TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 550
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....de whether it was a fit case of escapement of income so as to assume jurisdiction u/s 148 of the Act for reopening the case of the assessee. According he shared the information in his possession with the assessee seeking his reply to the same, by issuing notice u/s 148A(b) of the Act. No reply being filed by the assessee to the same, he passed order u/s 148A(d) of the Act holding it to be a fit case for issuing notice u/s 148 of the Act. Thereafter, notice u/s 148 of the Act was issued to the assessee, in response to which, the assessee filed its return of income declaring total income of Rs. 16,84,843/-. This total income included long term capital gain of 38,20,619/- and short term capital loss of Rs. 21,35,776/-. In response to the query of the AO relating to the business and profession of the assessee, it was submitted that the assessee was an architect and was also partner in a firm named and styled as Shree Real Estate Developers. The AO noted that during the year under consideration the assessee, despite having receipt of Rs. 15,49,531/- from profession, suffered loss under the head Business and profession. In the process of assessment, the AO agreed to the computation of LT....
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....- as unexplained cash credit u/s 68 of the Act." 2.2 After the above mentioned show cause notice, the assessee not only availed opportunity of video conferencing to explain the entries in the account, but also made further submissions in his attempt to explain the nature and genuineness of credit entries in his bank accounts. However, the submissions made by the appellant failed to persuade the AO who concluded as follows: "2.10 ...... In nutshell, the assessee has submitted that his family construction business is in loss since A.Y.2016-17 and his individual income is below taxable income and even during the year, the assessee has shown a loss of Rs. 7,91,848/- . However, assessee is living a luxury life. He is owning a Mercedes Benz, monthly EMI of the said car is Rs. 1,59,063/- and bank has also sanctioned a loan of Rs. 32,80,544/- to a person, whose annual income is below taxable income and who does not file an Income Tax Return. There are lots of unsecured loans/incomes/payments which are not related to the business for which income is offered in this Return of Income. The assessee was asked to explain the purpose, need, rationale of all the unsecured loan....
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....s only furnished copy of email received from ZISPL in respect of confirmation of payment made to ZEB IT Service P Ltd and has failed to furnish any documents in respect of receipt from ZISPL. (c) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 9,53,000/- made on account of unexplained credit transaction received from M/s. Shree Builders despite the fact that the assessee has only submitted copy of PAN, copy of ledger confirmation, bank statement to substantiate its claim. The assessee has not furnished other supporting documents to establish the creditworthiness of the lender. (d) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 9,53,000/- made on account of unexplained credit transaction received from M/s. Shree Builders despite the fact that the assessee has only submitted copy of PAN, copy of ledger confirmation, bank statement to substantiate its claim. The assessee has not furnished other supporting documents to establish the creditworthiness of the lender. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 17,04,563/- made on account of unexplained credit transaction received ....
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....ssessment proceedings. However, on going through the records it is apparent that confirmation in respect of only Hansraj Yashodharsinh Gohil was submitted during the assessment proceedings. In respect of Imtiyaz Desai, and Zeb IT Service Pvt. Ltd the appellant, at the time of assessment proceedings, had submitted only an unsigned ledger account. In respect of Zeb IT Service Pvt. Ltd the appellant had also provided e-mail communication with that person. In respect of all other five parties who are family member of the appellant or Proprietorship of the father or partnership firm in which the appellant is a partner, the appellant has not only submitted PAN No and their ledger account but has also submitted their bank account in order to prove the genuineness of the source of the source of the credit entries. The ground of appeal needs to be adjudicated on the basis of these documentary evidences filed by the appellant at the time of assessment proceedings. 5.2.6 Before adjudicating whether the onus of the assessee in respect of each individual entry in his bank account, was discharge or not, it is pertinent to point out that the AO appears to be overwhelmed by the facts that....
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....- the assessee has received Rs. 13,71,236/- from said person. This, receipt of Rs. 13,71,236/- was also received through banking channel from Zeb IT Service Pvt. Ltd. The copy of Email submitted by the appellant in respect of these transactions clearly indicates that Zeb IT Service Pvt. Ltd is an exchange for Bitcoin and crypto currencies. These transactions were properly explained and they cannot be termed as loan. Therefore, these credit entries were not only properly explained but were also outside the preview of Section 68 of IT Act. No addition u/s 68 can be made on receipt from Zeb IT Service Pvt. Ltd. 5.2.9 It is admitted by the appellant that his transaction with Mr. Harshraj Yashodharsinh Gohil was a loan. For which the appellant had supplied the PAN of the person and had demonstrated that the same was received from banking channel. For this transaction confirmation was also filed. Therefore, it cannot, without any other evidence to the contrary, be said that the appellant has failed to discharge his primary onus in explaining the cash credit. The AO, without assigning any specific reason to the contrary has committed an error in treating this receipt as unexplain....
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....ion and the documents produced before the AO, it is apparent that the assessee has discharged primary onus cast on him u/s 68. Mere absence of confirmating letter does not mean that the assessee could not prove the creditworthiness of the lender. In CIT vs United commercial and Industrial Company Pvt. Ltd. 187 ITR 596 (CAL.) it was decided by Hon'ble High court that confirmatory letter by themselves are not discharge of the onus cast on the appellant u/s 68. In other words the onus of proving the genuineness of the loan transaction and the creditworthiness of the lender can be proven with help of a number of documents which does not mandatorily include confirmatory letters. In the present appeal it is observed that the appellant has explained the circumstances of income of his father who is builder for 35 years and also of his mother who is a doctor having her independent source of income. Furnishing of a bank account is more convincing proof of creditworthiness of the lender which reflects the source of credit in the account of the lenders as well as clinching evidence of genuineness of the transaction. Therefore, it is decided that credit entries taken from family members and the....