TaxTMI 
TaxTMI 
2019 (9) TMI 38
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....capital, the creditworthiness of the cash creditor is established. (iii) The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing." 2. Rival contentions have been heard and record perused. Facts in brief are that in the present case, that the assessee derived his income from carrying on mining and stone crushing business and also have income from salary and capital gain and other sources. For the relevant previous year, the assessee filed his return of income on 31/3/2015, declaring total income of Rs. 9,06,330/-. Assessment U/s 143(3) was completed vide order dated 28/12/2016, wherein, income assessed was Rs. 2,17,51,330/-, resulting into addition of Rs. 2,08,45,000/-. 3. During the course of scrutiny assessment, the A.O. observed that during the relevant previous year, the assessee received Rs. 2,08,45,000/- from Shri Anand Kumar Agarwal. The AO required the assessee to establish the identity, creditworthiness of Shri Anand Kumar Agarwal and also the genuineness of the amount received from him. To satisfy the above-mentioned requirements of the AO, following documents were submitted, before him, by the assessee: S. No. Documents Su....
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....ating except for the lame observation that there were certain deposits in the bank statement prior to the issue of loan amounts on different dates. Noticeably such deposits are bank transfer or made by cheques. 7.3 There are umpteen judgments where in it is held that once name, address, PAN and ITR details are provided then addition u/s 68 cannot be invoked unless AO brings some adverse material on record which is in contrary to evidences filed by the lender. Whatever action is to be taken can only be taken in the hands of lender, the person who has given loan Some of the judgments supporting this view are: Hon'ble Supreme Court in the case of CIT v. Lovely Exports (P.) Ltd. [2008] 216 CTR 195, found the additions unsustainable; and proceeded to delete the same. He Hon'ble court observed as under: Section 68 of the Income-tax Act, 1961 - Cash credit - If share application money is received by assessee-company from alleged bogus shareholders, whose names are given to Assessing Officer, then Department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income under section 6....
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....fulfill all the ingredient of section 68 and as there is no adverse material/ evidence on record brought by the AO. The addition made by the AO is untenable. On the facts and in the circumstances of the case, the addition of Rs. 2,08,45,000/- is directed to be deleted. Appellant gets a relief in Ground No.1." 5. Against the above order of the ld. CIT(A), the revenue is in further appeal before the ITAT. 6. It was argued by the ld DR that the assessee was unable to prove the genuineness of loan transaction and creditworthiness of the loan creditor, therefore, the A.O. has correctly added the same. He relied on the order of the A.O. 7. On the other hand, the ld AR of the assessee has submitted that the assessee has established not only identity of the loan creditor but also genuineness of loan transactions as well as his creditworthiness. Our attention was invited to the various documents filed by the assessee before the A.O. which includes PAN card, Aadhar Card, Income Tax Return of loan creditor, details of companies owned by loan creditor, affidavit of loan creditor filed before the A.O. confirming the amount given to the assessee, letter received from loan creditor stating hi....
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..../s RR Minerals, a partnership firm. M/s RR Minerals, the partnership firm was created vide partnership deed dated 4.07.2011. Such partnership firm took over the running unit of stone crusher, owned by M/s Bhagwati Stone Crusher. Shri Raj Kumar Bafna, partner of the assessee in M/s RR Minerals, was also engaged in mining business and originally had his workings based in Kolkata. Shri Anand Kumar Agarwal was a businessman based in Kolkata and was Director in number of companies having operations in different sectors. As Shri Raj Kumar Bafna and Shri Anand Kumar Agarwal were both based in Kolkata, they had developed acquaintances. Since, Shri Raj Kumar Bafna and Shri Anand Kumar Agarwal were close business associates, as a result Shri Anand Kumar Agarwal, even gave Shri Raj Kumar Bafna, general Power of Attorney to deal with all the business issues related to mining or otherwise, in Rajasthan. This was so done by him as he was based in Kolkata and wanted a representative for his possible business ventures in Rajasthan. Due to the acquaintances existent between Shri Anand Kumar Agarwal and Shri Raj Kumar Bafna, Shri Anand Kumar Agarwal even provided loan of Rs. 75,00,000 to M/s RR Mine....
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....f Shri Anand Kumar Agarwal, in providing loan of Rs. 2.08 Crores to assessee, the AO should have considered the credit worthiness, funds availability of the companies in which Shri Anand Kumar Agarwal was a Director. The AO should not have considered the return of income filed by Shri Anand Kumar Agarwal alone, for the relevant previous year, in isolation. A group which can raise an amount of Rs. 818.14 crores (789.27 cr. +28.87 cr.) in the form of Share Capital and Loans from the Financial Institutions, can be considered to have capacity to provide loan to any person at least to the extent of Rs. 2.08 crore. Furthermore, it is not the case of the AO that in the Bank Statement, of Shri Anand Kumar Agarwal, for the relevant previous year, filed before him, cash deposits were made, at different intervals, just before when the amount was transferred to the assessee. The amounts were clearly received even by Shri Anand Kumar Agarwal through proper banking channel from his various group companies/entities within his group. It has also been observed by the AO, that money transferred to assessee by Shri Anand Kumar Agarwal was received from other sources and not through his existing bank ....