TaxTMI 
TaxTMI 
2020 (8) TMI 439
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....n creditor and genuineness of the transactions. He conducted enquiries with regard to the existence of M/s Baldev Promoters Pvt. Ltd., at the given address. However, the Inspector reported that Shri Ghanshyam Minocha, resident of ground floor, B-15, Shalimar Village, informed that there was some tenant before two years on the address and he has vacated the premises around two years ago. The AO, therefore, in order to verify the existence of the company issued summons u/s 131(1) to the Branch Manager, Axis Bank, Shakti Nagar, New Delhi, requiring him to furnish the following documents:- i) Photocopy of account opening form of M/s Baldev Promoters Pvt. Ltd. along with all enclosures attached while opening of account; ii) Details of transfer account from where the money has been credited/transferred in the above referred bank account; and iii) If the concerned account is maintained in your bank then complete copy of bank account from the date of opening to till date, else photocopy of cheque along with complete address and account statement. 3. The Branch Manager supplied the information which revealed that the account of M/s Baldev Promoters Pvt. Ltd., was opened by Shri Gulab....
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....nce sheet of M/s Baldev Promoters Pvt. Ltd. reveals that the company has shown loans and advances recoverable in cash or kind of Rs. 4,98,18,357/- which includes itself Rs. 90,00,000/- alleged to be advanced to the assessee company but the taxes paid by M/s Baldev Promoters Private Ltd, by way of TDS are only Rs. 2,00,476/- which establishes that the company is not charging the interest on the loans and advances given to other parties/companies.- (vi) The assessee company has not been able even to furnish the rate of interest payable on the unsecured loans of M/s Baldev Promoters Pvt. Ltd. loans. A perusal of the annexures of the balance sheet of the assessee society shows maximum outstanding at any time to M/s Baldev Promotes at Rs, 93,03,760/- which reflects that the assessee society has paid interest of Rs. 3,03,760./- on unsecured loans of Rs. 90 lakhs to Baldev Promotors Ltd., whereas the interest even @ 10% on the unsecured loans works out to Rs. 4,25,000/-. The interest of Rs. 3,03,760/- is shown to payable. 4. In view of the above, the AO held that M/s Baldev Promoters Pvt. Ltd. is not a genuine company and is merely an entry provider and the assessee Trust failed to pro....
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....ion of Rs. 25,00,000 made by the assessing officer, being unsecured loan received from Sh. Raju Khan, as alleged unexplained cash credit under section 68 of the Act. 4.1 That the CIT(A) erred on facts and in law in holding that the appellant was not able to establish identity and creditworthiness of the creditor and genuineness of the transaction, in total disregard of the contemporaneous evidences filed by the appellant. 4.2 That the CIT(A) erred on facts and in law in affirming the action of the assessing officer in conducting and relying upon-ex-parte enquires under section 131(1) of the Act. 5. That the CIT(A) erred in confirming levy of interest under sections 234B and 234C of the Act. The appellant craves leave to add, amend, alter or vary the above grounds of appeal at or before the time of hearing." 8. The ld. Counsel for the assessee submitted that the assessee has obtained a loan of Rs. 1.15 crores from M/s Baldev Promoters Pvt. Ltd., of Rs. 90 lakhs and from Raju Khan of Rs. 25 lakhs for the purpose of its business. Those loans were subsequently repaid in the subsequent years. He submitted that the primary/initial onus to explain the nature and sources of amount....
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....any and are not in the nature of any cash deposit. So far as the allegation of the AO that the director who is maintaining the bank account is not signing the income-tax returns of the company nor has signed the confirmation letter furnished in respect of the loan is concerned, he submitted that after the resignation of Shri Gulab Chand Verma w.e.f. 26th March, 2010, the income-tax return was signed by Krishna Kumar Sharma, who was one of the directors of the said company and subsequent to his resignation on 10th December, 2010 Shri Arvind Kumar Modi has signed the income-tax return for A.Y. 2011-12. So far as the allegation of the AO that neither the Managing Director Shri Gulab Chand Verma was produced nor his credit worthiness was established and that the ITR of Shri Verma has not been furnished is concerned, he submitted that there is no requirement in law to establish the credit worthiness of the directors of the company from whom such loan has been availed. 9. So far as the allegation of the AO that the assessee failed to furnish the annexures of the balance sheet showing the loan advanced to the assessee company is concerned, he submitted copy of audited accounts of M/s Bal....
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....e the assessee has discharged the initial onus cast on it by proving the identity and credit worthiness of M/s Baldev Promoters Pvt. Ltd. and the genuineness of the transaction, the addition of Rs. 90 lakhs made by the AO u/s 68 of the act and which has been confirmed by the CIT(A) should be deleted. 13. So far as the loan obtained from Shri Raju Khan is concerned, the ld. Counsel for the assessee submitted that since the assessee was not provided sufficient time to provide documents in support of the above loan transaction, the assessee during the course of appellate proceedings, requested the ld.CIT(A) to admit the following additional evidences:- i) Copy of affidavit of Mr. Raju Khan confirming loan given to the appellant; and ii) Copy of purchase deed executed by Mr. Raju Khan, evidencing the source of funds utilized for advancing loan to the appellant. 14. He submitted that since these additional evidences are crucial to the disposal of the appeal, the ld. CIT(A) should have admitted these additional evidences and decided the issue. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Virgin Securities & Credit (P) L....
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....e reasons while sustaining the additions made by the AO and not admitting the additional evidences filed in respect of Shri Raju Khan. He accordingly submitted that the order of the CIT(A) be upheld and the grounds raised by the assessee be dismissed. 18. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assesseee. We have also considered the various decisions cited before us. We find, the assessee, in the instant case, has accepted a loan of Rs. 90 lakhs from one M/s Baldev Promoters Pvt. Ltd., and Rs. 25 lakhs from Shri Raju Khan during the year under consideration. We find, the AO invoking the provisions of section 68 made addition of Rs. 1.15 crores being loan obtained from the above two persons. So far as the loan obtained from M/s Baldev Promoters Pvt. Ltd., is concerned, it is the case of the AO that the photograph of Shri Gulab Chand Verma, the Managing Director of the company, as appearing in the bank statement is different from the photograph appearing in the voter I. Card. Further Shri Gulab Chand Verma was never produced nor his credit worthiness for becoming a director ....