TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 84
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....nt order before the Ld. CIT(A). The Ld. CIT(A) after hearing the assessee allowed the appeal and deleted the addition made by the AO. The revenue is in appeal against the said findings of the Ld. CIT(A). 3. The revenue has challenged the impugned order passed by the Ld. CIT(A) on the following effective ground:- "Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,80,46,000/- on account of investment made from undisclosed sources. The observations made, while disbelieving the evidence produced during the assessment proceedings, specifically relating to the creditworthiness and genuineness of parties from whom loans have raised are not based on probabilities, but the evidence produced by the assessee are baseless. These said parties have no financial capacity to give huge interest free loans." 4. Before us, the Ld. departmental representative supporting the order passed by the AO submitted that the Ld. CIT(A) has deleted the addition made by the AO ignoring the fact that the assessee has failed to establish the genuineness of transaction by establishing creditworthiness of persons from whom unsecured loans had been ....
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....lant has attempted to demonstrate in his submission that all payments are either in cheque/Demand draft drawn from the appellant's bank account and the ones in cash are backed by cash withdrawal from the same Bank account. The Ld. AO has in the assessment order not doubted the payments through banking channels/cash withdrawals but has questioned the sources of the deposit/loans shown by the appellant stating that these are concocted, and entries taken to justify investment for which the appellant has himself not contributed anything. That the Ld. AO has made the addition u/s. 69 of the Act for unaccounted investment is matter of record; that the Ld. AO has also rejected genuineness of the loan transactions shown by the appellant is also a matter of record. Thus, before adjudicating on whether Section 69 or Section 68 would apply in the instant case; a discussion of the Ld. AO's findings with regards to the explanation of the sources offered by the appellant and the Ld. AR's submissions with regards to the same will be in order. a. Withdrawals of Rs. 1,57,00,000/- made from capital account with M/s. Mittal Traders, Nabha Gate, Sangrur, wherein the appellant is a partne....
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....operty at Park, Sangrur, with Smt. Kusum Lata and had been receiving rent from this property along with his aunt Kusum Lata is matter of record. That the appellant and Kusum Lata had been maintaining joint bank in ICICI Bank, Sangrur, for receiving rental income is also matter of record. The Ld. AO has not commented on this, but the documents were produced before him during the assessment proceedings. That the appellant and Kusum Lata were disclosing the rent as income form House property in their returns of income is also a matter of record and not in dispute. That, Kusum Lata is regularly assessed to tax is also matter of record and not in dispute. That Rs. 10,00,000/- had been transferred on 02/08/2014, from this Bank Account to that of the appellant is also established from record. It is my considered view that with regards to this credit entry the appellant has both during assessment and appellate proceedings established the source of the funds and the identity of the creditor (for 50%), the creditworthiness and the genuineness of the transaction. c. Withdrawals of Rs. 60,00,000/-, from joint Kissan Gold Card Bank account of the appellant with S/Shri Rajinder Pal Mittal and ....
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.... father and that the father's returned income is on the lower side. It is my considered view that the appellant has duly discharged the burden of proof regarding the identity creditworthiness of Shri. Surinder Pal Mittal and also the genuineness of the transaction. f. Loan of Rs. 21,00,000/- from Smt. Parveen Mittal and Smt. Kiran Bala That Parveen Mittal and Kiran Bala are income tax Assessee and relatives of the appellant is a matter of record and not in dispute. That the two regularly file returns of income showing income from rent, interest income, share from partnership firm other than agricultural income is a matter of record. That the two regularly file returns of income is also a matter of record. The appellant claims that the loan to the appellant was from a joint account held by Parveen Mittal and Kiran Bala which inter-alia regularly had their agricultural income deposited. That the loan of Rs. 21,00,00 was transferred in two tranches of Rs. 12,00,000/- and Rs. 9,00,000/- on 02/07/2014, and 03/07/2014 to the bank account of the appellant from the same joint account of Parveen Mittal and Kiran Bala is a matter of record and not in dispute. That the appellant filed....
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....e Ld. AO has brought nothing on record to establish that the bank transfer of loan and its repayment were not genuine or that Garg Chemical did not have the capacity to pay. However, that the appellant did not remember the name of a firm that gave it a short-term accommodation loan of Rs. 10,00,000/- and that these two transactions were the only transactions between the appellant and Garg Chemicals does raise a doubt about the arrangements, however there is nothing on record to controvert the transactions or that any cash passed on between the appellant and Garg Chemicals. With regards to the provisions of Section 68 of the Act, it is my considered view that with regards to Section 68 of the Act, the appellant has discharged the burden of proof to establish the identity and creditworthiness of the Creditor and the genuineness of the transaction qua the appellant. The Ld. AO has not raised any doubts about the source of the source. h. Loan from M/s. J.R. Printing Press, Nabha Gate, Sangrur With regards to JR Printing Press the Ld. AO has doubted the credit on the grounds that there is a disparity between the books of the appellant which shows a loan of Rs. 2,00,000 from M/s. J.R....
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....onsidered view the appellant has during assessment proceedings and later during appellate proceedings, discharged the burden proof to establish the identity and credit worthiness of the creditor and also the genuineness of the creditor JR Printing Press qua the appellant. The Ld. AO was free to refer the matter regarding the doubts about the transactions of the creditor to the concerned AO. 5.1 The Ld. AO has, starting on a well-founded premise that a purchase of immoveable property is unlikely to be funded almost entirely from loans not been able to controvert the appellant's submissions regarding the genuineness of the parties, their credit-worthiness as well as the purported genuineness of the transactions within the rubric of Section 68 of the Act. The Ld. AO's finding of judging the creditworthiness of the relatives of the relatives of the appellant based on their returned incomes for the AY of the impugned order alone, is in my considered view predicated on a flawed interpretation of net worth of the Creditors. After the appellant gave the underlying evidences to support the genuineness of the transactions and the source/identity of the creditors, the burden of proo....