TaxTMI 
TaxTMI 
2025 (3) TMI 2082
X X X X Extracts X X X X
X X X X Extracts X X X X
....entity and creditworthiness of the depositor as well as the genuineness of the transaction by furnishing his assessment particulars, confirmation of deposit and his bank account statement. 3. BECAUSE the National Faceless Appeal Centre (NFAC) has erred in law and on facts in sustaining addition of Rs. 11,75,000/- on account of unsecured loan taken from Shri Piyush Verma as unexplained money by invoking the provision of section 69A of the Income Tax Act, 1961. 4. BECAUSE the appellant has furnished the complete details of loan taken from Shri Piyush Verma and discharged her primary onus to establish the identity and creditworthiness of the depositor as well as the genuineness of the transaction by furnishing his assessment particulars, confirmation of deposit and his bank account statement. 5. BECAUSE the National Faceless Appeal Centre (NFAC) has erred in law and on facts in making enhancement of income of appellant on account of loan taken from Shri Piyush Verma from Rs. 8,75,000/- to Rs. 11,75,000/- without giving the show cause notice under sub-section (2) of section 251 of the Income Tax Act, 1961. 6. BECAUSE the National Faceless Appeal Cent....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings before the learned CIT(A) were accepted by the learned CIT(A) and were forwarded to the Assessing Officer for submitting remand report. The remand report was received by the learned CIT(A) from the Assessing Officer on 30/01/2024. Considering the facts and circumstances of the case, the remand report submitted by the Assessing Officer and the comments of the assessee on remand report, the learned CIT(A) sustained the addition of Rs. 93,08,207/- and Rs. 11,75,000/- on account of unsecured loans taken from Shri Umang Grover and Shri Piyush Verma respectively as unexplained money. The findings of learned CIT(A), related to this issue, are reproduced as under: Loan taken from Shri Umang Grover - husband of the appellant In this regard, the appellant has submitted bank account of Mr. Umang Grover and ledger account from her own books. However, the appellant has failed to produce copy of ITR, signed confirmation of accounts as well as financial statements of Mr. Umang Grover to establish genuineness and creditworthiness of the transaction and lender. Accordingly, addition made under section 69A on account of loan taken from Mr. Umang Grover is confirmed. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ver, which were paid by the appellant, claiming the said payment to be the expenditure incurred for business expansion of appellant. However, I concur with the view adopted by the Assessing Officer that the contention of the appellant cannot be accepted as the bills of addition to fixed assets are clearly in the name of Mr. Umang or M/s Umang Sarees. The same cannot be accepted to be used for business expansion of the appellant." 4. Learned Counsel for the assessee, during the course of hearing before the Income Tax Appellate Tribunal, submitted that so far as the deposits of Rs. 93,08,207/- taken from Mr. Umang Grover is concerned, the assessee has furnished the confirmation and filed copy of statement of account as appearing in their books of account along with their bank account statement with State Bank of India and Bandhan Bank out of which the aforesaid deposits have been made. Thus, the assessee has discharged her primary onus to establish the source of deposit along with all three necessary ingredients of cash credit i.e. (i) identity of the depositor by furnishing the assessment particulars of the depositor, (ii) creditworthiness of the depositor by furnishing his bank ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hree, out of four creditors, were furnished by her only as additional evidences before the CIT(A) under Rule-46A but the assurance of producing the creditors in person was not fulfilled and their ITRs etc. were also not furnished even in the remand proceedings in the first appeal. Learned D.R. further submitted that the assessee failed to discharge the burden of proof on her u/s 68, therefore, the finding recorded by the Assessing Officer and the learned CIT(A) are justified. In respect of first creditor i.e. Shri Umang Grover, learned D.R. submitted that in view of the spouse relationship between the assessee and the said loan creditor, assessee was under heavy burden to prove that the sums credited in her books of account represented genuine loan transactions because he could have been produced for examination, being husband of the assessee. His ITRs for the year under appeal as well as for the subsequent year are made u/s 44AD of the Act from which the said loan transaction is not verifiable. He further submitted that when his ITR for assessment year made u/s 44AD, on the premise that no books of accounts were maintained, then how could he issue the assessee's account statement ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fiable from his ITRs for assessment year 2016-17 to 2018-19. The assessee has not furnished any explanation regarding creditworthiness of transactions entered into with Mr Piyush Verma. Merely producing copy of bank statement without any satisfactory explanation cannot justify the genuineness and creditworthiness of the lender. One of the essential ingredients of the loan transactions is the security of the loan amount and the resultant benefit to the lender. The assessee has not allowed any interest to the said alleged lenders, which means that the lenders are not put to any benefit on the alleged investments made by them with the assessee. Nothing has been brought on records as to how the alleged deposits made by them with the assessee would remain secured from their point of view. The refund of loan/deposit to the lender at some point of time is also a relevant factor but, the ITRs of the assessee do not indicate as to whether the said deposits have ever been refunded back, either in whole or in part thereafter, or whether they are lying with the assessee indefinitely for the purposes of her business without imparting any benefit in the form of interest or otherwise to the alleg....