TaxTMI 
TaxTMI 
2019 (11) TMI 1141
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....11-12. 2. There is a delay of 28 days in filing this appeal. The Revenue has filed an affidavit for condonation of delay. We have gone through the affidavit and find that there is a sufficient cause to condone the delay. Accordingly, delay is condoned. 3. Facts of the case, in brief, are that the assessee is an individual engaged in the business of processing of manufacturing of cashew in the name and style of "Sri Balaji Process", filed his return of income by admitting total income of Rs. 3,85,725/-. Subsequently, the case of the assessee was converted into scrutiny and after following due procedure, assessment was completed u/sec. 143(3) by making addition of Rs. 1,19,18,600/-and added the same to the total income of the assessee. Dur....
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.... were repaid through cheque amounting to Rs. 36,12,700. Still 34 creditors are yet to be repaid amounting to Rs. 6,21,000 at the time of recording statements. Further, none of the 401 loan creditors received any interest. The persons examined were mainly from rural areas such as K.O. Mallavaram, D.Polavaram and Gunipudi etc. Most of them are agriculturists, daily labours and persons working in unorganised sectors. 5) Preponderance of probability of bank account repayment to said to have made through cheque. In this case there is bank account the assessee fails to explain the necessity of taking loan in cash. So in the circumstances it is difficult to believe that the said loan transactions are genuine. 6) Since it is found that all th....
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....the details of family expenses and savings etc. Further, they have submitted their proof of identity. The assessing officer did not point out any specific defect in the confirmation letters rather saying that the persons examined were mainly from rural areas such as K.O.Mallavaram, D. Polavaram and Gunipudi etc. Most of them are agriculturists, daily labours and persons working in unorganised sectors. Preponderance of probability of bank account repayment to said to have made through cheque. It was further stated that when the appellant is having bank account he failed to explain the necessity of taking loan in cash. The Assessing Officer stated that all the deponents are well tutored by the assessee in as much as all of the persons who wer....
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....unt of Rs. 73,91,700, as many as 367 creditors were repaid to the extent of Rs. 67,70,700 and more than 50% of the amount repaid was by cheque. After careful consideration of all these facts, I am of view that the appellant fulfilled his basic obligation to prove the identity of the creditors, the creditworthiness of such creditors and genuineness of the transaction i.e., unsecured loans. Therefore, the addition made by the Assessing Officer on mere preponderances and probabilities cannot withstand and the assessing officer is hereby directed to delete the addition of Rs. 2,85,24,750. The appeal made by the appellant on the above grounds stands allowed." 6. On being aggrieved, Revenue carried the matter in appeal before this Tribunal. 7....
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....t, he should have to issue summons to the parties and examine them, without doing that simply disbelieving the confirmation letters is not correct. On appeal before the ld. CIT(A) the assessee has filed the confirmation letters from all the remaining creditors. The ld. CIT(A) called the remand report from the Assessing Officer and in the remand report, the Assessing Officer has observed that most of the creditors are agriculturists, daily labours and persons working in unorganised sectors. He has also observed that payments should have been made through banking channel, but the assessee has borrowed the funds by taking cash and repaid the same in cash. We find there is nothing wrong in borrowing funds from daily labourers, agriculturists a....