TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 458
X X X X Extracts X X X X
X X X X Extracts X X X X
....cheques on 30.4.2012. Rs. .4,30,000/- from Kamal Kumar Kanstiya, Rs. . 4,00,000/- from Smt. Raj Kumari Kanstiya, Rs. 3,50,000/- from Smt. Nayan Tara Chordia and Rs. 6,21,000/- from Umraomal Chordia. Their detailed confirmed coples of accounts has been given, all are income tax assessees provided their PAN Nos. 1.2. That the ld. Assessing Officer grossly erred in not considering the facts that these Shri Kamal Kumar Kanstiya, Smt. Raj Kumari Kanstiya, Smt. Nayan Tara Chordia and Umraomal Chordia are sundry debtors and not creditors of the company. The amount given earlier received back through account payee cheques. 1.3. That the ld. Assessing Officer grossly erred in not considering the facts that the company has not explained the immediate source of deposit of Rs. 1 8,01,000/- on 30.4.2012 when duly explained by the company. 2.1 It may be noted that the ld. AR of the assessee vide application dated 25th Sept. 2023 filed an application for revised grounds of appeal praying that in Form 36, the assessee mistakenly and advertently taken the word debtors in grounds of appeal. Therefore, the assessee is filing the revised Grounds of appeal and the same may be kindly allowed. The B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on on 15-12- 2016 which has been taken on record by the AO at page 2 & 3 in the assessment order. However, the submissions filed by the ld AR of the assessee had been considered but it was not found acceptable by the AO for the reason that the assessee had explained to receive back immediate amount from Shri Kamal Kumar Kanstilya, Smt. Raj Kumar Kanstiya, Smt Nayan Tara Chordia and Shri Umraomal Chordia on 30-04-2012 and filed confirmation of account thereof. The AO in the assessment order noted that the onus lies upon the assessee to prove genuineness of transactions and creditworthiness of the above mentioned parties. In order to examine the nature and genuineness of transactions, the assessee was asked to produce the above mentioned four persons. Conclusively, the AO made an addition of Rs. 18.01 lacs in the hands of the assessee by observing as under:- ''4. I have considered all the facts and material available on records that merely filing the confirmation of the parties are not sufficient to explain the creditworthiness of such parties. The onus was upon the assessee to prove the nature and genuineness of transactions and creditworthiness of such parties with corroborative ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 30.04.2012. The appellant was asked to furnish the nature and source of the loan advanced (ii) This is the fact that the immediate source of the loan advanced is on account of payments received from the following entities on 30.04.2012 itself. Shri Kamal Kumar Kanstiya Rs. 4,30,000/- Smt. Raj Kumari Kanstiya Rs. 4,00,000/- Smt.Nayan Tara Chordia Rs. 3,50,000/- Shri Umraolal Chordia Rs. 6,21,000/- (iii) The appellant claimed that the source of loan was the amounts received back from:- Shri Kamal Kumar Kanstiya Rs. 4,30,000/- Smt. Raj Kumari Kanstiya Rs. 4,00,000/- Smt.Nayan Tara Chordia Rs. 3,50,000/- Shri Umraolal Chordia Rs. 6,21,000/- (iv) The appellant failed to prove with evidence the date/purpose of the amounts given originally, the genuineness of the transaction and creditworthiness of the said persons during the assessment proceedings, as well as during the appellate proceedings. (v) It is a fact, which has duty been observed by the AO, in the assessment order that as per the details of the debtors filed in the Balance Sheet as on 31.03.2012, trade receivables are reported at Rs. 5,53,325/- only whereas the claim of the appellant is that it had recei....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4,30,000/- 2. Raj Kumari Kanstiya 10,62,435/- 4,00,000/- 3. Nayan Tara Chordia 3,50,000/- 3,50,000/- 4. Umraomal Chordia 6,21,000/- 6,21,000/- Total 28,48,428/- 18,01,000/- 5. That amount of Rs. 18,01,000/- was received back through account payee cheques only. Their confirmed copies of accounts have been provided and all are income tax assessee's provided their PAN numbers. The opening balances are also duly reflected in the Audited Balance Sheet of the Company from year to year. 6. That the Assessing Officer grossly erred in making addition on the ground that assessee company could not produce these lenders. That section 133(6) of the Act empowers the Assessing Officer to call the person for any information. That section 131 of the Income tax empowered the Assessing Officer to call the person for recording the statement. The Assessing Officer failed to issue either summons u/s. 131 of the Act or notice u/s. 133(6) of the Act. Specific request was made by the assessee appellant vide letter dated 19.12.2016, however, for the reasons best known to him, he did not issue the same. 7. That assessee has discharged his burden of proof by submitting the P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was not in doubt and he had admitted to have advanced loan to assessee, fact that explanation furnished by him about his source of such advancement had not been accepted by revenue authority could not lead to any presumption that source of such advance by creditor emanated from assessee d. Hon'ble Jurisdictional Rajasthan High Court in CIT v. Jai Kumar Bakliwal (2014) 366 ITR 217 has held: When we peruse the facts herein above, it is an admitted position that all the cash creditors have affirmed in their examination that they had advanced money to the assessee from their own respective bank accounts. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then, in our view, such an addition cannot be sustained and has been rightly deleted by both the two appellate authorities. There is no clinching evidence in the present case nor the AO has been able to prove that the money actually belonged to: none but the assessee himself. The action of the AO appears to be based on mere suspicion. Accordingly, in our view, the ITAT, after appreciation of evidenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which monies were received by the assessee through banking channels. CIT(A) has confirmed the addition made by AO ignoring the evidence available on record. In my view the evidence filed by the assessee satisfactorily explains the credits in question and the impugned addition has been made ignoring the material on record on the basis of surmises and conjectures. There is an allegation that it is Assessee's money which went to Sneha International and that was deposited by Snehal International in a bank account and from that bank account funds were transferred to M/S.Sherwali Corporation and M/S.Venkata Industries, but there is no evidence to substantiate such allegation. Assessee has produced material evidence to show that the sum in question was received on account of sale of shares and no evidence has been brought on record to counter the plea of the assessee. No such evidence has been brought on record in the present case except to make an allegation that Sneha International was involved in rotating cash and the bank transactions in question had been made by Sneha International in favour of M/S. Sherwali Corporation and M/S. Venkata Industries after depositing such cash....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de the addition, therefore, the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified. Entries were made in the books of account maintained by the assessee and the entries in question appeared in the ledger account of the assessee, those were appearing in the bank account. The assessee also furnished an affidavit, the statement made therein - the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified. We therefore, delete the addition made by the A.O. and sustained by the Ld. CIT(A) - Decided in favour of assessee. That addition confirm by the lower authority is baseless without any cogent reason on the basis of assumption and presumption and same is deserves to be deleted. '' 3.4 On the other hand, the ld. DR supported the order of the ld. CIT(A). 3.5 We have heard both the parties and perused the materials available on record. The crux of the issue is that ld CIT(A) has confirmed the addition of Rs. 18.01 lacs holding that the assessee has failed to give any cogent explanation as to the source of loan advanced to Shri Vaibhav Chordia and also mentioned in his order that the assessee had not been able to rebut the observations/ fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ries in continuation to our earlier replies further wish to submit as under:- That we already submitted the confirmed copies of A/cs with detailed addresses of Smt. Nayantara Chordia, Umraomal Chordia, Kamal Kumar Kanstiya and Raj Kumari Kanstiya, amount received through A/c Payee Cheques, Bank A/c provided where cheques encashed, all the persons are debtors of the company earlier amount was lying with them of the company received back the amount, all are existing assessees, if further verification if desired may be made directly issuing notices u/s 133(6) or by summons u/s 131 of the I.T. Act, otherwise all material is on record. These are not the creditors but are debtors of the company. We hope that it shall be to your entire satisfaction and shall enable you to accept the returned income. Thanking you, Yours faithfully, Sd/-'' It is noted that by this way the assessee has discharged his burden of proof by the submitting the PAN and confirmation of the persons to whom advances have been given. The Bench has gone through the orders of the lower authorities in the case of the assesee as to the addition of Rs. 18.01 lacs made in the hands of the issues. It may be noted f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition has been made ignoring the material on record on the basis of surmises and conjectures. There is an allegation that it is Assessee's money which went to Sneha International and that was deposited by Snehal International in a bank account and from that bark account funds were transferred to M/S.Sherwali Corporation and M/S.Venkata Industries, but there is no evidence to substantiate such allegation. 10. As far as the decision cited by the leamed DR is concerned in the decision rendered in the Je of Mohana Kala (supra), the Hon'ble Supreme Court hele emphasized that thered in the not contend with the material and circumstances available on record not justfying creat being treated as income. In the present case, I am of the vice that the assessee has produced heaterial evidence to show that the sum in question was received on account of sale of shares and no evidence has been brought on record to counter the plea of the assessee. In the case of Vikram Singh (supra), the Hon'ble Delhi Court held thay the facts and circumstances of the case established that transactions were dubious. As already stated, no such evidence has been brought on record in the present case e....