2019 (6) TMI 544

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....a total income of Rs. 8,54,550/-. In the said return, dividend income received during the year under consideration was claimed to be exempt by the assessee from tax. No disallowance on account of expenditure incurred in relation to the said exempt income however was offered by the assessee. The AO, therefore, worked out such expenditure by applying Rule 8D and since the disallowance so worked out was more than the actual exempt dividend income of Rs. 1,49,519/- received by the assessee during the year under consideration, the disallowance u/s 14A was restricted by the AO to Rs. 1,49,519/-. On appeal, the Ld. CIT(A) confirmed the said disallowance made by the AO. 4. I have heard the arguments of both sides on this issue and also perused the....

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....e assessee however produced the final account and copy of bank statement of the loan creditor, a perusal of which by the AO revealed that there was a huge cash deposit made by the loan creditor in the bank account before issuing cheque to the assessee towards a loan of Rs. 9,00,000/-. The AO also noted that the turnover of the lender company during the year under consideration was only Rs. 16,30,159/-. Keeping in view all these facts and circumstances of the case, the AO held that the creditworthiness of the concerned loan creditor was not satisfactorily established and even the genuineness of the transaction was not proved. He accordingly treated the loan of Rs. 9,00,000/- claimed to be received by the assessee as unexplained cash credit ....

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....in the assessment completed u/s 143(3). He also pointed out from the relevant documentary evidence in the form of ledger account of the concerned loan creditor and the copy of bank statement that the loan of Rs. 9,00,000/- taken by the assessee during the year under consideration was repaid along with interest during the year under consideration for F.Y. 2013-14. He contended that the loan in question received by the assessee during the year under consideration thus was duly explained by the assessee in terms of section 68 by discharging the primary onus that lay on him and the addition made by the AO and confirmed by the Ld. CIT(A) u/s 68 by treating the same as unexplained cash credit is not sustainable. In support of this contention, he ....

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....iled by the assessee along with final accounts to show that the loan given to the assessee by cheque through proper banking channel was duly reflected in the accounts of the concerned loan creditor. The primary onus that lay on the assessee to prove identity and capacity of the concerned loan creditor as well as to establish the genuineness of the relevant loan transaction thus was duly discharged by the assessee. It is also observed that interest was paid by the assessee on the said loan and deduction claimed by the assessee for such interest was also allowed by the AO. It is observed that the AO still treated the loan in question received by the assessee during the year under consideration as unexplained cash credit u/s 68 for the reason ....