TaxTMI 
TaxTMI 
2018 (1) TMI 387
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....at the assessee had taken unsecured loans from various parties during the relevant period. The Assessing Officer issued notices u/s. 133(6) to some of these parties for verification. Thereafter, on the basis of the replies received from these lenders, the assessee was asked vide show cause notice dated 24.03.2014 to explain as to why unsecured loans from Shri Dheeraj M. Nagda (HUF), Shri Virendra Manilal Gandhi, Shri Haresh Deva Ravariya and Smt. Ria Ritesh Chedda should not be added as income of the assessee u/s.68 of the Act since the capacity, creditworthiness and the genuineness of the loans itself was doubtful in some cases. As regards unsecured loan of Rs. 3,50,000/- from Shri Dheeraj M. Nagda (HUF), it was observed that the returned income was only Rs. 1,35,580/- which did not justify the capacity of the lender to advance loan of Rs. 3,50,000/-. A perusal of Bank Account revealed that there was deposit of similar amount just before the issue of cheque to the appellant on the same day, otherwise balances in the Bank Account were always in Rs. 1000s. The said bank account was found to be replete with such transactions which indicated that this account was used as a conduit for....
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....ing Officer noted that there was similar amount of deposit just before the issuance of cheques for loans which indicated that the bank accounts were merely used as conduit for arranging loans. According to the AO, the bank statements were replete with such instances in these cases. As per copies of IT returns filed by these lenders, the Assessing Officer noticed that the income in some cases was even not enough to meet household expenses. The Assessing Officer also noted that instead of proving creditworthiness, copies of IT returns of these persons proved otherwise and indicated that these persons were not capable of giving such loans. It was also noted that the lenders had shown the amount given as loans in their balance sheet as capital. In the opinion of the AO, the sanctity of the balance sheet was not known because it was not audited and most of the cases had not been scrutinized. It was further noted that income of some of the lenders was even below taxable limit and thus the creditworthiness of the parties was not proved. It was found that the nature of transactions in these bank accounts was not commensurate with the nature, source and size of income of these persons. 6....
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....to have been taken from aforesaid four parties as the appellant failed to discharge the onus u/s.68 of proving the creditworthiness of the parties as well as the genuineness of the said transactions. In this connection, the appellant has furnished copies of account confirmations, PAN cards, acknowledgement of IT returns and bank statements of the lenders besides his own bank statement. It is well-established that the onus lies on the assessee to adduce necessary documentary evidence so as to prove all the three ingredients of section 68 viz. identity of the creditor, creditworthiness of the creditor and the genuineness of the transaction as the facts are within the knowledge of the assessee. The evidence adduced by the assessee has to be examined not superficially but in depth and having regard to the test of the human probabilities and normal course of human conduct. 4.3.2. It is now proposed to examine the genuineness of aforesaid unsecured loans in light of the legal propositions or principles enumerated above. From perusal-of the impugned order, it is noticed that the AO made addition of Rs. 15,00,000/- on account of unexplained unsecured loans based on relevant eviden....
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....ited in books of Assessee Company in the name of one 'R'. Facts revealed that 'R' was a benami of 'S' and the amount belonged to XS'. Evidently no such facts are there in case of the appellant and hence his reliance on the said case is not well-founded. Similarly, in the case of Anant Shelters Pvt. Ltd. (supra) addition u/s.68 was deleted because the Assessing Officer made no attempt to discharge his burden to rebut evidences filed by the assessee which is not so in the instant case. And finally, the appellant's reliance on order of Hon'ble ITAT in its own case for A.Y.2010-11 will be of no avail because the lenders during that period were mostly family members and concerns and no enquiry had been made by the AO to controvert evidences filed by the appellant. It is a matter of record that none of the said four parties is a member of the appellant's family or otherwise related to the appellant. Moreover, the AO in the present-case had conducted enquiries with the said four parties. It is a matter of record that the notices u/s.133(6)/summons u/s.131 issued by the AO to Shri Haresh Deva Ravriya and Shri Virendra Manilal Gandhi had been returned....