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2016 (9) TMI 797 - AT - Income TaxUnexplained credit - Held that:- Admittedly the assessee has shown ₹ 1 lakh in the cash book as withdrawal from the Axis Bank however, on verification the Assessing Officer found that there is no such entry in the account. The assessee then explained that this was a mistake committed by the Accountant and the amount involved is loan taken from two persons namely (1) Yagati Naganna & (2) Nerlige Karinayak. The assessee has also explained that the said amount was repaid by the assessee on 21.7.2009 and 22.7.2009 respectively. The Assessing Officer did not choose to verify the facts explained by the assessee and disallowed the explanation at threshold. It is pertinent to note that when the assessee has explained that this loan amount in question has been paid to these creditors and also filed the confirmation of these two parties then in case the Assessing Officer was not satisfied or doubting the veracity of the confirmation as well as the claim then further enquiry / investigation could have been conducted by the Assessing Officer. Instead of conducting further enquiry, the Assessing Officer has out rightly rejected the explanation as well as confirmation produced by the assessee. Accordingly in view of the facts and circumstances of the case we find that this issue requires a proper verification and examination. If need arises the creditors may be examined by the Assessing Officer on being production by the assessee. Addition towards unexplained cash credit - Held that:- The assessee claimed to have received an advance of ₹ 2,50,000 from various persons against the agricultural income. In support of the claim the assessee produced two agreements dt.2.4.2009 and 5.4.2009. However the stamp paper used for these agreements belong to the series of the stamp paper which were available only on 31.12.2010 onwards. Apart from these agreements the assessee has not produced any other supporting documents except confirmation letters from the creditors. It is manifest from the record that when the Assessing Officer questioned the genuineness of the claim the assessee attempted to manufacture the evidence in support of the claim by producing pre-dated agreements on subsequently purchased stamp papers. Therefore the evidence produced by the assessee is after thought and created only after the Assessing Officer has questioned the genuineness of the claim. In the absence of any contemporaneous supporting evidence we do not find any error or illegality in the orders of the authorities below for this issue. Addition on account of borrowed fund from villagers - Held that:- The Assessing Officer had enough reason to doubt the genuineness of the transaction as it is apparent that the assessee shown loan of ₹ 19,000 each from 34 persons. This fact itself shows that it is all well thought out claim of the assessee to escape the relevant provisions of the Act. Further all loans are shown as interest free loans which is not acceptable except in case of a close relatives nobody will advance loan without interest. The burden of proving the onus is on the assessee to produce the creditors specifically when the facts and circumstances clearly raise the suspicion on the very genuineness of the claim. Accordingly, we find that the assessee has failed to discharge his onus to prove the genuineness of the claim. This ground of the assessee is dismissed. Penalty levied under Section 271(1)(c) on the basis of defective notice under Section 274 is not sustainable and accordingly the same is deleted.
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