TaxTMI 
TaxTMI 
2024 (2) TMI 1197
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....not only source of loan but source of sources of loan. 3. The Ld. CIT(A) has further, erred in confirming the addition of Rs. 7,83,00,173/- whereas the assessee has received just total loan of Rs. 2,16,29,000/- during the year under consideration from 11 parties mentioned the assessment order. The Ld. CIT has ignored the submission of the assessee on this issue. 4. The Ld. CIT (A) has erred in confirming the addition of Rs. 7,83,00,173/- for which 11 parties has been mentioned in the assessment order and there are no transaction worth of Rs. 7,83,00,173/-. The assessee has submitted that how the figure of addition is work out but not considered by the Ld. CIT(A). The total transaction with all the 11 parties are as under: Opening Balance 1,76,54,037/- Add: received during the year 2,16,29,000/- Add: Interest 38,38,044/- Total 4,31,21,081/- Less: Amount return 9,55,821 TDS 3,79,424 13,25,245/- Closing Balance 4,17,85,836/- How, the figure of Rs. 7,83,00,173/- is arrived by the Ld. AO and how the Ld. CIT(A) has arrived the f....
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....N Opening balance as on 1/4/2019 Fresh loan taken during the year Repayment during the year Rate of Interest Interest paid Tax Deducted with proof Closing balance as on 31.3.2020 1 Suresh Chaudhri H. No. 11, Abhishek park, OId Valsad Rd. Samroli, Chikli ADNPC8624J 3351772 350000 320000 12.00 % 414558 41456 3754874 2 T John (Thresiamma John) Amrutkunj, Rinchhed Tal, Charbhuja, Rajsamand, ABMPJ8775C 4884565 165000 0 0 12.00 % 758071 75807 7207809 3 Vimal P.K. Kuruvilla 203,, Abhishek apt., OId Valsad Rd. Samroli, Chikli AJSPK9083A 1229191 995500 0 370000 12.00 % 1181329 118133 11877387 4 Hitesh Corporation (H.C. Jain HUF) 303, Kishan Apartment, Desai Vad, Vapi AAEHH1471G 0 100000 0 90000 1200 % 1000000 10000 1000000 5 Lehrulal Jat Junda Railmagra, Rajsamand, Rajasthan ACDPJ0183G 0 250000 0 250000 12.00 % 281096 28110 2502986 6 Babita Vimal Kuruvilla 203,, Abhishek apt., OId Valsad Rd. Samroli, Chikli ANSPK4145R 2806090 322900 0 0 12.00 % 521859 52186 6504763 7 Ja....
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....on on record. In the written submission, the assessee apart from giving the details of submission filed in response to the show cause notice before the Assessing Officer also submitted that it was not clear from the contents of assessment order and from the show cause notice, as to how the amount of Rs. 7.83 crores has been worked out by the Assessing Officer for making addition under Section 68 of the Act. The Assessing Officer in the show cause notice dated 17/03/2022 has mentioned the following figure against all 11 lenders: Particulars Opening balance Interest Amount recd. During the year Amount paid during the year TDS Closing balance Suresh R Chaudhari 3351772 414558 350000 320000 41456 3754874 T John 4884565 758071 1650000 9020 75807 7207809 Vimal P.K. Kuruvilla 1229191 1181329 9955000 370000 118133 11877387 Hitesh Corporation (H.C. Jain HUF) 0 1000000 1000000 Lehrulal Jat Junda 0 281096 2500000 250000 28110 2502986 Babita Vimal Kuruvilla 2806090 521859 3229000 52186 6504763 Jagdish Candra M Jat 2....
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....o.153/Mum/2010, Sooraj Leathers ITA No. 305/Mum/2016 and Delhi Tribunal in Surajbhan Bajaj Vs ITO (2008) 21 SOT 22. For the loan received during the year from 11 parties, the assessee furnished detailed particulars of all lenders. For lender No. 1 Suresh R. Choudhary, the assessee submitted to have received loan of Rs. 3.50 lacs. The assessee filed confirmation of account, bank statement, financial statement of Suresh Choudhary, confirmation of Rekha S Choudhary about the source of source. The Assessing Officer doubted that Suresh Choudhary has hardly any creditworthiness to the extent of loan amount without verification of document. The assessee submitted that the said creditor furnished reply in response to notice under Section 133(6) of the Act. The said lender was having sufficient balance in his bank account. The assessee is not only proved the source but source of source. For lender/creditor No.2 T. John, wife of assessee, the assessee received Rs. 3.00 lacs, filed confirmation, bank statement, financial statement and confirmation of Vimap P Kuruvilla about the source of source. The Assessing Officer without making verification of documents made a general remark of cred....
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....ender is Principal of Secondary school, Government of Rajasthan and was retired on 30/06/2016. Copy of letter issued by School was also furnished. The said depositor has confirmed that he has received Rs. 40.00 lacs on his retirement on account of provident fund, gratuity and commuted pension which was lying in his bank account. The balance in his account as on 24/04/2019 was Rs. 18,07,505/-. The lender stated that he deposited amount of Rs. 1.50 lacs and Rs. 5.06 lacs on 24/04/2019 from various banks which is evident on account of own cheque clearance. On the basis of such contention, the assessee submitted that the said lender has creditworthiness. From lender No. 6, Babita Vimal Kuruvilla, the assessee received loan of Rs. 22.24 lacs, filed her confirmation and financial statement. The assessee also filed confirmation of T. John and Vimal P Kuruvilla to prove the source of source. Copy of which was furnished. The Assessing Officer commented that Babita Vimal Kuruvilla has hardly any creditworthiness and objected against her creditworthiness. The assessee explained that he has taken loan of Rs. 22.24 lacs on seven occasions on different dates as mentioned on different occasion....
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....tified. For lender No.9 Fiona Vimal, the assessee received a loan of Rs. 1.10 lacs, the assessee filed confirmation of account, bank statement and confirmation of T. John in favour of that lender to prove the source of source. The assessee claimed that addition against his loan is unjustified. For lender No.10 Akssa Vimal from whom the assessee received Rs. 70,000/-, filed confirmation of account, bank statement and confirmation of Babita Vimal Kuruvilla who has given loan to lender to prove the source of source. The Assessing Officer doubted the creditworthiness of lender by taking a view that Aksa Vimal during the year has proved the source of source from his mother Babita Vimal Kuruvilla of Rs. 75,000/-. The assessee stated that when source of source is from genuine source which is available on record, nothing adverse can be found and no addition be made under Section 68 of the Act. The assessee again filed confirmation of Babita Vimal Kuruvilla and submitted that the addition is unjustified. For lender No.11 Eva Annu Vimal P K from whom the assessee received loan of Rs. 70,000/- and filed confirmation of account, bank statement and confirmation of Babita Vimal Kuruvill....
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....nd of creditworthiness of lenders. The submission of assessee cannot be treated as sacrosanct. The creditworthiness of lender about the transaction cannot be proved merely on filing bank statement. The assessee has not produced the income tax return of the lender or confirmation. Purported confirmation is only the copy of unsigned account of creditor. Source of fund has also not been explained. The decisions relied by the assessee is distinguishable on facts. The assessee has failed to produce the tax return of the creditors or any other material to show the creditworthiness. The creditworthiness and genuineness of transaction cannot be said to have been proved to shift the onus on revenue. The stand of assessee that transaction was made through banking channel is not sufficient to prove the genuineness of transactions and creditworthiness of creditors. Identity as well as creditworthiness of creditors must be proved. The ld. CIT(A) quoted the name of Ms. Jasmine Kocher Kapoor and recorded that credit in her bank account is not explained. On the basis of such observation, the ld. CIT(A) confirmed the action of Assessing Officer. 9. On the addition of purchases/non-genuine purcha....
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....ng Officer and ld. CIT(A), the assessee were required to file details of loan received from eleven lenders of Rs. 1.12 crore and to prove their identity, genuineness of transactions and creditworthiness. Out of eleven lenders, eight are family members. The assessee furnished confirmation of accounts, address, PAN, copy of bank statement, acknowledgment of ITR, source of loan with lender with copy of account confirmation to prove the source of source. The ld. AR of the assessee submits that the complete details are furnished as per page No. 19 to 35 of paper book. Neither the Assessing Officer nor the ld. CIT(A) made any comment on the evidence furnished by the assessee. The CBDT vide its letter dated 10/01/2018 directed all their Pr. CCIT, CCIT and DGIT (Inv) that if the assessee furnished explanation, the Assessing Officer should examine and if the explanation offered by assessee is not acceptable then order passed by Assessing Officer should be speaking one, bringing all the facts, explanation furnished by assessee in respect of nature and source of credit in the books of account and reason not accepting of such explanation. The ld. AR of the assessee submits that the assessee ha....
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....of grounds Nos. 7 to 9 of the appeal, the ld. CIT-DR for the revenue submits that the assessee has miserably failed to prove the genuineness of purchases. Thus, the order passed by ld CIT(A) is justified and required no interference by the Tribunal. 14. We have considered the submissions of both the parties and perused the record carefully. Ground Nos. 1 to 6 relates to addition of Rs. 7.83 crores. The Assessing Officer made addition of Rs. 7.83 crores by taking a view that on verification of assessee's account, it was revealed that the assessee has disclosed amount of unsecured loan of Rs. 7.95 crores. The Assessing Officer tried to verify the identity, creditworthiness and genuineness of transactions of the parties from whom the assessee claimed to have received such unsecured loan. The Assessing Officer prepared a summary of lender in the form of a chart showing names, address, PAN, opening balance as on 01/04/2019, loan taken during this year, repayment during the year, rate of interest, interest paid, TDS made and closing balance. The Assessing Officer by referring each and every lender and the alleged discrepancy with regard to creditworthiness and genuineness of transacti....
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....esh loan received during the year, amount repaid, interest paid and TDS deducted, and therefore closing balance was at Rs. 4,17,85,836/- which is the correct amount. We note that Hon'ble jurisdictional High Court in the case of DCIT vs. Rohini Builders 256 ITR 230 (Guj), held that where assessee established identity of creditors/lenders by furnishing their complete address, PAN as well as confirmation with copies of assessment order, the assessee discharged its onus. The same ratio was upheld by the Hon'ble jurisdictional High Court in the case of CIT vs. Ranchhod Jivabhai Nakhava in Tax Appeal No.50 of 2011 dated 20.03.2012. We note that Hon'ble Apex Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. 159 ITR 78(SC) held that when assessee furnished their complete address, PAN as well as confirmation and bank details of creditors/lender, the addition should not made in the hands of the assessee. We note that opening balance of the Lenders are not subject to disallowance in the current assessment year under consideration, if the Assessing Officer wanted to disallow the same, he could disallow in the previous assessment year. During the assessment year under consideration, the....