TaxTMI 
TaxTMI 
2024 (1) TMI 109
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....grounds of appeal: i. For that the assessment order passed u/s 143(3) is not based on correct facts and findings and is erroneous on points of law. ii. For that on the facts and circumstances of the case as well as on the points of law, the ld. AO erred in making an addition of Rs. 33,50,000/- u/s 69A of the Income Tax Act, 1961 and the ld. CIT(A) also erred in confirming the same. iii. For that on the facts and circumstances of the case as well as on the points of law, the ld. AO erred in disallowing the set of loss of Rs. 100542/- against income from business and profession and the ld. CIT(A) also erred in confirming the same. iv. For that any other ground/grounds may kingly by allowed to be urged at the time of hearing." 3. Brief facts of the case are that assessee filed her return of income by showing income of Rs. 3,07,931/-. The case of the assessee was selected for limited scrutiny under CASS followed by notice issued u/s 143(2) and 142(1) of the Act. The ld. AO direct the assessee to furnish the bank statement broker's ledger of security transactions for contract notes of all security transactions, profit & loss account of securities for the assessment year in ques....
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....rati Saha Natunpatty Mangaldoi Assam-784115 CPPPS2501L 02.02.2016 UCBAH16033016787 200000.00 6 Naitik Agarwalla Guwahati, Assam AQJPA11.02.2016 11.02.2016 Drawan on Axis Bank, Cheque No. 140460 900000.00 1.2 That Madam, the loan givers had paid the aforesaid amount to the appellant by Banking Channel only. 1.3 That Madam, the returns furnished by the Loan givers for the financial year 2015-16 stand accepted. 1.4 That Madam, from the perusal of the Bank Pass Book/Bank Statement of the loan givers, it is very much clear that they were having sufficient fund to make the Loan. 1.5 That Madam, the loan givers are Income Tax assessee and there PAN were duly furnished before ld. AO. 1.6 That Madam, the Assessing Officer merely on the ground that Loan Givers did not appear in response to notice issued to them u/s 131 of the I.T. Act,1961 treated the loan amount as bogus and added the same as concealed income of the appellant. However, the copy of the loan Confirmations have been enclosed herewith for your kind perusal as the same was found only after the assessment was over, the same could not be submitted in course of assessment proceedings. 1.7 That Madam, t....
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....rs in their bank accounts, the proper course would have team to make assessments in the cases of those creditors by treating the cash deposits In their bank accounts as unexplained investments of those creditors under section 69. 1.9 That, during the financial year 2015-16 the appellant received loan amounting to Rs.9,00,000.00 (Rupees Nine lakhs only) from Sri Naitik Aganval vide Cheque No. 140460. 1.10 That, the Loan Giver had paid the aforesaid amount by Cheque only. 1.11 That, the returns furnished by the Loan Giver for the financial year 2015-16 stands accepted and Loan made Is disclosed in the income tax return of the Loan Giver. 1.12 That, from the perusal of the Bank Pass Book/Bank Statement of the Lender, it is very much clear that they were having sufficient fund to make the Loan. 1.13 That, the Lender is an Income Tax assessee and his PAN is ACLIPA4096M 1.14 That, the Assessing Officer merely on the ground that the appellant could not be submit the Loan confirmation as well as the name, address of the Lender treated the Loan amount as bogus and added the same as concealed income of the appellant. However, the copy of PAN card of the Loan Giver has been enclos....
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....unt of money or part thereof from the creditor by way of cheque in the form of loan and in such a case if the creditor fails to satisfy as to how he had actually received the said amount and happened to keep the same in the bank, the said amount cannot be treated as income of the assessee from undisclosed source." At para-16: Since it is not the business of the assessee to find out the source(s) from where the creditors has accumulated the amount which he has advanced in form of the loan, to the assessee section 68 cannot be read to show that in the case of failure of the sub-creditors to prove their credit worthiness, the amount advanced as loan to the assessee by the creditor shall have to be read as a corollary as the income from undisclosed source of the assessee himself. At para-19: Once the assessee had established that he had received the said amount from the creditors aforementioned by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Viewed from this angle, we have no hesitation in holding that in the case at hand, the AO had failed to show that the amount which he had come to the hands of the....
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....enders who had been conveniently made to disappear. The assessee had provided no reason for such persons being untraceable at the time of assessment nor has she brought anything on record repayments have been made. It may also mentioned here, the loan givers inspite of being persons of meagre means had given loans without charging any interest nor putting forward any time frame for making repayment. The likelihood of pressure being put on these ordinary persons who had given their names cannot also be ruled out. Considering the above facts, it might be concluded that there was no sufficient course which prevented the assessee from producing evidence during assessment and therefore the additional evidence submitted may be rejected and the cases decided on merit." 6. The ld. CIT(A) after considering the facts of the case decide the issue against the assessee dismissing the appeal of the assessee. 7. Now we take up issue no. 1 regarding the framing the assessment of the AO is erroneous on the point of law as the case of the assessee was selected under limited scrutiny and without converting into complete assessment and the assessment was framed. We notice from the assessment order....
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.... not consider the same and sustained the order passed by the AO. 9. We have also taken the note of instruction No. 5/2016 dated 14.07.2016 the relevant part of which is reproduced as under : "In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny'. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/'CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on r....
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....action was still not genuine. However, the ld. AO has not made any further inquiries and has not brought any material on record to controvert the documentary evidences submitted by the assessee. On the similar issue the Hon'ble Supreme Court in the case of CIT vs Orissa Corpn. (P) Ltd. (1986) 159 ITR 78 125 Taxman 80F (SC): In this case assessee gave the names and address of the creditors. It was in the knowledge of the revenue that the creditors were income-tax assessees. The revenue apart from issuing notices under section 131 did not pursue the matter further. It did not examine the source of income of the alleged creditors to find out whether they were creditworthy. Therefore, it was held that in these circumstances, assessee could not do any further and it had discharged the burden laid on it. The Hon'ble Supreme Court in para 13 & 15 held as below: "The assessee had given the names and address of the alleged creditors. It was in the knowledge of the revenue that the said creditors were income-tax assessee. Their index number was in the file of the revenue. The revenue apart from issuing notices under s. 131 at the instance of the assessee did not pursue the matter furthe....