TaxTMI 
TaxTMI 
2019 (4) TMI 1104
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....count of unverifiable unsecured loans, as the creditworthiness/capacity to the lender could not be proved. 2. The Ld.CIT(A) has erred in law as well as on facts in law deleting the addition of Rs. 3,19,50,000/- made on account of unverifiable unsecured loans as the assessee failed to prove the genuineness of transaction." 3. The assessee is a Private Limited Company deriving income from business. Return declaring income at Rs. 4,21,980/- was filed on 02/10/2010. During the assessment proceedings the Assessing Officer observed that the assessee has raised unsecured loans amounting to Rs. 3,70,08,454/- from different Companies. Therefore, the Assessing Officer sought information u/s 133(6) of the Act from the aforesaid companies at the add....
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....s of income up to AY. 2012-13, PANs, copies of audited balance sheets, written replies furnished in compliance to notices issued u/s 133(6) of the Act, copies of their bank statements from whom the loans were advanced to the appellant which established the identity and creditworthiness of the lender companies and also genuineness of transaction. The appellant at the appellate stage has also furnished copies of the aforesaid documents in support of its claim. However, the aforesaid evidences were rejected by the AO and it was held that the unsecured loans were not genuine and the identity and creditworthiness of the lender companies could not be proved on the following grounds:- (i) That the replies submitted by the depositor companies i....
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....ompanies. As regards the difference in signatures on the replies filed in response to notice u/s 133(6) and confirmations letters, it is observed that confirmations letters have been signed authorized representative whereas the balance sheets and replies to notice u/s 133(6) of the Act have been signed by the Directors of the lender companies. The observation of the AO in regard to the low balances in their bank account has no force these are the current bank accounts of the lender companies and no interest is accrued on the balances in the current accounts. The observation in regard to maintenance of the bank account for establishing the existence on paper only has no legs as it is a mandatory requirement of law to actual business of the l....
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....orate entities, part of which was repaid in the subsequent year and interest was also paid to some of the depositors after deducting 1JJS, represented appellant's undisclosed income. The AO has not brought any adverse material on record to establish that the confirmation letters filed by the lender companies in response to notices issued u/s 133(6) of the Act were not genuine. From the perusal of the remand report of the AO dated 10-06-2015 and the copies of statements recorded by the AO on oath, it is observed that all the 11 corporate entities have deposed that their respective companies had. advanced loans to the appellant through account payee cheques and such advance had been reflected in their respective balance sheets, filed with....
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....s of means. Reliance is placed on the decision of Hon'ble Allahabad High Court in the case of CIT Meerut vs. Nav Bharat Duplex Ltd. dated 04-01-2013 in ITA No.279/2010. The intention of law is that unaccounted money should be brought to tax. As per provisions of section 68 of the Act onus is on the person in whose books of account such money is surfaced. If an amount is surfaced in the books of an assessee either in. the shape of share application money or a deposit/loan; it is presumed that such money belongs to the person in whose name it has been shown. However, as per provisions of section 68 of the Act, deeming provisions postulates that it is possible that the assessee may circulate its own unaccounted money in the shape of bogus ....