TaxTMI 
TaxTMI 
2021 (9) TMI 1114
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.... same in purchase of an immovable property on his behalf as unsecured loan and thereby upholding the addition made by the Assessing Officer amounting to Rs. 99,84,046/- as unexplained investment. 3. The assessee craves leave to add/alter any of the ground of appeal on or before the date of hearing of appeal. From the aforesaid grounds it is gathered that the only grievance of the assessee relates to the sustenance of addition of Rs. 99,84,046/- made by the A.O. under section 69A of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 3. Facts of the case in brief are that the assessee electronically filed the return of income on 29/11/2014 declaring an income of Rs. 8,87,340/- which was processed under section 143(1) of the Act, later on the case was selected for scrutiny. 3.1 During the course of assessment proceedings the A.O. noticed that there was a substantial increase in the capital account of the assessee amounting to Rs. 1,19,44,047/-. The A.O. asked the assessee to furnish the source of increase in the capital account with supporting evidence. The assessee submitted that he had introduced capital from the funds received from Shri Hardev Singh Sahi....
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....under:- 09.05.2013 Sh. Hardev Singh 19,00,000/- 15.05.2013 Sh. Hardev Singh ($ [email protected]) 37,55,262/- 22.11.2013 -- (105000 @ 59/-) 62,28,784/- Total 1,18,84,046/- You are again requested to please furnish the identity, creditworthiness and genuineness. The nature of the above said transactions/payments received, sources of their income, relationship with you and confirmation of the lenders on or before 06.12.2016. Please also state whether these are interest free loan or give the details of interest paid on these loans". 3.3 The assessee submitted that Shri Hardev Singh S/o Shri Joginder Singh was his maternal cousin. In respect of his creditworthiness and genuineness of the transactions, it was stated that he (Shri Hardev Singh) was a retired officer from a Government Organization and at the relevant time was residing in Canada, he transferred Rs. 19,00,000/- interest free out of his personal savings and retirement fund. It was further stated that the balance amount was transferred by him through his son's account. It was also stated that Shri Maninder Singh Sahi S/o Shri Hardev Singh Sahi, had well established set up of his....
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....ave stated that you have taken an advance money in form of interest free unsecured loan. You are changing your stand on every hearing. c) Reflecting the receipts of any amount in your bank statement does not prove the creditworthiness and genuineness of the receipts. The declaration submitted by you on 06.12.2016 on a simple plain paper was not proper and you were again asked to furnish an authentic confirmation to prove its genuineness. But on 14.12.2016 you have again submitted the same copy of declaration. The photocopy of declaration by Sh. Maninder Sahi submitted after cutting in it. The declarations are photocopies on the plain paper thus the authenticity and genuineness is not established. Sh. Hardev Singh, who was retired from his service in April, 2012 and has received pension of Rs. 11,050/- only but he has given Rs. 19,00,000/- to you on 09.05.2013. This document does not prove that the amount received as pension benefits is the sources of loan given to you as no such supporting bank statement placed on record. This is not confirming the genuineness of the transaction. d) Vide notice u/s 142(1) dated 29.04.2016, you were asked to furnish the sources of ....
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....as the occasion to give a further payment of Rs. 62,28,784/- on 22.11.2013. This explanation is merely an afterthought and cannot be accepted. No such copy of the agreement has been produced for verification of the authenticity of the reply so furnished. iv) The letter head of 'Sahi Constructions' submitted in respect of Sh. Maninder Sahi is a photocopy and on a simple plain piece of paper. The letter head of a concern must have the details of its head office e.g. contact No., e-mail ID, Fax No. its PAN or TAN number to facilitate its customer. But no details are printed on it. The document is not a registered document with any authority of Canada and not witnessed. v) No documentary evidence regarding his being a 'tax payer' is furnished to show that he had sufficient sources of income to give this amount. vi) The bank statement submitted is also not acceptable as it has neither the name of the account holder nor name of bank/branch. As per the assessee's statement Sh. Maninder Sahi has given loan of Rs. 37,55,262/- on 14.05.2013 and Rs. 62,28,784/- on 22.11.2013 from Canada in Indian Rupees. But from perusal of the bank statement, th....
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....ptions without offering the assessee an opportunity of being heard to rebut these erroneous and ambiguous presumptions of Ld. AO before pronouncing the impugned order. It is also brought to notice that the said proceedings were time barred as on 31/12/2016 and the Ld. AO passed the assessment order in haste without affording the assessee an opportunity of being heard to rebut the erroneous reasons based on which the Ld. AO framed the assessment order and made an impugned addition of Rs. 99,84,046/- u/s 69A of the Income Tax Act, 1961. The reasons stated by the Ld. AO for not accepting the submissions of the assessee in respect to the funds received from Sh. Maninder Singh Sahi are well covered and rebutted by the merits of the case in favour of the assessee which are taken up in ground No. 3 of the submissions. 3. Submissions based on Ground No. 3 of appeal, which states as under that: 'The learned AO, as per as assessment order is believed to be convinced based on the evidence submitted by the assessee on the genuineness of the claim of transaction of unsecured loan received by the assessee and identity of the said lender, Sh. Maninder Singh Sahi. But, someho....
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....rities testifying to the facts stated by the assessee during the proceedings to establish the creditworthiness of the assessee. Thereafter, the Ld. AO while framing the assessment order accepted the identity & genuineness of both the lenders. While determining the creditworthiness and source of income of both the lenders the Ld. AO accepted the submissions of the assessee in respect of capital introduction of Rs. 19,00,000/- from Mr. Hardev Singh whereas quashing/ disapproving the submissions made by the assessee to prove the creditworthiness of Mr. Maninder Singh Sahi. In respect to the same is hereby humbly submitted that the Ld. AO had accepted the submission of the assessee that 'the funds used in capital introduction amounting to Rs. 1,18,84,046/- was received from Sh. Hardev Singh through his regular bank account (Rs. 19,00,000) and the balance (amounting to Rs. 99,84,046/-) was transferred by him from his son Mr. Maninder Singh Sahi's bank account without asking any further questions or making any enquiries regarding the same. Therefore, it is clear from the aforementioned submission that though there were two lenders as per the records, th....
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....in this case the credit worthiness of Mr. Hardev Singh is required to be established since the funds belonged to him and the credit worthiness of Mr. Maninder Singh Sahi is not relevant. 2. In assessment order, the Ld. AO has already accepted the credit worthiness of Mr. Hardev Singh by approving the capital introduction of Rs. 19,00,000/- and now that the fact is established that the whole funds belonged to Mr. Hardev Singh, the Ld. AO is bound to accept the credibility of remaining funds amounting to Rs. 99,84,046/-. 3. The Ld. AO erroneously rejected part of the assessee's claim based on mere presumptions without offering the assessee an opportunity of being heard to rebut these erroneous and ambiguous presumptions of Ld. AO before pronouncing the impugned order. 4. The Ld. AO has erroneously rejected all the possible evidence submitted on record, by assessee, to substantiate the credit worthiness of the lender. The assessee has also further failed to call for the substantial information under the provisions of section 131 of the Income Tax Act, 1961 and therefore failed to carry out his onus to disprove the submitted documentary evidence ....
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....e assessee has clarified to the Ld. AO time and again that the said funds were given in personal capacity to the assessee by his relatives for prospective investment in property since the assessee is into the business of the same. The said funds were not for a particular property for which the agreement was ought to be entered into. Furthermore, in the affidavit furnished by the assessee he had clearly stated that the funds were advanced with the motive of making some investment in properties in India however no deal was materialized due to poor market conditions. Therefore the funds extended were not for any particular property already signed for but for the purpose of prospective investments and Ld. AO refusing to accept the explanation given by the assessee merely on presumptions and baseless grounds acted in bad faith. iv) The letter head 'Sahi Construction' submitted in respect of Sh. Maninder Singh Sahi is a photocopy and on a simile plain piece of paper. The letter head of a concern must have the details of its head office e.g. contact no, e-mail ID, Fac No. its PAN or TAN number to facilitate its customer. But no details are printed on it. The document is n....
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....art of them were wired to the assessee through Mr. Maninder Singh Sahi's (s/o Sh. Hardev Singh) bank account. Therefore the credit entry of 104975 Canadian dollar were transferred by Sh. Hardev Singh to Sh. Maninder Singh Sahi's bank a/c who in turn transferred the said funds to the assessee on behalf of Sh. Hardev Singh. vii) Moreover, perusal of bank statement, reveals that there are periodic small debit and credit entries in this account except big entry on 18.11.2013 Canadian dollar 104975 and later on it was transferred to the assessee. It is improbable that Sh. Maninder Singh Sahi had advanced such a huge interest free amount with small sources of income. Hence, the creditworthiness of Sh. Maninder Singh Sahi submitted by the assessee is not proved. In respect to the same it is hereby humbly submitted that in point no. 2 of our submission it is already established that entire funds transferred belonged to Sh.Hardev Singh and a part of them were wired to the assessee through Mr. Maninder Singh Sahi's (s/o Sh. Hardev Singh) bank account. Therefore the credit entry of 104975 Canadian dollar were transferred by Sh. Hardev Singh to Sh. Maninder Singh ....
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....e. Here, appellant is changing his pleas before the AO. Further, Sh. Maninder Singh is resident of Canada and the appellant conveniently expecting from the AO that he should call Sh. Maninder Singh u/s 131 of the Act. It is trite law that it is the assessee who has to explain bonafide of his claim beyond doubt before the Income Tax Authorities. The appellant has miserably failed to establish creditworthiness and genuineness of Sh. Maninder Singh with any supporting evidence. The case law relied by the appellant is on different facts, (iv) The pertinent point which is conveniently missing in the arguments of the appellant is that the this payment was made to the appellant for some property which property is only known the appellant or Sh. Hardev Singh and his son] and amount will be paid back if deal is not struck. On this issue both the parties are silent. Neither any deal has come to light till disposal of this appeal nor has money been paid back. This smokescreen has not been touched by the appellant. It is strange that more than One Crore rupees have just been thrown away by the father and son duo that too when father is retired government employee who must be knowing the value ....
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....eference was made to page no. 20-22 of the assessee's paper book to substantiate that the amount of Rs. 19,00,000/- was sent by Shri Hardev Singh for purchase of property. A reference was also made to page nos. 23-25 which is the copy of the letter dt. 07/10/2016 alongwith proof of inward remittances of the amount sent by Shri Maninder Singh Sahi from Canaa for the purchase of some property. It was contended that all the transactions were through regular banking channels, a reference was made to page no. 26 of the assessee's paper book which is the copy of letter dt. 06/12/2016 describing the capacity and identity of Shri Hardev Singh. The Ld. Counsel drew our attention towards page nos. 30 to 32 which is the declaration of Shri Maninder Singh Sahi alongwith proof of the remittances, a reference was also made to page no. 33 to 34 which is the coy of letter wherein the sources of Shri Hardev Singh and Shri Maninder Singh Sahi had been shown in the bank statement, the ID address had been furnished and the purpose of sending the money by Father and son i.e Shri Harvinder Singh & Shri Maninder Singh Sahi had been mentioned which was to make some investment in property in India. It w....
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....nd sustained by the Ld. CIT(A) was not justified. Reliance was place on the following case laws : • CIT Vs. Orissa Corporation (P) Ltd. [1986] 159 ITR 78 (SC) • Add. CIT Vs. Hanuman Aggarwal [ 1985] 151 ITR 150 (Patna) • DCIT Vs. Rohini Builders [2002] 256 ITR 360 (Guj) • M/s Suraj Stones Corporate Ltd. Vs. ITO, Bengaluru in ITA No. 52/Bang/2020 vide order dt. 18/02/2021 (ITAT Banglore) • Orient Trading Co. Ltd. Vs. CIT reported in 49 ITR 723 (Mum) • Shri Chunni Lal reported in 211 ITR 11 (Statue) (P&H) 6.4 It was submitted that the deceased assessee apart from declaration from the depositors had also furnished evidences in the form of bank pass book of Shri Maninder Singh Sahi in Canada coupled with the remittance advices which were not doubted, therefore the reliance placed by the Ld. CIT(A) upon the Judgment of Human Probability did not hold good when documentary evidences in the form of remittance certificates, bank pass book, copy of passport were furnished by the assessee and also a request was made to issue summons under section 131 of the Act, if the A.O. had any doubt. The reliance was placed ....
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.... the copy of the capital account of the deceased assessee. 9. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that the assessee received Rs. 19,00,000/- from his relative Shri Hardev Singh through banking channels and also received Rs. 99.84 lacs ( Rs. 37.55 lac + Rs. 62.29 lacs ) from Shri Maninder Singh Sahi S/o Shri Hardev Singh through banking channel. The aforesaid amounts were credited in the capital account of the deceased assessee, copy of which is placed at page no. 19 of the assessee's paper book. The A.O. accepted the amount of Rs. 19,00,000/- received from Shri Hardev Singh but had not accepted the amount of Rs. 99.84 Lacs received from his son Shri Maninder Singh Sahi although both of them were residing in Canada, were related to the assessee and sent the amount through banking channel. 9.1 In the present case the A.O. invoked the provisions of Section 69A of the Act while making the impugned addition. The provisions contained in the said section read as under: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jew....
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....ions u/s 68 ofhte Act. The assessee before us has discharged his onus of complying with the three conditions in respect of loan received during the year. The identity of the person being father of the assessee stands established in view of the statement recorded during the course of assessment proceedings. The credit worthiness of the person is also established by the series of evidence filed, wherein in addition to the agriculture income earned by him, the father of assessee has shown the receipt of money by way of return of loans, which were advanced as per registered mortgage deed, placed before us in the paper book. Further, the said amount then being transferred to the bank account of the father of the assessee from where the cheques have been issued to the propriety concern of the assessee establishes the genuineness of transaction. In the totality of facts and circumstances of the case, the genuineness of transactions stands established. The maounts have been advanced through account payee cheques and we find no merit in the addition being made on this account. Their lordships of Hon'ble Supreme Court in CIT Vs. Chuni Lal [211 ITR (8T) 11] had held that cash credits rece....
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....he signature of the confirming parties were barely visible. The address of the confirming parties are very much available in the confirmation and if any doubt persisted on the veracity of the confirmation, then the proper course would have been to issue summons to the confirming parties to find out the truth or otherwise of the transactions on sale of shares on account of which monies were received by the assessee through banking channels. Without resorting to such process, I am of the view that the CIT(A) has confirmed the addition made by AO ignoring the evidence available on record. In my view the evidence filed by the assessee satisfactorily explains the credits in question and the impugned addition has been made ignoring the material on record on the basis of surmises and conjectures. There is an allegation that it is Assessee's money which went to Sneha International and that was deposited by Snehal International in a bank account and from that bank account funds were transferred to M/S.Sherwali Corporation and M/S.Venkata Industries, but there is no evidence to substantiate such allegation. 10. As far as the decision cited by the learned DR is concerned in the decis....
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....at # 3077, Sector 19D, Chandigarh, PAN: AHDPB1S73D, do hereby solemnly affirm & declare as under that - 1. I have taken an advance money in form of interest free unsecured loan from father and son namely Sh. Hardev Singh s/o Sh. Joginder Singh Sahi, resident of village - Pambra, P.OBhunga, District-Hoshiarpur (PB), having present residence at #6792, 146B Street, Surrey, BC, Canada of Rs. 19,00,000 /- in my HDFC account no 05971000013800 on 9th May 2013 and from Sh. Maninder Singh Sahi s/o Sh. Hardev Singh, of Rs. 99,84,046/- via AXIS bank on following date and transaction ID's. Date Transaction ID Amount 14/05/2013 S84376008 37,55,262 22/11/2013 S86406704 62,28,784 Total 99,84,046/- 2. Further, the above said advance money was given by the above mentioned father and son, namely Sh. Hardev Singh and Maninder Singh Sahi, to me, with the motive of making some investment in properties in India.But since, no deal could got materialized because of the poor market sentiments & conditions and hence, I shall be repaying back the above said advance of the total amount of Rs. 1,18,84,046/-to Sh. Hardev Singh and Maninder Singh S....