TaxTMI 
TaxTMI 
2017 (11) TMI 1236
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....as further erred in confirming the addition even when purchased and sales are accepted by him. 2. The learned Commissioner of Income-tax (Appeals) has erred on facts and in law in confirming the addition of Rs. 85,49,700 by treating the following cash creditors as unexplained : S. No. Name of the creditor Amount 1. Ravi Kant Rs. 1,00,000 2. Bishan Singh/Ashok Kumar Rs. 28,10,000 3. Raju/Satpal Tanwar Rs. 16,74,700 4. Rakesh Chiwa/Bhukar Rs. 5,00,000 5. Vinita Devi Rs. 34,65,000 Total Rs. 85,49,700 3. The learned Commissioner of Income-tax (Appeals) has erred on facts and in law in not allowing the set off of trading addition against the addition of cash credit confirmed by him." Ground of the Revenue's appeal "1. That the Commissioner of Income-tax (Appeals), Alwar has erred in law as well as on the facts and circumstances of the case in reducing the trading addition of Rs. 23,49,472 to Rs. 2,85,181 made by the Assessing Officer on account of low gross profit rate declared. 2. That the Commissioner of Income-tax (Appeals), Alwar has erred in law as well as on the facts a....
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....r even lesser is confirmed in similar nature of business. 3.1 In the course of remand proceedings, the assessee produced the computerised cash book, ledger and purchase bills and claimed that bills/vouchers for expenses debited in the profit and loss account are not maintained owing to the same being petty in nature. The Assessing Officer, however, held that the assessee has failed to discharge its onus regarding the rejection of books of account in as much as no details of stock, sale summary and bills/vouchers of expenses claimed in the profit and loss account were produced for verification. In response to the same, the asses see produced the sales summary and submitted that the stock details are not required being no opening and closing stock and bills for expenses claimed in the profit and loss are not maintained being some petty in nature and some fixed in nature. The assessee thus pleaded that application of section 145(3) is unlawful and unjustified. The assessee also questioned the application of gross profit rate of 13.92 per cent. by submitting that the same cannot be altered/changed inasmuch as all the bills/vouchers for purchase account and expenses towards the tradi....
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....nts were produced before the Assessing Officer in the course of remand proceedings. The facts of the case relied upon by the Assessing Officer are not comparable as the turnover of the assessee is Rs. 2.98 crores as compared to the turnover of Rs. 85.53 lakhs of the wine contractor at Bhiwadi. The turnover has increased from Rs. 76.27 lakhs in the preceding year to Rs. 2.98 crores as a result of selling goods at a lesser margin of profit. The gross profit declared has however increased from Rs. 5.56 lakhs in the preceding year to Rs. 18.02 lakhs in the period under consideration. 4.7 It is further stated by the appellant that the Assessing Officer has accepted the gross profit rate 3.77 per cent. declared in the assessment year 2010-11 under an order passed under section 143(3) of the Income-tax Act. It is stated that complete books of account have been maintained and were produced before the Assessing Officer in the course of remand proceedings also. 4.8 I have examined the contentions and judicial decisions cited by the appellant and material available on record and find that the appellant has not been able to controvert the fact that complete sales records in t....
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....,30,810 and the net profit rate is 3.15 per cent. In the assessment year 2010-11, the gross profit rate is 3.61 per cent. on the turnover of Rs. 6,38,41,000 and the net profit rate is 1.59 per cent. In the subsequent year, the Assessing Officer made lump sum trading addition of Rs. 1 lakh vide order dated March 28, 2013 under section 143(3) of the Income-tax Act, 1961, thereby determining the gross profit rate at 3.77 per cent. Thus, when in the subsequent year, on similar facts, gross profit rate is determined at 3.77 per cent. (considering the addition of Rs. 1 lakhs), there is no justification to apply the gross profit rate of 13.92 per cent. applied by the Assessing Officer and seven per cent. applied by the learned Commissioner of Income-tax (Appeals) by ignoring that net profit rate of 3.15 per cent. is better as compared to the previous year and the subsequent year. Hence, the gross profit rate of 6.04 per cent. declared by the assessee in the year under consideration be accepted. 4.2 It is a settled law that even if the books of account are rejected it is not necessary that there should be a trading addition. After rejection of the books of account, assessment is to be m....
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....applied the same in the instant case without highlighting the comparability parameters. The learned Commissioner of Income-tax (Appeals) has accepted the assessee's contention regarding pressure on the gross margins in view of increase in the turnover and at the same time, looking at the past history, estimated the gross profit rate of seven per cent. In the peculiar facts and circumstances of the case where there is no satisfactory explanation to substantiate the fall in the gross profit rate, we find the approach of the learned Commissioner of Income- tax (Appeals) was reasonable where he has followed the past history of the assessee. In the result, the grounds taken by both the assessee and the Revenue are dismissed. 7. Ground No. 2 of the assessee's appeal as well as ground No. 2 of the Revenue's appeal are relating to the additions under section 68 of the Act. The Assessing Officer has made an addition of Rs. 2,03,16,200 which has been reduced to Rs. 84,49,700 by the learned Commissioner of Income-tax (Appeals). The assessee is challenging the sustenance of addition of Rs. 84,49,700 and the Revenue is challenging the reduction in addition under section 68 of the....
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....es. In case of private limited companies, the courts have laid down a strict approach in terms of satisfying such burden of proof. (f) In case of private limited companies, generally persons known to directors or shareholders, directly or indirectly buy or subscribe to shares or lend money to the company. Upon receipt of money, the share subscribers/lenders do not lose touch and become incommunicado. Call money, dividends warrants, interest payout, etc. have to be sent/made and the relationship remains a continuing one. Therefore, an assessee cannot simply furnish some details and remain quiet when summons/notices issued to shareholders/lenders remain unserved and uncomplied. As a general proposition, it would be improper to universally hold that the assessee can plead that they had received money but could do nothing more and it was for the Assessing Officer to enforce shareholders/lenders attendance in spite of the fact that the shareholders/lenders were missing and not available. Their reluctance and hiding may reflect on the genuineness of the transaction and creditworthiness of the shareholder/lender. It would be also incorrect to universally state that an inspector m....
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....es are related or known to each other; the manner or mode by which the parties approached each other, whether the transaction was entered into through written documentation and due diligence to protect the investment and the pay back on such investment, whether the investor professes and was an angel investor, the object and purpose (profit motive) behind the investment and whether any dividend declared and distributed in the past or not. Whether share subscribers have their own profit making apparatus and were involved in any tangible business activity or were they merely rotated money, which was coming through the bank accounts, which means deposits by way of cash and issue of cheques. Creditworthiness and genuineness of the transaction is therefore not proved by showing merely issue and receipt of a cheque or by furnishing a copy of statement of bank account of share subscriber, when circumstances requires that there should be some more evidence of positive nature to show that the subscribers had made genuine investment. Similar analogy will apply in respect of any loan transaction. (j) The entire evidence available on record has to be considered and a reasonable approa....
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....ioner of Income-tax (Appeals) and the assessee's contentions before us. Each of the transactions hereinafter shall be tested in the light of the above legal propositions in order to determine whether necessary onus has been satisfied by the assessee in terms of section 68. Each of these 13 cases are discussed in detail in the following paragraphs : 8.1 Ravi Kant-Rs. 1 lakh (assessee's appeal) : Assessing Officer's Appellate and remand CIT(A)'s findings Assessing Officer Page 6 Appellate proceedings CIT(A) Page 31-33 - No confirmation filed - Permanent account number is AAIPC2761N - Assessee has merely filed a confirmation along with permanent account number of the creditor - No identity proof filed - Amount received on March 28, 2009 through demand draft - Assessee failed to produce the creditor - Address not provided at primary stage of scrutiny proceedings and same was provided on December 27, 2011 - Complete address given in assessment proceedings as Ravi Kant S/o Ram Chander, Chandna Bus Stand, Near Natraj Hotel, Rewari, Haryana - No reply received from creditor in response to notice under section 133(6) - No permanent ....
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....appellant failed to produce the creditor before the Assessing Officer. The Assessing Officer has issued notice under section 133(6) of the Income-tax Act and in response to which no reply was received from the creditor. Further, notice under section 131 of the Income-tax Act was issued by the Assessing Officer, which came back with the remark 'refused service'. When these facts were confronted to the appellant in the course of remand proceedings, the appellant has stated that the amount was received through banking channel and beyond this he failed to substantiate the transaction of loan having been received. No copy of the bank statement of the creditor was filed. No details regarding the sources of income so as to establish the creditworthiness of the creditor were filed, no copy of the Income-tax return filed by the creditor was produced before the Assessing Officer. In view of the above facts, I find that the appellant has not been able to discharge the onus under section 68 of the Income-tax Act- identity and creditworthiness of creditor, genuineness of the trans action have not been proved. Thus, I confirm the addition of Rs. 1,00,000 made by the Assessing Of....
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....and ICICI Bank filed Assessing Officer's observation - All the above documents filed with reply dated December 26, 2013 by the assessee through his authorised representative and not by the cash creditor - Only one DD of Rs. 16,74,000 has been issued from ICICI bank on July 23, 2008 and no details of the manner of other DD of Rs. 16,74,000 are available as per the copies of bank account filed - On July 22, 2008 and July 23, 2008, there are cash deposits in the bank account of the cash creditor which ultimately has been utilised in DD issued for Rs. 16,74,000 from this bank account - No Income-tax return of the assessment year 2009-10 seems to have been filed by Sh. Anil Kumar 9.1 In this regard, the learned authorised representative submits that he relied on the finding of the Commissioner of Income-tax (Appeals). It was further submitted that the Assessing Officer wrongly stated that only one DD of Rs. 16,74,000 was filed whereas the assessee has filed three DD's, two of Rs. 16,74,000 each and one of Rs. 500. In fact, the assessee has deposited Rs. 8,3....
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.... addition of Rs. 33,48,500 made by the Assessing Officer on this account." 9.3 We have heard the rival contentions and pursued the material available on record. The source of cash deposit in the bank account has been explained to be receipt from RIICO pursuant to cancellation of plot. We accordingly confirm the above findings of the learned Commissioner of Income-tax (Appeals) where he has held that the assessee has discharged the onus placed on him under section 68. The findings of the learned Commissioner of Income-tax (Appeals) remain uncontroverted before us. We hereby confirm the deletion of the addition of Rs. 33,48,500. The ground of the Revenue's appeal to this extent is hereby dismissed. 10. Bhishan Singh-Rs. 28,10,000 (Assessee's appeal) Assessing Officer's findings Appellate proceedings CIT(A)'s findings - No confirmation filed - Complete address given in assessment proceedings as VPO Santhlaka, 278 Vasai- 401202 - The appellant has filed confirmation, a certificate from bank and affidavit of the creditor. - No identity proof filed - The appellant failed to produce the creditor and also failed to furnish any evidence regarding source....
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..... How the assessee had known at the time of acceptance of loan that the 1st holder is Bhishan Singh. It is merely an afterthought. Even after substitution of name of creditor, creditworthiness remains unexplained. 10.1 The learned authorised representative submitted that from the above, it can be noted that the identity of the creditor is established. He has given the amount by directly depositing to the Excise Department for obtaining advance licence of liquor. The amount was given by him by DD. This proves the genuineness of the transaction. He is assessed to tax. He has replied under section 131 to the Assessing Officer. All these facts prove his creditworthiness. The reason for giving the confirmation by Shri Ashok Kumar was explained in as much as the same was given out of the bank account which is jointly held by Bhishan Singh and Ashok Kumar. The assessee is not required to prove the source of the source more particularly when his permanent account number is provided. Only because notice issued under section 131 to the creditor has come back with the remark "refused service" and the creditor could not be produced, cannot be a reason to mak....
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....ard the rival submissions and pursued the material available on record. The Assessing Officer has given a finding that cash was deposited in the creditor's bank account and on the same date, demand draft was issued. Nothing has been submitted to explain the source of such cash deposits. It is not a question of determining the source of source rather it is a question of satisfying the test of creditworthiness. The said finding of the Assessing Officer which has been confirmed by the learned Commissioner of Income-tax (Appeals) remain unrebutted before us. The assessee has thus failed to satisfy the initial onus placed on him especially in terms of the creditworthiness of the creditor. In the result, we confirm the findings of the learned Commissioner of Income-tax (Appeals) and the addition of Rs. 28,10,000 is hereby confirmed. The ground of the assessee's appeal to this extent is thus dismissed. 11. Mangal Singh-Rs. 7,20,000 (Department's appeal) Assessing Officer's findings Appellate proceedings CIT(A)'s findings - The assessee produced Sh. Mangal Singh and his statement was recorded on December 16, 2011 wherein he stated that he is filing regular return....
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.... 68 stood discharged. Thus, the order of the learned Commissioner of Income-tax (Appeals) be upheld by dismissing the ground of the Department. 11.2 The findings of learned Commissioner of Income-tax (Appeals) are as under : "In view of the above facts, I find that the appellant has filed confirmation, copy of the Income-tax return, permanent account number, copy of the bank account, etc., before the Assessing Officer in the course of remand proceedings. Further, the cash creditor was also produced before the Assessing Officer and statement was recorded in the course of remand proceedings. This, I find that the appellant has been able to discharge the onus under section 68 of the Income-tax Act identity and creditworthiness of creditor, genuineness of the transaction have been proved. Accordingly, I delete the addition of Rs. 7,20,000 made by the Assessing Officer on this account." 11.3 We have heard the rival contentions and pursued the material available on record. In the instant case, the assessee has failed to discharge the onus placed on him under section 68 in terms of satisfying the test of creditworthiness of Shri Mangal Singh. Regarding the assessee....
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....31 is at paper book 38 - No bank statement filed - Confirmation of account is at paper book 36-37 - Bank statement is at paper book 39 - Satpal Tanwar is the brother of Raju Tanwar and he has confirmed in his own signature the transaction of his brother Raju Tanwar - The Assessing Officer has overlooked the Income-tax return of the creditor for the assessment years 2008-09 and 2009-10 even when the same is filed in his jurisdiction ward only Assessing Officer's observation - One confirmation bears the signature which can be clearly read as 'Satpal Tanwar' and another confirmation bears the name Raju Tanwar and has been signed as 'Raju'. Thus, how the cash creditor is changing names and even his signatures with the passage of time is not clear which implies that assessee has made entry in his books as per his own sweet. - As per the account statement filed in respect of Sh. Raju Tanwar for account No. 20441668239 with Allahabad Bank, Bhiwadi, it is evident that there was cash deposit in the bank account for Rs. 16.50 lakhs which wa....
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....tten communication was received from the creditor stating that Accordingly, the Assessing Officer has raised doubts about the name of the creditor as the confirmation filed was stated to have been signed by another persons in the name of Satpal Tanwar and also the above communication reflects that funds have been rotated by the appellant by making deposits in cash in the name of the cash creditor. In the course of remand proceedings, the appellant has stated that Sh. Raju Tanwar and Satpal Tanwar are brothers and therefore, the confirmation was signed earlier by Satpal Tanwar. None the less, the explanation given by the appellant remains unsubstantiated as it was stated earlier that Raju is the nick name of Satpal Tanwar. Therefore, what is the real fact still remains unclear. The appellant has failed to furnish any details regarding the sources of income of the creditor so as to establish the creditworthiness. Further, no copy of the Income-tax return filed by the creditor was produced before the Assessing Officer. The appellant has also failed to produce the cash creditor for examination in response to the notices issued to verify the veracity of the contentions....
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....en received by account payee cheque - The appellant failed to produce the creditor before the Assessing Officer - Incomplete address provided as Village Bhiwadi, Tehsil Tijara, District Alwar to avoid further verification - The assessee cannot be required to explain the source of source of cash credit - Notice issued under section 133(6) received back with remark "incomplete address". Further, notice under section 131 was issued by the Assessing Officer at the other address provided by the authorised representative which was served but no compliance was made by the creditor. - No permanent account number Remand proceedings - Copy of the bank statement of the creditor not filed - No regular source of income to give such loan - The correct name of the cash creditor is Rakesh Bhukar s/o Doongar Mal Bhukar. Copy of permanent account number card is at paper book 40. - Details regarding the sources of income so as to establish the creditworthiness of the creditor not filed - No explanation about the source of cash creditor - Address as per the driving licence is WN-19, Chirawa, Jhunjhunu. Copy of driving licence is at paper book 41. - Copy of the In....
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....sources of income so as to establish the creditworthiness of the creditor were filed, no copy of the Income-tax return filed by the creditor was produced before the Assessing Officer. Further, another interesting fact in this case is that the name of the creditor and address has been changed thrice in the course of remand proceedings. First the name of the creditor was given as Rakesh Chiwa, then changed to Rakesh Thankar and finally to Rakesh Bhukar. Thus, there is no doubt left that the appellant has not been able to discharge the onus under section 68 of the Income-tax Act identity and creditworthiness of creditor, genuineness of the transaction have not been proved beyond doubt. Thus, I confirm the addition of Rs. 5,00,000 made by the Assessing Officer on this account." 13.3 We have heard the rival submissions and pursued the material available on record. The appellant has not been able to discharge the initial onus placed on him under section 68 of the Income-tax Act. The identity, creditworthiness of the creditor, and genuineness of the transaction have not been proved The findings of the learned Commissioner of Income-tax (Appeals) remain unrebutted befo....
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....ued under section 133(6) of the Income-tax Act (paper book 42) Assessing Officer's observation Perusal of the bank account statement of the cash creditor reveals that there are cash deposits in the bank account before advancement of loan to the assessee towards the source of which no explanation has been filed by the cash creditor 14.1 In this regard, the learned authorised representative submitted that he relied on the findings of the Commissioner of Income-tax (Appeals). It was further submitted that the assessee has filed the confirmation, return of income, permanent account number, bank account statement. Also, the books of account of the creditor are audited under section 44AB as confirmed by the Assessing Officer and the creditor is regularly assessed to tax. The creditor has further replied to the Assessing Officer under section 133(6). The amount has been subsequently repaid on March 29, 2012. Thus, when the assessee has discharged the onus under section 68, no addition can be made. Therefore, the order of the learned Commissioner of Income-tax (Appeals) be upheld by dismissing the ground of the Department. 14.2 ....
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....such cash deposits and whether cash belongs to cash creditor or to the assessee. As we have held above, it is not a question of determining the source of source rather it is a fundamental test to be satisfied to establish the creditworthiness of the cash creditor. In the result, we reverse the findings of the learned Commissioner of Income- tax (Appeals) and the addition of Rs. 7,20,000 is hereby confirmed. The ground of the Department's appeal to this extent is thus upheld. 15. Vikram Singh-Rs. 2,30,000 (Department's appeal) Assessing Officer's findings Appellate proceedings CIT(A)'s findings - No confirmation - Sh. Vikram Singh s/o Sh. Shree Bajrang Singh resides at Behind Krishi Upaj Mandi, W-18, Sikar - 3320011 - The appellant has filed confirmation, copy of the Income-tax return, permanent account number, copy of bank account etc. before the Assessing Officer in course of remand proceedings. - No identity proof - The assessee cannot be required to explain the source of source of cash credit - The creditor is regularly assessed to tax - The assessee did not considered fit to provide proper and complete address at stage of scrutiny procee....
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....nt of the creditor. The onus under section 68 is to prove the identity, genuineness and the creditworthiness of the creditor. Thus, when the assessee has dis charged the onus under section 68, no addition can be made. Therefore, the order of the learned Commissioner of Income-tax (Appeals) be upheld by dismissing the ground of the Department. 15.2 The findings of the learned Commissioner of Income-tax (Appeals) are as under : "A careful examination of the above facts reveal that the appellant has filed confirmation, copy of the Income-tax return, permanent account number, copy of the bank account etc. before the Assessing Officer in the course of remand proceedings. Further, the cash creditor has also furnished these documents before the Assessing Officer in the course of remand proceedings. Further, it is submitted by the appellant that in the regular books of account of the creditor there is sufficient cash balance, which was deposited in the bank account before the issue of cheque to the appellant. It is stated that the creditor is regularly assessed to tax. The Assessing Officer may if he so desires pass the information to the Assessing Officer with whom the credito....
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....of the assessee for the purpose of obtaining liquor licence in the name of the assessee - No permanent account number Remand proceedings - No regular source of income to give such loan - In response to the notice issued under section 133(6) of the Income-tax Act (paper book 56), copy of confirmation (paper book 57), copy of the Income-tax return and computation of total income for the assessment year 2009-10 (paper book 58-59) and bank statement filed (PB 60). - No explanation about the source of cash creditor - The accounts of the creditor are audited under section 44AB of the Income-tax Act, 1961 - The bank balance as on March 4, 2009 i.e. before the issue of cheque of Rs. 2 lakhs to the assessee is Rs. 2,29,683 while the learned Assessing Officer is asking for explanation of credit entry dated February 14, 2009 and February 16, 2009 16.1 The learned authorised representative relied on the finding of the learned Commissioner of Income-tax (Appeals). It was further submitted that the assessee has filed the confirmation, return of income, permanent account number, bank account statement. T....
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....e result, the appeal of the Department to this extent is dismissed. 17. Sh. Thawaria-Rs. 1,00,000 (Department's appeal) Assessing Officer's findings Appellate proceedings CIT(A)'s findings - No confirmation - Sh. Thawaria Singh S/o Sh. Ram is an Income-tax assessee having permanent account number ADMPT7955J. - The appellant has filed confirmation, copy of the Income-tax return, permanent account number, copy of bank account etc. before the Assessing Officer in course of remand proceedings. - No identity proof - He resides at Opp. 132 KV Power Station, Neelam Chowk, Bhiwadi. - The cash creditor was also produced before the Assessing Officer in the course of remand proceedings and his statement was recorded on oath - The assessee did not considered fit to provide proper address at stage of scrutiny proceedings - Copy of confirmation evidencing repayment of loan is at paper book 64 - The creditor is regularly assessed to tax and is filing return of income - Perusal of the bank statement of Sh. Thawaria filed by the assessee revealed that cash of Rs. 4,51,660 was deposited on March 17, 2009 out of which DD of Rs. 1 lakhs was issued on same ....
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....sit in his bank account vide order dated February 23, 2016 (Copy of assessment order of Shri Thawaria is at paper book 69). Thus, the assessee has discharged his onus under section 68. Therefore, the order of the learned Commissioner of Income-tax (Appeals) be upheld by dismissing the ground of the Department. 17.2 The findings of the learned Commissioner of Income-tax (Appeals) are as under : "An examination of the above facts reveal that the appellant has filed confirmation, copy of the Income-tax return, permanent account number, copy of the bank account etc. before the Assessing Officer in the course of remand proceedings. Further, the cash creditor was also produced before the Assessing Officer in the course of remand proceedings and a statement was recorded on oath. It is submitted by the appellant that regular books of account of the creditor are maintained and it has sufficient cash balance, which was deposited in the bank account. It is stated that the creditor is regularly assessed to tax and is filing return of income. The Assessing Officer may if he so desires pass the information to the Assessing Officer with whom the creditor is assessed to tax Th....
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....t is submitted by the appellant that the creditor has explained the sources of credits in the bank account - No explanation about the source of cash creditor Remand proceedings - The appellant has thus discharged the onus under section 68 of the Income-tax Act and addition made by the Assessing Officer on this account is deleted. - The creditor was produced for verification on February 1, 2013 whose statement was recorded on oath (paper book 72-73) - The loan is returned back to the creditor through account payee cheque in the financial year 2010-11 and the same is also confirmed by the creditor in reply to question No. 3 of the statement recorded - In reply to question No. 4 of the statement recorded, the creditor claimed that she has taken a loan of Rs. 33 lakhs from Sh. Mahendra Singh, S/o Kishan Lal, VPO, Bhiwadi through cheque in its bank account out of which a sum of Rs. 6 lakhs was advanced to the assessee. 18.1 The finding of the Commissioner of Income-tax (Appeals) is relied upon. The assessee has filed the confirmation, return of income, permanent account number, bank account statement. The c....
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.... - The fact that loan has been repaid by the appellant does not carry much conviction as the same amount stands withdrawn next day which again substantiates the version of the Assessing Officer that the transaction of loan is sham - No PAN Remand proceedings - NO ROI - The creditor was produced for verification on May 2, 2013 whose statement was recorded on oath. - The appellant though has proved the identity of the creditor but failed to adduce enough evidence to satisfy about the creditworthiness of the creditor and genuineness of the transaction - Perusal of pass book (paper book 76) of Vinita Devi filed by the assessee revealed that cash of Rs. 34,65,000 was deposited on February 25, 2009 and on the same day withdrawn by issue of DD in favour of the assessee - The creditor submitted that the source of advancement of loan to assessee is compensation received from RIICO. - The Assessing Officer may, if he so desires pass on the information about the peak working of cash deposits in the account of the creditor to the Assessing Officer having jurisdiction over the case of the cash creditor - No regular source of income to give such loan - ....
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....f Income-tax (Appeals) are as under : "Considering the material available on record, I find that the appellant has been able to file evidence regarding identity and bank statement of the creditor. The cash creditor is not assessed to tax and the permanent account number has also been applied in 2012-13 (September, 2012). The creditor Smt. Vinita Devi was produced for verification on May 2, 2013, whose statement was recorded on oath wherein it has been claimed that she has advanced loan of Rs. 34,65,000 to Sh. Pratap Singh Tanwar which has been repaid in later years for which copy of bank account has been filed. The Assessing Officer has observed that on perusal of bank account filed by the cash creditor, it is revealed that immediately before advancement of loan of Rs. 34,65,000 to the assessee there was equivalent cash deposit in bank account. It was also submitted by the cash creditor that during the year under consideration compensation from RIICO was received and the same funds were utilized for advancing of loans to Sh. Pratap Singh Tanwar. Regarding the repayment of loan as claimed by the cash creditor it is observed by the Assessing Officer that the cash creditor ha....
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.... the hands of the cash creditor. Thus, I confirm the addition of Rs. 34,65,000 made by the Assessing Officer under section 68 of the Income-tax Act." 19.3 We have heard the rival submissions and pursued the material available on record. The cash deposits in the bank account has been examined by the jurisdictional Assessing Officer of Smt. Vinita Devi and the same has been accepted as evidenced by the order passed under section 143(3) read with section 147 of the Act dated February 26, 2016 which is available on record. Apparently, the said order has been passed subsequent to the order of the learned Commissioner of Income-tax (Appeals) but facts remain that the cash deposited has been found duly explained in her own assessment proceedings. In the light of the same, there cannot be any basis to add the same amount in the hands of the assessee under section 68 of the Act. In the result, the assessee's appeal to this extent is allowed. 20. Sh. Mahendra-Rs. 58,48,000 (Department's appeal) Assessing Officer's findings Appellate proceedings CIT(A)'s findings - No confirmation - Sh. Mahendra Singh S/o Kishan Lal resides at Village Santhalaka, Bhiwadi,....
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....he Assessing Officer and his statement was recorded under oath on May 2, 2013. The creditor has explained the source of cash deposit in his bank account. A certificate from the bank manager, Oriental Bank of Commerce regarding the same has also been submitted (paper book 82). The loan has been subsequently repaid. Further, the Assessing Officer of the creditor vide order under section 143(3)/147 dated February 23, 2016 has accepted the source of cash deposit in the account of the creditor and has made no addition for the same (copy of the assessment order of Shri Mahendra Singh is at paper book 83). Thus, when the assessee has discharged the onus under section 68, no addition can be made. Therefore, the order of the learned Commissioner of Income-tax (Appeals) be upheld by dismissing the ground of the Department. 20.2 The findings of the learned Commissioner of Income-tax (Appeals) are as under : "On examination of the above facts, it is found that the appellant has filed confirmation copy of the permanent account number, copy of the bank account etc. before the Assessing Officer in the course of remand proceedings. Further, the cash creditor was also produced before th....