TaxTMI 
TaxTMI 
2024 (1) TMI 109
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....e qua. The assessee has raised the following 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 transa....
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....ddin Ahmed Ward No. 5 Natunpara, Mangaldoi Assam-784145 AGXPA9599F 30.01.2016 SBINRS2016013025377662 400000.00 5 Arati 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 enclose....
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....assessing officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the assessing officer was not satisfied with the cash amount deposited by those creditors 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 appell....
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....mation received may take loan from such a person. It is not the business of the creditor had agreed to advance the amounts were genuine or not. If a creditor has by any undisclosed source a particular amount of money in the bank there is no limitation under the law on the part of the assessee to obtain such amount 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 receive....
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....s of loans were not available at the time of assessment and is therefore being produced in appeal is not relevant as the alleged loans were received by cheque/RTGS and hence that the transactions had taken place was never in doubt. The persons were required to be examined on oath but the assessee was unable to provide traceable information of the loan givers implying that the persons were just name lenders 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. C....
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....bmission as asked for. However, the ld. AO without converting the limited scrutiny into complete scrutiny issued notice to the assessee on 22.11.2018 raising new issues which is beyond the purview of the limited scrutiny and without obtaining necessary approval from the competent authority. Therefore, the order is bad in law. The assessee has challenged the issue before the ld. CIT(A). However, the ld. CIT(A) did 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 ca....
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....uding the Pan No of the persons who provided funds to the assessee. In the instant case once the appellant had produced all documents in order to establishing the identity and capacity of the creditors as well as genuineness of the transaction, the initial onus cast upon the assessee was discharged and the onus shifted to the AO to bring material on record to the effect that in spite of identity and creditworthiness of the creditor being proved, the transaction 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, assesse....