TaxTMI 
TaxTMI 
2023 (1) TMI 762
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....eturn was selected for scrutiny assessment. 2.1. On verification, the assessee had received unsecured loan of Rs.25,00,000/- from Pravinchandra N. Patel and Rs. 2,00,00,000/- from M/s. Rudra Enterprise during the financial year. On further verification of the copy of the acknowledgement of Return of Income filed by M/s. Rudra Enterprise, it had showed Nil Income and how it could have given unsecured loan of Rs. 2 Crores to the assessee. Further on verification M/s. Rudra Enterprise had received Rs. 2 Crores through transfer from third party on 15.10.2015 and the same day this Rs. 2 Crores was transferred through RTGS to assessee's account. The assessee has not paid interest on the unsecured loan provider. Thus the creditworthiness of M/s. Rudra Enterprise is not proved. Therefore the assessee was requested to show cause as to why the unsecured loans of Rs. 2 Crores received from M/s. Rudra Enterprise should not be treated as bogus and added to the total income of the assessee. 2.2. The assessee replied that though the interest was not paid to M/s. Rudra Enterprise during the financial year 2015-16 because of mutually agreed terms and condition between the parties. However interes....
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....be proved and has filed a copy of return filed by M/s. Rudra Enterprise. The appellant has relied on the ratio of following case laws: Deem Roll Tech Ltd. V. DCIT [2018] 92 taxmann.com 72 (Ahd. Trib) CIT v Haresh D Mehta 86 taxmann.com 22(2017) (Bombay) ACIT v. Ravnet Solutions (P) Ltd. [2018] 93 taxmann.com 59 (Del Trib) Prinkulandfin (P.) Ltd v. Income Tax Officer, ward-14(4), New Delhi [2018] 91 taaxmann.com 120 (Del Trib)/[2018] 170 ITD 139 (Delhi- Trib.) ACIT, Central Circle-13, New Delhi v Adamine Construction (P.) Ltd [2017] 87 taxmann.com216 (Delhi-Trib.). Sarjan Corporation v ACIT [2012] 14 ITR (Trib) 140 (Ahm) CIT v. Shalimar Buildwell Pvt. Ltd (2013) 40 taxmann.com 285 (Allhabad) CIT v Kamdhenu Vyapar Co. (2003)263 ITR 692 (Cal). CIT v Sanghamifra Bharali (2014) 361 ITR 481 (Gau) Khandelwal Constructions v CIT 227 ITR 900 (Gau). Smt Madhu Raitani v ACIT 10 ITR (Trib.) 91 (Gau) The appellant has further submitted as under: "Further though Appellant not required to prove the source of the source of the unsecured loan received, in good faith and in order to satisfactorily prove the nature and source, appellant also submitted that the said....
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....ders, it was his duty to ascertain from the Assessing Officer of those lenders, whether in their respective return they had shown existence of such amount of money and had further shown that those amounts of money had been lent to the assessee. If before verifying of such fact from the Assessing Officer of the lenders of the assessee, the Assessing Officer decides to examine the lenders and asks the assessee to further prove the genuineness and creditworthiness of the transaction, in our opinion, the Assessing Officer did not follow the principle laid down under Section 68 of the Income Tax Act. If on verification, it was found that those lenders did not disclose in their income tax return the transaction or that they had not disclosed the aforesaid amount, the Assessing Officer could call for further explanation from the assessee to prove the genuineness of the transaction or creditworthiness of the same. However, without verifying such fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by th....
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....eee has given the GIR number / PAN of the creditor and also shows that the amounts were received by account payee cheques. It was further held that it is not necessary, that there should be an explanation as to the source of the money on the part of the creditors in every case." Reliance is also placed on another case i.e. CIT vs. Dharamdev Finance Pvt. Ltd. 43 Taxmann 395 (Guj.) wherein it is held, "No addition on account of cash credits could be made, where assessee had given PAN of creditors, their confirmations and their bank statements which established their creditability". There are other case laws supporting the case of the appellant as under: i) Murlidhar Lahorimal Vs. CIT 280 ITR 512 (Guj.) ii) CIT Vs. Pragati Co-op. Bank Ltd. 278 ITR 170 (Guj.) iii) CIT Vs. Orissa Corporation Pvt. Ltd, 159 ITR 78 (SC) iv) CIT vs. Sanjay K. Thakkar Tax Appeal Nos.524 of 2004, 525 and 526 of 2004 and 579 to 583 of 2003 dated 12-9-2005 (Guj. HC) v) ITO Vs Kailpar Credit & Mercantile Pvt. Ltd. in ITA No.421/Ahd/2008 (ITAT, Ahd.) I am not inclined to accept the findings of the A.O. the plethora of evidences on record cannot be ignored as much as there are comments o....
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.... Sr. D.R. Shri Rakesh Jha appearing for the Revenue supported the order of the Assessing Officer and prayed that the departmental appeal should be allowed. 6. Per contra, Shri S.N. Divatia Ld. Counsel for the assessee submitted a Paper Book which contains the replies filed by the assessee before A.O. as well as ledger confirmations contra account of M/s. Rudra Enterprise, Income-tax Returns Acknowledgements for the Assessment Years 2016-17 to 2018-19 and HDFC Bank Statement for May and July, 2017 of M/s. Rudra Enterprise at page nos. 13 to 22 of the Paper Book as well as acknowledgement of the Income-tax Returns filed by Arya Tradex Pvt. Ltd. for the Assessment Year 2016-17 and company master data downloaded from Ministry of Company Affairs at page no. 23 & 24 of the Paper Book. Thus the Ld. A.R. pleaded that the assessee not only proved the source of the unsecured loan but submitted the details of "source of source" of the creditors, Income-tax Returns, Confirmation Letters, relevant and Bank Statement. Thus the provisions of Section 68 does not attracted and therefore the addition made by the A.O. is not sustainable. The ld. A.R. also produced before us regular assessment order ....