TaxTMI 
TaxTMI 
2019 (12) TMI 1197
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....sactions. (ii) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the decision in the case of Kamal Motors v CIT[20031131 Taxman 155(Raj.), where it was held that the responsibility is on the assessee to discharge the onus that the cash creditor is a man of means to allow the cash credit. (iii) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the clear rotation of cash which is evident from the bank accounts of loan providers and duly established by AO during assessment proceedings. (iv) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the loan providers were not the persons of sufficient capacity therefore, creditworthiness is not proved. (v) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the additions were made by AO after conducting discreet enquiries u/s 131 of the I. T. Act. (vi) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the financial strength of the creditors do not h....
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....ad taken various unsecured loans. He called for the details from the assessee to explain cash credit. All the alleged loans taken from account pay cheque. The assessee file various details including confirmation, bank statement, proof of land holding for source of funds from a few of the loan providers and income tax return, copy of the loan providers assessed to tax. Summons were also issued by the Ld. AO u/s 131 of the Act for the personal presence of the cash creditors, Except one creditor namely Ragini, rest all the cash creditors appeared personally before the Ld. AO stating on oath that they had sufficient funds in their account and have given the loan to the assessee. However, the Ld. AO was not satisfied and proceeded to make the addition u/s 68 of the Act at Rs. 1,94,98,000/- observing as follows: 4.8 From the above, it is seen that the assessee has failed to produce Income tax Returns, bank statements or any proof with regard to then creditworthiness in respect of 4 cases totaling to Rs. 29,20,000/- mentioned in Table-1 in the preceding part of this order. The assessee has just filed the confirmation in respect of these parties and has even not produced them f....
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.... is cash deposit and loan to the assessee in the instant year, S No. 2,3,4,6,8 and 9 of Table-2 above had contributed as loans to the assessee in the immediate preceding year also. Given their declared sources, they could not have lent so much to the assessee. Therefore, it can be said the cash deposits before the loan is nothing but assessee's unaccounted money brought in the books in the guise of unsecured' loans from sundry lenders. 4.10 Given the above, the source of cash deposit totaling to Rs. 1,65,78,000/- in the bank accounts of the 18 persons as per Table-2 above immediately preceding the loans given to the assessee remains unexplained. The creditworthiness of such lenders is not proved and hence, the amount of Rs. 1,65,78,000/- is liable to be added to the income of the assessee u/ s 68. 4.11 Therefore, total addition of Rs. 1,94,98,000/- (29,20,000+1,65,78,000) as unexplained cash credit u/s 68 is made to the income of the assessee 5. Accordingly income assessed at Rs. 1,98,40,620/-. 6. Aggrieved assessee preferred an appeal before the Ld. CIT(A) challenging the addition u/s 68 of the Act at Rs. 1,94,98,000/- and gave detailed submissions ....
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....h 600000 10 Ravi Nagar 500000 11 Vinod Nagar 800000 12 Kuldeep Jageshwar Mukati 603000 13 Jayprakash Nareshchandra 625000 14 Ruby Jain 100000 15 Y.D. Trading 450000 16 Ragini 500000 17 Pankaj Lata Gupta 900000 18 Maya Patel 600000 Total 1,65,78,000 12. Ld. AO made an addition for all the cash creditors referred in table 1 of Rs. 29,20,000/- and with regard to table 2 addition was restricted only to the amount of Rs. 1,65,78,000/- totalling to Rs. 1,94,98,000/-. 13. We observe that the assessee in order to prove identity, genuineness and creditworthiness of the cash creditors has given details for each cash creditor in the following manner. (i) Smt. Anusuiya Patel (Rs. 7,00,000/-) (a) She is having 21.18 Bighas of agricultural land. Market (Guideline) value of said property is 9.26 crores as on today. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which she confirmed the transaction. (ii) Beniram Patel (Rs. 6,25,000/-) (....
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.... shares (vii) Rachita Patel (Rs. 6,00,000/-) (a) She is having 6.588 Bighas of agricultural land. Market (Guideline) value of said property is 1.12 crores as on today. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which she confirmed the transaction (viii) Ramakant Patel (Rs. 6,00,000/-) (a) He is having 11.88 Bighas of agricultural land. Market (Guideline) value of said property is 4.78 crores as on today. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction (e) He is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (ix) Babulal Patel (Rs. 6,00,000/-) (a) He is having 89.424 Bighas of agricultural land jointly with Gulab Singh Patel. Market (Guideline) value of said property is 33.53 crores. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed ....
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....cheque and repaid through account payee cheque (xvii) Pankaj Lata Gupta (Rs. 20,00,000/-) (a) Loan taken through account payee cheque and repaid through account payee cheque (b) Statement on oath taken by the AO in which he confirmed the transaction (c) She is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (d) Getting a salary of Rs. 2,00,000/- P.A. plus rent of Rs. 75,000/- P.A. (e) She has sold an apartment and out of that given loan. (f) Copy of Sale deed is filed. (xviii) Maya Patel (Rs. 6,00,000/-) (a) Loan taken through account payee cheque and repaid through account payee cheque (b) Affidavit filed (c) Statement on oath taken by the AO in which she confirmed the transaction (d) She is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. 9. Now coming to Table -1 given by the AO, the details are as under:- (i) Hitesh Bhargava (Rs. 2,00,000/-) (a) He is an Income Tax assessee and getting a salary of Rs. 12,00,000/- P.A. (b) He has not deposited cash while giving loan (ii) P....
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....ransaction - the appellant has taken the loan through banking channel. The appellant is in the receipt of loan by cheque. iii. Creditworthiness of the creditors - The persons not only given the loan to the appellant but to other parties also and confirmed the same. 4.1.2 From the above it is clear that the appellant ha satisfied all the three conditions required for genuineness of the transaction. It is also to be mentioned that most of the credit parties are assessed to tax. The same view has been upheld by Honble ITA T in the following cases:- i. Umesh Electricals vs Asst. CIT(201]) 18 JT.1 635 (Trib- Agra): (20] 1) 131 lTD 127 : (2011) 141 TTJ Establishment of identity and credit-worthiness proved- Assessee produced the bank account of creditor in his bank account on the same day on which loan was given- Assessee furnished the cash Dow statement of creditor-Based on inquiry, AO noted that creditor was engaged in providing accommodation entries-HELD- In group cases, it has been held that there was no evidence against the creditor to prove that he was providing accommodation entries- Further, mere deposit of money by the creditor on the same day....