TaxTMI 
TaxTMI 
2022 (3) TMI 774
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....ration was filed by it on 15.09.2015 declaring a loss of (-) Rs. 2,29,71,765/-. In the balance-sheet filed along with the said return, unsecured loans of Rs. 1,43,91,315/- were shown by the assessee. In this regard, the required details and documents were filed by the assessee during the course of assessment proceedings to support and substantiate the said unsecured loans. From the perusal of the details so filed by the assessee, the Assessing Officer found that similar type of income was returned by certain creditors which was below taxable limit. He also noticed that certain parties did not have sufficient balance in their accounts throughout the year and funds were deposited in the bank accounts just before the loans were given to the assessee. He further noticed that no interest was paid by the assessee on the said loans. He, therefore, issued a notice requiring the assessee to show-cause as to why the unsecured loans to the extent of Rs. 37,00,000/- should not be treated as unexplained cash credits and the amount of such loans should not be added as income of the assessee under Section 68 of the Act. In reply, written submission was filed by the assessee on 15.12.2017 stating,....
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....cured loans to that extent as unexplained cash credits under Section 68 of the Act for the following reasons given in the assessment order: "A. The assessee has shown loan from various parties but none of them have creditworthiness to provide loans to assessee. It is revealed from submitted bank statement of the parties that in the bank account of most of them, cash amount equal to the loan entry was deposited immediate to loan entry. Further, most of them have declared in their income in the return of income at the basic exemption of tax liability. Further, modus operandi of the transaction reveals that the modus operandi of the transaction of loan is same, it is cleared in summary manner that none of them have capability to provide loans to others. B. In respect of all the parties, it is seen that they are advancing sums of money to the assessee but the source of income is not clear. They have deposited fund in their accounts but there is no explanation of the source of deposits. Their creditworthiness is simply not proved. All are advancing huge sums of money but details are not available of their income savings and expenditures. Thus the creditworthin....
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....D ITR ARE ON FILE AND THUS SOURCE OF IMCOME BEING BUSINESS INCOME AND LOAN AMOUNT GIVEN IS VERIFIED HEREWITH 5 (RAMESHBHAI NARANBHAI PATEL, ADD: A2, SWASTIK PARK FLATS, OPP. JUDGES BUNGALOW, BODAKDEV, AHMEDABAD AGXPP1035H 500000.00 THE ASSESSEE HAS GIVEN ITR ON RECORD AND BASED ON SOURCE OF INCOME AND BANK STATEMENT, IT IS VERIFIED THAT MONEY IS RECEIVED FROM BANK 6 R.S. ENTERPRISE (PROP: RANJANBEN RAMESHBHAI CHEKALIYA) ADD: 91, MACHICHUNAGAR, CINZOL DASKROI, AHMEDABAD-382445 ATKPC5963F 800000.00 THE ASSESSEE HAS GIVEN PAN AND ITR AND IT IS VERIFIED THAT BUSINESS INCOME IS SHOWN. MONEY IS RECEIVED VIA BANKING CHANNELS. 7 SHANTABEN MOHANLAL PATEL, ADD: 80, PANKAJ SOC., NR. ANJALI BUS STOP, ANJALI CHAR RASTA, PALDI, AHMEDABAD-380022 AEKPP0275L 400000.00 THE ASSESSEE HAS GIVEN PAN AND ITR ON RECORD AND THE SOURCE OF INCOME SHOWN IS BUSINESS AND OTHER SOURCES. MONEY IS RECEIVED VIA BANKING CHANNELS. 8 SHWETA ASHISHBHAI PATEL, ADD: 16, BASHIDHAR SOC. NR. BANSHIDHAR GARDEN, VASNA, AHMEDABAD - 380007 RWEPP2123E 100000.00 THE ASSESSEE HAS GIVEN PAN AND ITR ON RECORD AND SOURCE OF INCOME IS SHOWN. MONEY IS RECEIVED VIA BANKING CHAN....
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....he concerned loan creditors which clearly proves that the bank statements of the loan creditors were duly furnished by the assessee before the Assessing Officer. The learned DR has also contended that a very small amount of income was declared by all the loan creditors in their returns of income and going by this pattern, the genuineness of the loans become doubtful as rightly held by the Assessing Officer. However, this aspect of the matter alone, in our opinion, cannot disprove the unsecured loans in question received by the assessee; the genuineness of which was duly established by the assessee by filing the confirmation letters, PANs, Income-Tax Returns, bank statements etc. of the concerned loan creditors as rightly held by the learned CIT(A) by relying on the decision of Hon'ble jurisdictional High Court in the case of Ranchhod Jivabhai Nakhava (supra) and Rohini Builders (supra). The primary onus that lay on the assessee to establish the identity and capacity of the concerned loan creditors as well as the genuineness of the relevant loan transactions was duly discharged by the assessee and in the absence of any evidence brought on record by the Assessing Officer to prove to ....
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....ed in Ground No.1, it is observed that this issue is squarely covered in favour of the assessee by the decision of Hon'ble Gujarat High Court in the case of PCIT vs. Vaishnodevi Refoils & Solvex, [2018] 253 Taxman 135 (Guj.), wherein it was held that when the assessee-firm had furnished details with regard to source of capital introduced by its partners and the partners had also confirmed such contribution, it could be concluded that the assessee-firm had duly discharged the onus cast upon it. It was held that if at all the Assessing Officer was not convinced about the creditworthiness of the partners who had made the capital contribution, enquiry had to be made at the end of the partner and not against the firm. Respectfully following this decision of Hon'ble jurisdictional High Court in the case of PCIT Vs. Vaishnodevi Refoils & Solvex (supra), we uphold the impugned order of the learned CIT(A) deleting the addition made by the Assessing Officer by treating the capital introduced by the partners of the assessee-firm as unexplained cash credits under Section 68 of the Act. Ground No.2 of the Revenue's appeal is accordingly dismissed. 11. The issue raised in Ground No.3 relates ....
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.... also amount to expenditure. We have cover & support is in u/s 6DD(J) of the Income Tax Act. We have to state that we had proved (a) genuineness of the transaction (b) identity of the payee is satisfied. Further the payment was made & covered by exception circumstances of rule 6DD where the above stated twin conditions were satisfied. The provision of Section 40A(3) and Rule 6DD(i) have been incorporated in the Act in order to check the incurring of bogus and fictitious expenses to non-existing parties, in our case this type of situation is not done. Legal submission & supported case law: (a) Avtarsingh & sons v/s C1T (1992) 61 Taxman 142 (Punj. & Haryana) (b) CIT v/s Chaudhary & Co. (1996) 84 Taxman 495 (Allahabad) (c) CIT v/s Punjab Boot House Ltd (1998) 142 Taxman 770 (MP) (d) Basu Distributors (P) Ltd v/s ACIT (2012) 19 Taxman.com 111 (Delhi) (e) Anupam Tele Services v/s ITO(2014) 43 taxmann.com 199 (Gujarat) Finally we have to state that the cooks of account was audited & No any averse remark pointed by our Auditor. Looking to the above submission both on facts and law you are requested not to make the add....