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2016 (5) TMI 238 - AT - Income TaxAddition of unsecured loan received from 10 persons added u/s 68 - ingenuity - Held that:- Regarding the identity of the creditors, it has been proved by the assessee beyond doubt as all the lenders are having permanent account number bank account and have filed their return of income. While filing the computation of total income along with return of income only income from embroidery and knitting is mentioned. There is no detail of gross income or expenditure incurred by these assesses on their respective business is shown. All the computation of income, statement of affairs and capital account has been prepared in similar fashion. Surprisingly all the 10 lenders have opened their bank account with the same branch of Dena bank i.e. Dena Bank, Subash Bazar, Meerut City. It is also surprising that the address of all the parties is 13 Ismail Nagar, Meerut City. All these lenders have come together and deposited cash in their bank accounts with the same bank and then deposit these amounts with the assessee as well as its sister concern on the very next day proves more than what is saidby lower authorities. Therefore in the case of these 8 ladies wherein the identicalmodus operandi has been adopted for giving alleged loan to the assessee who are having their meager income and has meager cash in hand and have minimum bank balance with them. We are of the view that the assessee has miserably failed to prove the creditworthiness of these lenders. Coming to the issue of genuineness of these transaction because loan is through banking channel it cannot surpass the test of genuineness of the transaction on the facts narrated above in the case of the assessee. Similarly, in the case of other two other assesses who have deposed before the AO regardingdeposit ₹ 5 lacs each are also dealt in a similar manner. In case of Mr. Ashique Elahi the income of ₹ 210,000/- has been shown however, there is no narration in the computation of total income about the activities of these persons. In the statement of affairs cash at hand of ₹ 170,000/- has been shown, further in his bank account only cash of ₹ 25,000/- is available. In the case of Rehmat Elahi, the facts are also identical. Therefore all these evidences in case of lenders lead that theidentity of these creditors have been proved and nothing else. In view of the above facts, we confirm the order of the learned Commissioner of Income tax (Appeals) confirming addition of ₹ 6125000/- with respect to 10 lenders unsecured loan added u/s 68 - Decided against assessee Addition u/s 41(1) - Held that:- It is apparent that Mr. Asraf Sohail appeared before the AO and confirmed that he is a broker and purchase of animals has happened through him. It is also submitted that it is modus operandi of the assessee to credit the name of broker instead of petty suppliers. However, the name of those suppliers who supplied animals through this broker was not made available by the assessee before the lower authorities. Therefore in the interest of justice we set aside this ground to the file of the AO to enquire from whom the assessee has purchased animals and how payment have been made to the subsequent. If Asraf Sohail has received the payment then the statement of Asraf Sohail needs to be verified and reexamined and if the paymentsare made to the petty suppliers then definitely the assessee must be having detail about them. Regarding the claim of the modus operandi existing we are of the view that the assessee may be entering purchase transaction through various other brokers and whether similar modus operandi prevails or not. This fact has not been verified by AO therefore also we set aside this issue to the file of AO to make enquiry in accordance with law after affording proper opportunity to the assessee.
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