TaxTMI 
TaxTMI 
2018 (8) TMI 752
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....ied in upholding the addition of Rs. 38, 77, 390/- made towards introduction to capital as unexplained cash credit, in the facts and circumstances of the case. 4.1. The brief facts of this issue is that the assessee is an individual engaged in the business of running a restaurant and sale of liquor. The return of income for the Asst Year 2011-12 was filed by him on 30.9.2011 declaring total income of Rs. 3, 02, 043/- and later a revised return was filed on 7.6.2012 declaring total income of Rs. 3, 14, 518/-. The assessee is the proprietor of M/s Sona Restaurant & Hotel. As on 31.3.2010, the capital account of the assessee as appearing in the balance sheet of his proprietory concern M/s Sona Restaurant &Hotel was Rs. 23, 14, 361.91 and bank loans payable at Rs. 3, 63, 028/-. The total value of balance sheet as on 31.3.2010 was Rs. 26, 77, 389.91. The same is considered at Rs. 26, 77, 390/- for the sake of convenience. The assessee also started another proprietory business engaged in sale of liquor under the name and style of 'Sona Kuthi' on 23.4.2010. From the Balance Sheet of M/s Sona Kuthi as on 31.3.2011, the ld AO observed that the assessee had shown opening capital account as ....
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....nt. But the same comprises of own capital of Rs. 23, 14, 362/- and bank loan liabilities of Rs. 3, 63, 028/-. We find that the assessee had not provided any evidence to prove whether the said bank loans were settled by him. Hence the sum of Rs. 3, 63, 028/- cannot be used as available source for investment in new proprietory business M/s Sona Kuthi. However, we find that there is no evidence to the contrary to prove that the closing capital balance of assessee in M/s Sona Restaurant as on 31.3.2010 in the sum of Rs. 23, 14, 362/- was utilized for any other purpose. Hence that sum is very much available to explain the investment in capital of M/s Sona Kuthi. Hence it is effectively a transfer of capital account from one proprietorship business to another proprietorship business. Hence in our considered opinion, the assessee should be given credit for Rs. 23, 14, 362/- in the addition made towards introduction of capital of Rs. 38, 77, 390/- as source is explained to the extent of Rs. 23, 14, 362/-. 4.3.1. With regard to receipt of gifts from father and brother, we find that the assessee had duly filed a declaration and confirmation of gift from the donors explaining the circumstanc....
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....ctfully following the judicial precedent relied upon hereinabove, we have no hesitation in directing the ld AO to delete the addition made in the sum of Rs. 38, 77, 390/- towards introduction of capital. Accordingly, the Ground No. 3 raised by the assessee is allowed. 5. The second issue to be decided in this appeal is as to whether the ld CITA was justified in upholding the additions of Rs. 25, 10, 682/- and Rs. 15, 40, 000/- made towards secured loans and unsecured loans received by the assessee as unexplained cash credit, in the facts and circumstances of the case. 5.1. The brief facts of this issue is that the assessee is an individual engaged in the business of running a restaurant and sale of liquor. The liquor business is carried in the proprietary concern styled as M/s Sona Kuthi. In the Balance Sheet of M/s Sona Kuthi as on 31.3.2011, the assessee had reflected the secured loans received by him for the purpose of business as under:- State Bank of India - 31661639104 Rs. 8, 10, 682/- United Bank (HBL) Rs. 17, 00, 000/- 25, 10, 682 In the assessment order, the ld AO observed that no supporting documents or evidences were filed by the assessee in this regard an....
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....10, 682/-, the assessee submitted the loan account statement before the ld AO which was ignored by him in the remand report. The ld CITA placing reliance on the remand report and ignoring the objections of the assessee filed thereon, upheld the action of the ld AO in sustaining the addition in the sum of Rs. 25, 10, 682/-. 5.4. With regard to the unsecured loans of Rs. 15, 40, 000/- are concerned, the assessee submitted the names and addresses of the persons (all are family members) from whom monies were received together with their PAN, balance sheets, loan confirmation and income tax return details. The same were subjected to remand proceedings by the ld CITA. All these documents are enclosed in pages 37 to 70 of the paper book filed before us. The ld AO analysed the details submitted by the assessee for each and every loan creditor and observed that they did not possess enough creditworthiness eventhough they had confirmed having given loan to the assessee and the fact of giving loan to assessee is also reflected in their respective balance sheets. Accordingly , he supported the assessment order in making the addition of Rs. 15, 40, 000/-. The ld CITA placing reliance on the re....