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2012 (11) TMI 98 - AT - Income TaxAddition under section 68 of the IT Act - unsecured loans - identity and credit worthiness of the loan creditors and the genuineness of the transactions - loan advanced by HUF Held that:- assessee has produced the above loan creditors before the AO with sufficient details like Acknowledgments of income tax Returns, copies of profit and loss accounts, balance sheets, confirmation letters, bank statements etc. and since their statement have been recorded by AO u/s. 131 and all of them have confirmed to have given the loans, assessee has discharged the burden cast on him in terms of section 68 of the Income Tax Act addition deleted Regarding loans from mother of the Director Held that:- She is an Income tax assessee and derives income from grocery shop and sale of buffaloes and holds around 100 Acres of agricultural land. - Merely because the profit is being determined u/s. 44AF or that the lady does not have any bank account for which she advanced the loan by demand draft to avoid the rigours of provision of section 269SS, the same cannot be a ground to disbelieve the loan amount addition deleted Regarding loan from Director alleged that amount obtained by him from Smt. Priti Mishra does not inspire confidence because she had no sufficient cash balance on those days Held that:- Amount advanced by Smt. Priti Mishra has been accepted by the CIT(A). Merely because her income is assessed u/s.44AD, the same cannot be a ground to disbelieve the loan obtained from Smt. Priti Mishra by Sri A.K. Mishra who has advanced as loan to the assessee company - in the instant case could have been made in the hands of Sri A.K. Mishra but definitely not in the hands of the assessee company addition deleted Regarding loan from Sri A.K. Mishra (HUF) - HUF is assessed to tax and the copy of the acknowledgement of income tax Return, computation of income, balance sheet etc. were filed before the AO Held that:- Creditor has shown profit of Rs. 60,630/- as indirect income and Rs. 89,820 as profit from Mangalam construction - After considering the opening capital and income during the year and the personal drawings during the year the HUF is left with sufficient funds to advance loan of Rs. 1 lakh during the year addition deleted Regarding loan from Sri Vishnu Mohan Sangle Held that:- Loan creditor was not produced before him for his verification. Therefore, the identity of the person remains to be verified - direct the AO to give an opportunity to the assessee to produce the above loan creditor and satisfy the credit worthiness of the loan creditor - appeal filed by the assessee is allowed for statistical purposes. Regarding loans from mother of the Director Held that:- She is an Income tax assessee and derives income from grocery shop and sale of buffaloes and holds around 100 Acres of agricultural land. She has also filed an affidavit stating that she is filing return of income since assessment year 1994-1995. The affidavit filed by the loan creditor has not been proved to be false or incorrect. Merely because the profit is being determined u/s. 44AF or that the lady does not have any bank account for which she advanced the loan by demand draft to avoid the rigours of provision of section 269SS, the same cannot be a ground to disbelieve the loan amount addition deleted Regarding loan from Director alleged that amount obtained by him from Smt. Priti Mishra does not inspire confidence because she had no sufficient cash balance on those days Held that:- Amount advanced by Smt. Priti Mishra has been accepted by the CIT(A). Merely because her income is assessed u/s.44AD, the same cannot be a ground to disbelieve the loan obtained from Smt. Priti Mishra by Sri A.K. Mishra who has advanced as loan to the assessee company - in the instant case could have been made in the hands of Sri A.K. Mishra but definitely not in the hands of the assessee company addition deleted Regarding loan from Sri A.K. Mishra (HUF) - HUF is assessed to tax and the copy of the acknowledgement of income tax Return, computation of income, balance sheet etc. were filed before the AO Held that:- Creditor has shown profit of Rs. 60,630/- as indirect income and Rs. 89,820 as profit from Mangalam construction - After considering the opening capital and income during the year and the personal drawings during the year the HUF is left with sufficient funds to advance loan of Rs. 1 lakh during the year addition deleted Regarding loan from Sri Vishnu Mohan Sangle Held that:- Loan creditor was not produced before him for his verification. Therefore, the identity of the person remains to be verified - direct the AO to give an opportunity to the assessee to produce the above loan creditor and satisfy the credit worthiness of the loan creditor - appeal filed by the assessee is allowed for statistical purposes.
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