TaxTMI 
TaxTMI 
2020 (3) TMI 1190
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....umstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of loan amount from Sh Aayush J Patel amounting to Rs. 16,07,178/- as unexplained loan. 3. On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of loan amount from Sh Vasantbhai S Patel amounting to Rs. 12,00,000/- as unexplained loan. 4. On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of loan amount from Sh Jignesh Vasantbhai Patel amounting to Rs. 57,50,000/- as unexplained loan. 5. On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of entire deposits in the two bank accounts totalling to Rs. 1,27,39,300/-. 6. On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 1,12,49,155/....
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....to the taken loan from Shri Nilesh N Panchal: The assessee claimed that it has taken unsecured loan of Rs. 50 lakh but failed to furnish confirmation or any other documentary evidence in order to substantiate genuineness of the transaction. Accordingly the AO added the same to the total income of the assessee as unexplained cash credit u/s 68 of the Act. 4.2 With regard to loan form Shri Aayush J Patel a. The assessee during the year accepted unsecured loan of Rs. 16,07,178/- from Shri Aayush J Patel. The assessee in support of its claim furnished confirmation letter and ITR acknowledgment copy of the lender. b. However the AO on perusal of ITR, observed that the lender has not sufficient creditworthiness to advance loan. Therefore the AO purposed for treating the same as unexplained cash credit under section 68 of the Act. But the assessee failed to reply to the show cause notice issued by the AO. Accordingly the AO added the unsecured loan of 16,07,178/- to the total income of the assessee under section 68 of the Act. 4.3 With regard to loan from Shri Vasantbhai S Patel: a. The assessee during the year has taken fresh loan of Rs. 12Lakh only from the party and f....
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....santhbhai and Shri Nilesh N Panchal along with copy of PAN and address detail of Shri Nilesh. The assessee further submitted that Shri Nilesh N Panchal is absconding due to ongoing criminal proceeding against him. Hence it is unable to submit any other evidence or confirmation from Shri Nilesh N Panchal. 5.2 With regard to loan from Shri Aaysush J Patel: The assessee submitted that the loan amount of Rs. 16,07,178/- represent amount credited during the year on account of its liability paid by Shri Aayush J Patel on its behalf. The assessee in its support furnished copy of ledger confirmation, and ITR of the lender. 5.3 With regard to loan from Shri Vasantbhai S Patel: With regard to the loan amount of Rs. 12Lakh, the assessee before the ld. CIT (A) filed copy of ledger confirmation, bank statement of Shri Vasantbhai S Patel and copy of ITR for the current year and preceding year. 5.4 With regard to loan from Shri Jignesh Vasantbhai Patel: With regard to the loan from Shri Jignesh Vasantbhai Patel, the assessee submitted that it has received loan of Rs. 29.5 lakh only and filed the confirmation from Shri Jignesh vasantbhai Patel, his ITR and bank statement. Howe....
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....see. 7. On the other hand the learned DR vehemently supported the order of the authorities 8. We have heard the rival contentions of both the parties and perused the materials available on record. The dispute in the instant case relates to the unsecured loan received by the assessee in the year under consideration from certain parties which was treated as unexplained cash credit under section 68 of the Act by the AO. The learned CIT (A) subsequently confirmed the addition made by the AO. 8.1 The provision of section 68 of the Act fastens the liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the parties/lenders. These liabilities on the assessee were imposed to justify the cash credit entries under section 68 of the Act by the Hon'ble Calcutta High Court in the case of CIT Vs. Precision Finance (P) Ltd reported in 208 ITR 465 wherein it was held as under: "It was for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. On the facts of this case, the Tribunal did not take into account all these ingredients which had to....
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....the assessee about the receipt of money by Shri Nilesh N Panchal from Shri Vasantbhai Patel. However, on perusal of the bank statement of Shri Nilesh N Panchal and the bank statement of the assessee maintained with Bank of India, we find that Shri Nilesh N Panchal has transferred a sum of Rs. 26.50 lakhs only through cheques and Rs. 5 lakhs only through NEFT to the bank of India account and the SBI account respectively. These facts can be verified from the bank statements of the respective parties. Accordingly, we are of the view that the assessee has explained and satisfied the condition specified under section 68 of the Act to the tune of Rs. 31.50 lakhs only. 8.5 Taking up the matter further for the balance amount of loan of Rs. 18.50 lakh, we find that there was no banking transaction between the assessee and Shri Nilesh N Panchal. As such, the assessee failed to justify the receipt of loan from Shri Nilesh N Panchal based on any documentary evidence to the tune of Rs. 18.50 lakhs. Accordingly, we sustain the addition of the amount of Rs. 18.50 lakhs. 8.6 Now coming to the loan accepted from Shri Aayush J Patel for Rs. 16,07,178.00 we note that the assessee has not ....
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....esh V Patel. But the AO on perusal of the bank statement further found that Shri Jignesh V Patel has advanced loan to the assessee for Rs. 28 lakhs in the manner as detailed under: Date Mode Amount 08-12-2010 Cheque no.919902 12,50,000 20-12-2010 Cheque no.917903 12,50,000 22-12-2010 Cheque no.917906 1,00,000 03-03-2011 Cheque no.919911 1,00,000 TOTAL 28,00,000 In view of the above, the AO treated the entire sum of Rs. 57.50 lakhs ( 29.50 lakhs and 28 lakhs ) as unexplained cash credit under section 68 of the Act. The view was subsequently upheld by the learned CIT (A). 9.1 However, on perusal of the bank statement of Shri Jignesh V Patel, we note that he has advanced loan to the assessee for Rs. 28 lakhs which was deposited in the bank account of the assessee namely Bank of India in the manner as discussed above. 9.2 The assessee subsequently transferred a sum of Rs. 25 lakhs from the bank of India account to its SBI account and Rs. 3 lakh to Aayush J Patel in the manner as detailed under: S.No Book date Bank date Cheque No Amount Note 1 13-11-2010 19-11-2010 ....
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.... Gift from Madhuben K Patel 3000000 Agriculture Income 293135 7131251 Unsecured loan from Vasantbhai S patel 1500000 Sale of agriculture land 2069000 Total new fund inflow (A+B) 13123887 The above statement showing creditworthiness of the party has not been doubted by the authorities below. 9.5 Further on perusal of the bank statement of Shri Jignesh V Patel, we note that he has received the amount from his aunt namely Madhuben Kanubai which he claimed to have received as of gifts from his aunt as per above table. Thus, from the above it is clear that the assessee has discharged his primary onus by furnishing the details about the creditworthiness of the party or availability of fund in the hand of party which have not been doubted by the authorities below. 9.6 It is also pertinent to note that, at the time of hearing we express from the bench to restore the matter to the file of the AO for fresh adjudication. However at the time of dictation of the order, we do not find any reasons to set aside the issue to the file of the AO as all the informations are available on record. Accordingly, instead ....
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....f account. Further the assessee also claimed that the amount of Rs. 66,50,000/- deposited through cheques were actually received from the existing promoters i.e. received by Shri Nilesh N panchal and deposited in assessee bank and later on withdrawn by him. The assessee in its support submitted chart showing amount claimed to have received from existing promoters. 12.1 The submission of the assessee was provided to the AO for remand report. The AO in remand report objected the admission of additional evidences. However the AO without prejudice also submitted that assessee in remand proceeding also failed to submit any concrete documentary evidence in order to substantiate the source of credit in the bank. 13. However, the learned CIT (A) disregarded the contention of the assessee and confirmed the addition made by the AO by observing as under: It has been claimed that such deposits had been made by Mr. Nilesh out of the payments received from incoming promoters on different dates and the said amount after crediting in company books, were withdrawn in cash and then redeposited in these bank accounts by way of cash and cheque. It has been claimed that the sources of these....
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....k of India, we note that there was the deposit of cash and cheques amounting to Rs. 60,40,800/- and Rs. 66.5 lakhs respectively. The learned AR at the time of hearing agreed for the addition for the deposit of cash in the impugned bank account. Thus there is no dispute qua the cash deposit in the bank account. But we are of the view that if the entire amount is added the total income of the assessee, there would be double addition to the extent of Rs. 18.50 lakhs. Accordingly, we confirm the addition on account of the deposit of cash of Rs. 41,90,800.00 (60,40,800- 18,50,000.00) in the account maintained with bank of India. For our detailed finding, please refer the paragraph numbers 16.6 to 16.9 of this order. 16.2 Regarding the deposits of cheques amounting to Rs. 66.5 lakhs, we are of the view that such deposits cannot be added to the total income of the assessee merely on the reasoning that such bank account was not disclosed in the books of accounts. As such, the deposits in the bank account should represent the income of the assessee. 16.3 On perusal of the impugned bank statement, we find that the details of the cheques deposits by the parties stand as under: Dat....
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.... 41493 10 Lakhs Loan from Vsanthbhai Patel 21-12-2010 41494 10 Lakhs Laon from Jighnesh V Patel 08-01-2011 41495 10 Lakhs Loan from Nilesh Panchal 12-03-2011 41496 10 Lakhs Loan from Nilesh Panchal 23-03-2011 41498 10 Lakhs Loan from Nilesh Panchal 15-02-2011 41596 3 Lakhs Loan from Jignesh v Patel adjusted with loan repaid to Aayush J Patel 17-02-2011 41598 2 Lakhs Loan from Vasantbhai Patel adjusted with loan repaid to Aayush J patel Total 85 Lakhs 16.7 It is pertinent to note that the assessee claimed to have accepted loan of Rs. 85 lakhs from the parties as discussed above through the involvement of the undisclosed bank account namely Bank of India. However, the assessee has shown receipt of cheques amounting to Rs. 66.5 lakhs from the parties as detailed in table shown somewhere in the preceding paragraph of this order. The difference amount of Rs. 18.5 lakhs transferred out of cash deposit were held as unexplained cash credit under section 68 of the Act by us while deciding the loan amount of Rs. 50 lakh from Shri Nilesh N Panchal in vide paragraph no 8.5 of this order. For ....
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.... The learned AR for assessee before us submitted the impugned debtors were classified under the current assessee and this fact was admitted by the authorities below for the year under consideration as well as in the earlier years. Therefore, the assessee is entitled for claiming the deduction is bad debts. 23. On the contrary the learned DR vehemently supported the order of the authorities below 24. We have heard the rival contentions of both the parties and perused the materials available on record before us. Admitedly the assessee written offthe debtor balance to the tune of Rs. 19,16,749 and claimed the deduction for the same. However, the AO disallowed the claimof the assessee for the reasons as discussed above and the view of the AO was also subsequently confirmd by the learned CIT (A). 25. At the oustset we not that the provisions of section 36 (2) of the Act allow the assesse to claim the dedution of bad debt written off during the year under consideration subject to the condition specified therein. The provision of secton 36 (2) of the Act read as under: Other deductions. 36. (1) ********* 2) In making any deduction for a bad ....