TaxTMI 
TaxTMI 
2016 (7) TMI 1260
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....of assessment proceedings, AO noted that the assessee had received unsecured loans from various persons. On perusal of the unsecured loans accounts of these lenders reveals that most of these persons have received cheque from M/s Ludhiana Comfin Services and further advanced this amount to the appellant. The details are as under: S.No. Name of lender Cheques received from M/s Ludhiana Comfin Services (Rs.) Amount advanced to assessee (Rs.) 1. Sahi Ram and Sons HUF 3,19,570/- 3,19,000/- 2. Amita Gupta w/o Jawahar Mlttal , 2,99,850/- 2,99,850/- 3. Bindiya Mittal w/o Tarun 1,00,140/- 1,00,000/- 4. Jawahar Lai and Sons HUFMittal 3,01,210/- 3,01,210/- 5. Sumit Mittal 1,24,390/- 1,24,000/- 6. Sumit Mittal and Sons HUF 4,49,480/- 4,49,000/- 7. Neha Mittal 2,34,110/- 2,34,000/- 8. Shikha Mittal 1,29,720/- 1,29,500/- 9. Tarun Mittal and Sons HUF 3,49,680/- 3,49,500/- Total 23,05,500/- 5(i) The assessee was asked to discharge his onus under section 68 of the Income tax Act 1961. The AO perused the reply filed by the assessee and noticed that the....
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....ave ended there itself. The Assessing Officer filed the remand report and more or less reiterated the facts stated in the assessment order and it was highlighted that M/s Ludhiana Comfin Services is not a member of any Indian Commodity Exchange, therefore, there is a doubt in the genuineness of the transaction. 7. The assessee filed rejoinder in which same facts have been reiterated. 8. The ld. CIT(Appeals), however, did not accept contention of the assessee and noted that mere filing of PAN and confirmation would not prove credit worthiness of the creditors. The ld. CIT(Appeals) also noted that M/s Ludhiana Comfin Services has not confirmed the transaction and was not registered in any Indian Commodity Exchange. Therefore, these facts cannot be ignored. The ld. CIT(Appeals), accordingly, dismissed the appeal of the assessee on these grounds. 9. The ld. counsel for the assessee reiterated the submissions made before authorities below and submitted that assessee filed affidavits, statement of accounts of the creditors in the books of M/s Ludhiana Comfin Services alongwith copy of the bills issued, copy of the confirmed accounts of the assessee, bank statements and ITR of al....
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....he Assessing Officer during remand proceedings and matter was remanded to the Assessing Officer. All those persons were produced before the Assessing Officer and in this regard he referred to the various documents filed and copies of the statements recorded by the Assessing Officer of various persons which are placed in the paper book. He also referred to the statement of Shri Ankit Garg who is owner of M/s Satyam Commodities which is filed in the paper book at pages 123 to 126. After recording the statements, the assessment was completed u/s 143(3) of the Act and copy of the assessment order is filed at page 136 where only the nominal addition has been made and returned income has been accepted. Thus, assessee has clearly proved the three ingredients i.e. (i) name of the lender, (ii) genuineness of the transaction and (iii) source of the credit. Even the persons from whom loans were taken were presented before the Assessing Officer wherein they have confirmed the loans. In any case, the Tribunal in the similar circumstances has deleted the addition in the case of Shri Seva Ram v ITO in ITA No. 327/Chd/2011, copy of the order is filed on record. 7. On the other hand, the L....
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....4.00 -- 727,826.00 3.11.2006 By cheque No. 058589 -- 60,200.00 788,026.00 30.1.2007 By cheque No. 058590 -- 101,300.00 889,326.00 15.3.2007 To cheque No. 311117 7,000.00 -- 882,326.00 19.3.2007 To cheque No. 813878 70,000.00 -- 812,326.00 19.3.2007 To cheque No. 813881 30,000.00 -- 782,326.00 31.3.2007 By Amount of interest -- 87,325.00 869,651.00 31.3.2007 To amount of TDS 8,907.00 -- 860,744.00 Total 129,301.00 990,045.00 Credit balance as on 31.3.2007 860,744.00 Above clearly shows that during the year Sewa Ram HUF has further given four cheques amounting to Rs. 36,466/-, Rs. 48,200/-, Rs. 60,200/- and Rs. 101,300/- on 28.9.2006, 13.10.2006, 3.11.2006, 30.1.2007. Out of these last three cheques i.e. Rs. 48,200/-, Rs. 60,200/- and Rs. 101,300/- have been doubted by the AO on the basis that these amounts have been received as profit from the commodity transactions. First of all once if there was any doubt regarding profit it should have been examined....
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....aised by the AO is that profits have been earned in the equal installments by all the family members, this may be matter of chance. This may even raise some doubt also but in that case the AO should have specifically enquired from each of the family members but no such enquiries have been made. Third serious objection raised by the AO is that since income of various family members was lower and that is why it cannot be accepted and it must have been earned by the assessee. This objection is not correct because there is no finding that such individual family members were acting as benamidar of the assessee. Family members are regular income tax assessees and even similar income from commodity transactions was accepted in the hands of such family members in the immediately previous year also. Fourth serious objection raised is irregularity in the filing of registration forms but the AO has not pointed out what is the irregularity. Only thing which has been pointed out is that Shri Vijay Kumar i.e. son of the assessee was interacting with M/s Satya Narayan Online Trading Pvt Ltd., Ludhiana on behalf of the family members. This itself cannot be called a irregularity because it is commo....
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.... in all probabilities Sampathkumar may have received compensatory payments in lieu of the gifts made by him. The letters according to the AO suggest that Sampathkumar reserved his right to receive suitable compensation from the respondents-assessees. The AO in the circumstances came to the conclusion that the gifts though apparent are not real and accordingly treated all those amounts credited in the books of the assessee as the income of the assessees." The additions were confirmed by the ld. CIT(A). The matter traveled to the Tribunal where there was a difference of opinion between the two Members, therefore, the matter was referred to the Sr. Vice President who concurred with the findings of the AO. In this background the Court referred to various decisions including the decision of Sumati Dayal, 214 ITR 801 and made various observations including observations in para 24 which reads as under:- "It is true that even after rejecting the explanation given by the assessee if found unacceptable, the crucial aspect whether on the facts and circumstances of the case it should be inferred the sums credited in the books of the assessee constituted income of the pr3evious year mu....
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....his observation that the same is rebuttable and we again highlight the observation, "Such opinion formed itself constitutes a prima facie evidence against the assessees, viz., the receipt of money, and if the assessees fail to rebut the said evidence the same can be used against the assessees by holding that it was a receipt of an income nature." Whereas in case before us the assessee had discharged its onus by clearly filing copy of account, PAN No., income-tax return, bank statement, source of funds regarding loan to discharge burden envisaged u/s 68 of the Act. The above observations are definitely in the context of gift received in that case and cannot be made applicable in all the cases of cash credits. In any case, it has not been shown before us how reply of the assessee is not satisfactory. As pointed out earlier that in case of loan transaction only three ingredients i.e. identity of the creditor, genuineness of the transaction and capacity of the depositor or loanee is required to be proved which have been clearly proved in case before us. In fact in this case the observations of Hon'ble Supreme Court while discussing SLP of the Department reported at 211 ITR 11 (Sta)....
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....ny defect in such amounts or without recording the finding of such profit was bogus, same could not have been addedto the income of the assessee. In these facts and circumstances of the case we set aside the order of ld. CIT(A) and deleted the addition of Rs. 17,21,100/-." 9. In the above noted paras even the decision of Hon'ble Supreme Court has been considered in detail. In fact, if the Assessing Officer has suspicion that commodity profit was not genuine in the hands of various family members, the same could have been added in their assessments by reopening the same but the same cannot be assessed in the hand of assessee because such persons have confirmed the transactions of loans and has filed the relevant papers. Therefore, in our opinion the view taken in the case of Seva Ram v ITO (supra) is squarely applicable in this case also and we decide the issue in favour of the assessee." 10(i) The order of the Division Bench is binding on the Single Bench. The issue is, therefore, identical and covered in favour of the assessee. All points raised in the present appeal have already been decided by Division Bench in favour of the assessee. Therefore, the issue is cove....