TaxTMI 
TaxTMI 
2015 (8) TMI 1559
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....roceedings under section 143(3) of the Income Tax Act, 1961, in short 'the Act'. 2. The Revenue's sole substantive ground in its appeal challenges the CIT(A) order restricting section 68 addition of unexplained cash credit of Rs.39,79,773/- to Rs.15,33,376/- by granting relief of Rs.24,26,370/-. It prays for restoration of the entire addition amount. The assessee's cross appeal raises three substantive ground. The first one assails the remaining addition amount of Rs.15,33,376/-. Its remaining two grounds seek to delete interest disallowances of Rs.8,82,025/- in respect of investments made for machinery purchases and Rs.1.6 lac relating to amounts given to M/s. Heritage Board Pvt. Ltd. and the one outstanding qua share transactions with ....
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.... demonstrated sums deposited therein to be within very short span of time of 2-3 days prior to assessee's transactions. He accordingly added this entire sum of Rs.39,79,773/- as assessee's unexplained credits u/s.68 of the Act. 4. The assessee preferred appeal. The CIT(A) has partly accepted its contentions as under: "3.2.1 During the appellate proceedings, the AO was asked to submit the remand report after examining all the lenders regarding the source of advance to the appellant. The AO has submitted the remand report vide letter dt 26-2-2010. Copy of this remand report was given to the appellant for his comments. The remand report submitted by the AO and his comments in respect of 15 lenders is as under :- No. Name of t....
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....2,14,816 Neither attended nor furnished any written submission. 8 Narendrakum ar M Jain 1,61,540 Neither attended nor furnished any written submission. 9 Usha P Agarwal 2,01,249 Neither attended nor furnished any written submission. 10 Indrakurnar D Agarwal 3,78,899' Summons issued and served by Speed Post. However the same was unserved and returned to this office on 19-2-10 with remark of Postal Deptt that 'Not known'. 11 Ratnadevi K Agarwal 2,16,964 The assessee filed written submission in the form of ledger account and bank statement but failed to attend on the date of hearing 12 Hansaben Rathod 3,83,578 ....
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....on monthly basis after meeting household expenses it is difficult to believe that he should have advanced loan of Rs.1,62,501/-. Therefore in respect of Niranjan D Agarwal since the summons have been returned with remarks "not known" neither identity is proved nor the creditworthiness is proved, hence the addition of Rs. 1,62,501/- in respect of Niranjan D Agarwal is confirmed. 4.2.2 With respect to Linaben N Shah the remarks of the AO in the assessment order are that the income is only Rs. 87,322/-which is very small and does not prove the creditworthiness. She has deposited cash of Rs.1,50,000/- on 29-4-2005 and Rs.-1,80,000/- on 5-5-2005, the summons also returned unserved with remarks 'not known'. This shows neither identit....
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....nus in respect of those parties. It is the AO who has to bring on the records that the credits / deposits are not genuine. Since the AO has conducted enquiries during the .remand proceedings and has failed to collect any adverse material except saying that the summons were served but theses parties have neither attended nor furnished any submission , hence these loans cannot be added back to the total income and these loans are deleted. 4.4 in view of the above, loan of Shri Niranjan Agarwal Rs.1,62,501/, Lilaben Shah Rs.6,32,313/-, Indrakumar Agarwal Rs.3,78,899/-, Jitendra Mali Rs.3,79,663/- are confirmed and balance are deleted. This ground of appeal is therefore partly allowed." 5. We have heard both sides and gone through t....
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....d Jivabhai Nakhava, (2012) 21 taxmann.com 159 (Guj.) reiterating the abovestated view of the hon'ble apex court in these facts and hold the assessee to have successfully proved genuineness/creditworthiness of all the impugned unsecured loans of Rs.39,79,770/- hereinabove. The Revenue's sole substantive ground in its appeal fails and assessee's first ground is accepted. Revenue's appeal ITA 2917/Ahd/2010 is dismissed. 6. This leaves us with the assessee's two remaining grounds challenging disallowance of interest of Rs.8,82,025/- and Rs.1,60,000/- (supra). It submits that the former sum of interest may be remitted back to the Assessing Officer for examining pro rata interest component as related to the first issue of unsecured loans; i....