TaxTMI 
TaxTMI 
2024 (2) TMI 603
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....e u/s. 133(6) to all the parties and only five parties have replied. The AO held that, the parties do not have creditworthiness to extend unsecured loans to the assessee. Hence, relying on the judgment of the Hon'ble High Court of Delhi in the case of Titan Securities Ltd. in ITA No. 263/2012 the Assessing Officer held that, the assessee failed to establish the creditworthiness of the parties and made addition of Rs. 2,25,40,000/- u/s 68 of I.T Act. 4. Aggrieved, the assessee filed appeal before the ld. CIT(A), who deleted the addition made by the AO. 5. Aggrieved with the order of the ld. CIT(A), the Revenue filed before the Tribunal. 6. During the arguments before us, the ld. DR referred to para 2 of the Assessment Order page no. 1, 2 & 3 and argued that it is responsibility of the assessee to prove identity, genuineness and creditworthiness of the loan parties failing which the amount be treated as undisclosed income of the assessee. The money is being credited to their account either by depositing cash or through RTGS from unexplained sources and money is being immediately transferred to the appellant which reflects that these are merely accommodation entries and lack ....
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....2012-13 which is much more than the loan disbursed and has still disallowed the loan amount. Such an approach is blatantly contradictory and prejudicial. PARTIES WHO HAVE ADVANCED LOANS OF LESS THAN RS 7,50,000/ 3 Bhavabhai Trikmaji Chaudhari 5,00,000 As per the only ITR, for AY 2011-12 the party has shown income at Rs 1,42,575. No legible copy of bank statement to ascertain whether, the bank statement pertains to him. The party has creditworthiness to extend such amount of loan to the assessee company The Ld Assessing officer has erred in matter of fact by stating that bank statements or confirmations were not provided. All the documents including bank statements and confirmation were duly provided either to the AO during assessment proceedings vide submission dated 19.02.2015 or through additional evidence. The ld Assessing Officer has erroneously relied only on taxable income for evaluating the creditworthiness. Taxable income of the assessee is arrived at after giving effect to various exemptions and allowances and does not in any manner depict the funding capacity of a creditor. The Ld Assessing Officer has himself without complete information attempted to....
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....ere provided. As per ITR, the party has no creditworthiness to extend such amount of loan. 9 Prakashbhai Ishvarbhailad 5,00,000 As per the only ITR provided for AY 2011-12, the party has shown income at Rs 1,57,153. As per the bank statement the party has received money on 18.10.2011 from unknown entity and transferred the entire amount on 19.12.2011 10 Ramesh Kumpaji Patekl 50,00,000 As per ITR for AY 2011-12, 2012-13 and 2013-14, the party has shown income at Rs 1,51,635, Rs 1,78,250 and Rs 1,98,100 respectively. As per bank statement, party has received money of Rs 5,00,000 transfer from unknown entity and transferred the entire amount to the assessee company 11 Shivrambjhai Chamanji Patel 5,00,000 As per the only ITR provided for AY 2012-13, he shown income at Rs 1,76,934. As per bank statement, the party has received money of Rs 5,00,000 through RTGS to unknown entities on 18.10.2011 and transferred the entire amount to the assessee company on 19.10.2011. The party has no creditworthiness to extend such amount of loan to the assessee company. 12 Vaghabhai Ratnabhai Patel 5,00,000 As per ITR provided ....
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....ch IS computed after certain deductions and allowances. The Ld AO has also relied on the fact that the amount was received by the creditor through cash deposit or RTGS from unknown entity. This reliance does not justify an addition in the case of the assessee. If the Ld AO had doubts about the source of source, nothing in law precludes him from using his powers to verify the creditor directly. 17 Mahasukh Jayantibhai Rohit 10,00,000 No details filed The ld AO has completely erred in matter of fact in this case, the assessee has submitted ITR for Al 2012-13, 2013-14 and 2014-15, relevant bank statement and confirmation vide submission dated 19.02.2015. Without providing any specific basis, the Ld AO has simply disallowed the amount arbitrarily. 18 Manjitbhai Dondabhai Gamit 10,00,000 As per ITR for AY 2011-12, 2013-14 and 2014-15, the party has shown income at Rs 1,61,048, Rs 1,94,580 and Rs 1,98,244 respectively. As per the bank statement, the party has received Rs 10,00,000 through RTGS from Raju enterprise and R Bariya Exports and On 22.12.2011, the whole amount Of Rs 10,00,000 Was transferred to the assessee company. This shows that the party has no cr....
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....himself provides the source of the creditor being amount received from RTGS. There is nothing in law precluding the AO to enquiring the creditor about his source but if the Ld AO is expecting the assessee to know the source of source of source, it is a never ending process and highly prejudicial to the assessee company who has no knowledge of the funding of the creditor. The Ld Assessing Office has erroneously only used taxable income for his analysis which is computed after certain deductions and allowances and the financial capacity of the creditor is based on factors more than taxable income. The credit capacity of a creditor cannot appropriately judged from the taxable income of the creditor. 21 Mukesh Rajendra PRasad 10,00,000 As per ITR for AY 2013-14 and 2014-15 provided, the party has shown income at Rs 1,73,290 and Rs 1,93,290 respectively. No other details have been provided. The party has no creditworthiness extend such amount of loan to the assessee company. 22 Narpit Mahipat Chodhri As per ITR for AY 2012-13, AY2013-14 and 2014-15, the party has shown income at Rs 1,60,411, Rs 1,93,280 and Rs 1,94,580 espectively. As per bank statem....