TaxTMI 
TaxTMI 
2017 (6) TMI 949
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....the AO observed from the balance sheet of the assessee that the assessee has shown unsecured loans of Rs. 1,80,00,000/- out of which a loans by 31 creditors were not genuine and the creditors have no creditworthiness. The AO on the basis of information filed by the assessee qua the names and addresses of the creditors, copies of bank accounts, income tax returns, observed that there were cash deposits and cheques transfer entries in the bank accounts of the lenders and only thereafter issued cheques in favour of the assessee and also all these creditors were having income below the taxable limits, though, these creditors were filing income tax return and thus these loans were nothing but manipulations only. The AO made independent inquiries and also recorded the statements of the few lenders who were found to be labourers in the payroll of the sub-contractors working under the assessee developers. The said labourers/loan creditors confirmed to have opened the bank accounts on the advice of their employer and money was deposited by the said employer out of their savings as confirmed in the statements given to the AO by six lenders. The persons, who were examined, denied to have any ....
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....ded u/s.131 of the Act and in the course of this proceedings u/s.131 It was established that these 6 parties are basically giving accommodation. In the remaining 25 loan creditors also, the AO deputed the Inspector and carried out the investigation from the Banks and observed these loan creditors also have no creditworthiness. The brief details of these six(6) parties including remaining 25 parties are discussed below: Sr. No. Name of loan creditors Amount(Rs.) Remarks 1 Ambalal Arjan Patel 4,00,000 Cash were deposited before loan was advanced. Statement recorded u/s.131, proves that he was a labour supervisor at the site of appellant; source of loan advanced not explained. He was earning a meager salary of Rs. 15,000 2 Vinod Karmshi Dholul 3,00,000 R/I of Rs. 1,62,030/filed.Cash were deposited before loan was advanced,. Statement recorded u/s.131, proves that he was a labour supervisor at the site of appellant; source of loan advanced not explained. He was earning a meager salary of Rs. 15,000 3 Nitin I. Makani and Nitin Makani (HUF) 6,25,000....
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....ed. In this case, the cash were deposited in the third party accounts and cheques issued through M D Patel 13. Lakhamshi K Parasiya (HUF) 2,50,000 R/I of Rs. 1,46,604/-. Cash were deposited before loan was advanced. 14 Ashvin Patel (HUF) 5,00,000 R/I of Rs. 1,41,521/- filed. Cash were deposited before loan was advanced. In this case, the cash were deposited in the third party accounts and cheques issued through A K Patel(HUF) 15. Vinod K Chauhan 4,00,000 R/I of Rs. 1,1,05,693/-. Cash were deposited before loan were deposited by the third party accounts and cheques issued through V K Chauhan 16 Ashok Chhabhaiya (HUF) 5,00,000 R/I of Rs. 1,45,951/- filed. Cash were deposited before loan was advanced. In this case the cash were deposited by the third party accounts and cheques issued through A K Chhabhaiya(HUF) 17. Vishanji B Patel 5,00,000 R/I of Rs.l,31,254/-filed. Cash were deposited before loan was advanced. In this case, the cash were deposited by third party and cheques issued through Vishanji B. Patei 18....
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....to appellant 28 Sohanlal P Jain (HUF) 5,25,000 R/I of Rs. 1,47,610/-- filed. Cash were deposited before loan was advanced. In this case, the cash were deposited by the third party and cheques issued through Kirit Devji Thakkar (HUF) to Sohanlal P Jain to appellant 29 Shivubha M Jadeja 2,50,000 R/I of Rs. 1,48,558/-- filed. Cash were deposited before loan was advanced. In this case, the cash were deposited by the third party and cheques issued through Shivubha M Jadeja to appellant 30 Shital Jitendra Patel 4,50,000 R/I of Rs. 1,78,790/- filed. Cash were deposited before loan was advanced. In this case, the cash were deposited by the third party and cheques issued through Shital Jitendra Patel to appellant. AO has carried out a complete investigation and has proved that these loan creditors do not have any creditworthiness and further established that, these loan creditors were providing accommodation entries, routing unaccounted money of the appellant. In view of the above stated facts, the addition made by the AO of Rs. 1,28,OO,OOO/- as unexplained cash credit u/s.68 of t....
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....d few days prior to the lending of the money to the assessee and nexus was clearly established as 3 to 4 times cash were besides cheque clearings and thereafter the entire money was given as advanced to the assessee as unsecured loans. The ld. DR submitted that mere acceptance of payment of interest on these loans by the revenue authorities would not automatically proved the existence of three ingredients i.e. identity , creditworthiness and genuineness of the transactions and therefore the addition as made by the AO and confirmed by the FAA should be upheld by dismissing the appeal of the assessee. 7. We have carefully considered the rival submissions of the parties, perused the material placed before us and also gone through the orders of authorities below and various case laws relied upon by the assessee. We find from the record that the money has been borrowed by the assessee during the year under consideration from 31 parties who were employed with the sub-contractor engaged by the assessee. It is also undisputed fact that the all these persons were assessed to income tax and filing income tax return every year which were available before the AO. However, the AO examined si....