TaxTMI 
TaxTMI 
2024 (7) TMI 1421
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....h credit u/s 68 of the Act. On proper appreciation of facts and law applicable, there being no unexplained cash credit at all, the provisions of section 68 of the Act are not applicable to the fact of the case, the addition as made/confirmed being erroneous is to be deleted. 3. In any case, the authorities below have erred in not appreciating the fact that most of the loans were accepted during earlier years and having opening balances. The addition made to the extent of opening balance being bad in law and such addition is to be deleted. 4. The Authorities below have erred in not appreciating the fact that the identity, genuineness and the creditworthiness of the loan creditors is duly explainable and therefore the addition as made /confirmed u/s 68 of the Act is to be deleted. 5. The learned CIT(A) has erred in confirming that the provisions of Section 115BBE of the I.T. Act, are applicable to the above addition as made and confirmed. On proper appreciation of the facts of the law, it is clear that the provisions of Section 115BBE of the I.T. Act, are not applicable to the case of the appellant and therefore the computation of tax under Section 115BBE o....
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....am 4,00,000 11. Rekha Ram 2,00,000 12. Dhara Devi 2,65,013 13. Satish Kumar 1,64,669 Total 91,14,998 4. The AO issued notice u/s. 133(6) of the Act dated 26/11/2019 to the above persons who had given unsecured loans to the assessee requesting them to provide the details of their income, etc., but in response to the said notice u/s. 133(6) of the Act, only 10 persons (Sr.Nos.1 to 10) replied on 04.12.2019 and the remaining 3 persons (Sr.Nos.11 to 13) did not file any reply. The AO on the ground that the persons who had replied are having the same address as that of the assessee and also their income was not in commensuration to the loans advanced by them, further issued summons u/s. 131 of the Act in order to verify the genuineness of the loans advanced. However, none of the 10 persons mentioned above either appeared on the said date or filed any reply. Based on the above, the AO is of the opinion that the assessee has shown bogus loan and accordingly brought in his unexplained cash credit in the form of unsecured loans which the assessee has not proved to be genuine. Since the genuineness and creditworthiness of the persons are not p....
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....partmental Representative, on the other hand, vehemently supported the orders of the Lower Authorities and further submitted that since the genuineness and creditworthiness of the persons & Transactions were not proved, the AO has rightly treated Rs. 91,14,998 as unexplained cash credits as per the provisions of section 68 of the Act. 8. We have heard the rival submissions and perused the material on record. We observe that mainly the additions made u/s. 68 of the Act amounting to Rs. 91,14,998 was on account of the following:- (i) The persons (Sr.Nos.1 to 10) who had replied to the notices u/s. 133(6) of the Act are having the same address as that of the assessee; (ii) The income of the persons, who replied to notices u/s. 133(6) was not in commensuration to the loans advanced by them; and (iii) In response to the summons issued u/s. 131 of the Act, from Sr.Nos.1 to 10, none of them either appeared or filed any reply. 8.1 Further, we also cannot brush aside the fact that the assessee has furnished all the documentary evidences in response to show cause notice dated 12.11.2019 with regard to unsecured loans. Further, it is also an undisputed fact th....
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.... order to invoke the provisions of section 68 of the Act:- (i) Any sum must be found to be credited in the books of an assessee maintained for any previous year (ii) The assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the AO satisfactorily. Then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. 8.3 In the present case, we found that the addition made u/s. 68 of the Act to the extent of Rs. 81,73,804 was on account of opening balance in respect of unsecured loans taken by the assessee in earlier financial years. It is well settled law that addition u/s. 68 of the Act can be made only during the year in which such credits has been received and if the credit balances appearing in the account of the assessee is not pertaining to the year under consideration, the AO cannot make addition u/s. 68 of the Act in the subsequent assessment year. This view is supported by the decision of the ITAT Ahmedabad Benches in the case of Samir J Shah (supra), wherein the Tribunal held as under:- "6. We have heard the rival contentions and per....