TaxTMI 
TaxTMI 
2017 (2) TMI 1129
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.... Without prejudice to the ground No.2, it is submitted that the Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the disallowance u/s.40{a)(ia) of the Act, in respect of interest expenses of Rs. 3,00,3487- paid without compliance to provision of Section 194A of the Act. . 4) The Ld. Commisjsioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts jin admitting additional evidences in violation of Rule 46A. 5) On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer. : 2. Briefly stated facts of the case are that assessee is a partnership firm engaged in the business of building construction. Return of income for Asst. Year 2009-10 was filed on 23.07.2009 declaring total loss of Rs. 10,19,380/-. Case was selected for scrutiny assessment and notice u/s 143(2) of the Act followed by notice u/s 142(1) of the Act was issued along with detailed questionnaire. In response thereto necessary details were filed. During the Course of assessment proceedings, ld. Assessing Officer on verification of balance sheet o....
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....ined cash credit of Rs. 1,20,21,020/-. 6. Brief facts relating to this issue are that out of the unsecured loans of Rs. 1,35,53,985/- ld. Assessing Officer called for details about the loans taken during the year which stood at Rs. 1,20,21,020/-. During the course of assessment proceedings as well as before ld. Commissioner of Income Tax(A) assessee in order to prove the identity, genuineness and creditworthiness submitted complete details containing the names, addresses, PANs, copies of bank statements, income-tax returns of cash creditors along with financial statement and confirmation of accounts. However, ld. Assessing Officer on the basis of his observation that most of the cash creditors have shown a meager income whereas they have given a substantial amount of loan to the assessee and on this basis framed a view that assessee has been unable to prove the creditworthiness of the loan creditors. In appeal before ld. Commissioner of Income Tax(A) action of ld. Assessing Officer was brushed aside by ld. Commissioner of Income Tax(A) following the judgment of Hon. Gujarat High Court in the case of DCIT vs. Rohini Builders 256 ITR 360 (Guj) and in the light of documents placed ....
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....97,020/- 12. Varshaben Shyamal Satdev 3,6Q,000/- 13. Thakuribai Guralmal Satdev 3,20,000/- 14. Kishan Bhagwandas Miterani 2,66,000/- 15. Bhagwandas Santumal HUF 2,29,000/- 16. Indraben Dayaldas Miterani 3,35,000/- 17. Hassanand Gurumal HUF 1,97,000/- 18. Hemaben Virumal Miterani 19,70,000/- 19. Hassanand Gurumal 1,78,000/- 20. Balumal Thanwardas 1,50,000/- 21. Anilkumar Dayaldas HUF 1,10, 000/- 22. Veena Balumal 1,00,000/- 23. Balumal Thanwardas HUF 50,000/- 24. Amit Balumal 50,000/- Total 1,20,21,020/- 10. We further observe that during the course of assessment proceedings assessee gave names, addresses & PAN of all the 24 parties and copy of bank statements, income-tax return and confirmation account of 23 parties and for the remaining one assessee gave necessary documents before ld. Commissioner of Income Tax(A). The only reason for which ld. Assessing Officer was not convinced and the reply of assessee was that the income shown by the loan creditors was NIL or very less in comparison to loan given by them and ld. Assessing Officer's o....
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....he person from whom loans taken as required u/s 68 of the Act is properly and satisfactorily discharged. The A.O. without making any iota of inquiry from any of such person only on the basis of details furnished by appellant and on the basis of one year's return of income or bank statement uniformly held in most of the case that "looking to the depositor's bank statement & R.O.I, and balance sheet, credit worthiness is not proved". In none of the case A.O. discussed or elaborated or made any independent inquiry. In almost every case, A.O. held so in a mechanical manner, despite of the facts that all of them given confirmation and PAN with details of their latest return filed. The appellant during the course of appellant proceedings apart from relying various case lows as discussed in earlier paras also relied on Hon'ble Gujarat High court recent judgment in the case of CIT v/s Ranchod Jivabhai Nakhava (Tax appeal No. 50 of 2011 judgment order dt. 20/03/12) (2012) 21 tax man. Com 159 (Gujarat) wherein Hon'ble Gujarat high court held (as per head notes) "Section 68 of the income tax Act, 1961-cash credits asstt. year 06-07 -whether once assessee has established tha....
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.... addresses, Permanent Account Number (PAN), bank statement, income-tax returns and financial statements of all the alleged loan creditors and no anomaly or mistake has been observed by the Revenue authorities except for the low or nil income shown during the year. Further no enquiry has been conducted in any of the loan creditor so as to disprove the evidences and documents placed by assessee with respect to proving identity, creditworthiness and genuineness of the loan creditor. In the course of proceedings before us, we examined two of the loan creditors namely Ranjana Suraj Bhojavani and Hemaben Virumal Miterani from whom loan of Rs. 28,00,000/- & Rs. 19,70,000/- respectively was taken during the year. These two amounts were the two highest amount among 24 loan creditors, with the help of ld. Authorised Representative we went through the confirmations a/c. bank statement, income-tax return and balance sheet of these two creditors and observed that no cash was deposited before the issue of cheque to the assessee and the transactions were entered through account payee cheques only wherein some funds came through third party into the account of loan creditor and thereafter account ....
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....h fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by the Commissioner of Income Tax (Appeals) and in such circumstances, we find that both the Commissioner of Income Tax (Appeals) and the Tribunal were justified in setting aside the deletion as the Assessing Officer, without taking step for verification of the Income Tax Return of the creditors, took unnecessary step of further examining those creditors. If the Assessing Officers of those creditors are satisfied with the explanation given by the creditors as regards those transactions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessments of the creditors of the assessee when a co-ordinate Assessing Officer is satisfied with the transaction. We thus, find that in the case before us the Tribunal below rightly setaside the deletion made by the Assessing Officer, based on er....
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....im of the assessee by upholding the order of the CIT(A). 5. In the result, the appeal stands dismissed. 14. We further observe that in the case of ACIT vs. M/s Amik Printers (supra) Tribunal has decided similar issue by observing as under :- 5. With the assistance of Ld. representatives, we have gone through the record carefully. Section 68 of the Act contemplates that where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. No doubt, credit entries are available against the names of 13 persons in the books of assessee, therefore, he is supposed to explain the source of deposits in the books. Section 68 of the Act puts an obligation upon the assessee to prove identity of the creditor, his creditworthiness and genuineness of the transaction. In order to discharge the onus cast upon the assessee, he has filed names and address, PAN no., copy of bank account, copy of income tax return f....
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....following the judgment of Hon. Jurisdictional High Court and the decisions of the Co-ordinate Bench referred above, and discussion made in the preceding paragraphs and examining the facts of the case in the light of above decisions, we are of the view that assessee has in its permissible limit has proved beyond doubt the identity, genuineness and creditworthiness of the loan creditors and it could not be disputed by the Revenue at any stage nor any enquiry was made in case of any other loan creditor, which could disprove the evidence placed by assessee. We therefore, find no reason to interfere with the order of ld. Commissioner of Income Tax(A) deleting the impugned addition on account of unexplained cash credit of Rs. 1,20,21,020/-. We accordingly, dismiss this ground of Revenue. 16. We now take up ground no.2 raised by Revenue against ld. Commissioner of Income Tax(A)'s order deleting the disallowance of Rs. 7,06,261/- made on account of interest expenses on cash credit of Rs. 1,20,21,020/-. As we have already decided adjudicating ground no.1 of Revenue wherein we have confirmed the order of ld. Commissioner of Income Tax(A) deleting the impugned addition u/s 68 of the Act at....
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....we have held that ld. Assessing Officer erred in making addition u/s 68 of the Act for unexplained cash credit of Rs. 1,20,21,020/- and also erred in disallowing interest of Rs. 7,00,261/- . Ld. Assessing Officer in his assessment order made an alternate disallowance u/s 40(a)(ia) of the Act on the interest of Rs. 3,00,348/- for non-deduction of TDS. On perusal of the paper book from pages 254 to 263 we observe that assessee filed form no.15G in the case of 9 parties to whom total interest of Rs. 3,00,348/- was paid. These 9 form 15G were submitted to ITO, TDS well within the statutory limit provided under the Act for filing form no.15G. It seems that ld. Assessing Officer could not lay his hands on these documents during assessment proceedings. We are of the view that as the assessee has filed form no.15G in the cases of 9 parties to whom interest of Rs. 3,00,348/- was paid there was no liability of deducting tax at source at assesse's behest and, therefore, ld. Commissioner of Income Tax(A) has rightly deleted the disallowance by observing as follows :- In respect of disallowance of interest of Rs. 3,00,348 made u/s 40(a)(ia) of the Act out of total disallowance of interest of....