TaxTMI 
TaxTMI 
2023 (9) TMI 946
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....ns and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. The Appellant prays that the addition/ disallowance of Rs. 58,85,190/- made in respect of non-genuine unsecured loan u/s. 68 of deleted. 3. The learned CIT(A) has erred in law and on facts of the case in confirming the action of the learned AO in charging interest under Sections 234A, 234B, 234C and 234D of the I. T. Act, 1961. 4. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in initiating penalty u/s. 271(1)(c) of the Act. 5. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal." 3. The brief facts of the case are that during the year under consideration, assessee was engaged in the business of wholesale trading of groceries in the name and style of "GG Sons". During the course of assessment, the Assessing Officer asked the a....
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.... the rejoinder mainly submitted that the from Hariom Enterprises was arranged by her brother through broker and which was also paid by her brother only. Therefore, no confirmation could be filed. In view of the mentioned above, it is quite evident that the appellant has to the identity, genuineness and creditworthiness of the person from whom loan taken. The appellant has that loan was arranged through broker and confirmation and bank statement is not available is sufficient to draw adverse inference that the appellant herself is not confident about the identity, genuineness and creditworthiness of Hariom Enterprises. The issue is directly covered by the recent decision of Hon'ble Ahmedabad ITAT, Hon'ble Gujrat High Court and Hon'ble Supreme Court in the case of Pavankumar M, Sanghavi v/s ITO. The Hon'ble ITAT (81 taxmann.com 308) has held that when received unsecured loan but could not produce for verification and these lenders were found to be shell companies, said loan could not be said to be merely filed loan confirmations copies of ledger accounts and other supporting evidences. The relevant observation of the ITAT is also reproduced herein below: "8. ....
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....as not genuine. In absence of any perversity, we do not see any reason to interfere. 4. Learned Counsel for the assessee however vehemently contended that the assessee had received loans through cheques from lenders who had confirmed the same. Their accounts are audited and filed before the Revenue authorities. Thus, the genuineness of the transactions, the capacity of the lender and the factum of lending all have been established. Addition under section 68 of the Act there could not have been made. However, as noted, the Tribunal has minutely examined the position of the lenders, the circumstances under which, the amounts were allegedly loaned to come to the conclusion that the "transactions were not genuine." The Hon'ble apex court on 01.05.2018 also dismissed the SLP filed against the order of the Hon'ble Gujarat High Court. 4.9. In view of the facts mentioned in assessment order and remand report and legal position discussed above, the addition made by the AO on account of unexplained cash credit from Hariom Enterprise of Rs. 58,85,190/- is confirmed. Thus the ground of appeal is dismissed." 5. The assessee is in appeal before us against t....
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....to be deleted. 6. In response, the Ld. DR placed reliance on the observations made by the Assessing Officer/Ld. CIT(Appeals) in their respective orders. 7. We have heard the rival contentions and perused the material on record. On going to the facts of the case, we observe that the assessee has filed substantial details to prove the genuineness of the transaction and circumstances in which the loans were taken/repaid by the assessee. It is noteworthy that when the Department has accepted part of the loans taken from the same party Hariom Enterprise as genuine, then it is not understandable that with respect to the balance amount of loan taken from the same party, why the loan has been held to be non-genuine, only in absence of confirmation from such party viz. Hariom Enterprise. Further, it is a well settled principle of law that once the revenue was accepted the repayment of loan, no addition is to be made on account of cash credit. Various judicial precedents have upheld the principle that once the repayment of loan has been established based on documentary evidences, credit entries cannot be looked into isolation after ignoring debit entries. In the case of Ayachi Chandras....