TaxTMI 
TaxTMI 
2017 (7) TMI 253
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....e brief facts of the case are that the assessee is an Individual having rental income from house property and brokerage & commission income from dealing of property. On the basis of AIR information received by the Revenue to the effect that the assessee had deposited the cash amount of Rs. 17,35,200/- in Oriental Bank of Commerce, Ajmer Road, Jaipur during the year under consideration (A.Y. 2008-09), a notice under section 143(2) was issued to the assessee along with a copy of AIR information. The assessee was asked to furnish the documentary evidence with regard to the cash deposited in the bank. Pursuant to the notice received by the assessee, the assessee in reply has submitted that unsecured loans were taken by the assessee from various persons in cash as well as by cheque. The details of the persons from whom the loans were taken in the A.Y. 2008-09 are as under :- (i) Bharu Lal Yadav Rs. 2,00,000/- (ii) Kamlesh Yadav Rs. 95,000/- (iii) Manoj Yadav Rs. 1,50,000/- (iv) Mohan Lal Yadav Rs. 3,00,000/- (v) Raju Yadav Rs. 65,000/- (vi) Ram Babu Yadav Rs. 2,00,000/- (vii) Sitaram Yadav Rs. 72,000/- (viii) Sua Lal Y....
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....h Yadav @ Raju Yadav, Shri Sita Ram Yadav and Shri Sua Lal Yadav on account of unavailability of correct address. It was further contended that Shri Sita Ram Yadav and Shri Sua Lal Yadav since have expired before the examination of all the lenders, therefore, the AO was directed to conduct enquiry/record statements of these three persons. Pursuant to the direction of the Id. CIT (A), the AO has submitted his report on 5.8.2013 and has submitted that no cognizance can be taken on the additional evidences furnished before him and addition made by the AO deserves to be confirmed. 5. In response thereto the assessee has filed his reply and submitted that the addition made in respect of Ramesh Yadav, Laxmi Narayan and Sita Ram Yadav are required to be deleted. 6. The Id. CIT (A) after perusing the remand report, material available on record and the statements made before the AO in respect of 7 persons and thereafter, have allowed the deletion of Rs. 13,10,000/- and has confirmed the addition of Rs. 2,34,619/-. 7. Now the revenue is in appeal before us in respect of the deletion of addition of Rs. 13,10,000/- made by the AO under section 68 and the assessee has filed cross objec....
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....of the appellant stood discharged as soon as the lender appeared before the AO and confirmed about the transaction. The assessee had proved all the ingredients of section 68 of the IT Act by fulfilling all the criterias of section 68. In case the AO had some doubts about the capability of the lender to extend the loan he could have proceeded against such lenders or could have sent intimation to jurisdictional AO of such lenders. The Hon'ble Rajasthan High Court in the case of CIT v. First Point Finance Ltd. [2006] 286 ITR 477 held that" once the assessee proves identity of the lenders, their existence and their confirmations by way of statements recorded, there is no further requirement on him to prove source of such money with the lender. 8.1 We have also perused the judgments cited by Id. D/R. We find that none of the judgments is applicable to the facts and circumstances of the case. The said judgments were pertaining to the cases of share applications. In the said cases share application was filed and the money was credited to the account of the company. In that eventuality, Hon'ble Delhi High Court in various cases including Oasis Hospitalities Services Ltd. (supra)....
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.... a result of settlement of the ancestral property with the assessee, it is reasonable that a sum of Rs. 1,62,000/- is owned from the assessee. Considering the statement of legal heir Shri Laxmi Narayan Yadav son of the deceased assessee and circumstances of the case, the addition of Rs. 1,62,619/- is deleted. 12. In the result, Revenue's appeal is dismissed while assessee's Cross Objection is allowed. T.R. Meena, Accountant Member - The appeal by revenue and cross objection by assessee arise from the order dated 09/10/2013 passed by the learned CIT (A)-I, Jaipur for A.Y. 2008-09. 2. The assessee had rental income from house property and brokerage and commission income from dealing in property. 3. I have perused the order of Id Judicial Member, which was put up for my signature. It is a fact that the assessee had taken loans from the 10 cash creditors at Rs. 16,16,119/- but in case of (i) Bharu Lal Yadav, (ii) Kalesh Yadav, (iii) Manoj Yadav, (iv) Mohal Lal Yadav, (v) Raju Yadav, (vi) Ram Babu Yadav, (vii) Sitaram Yadav, (viii) Sua Lal Yadav and (ix) Vivek Yadav in totalling Rs. 14,44,619/-. The AO was not found fulfilled the condition laid down u/s. 68 of the In....
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....) Ltd. [2013] 350 ITR 407, the Hon'ble Court has held that mere furnishing of bank statement of share of applicant, is not sufficient to prove the creditworthiness. The Hon'ble Delhi High Court in these cases has considered Section 68 against share money after considering the decision in the case of Lovely Export (P.) Ltd. (supra) where the onus on the applicant is limited but cash creditor shown in form of loan where the assessee is required to prove all the ingredients of Section 68 of the Act. No where the Id Assessing Officer asked to prove the source of source. No interest has been given to the cash creditor. Accordingly, I confirm the addition made by the Id Assessing Officer. (ii) Shri Kamlesh Yadav had advanced Rs. 95,000/- in cash. Statement u/s. 131 of the Act was also recorded. In his statement, he has admitted to advance unsecured loan of Rs. 95,000/- to the applicant in cash. Out of this, Rs. 45,000/- was repaid by the applicant and Rs. 50,000/- was remained to be returned back. He had admitted that he had been filing income tax return for the last four years. The identity had been proved by the applicant but genuineness and creditworthiness of the cas....
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...., therefore, identity of the cash creditor is proved but genuineness and creditworthiness has not been proved in the case of Shri Mohan Lal Yadav. In his statement he admitted that he was running Dairy business and earned from it nearly Rs. 8,000/- per month. He was having bank account. Repayment of Rs. 2 lacs was in cash, which has not been deposited in the bank account. He also admitted that household expenses is between Rs. 4,000/- to Rs. 4,500/- per month. He furnished copy of return for A.Y. 2007-08 (Date of filing of return is not legible), in which returned income has been shown at Rs. 1,73,790/- in claimed deduction under Chapter VI-A at Rs. 63,993/-. Besides this, no other evidence has been furnished by the assessee that he had accumulated savings from the previous year in form of cash. Therefore, genuineness and creditworthiness of cash creditor has not been established by the appellant. The case laws referred in the case of Shri Bharu Lal Yadav are squarely applicable in this case also. No interest has been given to the cash creditor. Accordingly, I confirm the addition made by the ld Assessing Officer. (v) Shri Raju Yadav had advanced Rs. 65,000/- in cash to th....
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....n cash. The assessee has not furnished confirmation before the Assessing Officer. In absence of proper address, the Assessing Officer could not issue summons u/s. 131 of the Act. Accordingly, the assessee has not discharged his burden comes u/s. 68 of the Act. The ld CIT (A) by considering the remand report has held that cash creditor has expired but no legal heir appeared in the office of the Assessing Officer at the time of remand report. Only copy of Girdawari of agricultural land had been filed. In absence of confirmation, loan shown in cash and there is no evidence of repayment of loan. If genuine loan has been taken by the appellant from Shri Sita Ram Yadav, the legal heir might have appeared before the Assessing Officer to prove the loan as genuine and also his claim for outstanding debtors of father before the applicant. There is no evidence on record to prove that this transaction is genuine and assessee has creditworthiness to advance Rs. 72,000/-. Accordingly, I concur with the findings of the Id Assessing Officer. The case laws referred in the case of Shri Bharu Lal Yadav are squarely applicable in this case also. No interest has been given to the cash creditor. The ld ....
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..../- to 4,000/- per month. He filed return for A.Y. 2008-09 on 12/5/2009 wherein he has shown income from Muskan Pavitra Bhojnalaya at Rs. 1,09,890/-. No evidence for remaining year return have been filed by the applicant for cash creditor. Therefore, identity of cash creditor has been proved but genuineness and creditworthiness of cash creditor have not been proved. The case laws referred in the case of Shri Bharu Lal Yadav are squarely applicable in this case also. No interest has been given to the cash creditor. Accordingly, I confirm the addition made by the ld Assessing Officer. 4. In view of the above facts and circumstances, I reverse the order of the ld CIT (A) and confirm the order of the ld Assessing Officer. Accordingly, the appeal filed by the revenue is allowed and assessee's CO. is dismissed. 5. In the result, the appeal of the revenue is allowed and C.O. of the assessee is dismissed. REFERENCE U/S 255(4) OF THE INCOME TAX ACT, 1961 AS THERE IS DIFFERENCE OF OPINION AMONG BOTH THE MEMBERS I.E. LD. JUDICIAL MEMBER AND LD. ACCOUNTANT MEMBER. As there is a difference of opinion between us i.e. Judicial Member and ld. Accountant Member, therefore, the follow....
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....g of loan to the assessee in their statements, it amounts to filing of the confirmation. The statements recorded by the Assessing Officer of these 7 creditors clearly revealed that though they have been filing return of income but they were having only meagre income and out of the same also, they were incurring household expenditure. No evidence of earning of source of income by any of the creditors has been filed. All the credits are stated to have been given in cash. The Id. counsel for the assessee, during the course of arguments submitted that he is not aware of the fact whether any of the creditors were maintaining any bank account. It, therefore, proved that except the statements of 7 creditors have been recorded by the Assessing Officer, and they have filed proof of filing of the return under the Income Tax Act with identity proof, no other evidence has been filed to prove the creditworthiness of the creditor and genuineness of the transaction in the matter. The ld. CIT (Appeals) merely going through statements of 7 creditors, deleted the additions in their cases holding that the statements of the creditors proved their creditworthiness and genuineness of the transaction. Th....
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....case of CIT v. Durga Prasad More [1971] 82 ITR 540 and Sumati Dayal v. CIT [1995] 214 ITR 801 held that, "The Courts and Tribunal have to judge the evidence before them after considering surrounding circumstances and applying the test of human probability". When the aforesaid test is applied in the facts and circumstances of the case, it is clear that out of the creditors, though 7 creditors were produced before Assessing Officer and their statements have been recorded under section 131 of the Act, but the creditors were having only meager income and have failed to produce any cogent and reliable evidence of source of their income. None of the creditors were maintaining any bank account, therefore, mere recording of the statement and filing acknowledgment of ITR would not be sufficient to prove the creditworthiness of the creditors and genuineness of the transaction in the matter. The evidences and material produced on record are not sufficient to discharge the onus upon assessee to prove creditworthiness of the creditors and genuineness of the transaction in the matter. The learned Accountant Member was, therefore, right in his approach in confirming all the additions made by the ....
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....7 creditors have been produced before the Assessing Officer and they have confirmed giving of loan to the assessee in their statements, it amounts to filing of the confirmation. The statements of these 7 creditors recorded by the Assessing officer clearly revealed that through they have been filing return of income but they were having only meagre income and out of the same also, they were incurring household expenditure. No evidence of earning of source of income by any of the creditors has been filed. All the creditors are stated to have been given in cash. The Id. Counsel for the assessee, during the course of arguments submitted that he is not aware of the fact whether any of the creditors were maintaining any bank account. It, therefore, proved that except that statement of 7 creditors have been recorded by the Assessing Officer, and they have filed proof of filing of the return under the Income Tax Act with identity proof, no other evidence has been filed to prove the creditworthiness of the creditor and genuineness of the transaction in the matter. The ld. CIT (Appeals) merely going through statements of 7 creditors, deleted the additions in their cases holding that the stat....