TaxTMI 
TaxTMI 
2018 (9) TMI 1540
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....ear 1994-95 wherein the assessee has raised the following grounds :- 1. The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 1,30,35,000/- u/s 68 by treating the loan received from the following persons as non-genuine :- S.No. Particulars Amount (in Rs.) 1. Smt. Anupriya Johari 15,00,000/- 2. M/s. Trimurti Enterprises 25,00,000/- 3. Smt. Sita Devi Johari 15,00,000/- 4. Smt. Kanak Prabha Johari 10,00,000/- 5. Smt. Shashi Johari 10,00,000/- 6. M/s. Johari Jewellers (P) Ltd. 25,00,000/- 7. Shri Ashok Akar 1,40,000/- 8. Shri Ashok Kumar 35,000/- 9. Shri Girish Paliwal 1,80,000/- 10. Shri K.D. Patel 1,60,000/- 11. Smt. Kamla Patel 1,30,000/- 12. Shri Nand Lal Verma 1,00,000/- 13. Smt. Rekha Singh 85,000/- 14. Shri Sudhir Patel 1,35,000/- 15. Smt. Vimla Sharma 50,000/- 16. M/s. Shri Krishna Builders 70,000/- 17. M/s. Western Textiles 3,40,000/- 18. M/s. Jewer Jewellers 2,00,000/- 19. Sh. Ramji Lal Bittan Lal Panwala 10,00,000/- 20. Shri Dayal Das 1,50,000/- 21. ....
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....ummons sent to 14 creditors were received back unserved, out of which 3 creditors refused to accept the summon and remaining 11 were not found at the given address. In the set aside proceedings, the AO passed the order dated 14.12.2007 whereby repeated the additions to the extent of Rs. 1,30,35,000/- after accepting the claim of Rs. 9,00,000/- in the name of M/s. Rajasthan Textile Financing Works. Against the said order of the AO, the assessee again filed an appeal before the ld. CIT (A) which was decided vide order dated 25.08.2009 whereby the ld. CIT (A) confirmed the addition made by the AO on the ground that the assessee has failed to produce the creditors/persons. The assessee further carried the matter to this Tribunal and vide order dated 5th March, 2014 in ITA No. 827/JP/2009 the Tribunal again set aside the issue to the record of the ld. CIT (A) by giving the directions in para 10 as under :- " 10. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it appears that the submissions of the assessee along with various evidences furnished to the ld. CIT (A) was not appreciated in righ....
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....nt. As regards the remaining Rs. 50,00,000/- of loan from M/s. Trimurti Enterprises and M/s. Johari Jewellers Pvt. Ltd. of Rs. 25,00,000/- each, the ld. A/R has submitted that the assessee produced the details of the cheques through which the loans were received as well as the details of the cheques of repayments of the said loans. Further, the assessee also produced the confirmations from these two loan creditors, namely M/s. Trimurti Enterprises and M/s. Johari Jewellers Pvt. Ltd. Therefore, the assessee discharged his onus to prove the identity, creditworthiness and genuineness of the transactions when all the relevant evidences were produced of receipt of the loans and repayment of the loans as well as confirmations from the loan creditors. As regards the other loan amounts of Rs. 50,00,000/- received from 4 creditors of Johari Group, since there was a FIR which contains the details of the loans given by these creditors to the assessee, apart from the confirmations filed by the assessee the said transactions cannot be doubted as it is verifiable from independent evidences. The ld. A/R has submitted that all these documents were turned down by the ld. CIT (A) on the ground that ....
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....ced the record of receipts of the amount of loan through cheque as well as confirmation. Therefore, the genuineness of the transaction is also established when the assessee has produced the evidence of receipt of loan through cheque and confirmation of the creditor. As regards the loan of Rs. 2,00,000/- from M/s. Jewer Jewellers, the said concern belongs to M/s. Johari Group and the amount is received by cheque on 4th December, 1993 which was repaid on 30th December, 1994 through cheque. All these evidences were produced by the assessee before the authorities below. The AO made the addition in the set aside proceedings only on the ground that summon issued under section 131 could not be served due to incomplete address. The ld. A/R has submitted that summons issued by the AO at the same address of the creditors of Johari Group have been duly served and, therefore, it cannot be said that the address given by the assessee was incomplete. Since the assessee has dispute with the Johari Group and a FIR was also lodged against the assessee, therefore, the assessee could not produce the confirmation or the party before the AO for examination. Thus the ld. A/R has submitted that in view of....
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....erefore, it is a clear case of failure on the part of the assessee to discharge the primary onus of proving the identity and creditworthiness of the creditors as well as genuineness of the transactions. The summons were issued by the AO to all the parties at the addresses provided by the assessee. None of these creditors had either responded or appeared before the AO in response to the summons issued under section 131. The assessee also expressed his inability to produce any creditor except one Smt. Kanta Rani Dawra, Prop. Of M/s. Rajasthan Textile Finishing Works and relief of Rs. 9 lacs was granted by the AO in respect of the said creditor. For remaining 14 creditors, summons were received unserved and in 9 cases the summons were served but the parties choose not to attend or respond to the summons or filed any documentary evidence. Hence in the absence of any evidence or details in support of the claim to the tune of Rs. 1,30,35,000/- in the name of 23 creditors it remained unexplained and consequently the addition was made under section 68 of the Act which is as per law and justified. The ld. D/R has relied upon the orders of the authorities below. 5. We have considered t....
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.... Opp. Kapoor Carpet Factory, Amer Road, Jaipur. GIR : S-1677/2(1) 10,00,000/- Kanak Prabha Johari C/o Johari Bhawan, Govind Nagar (E), Opp. Kapoor Carpet Factory, Amer Road, Jaipur. GIR: 30-031-Q4-5632/2(1) 10,00,000/- Sashi Johari C/o Johari Bhawan, Govind Nagar (E), Opp. Kapoor Carpet Factory, Amer Road, Jaipur. GIR : S-1909/2(8) 15,00,000/- Trimurti Enterprises C/o Johari Bhawan, Govind Nagar (E), Opp. Kapoor Carpet Factory, Amer Road, Jaipur. GIR : 30-031-PC-5925/2(1) 25,00,000/- Johari Jewellers (P) Ltd. 1180, Partaniyon Ka Rasta, Johari Bazar, Jaipur. GIR : 30-044-CQ-3211 25,00,000/- On verification of the record, we find that Rs. 50 lacs as received from the 4 persons find place in the FIR and the amount of cheques as well as the names of the creditors are matching with the details recorded in the books of accounts of the assessee. Therefore, to the extent of Rs. 50 lacs, the said amount has been part of the FIR lodged by these persons against the assessee established the fact that the assessee had taken the loans of said Rs. 50 lacs from the 4 persons of Johari Group. Accordingly when the loan....
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....has erred on facts and in law in confirming the addition of Rs. 38,27,913/- u/s 68 by treating the loan received from the following persons as non-genuine :- S.No. Particulars Amount 1. M/s. Sheetal Suitings Pvt. Ltd. 8,00,000/- 2. Smt. Suraj Devi Modi 1,00,000/- 3. Bansal Exports 10,00,667/- 4. Shri Ganpat Lal Sarda 75,000/- 5. M/s. Italin Jewellery Mfg. Co. 10,08,000/- 6. M/s. M.E.P. Engineering 5,00,000/- 7. M/s. R.K. Fine Export 2,74,246/- 8. Shri Shankar Lal Maroo 70,000/- Total 38,27,913/- 2. The ld. CIT (A) has erred on facts and in law in sustaining the disallowance of Rs. 18,09,798/- (2,58,092 + 15,51,706) out of interest expenses. He has further erred in sustaining the disallowance ignoring that his predecessor CIT (A) vide its order dt. 25.08.2009 has already deleted disallowance of Rs. 2,56,711/- and to this extent the order of ld. CIT (A) has attained finality. 3. The ld. CIT (A) has erred in facts and in law in not following the directions given by the Hon'ble ITAT in correct prospective in confirming the above addition. 4. The assessee ....
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....he receipt and payment of the said amount. The assessee has also explained the creditworthiness of each of the parties as all these parties are assessed to tax and their income was assessed by the department which is many times than the amount of loan given by the parties to the assessee. Thus the ld. A/R has submitted that the assessee has brought on record the fact that the amounts from all the creditors were received by cheques and the repayment of the loans to these parties except two at sl. No. 4 & 5 has been made through banking channel. As regards the creditors M/s. Italian Jewellery Mfg. Co. at sl. No. 5 of the list of the creditors, a legal notice was served through its Advocate for recovery of the loan amount of Rs. 10 lacs which established the fact that the transaction is genuine. Thus the ld. A/R has submitted that the AO and ld. CIT (A) has made the addition only for want of production of the creditor by the assessee which was not possible for the assessee after the lapse of a period of 22 years. The ld. A/R has submitted that having regard to the facts and circumstances of the case, the assessee at the first stage requested the AO to summon the parties for enquiry an....
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....by the AO. This Tribunal in the first round of appeal had specifically directed the assessee as well as the AO to bring the positive evidence on record in respect of the claims of loan credits. We further note that the assessee has claimed to have repaid the amounts of loans for the assessment year 1994-95 in the subsequent assessment year. Therefore, the repayment which is prior to the introduction of new cash credits would be available for set off against the additions of this assessment year. Since the AO has not given the benefit of repayment of the amount to the assessee but the fact remains that the assessee has repaid some of the creditors appearing in the books for the assessment year 1994-95 during the assessment year 1995-96, therefore, to the extent of repayment as per the record and bank account of the assessee which is prior to the introduction of new creditors during the assessment year 1995-96, the assessee would get the benefit of the said amount. Thus to the extent of no change in the peak cash credit in the cash book of the assessee, the repayment would be considered as re-introduction of the fresh cash credit during the year. Hence, we allow part relief to the ex....