Shri Balwant Singh Pannu was the source of cash deposited in the assessee's bank account. Also, it is evident from his statement recorded on 26.2.3013 that advance given to the tune of Rs. 16,00,000/-....
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....nd 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 and mere non- compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee .. " [Emphasis Supplied] c) 149 TTJ 401(tm) (Luck) Dwarikadhish Sugar Industries vs. ITO "held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is establ....
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....nies did not exist at the given address. No doubt, if the companies are not existing, i.e., they have only paper existence, one can drawthe 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 itself cannot be treated as the conclusive factor. As pointed out above, these applicant companies have PANs and assessed income tax No effort was made to examine as to whether these companies were filing the IT returns and if they were filing the same, then what kind of returns these companies were filing. If there was no return, this could be another factor leading t....