TaxTMI 
TaxTMI 
2023 (11) TMI 789
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....essment-Year ["AY"] 2019-20, the assessee has filed this appeal on the grounds mentioned in Appeal Memo. 2. Heard the learned Representatives of both sides at length and case- records perused. 3. Brief facts leading to present appeal are such that the assessee filed return of income for the relevant assessment year declaring total income of Rs. 42,24,570/- which was subjected to scrutiny assessment and the AO completed assessment after making an addition of Rs. 9,50,000/- u/s 68 account of unexplained unsecured loan taken by assessee from one Shri Aashish Patwala. Aggrieved by the action of AO, the assessee carried matter in first appeal but could not succeed. Now, the assessee has come in next appeal before us. 4. The sole grievan....
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....s of AO. He further noted (Page No. 31 of appeal-order) that the assessee has not brought on record any evidence showing income-earning activities of the creditor. He also noted that the A/c Confirmation filed by assessee did not contain complete address of the creditor which prevented the AO from conducting further enquiries (Page No. 32 of appeal-order). He also relied upon certain judicial rulings including the decision of Hon'ble Delhi High Court in the case of PCIT Vs. Bikram Singh (2017) 399 ITR 407 where it was held that even if a transaction of loan is made through cheque, it cannot be presumed to be genuine in the absence of any agreement, security and interest payment (Page No. 35 of order). He also distinguished various rulings c....
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....ny, etc. The assessee is a living individual to whom PAN card is issued after obtaining valid statutory documents and the PAN card contains the photograph of assessee. Ld. AR submitted that the physical existence of non-living person can be doubted but it cannot and should not be doubted in case of living person. In nutshell, the Ld. AR contended, the identity is proved by A/c confirmation and PAN Card; creditworthiness/capacity is proved by bank pass-book which clearly reveals that the creditor received a clearing of Rs. 10,00,000/- and the same proceed was utilized for giving loan to assessee; and the genuineness is also proved by bank pass-book. 7. Ld. AR further contended that despite submission of primary documents, if at all the AO....
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.... present case are clearly distinguishable and fall in the second category and are more in line with facts of Lovely Exports (P) Ltd (supra). There was a clear lack of inquiry on the part of the AO once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made u/s 68 of the Act. Consequently, the question is answered in the negative. The decision of the Tribunal is correct in law." 8. So far as non-filing of income-tax return by creditor is concerned, Ld. AR submitted that the creditor may not be required to file return under the provisions of law, therefore not filed. In any case, it is neither a concern nor a right of assessee to look into the affairs of creditor,....
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....The moment the firm gives a satisfactory explanation and produces the person who has deposited the amount, then the burden of the firm is discharged and in that case that credit entry cannot be treated to be the income of the firm for the purposes of income-tax. It is open to the Assessing Officer to take appropriate action under Section 69 of the Act, against the person who has not been able to explain the investment. In the present case, there is the concurrent finding of both the Commissioner of Income-tax (Appeals) as well as of the Tribunal that the firm has satisfactorily explained the aforesaid entries. 6. We are, therefore, of the opinion that the view taken by the Tribunal is correct and the aforesaid question is answered ....
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....because of friendly relations the assessee enjoys with creditor. 12. We have considered rival submissions of both sides and perused the material held in Paper-Book. On a careful consideration, we find the assessee has filed three documents to AO which are un-disputably accepted by both AO and CIT(A), namely (i) A/c confirmation, (ii) Bank Pass-Book and (iii) PAN card. The A/c confirmation is duly signed by creditor and contains full address as well as PAN of creditor. Thus, the identity of creditor is duly proved by these primary documents. The Bank Pass Book clearly shows that the creditor received a sum of Rs. 10,00,000/- through clearing and the loan was given to assessee out of it. Therefore, the capacity/creditworthiness of creditor....