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2017 (6) TMI 441 - AT - Income TaxUnsecured loans - identity and creditworthiness of the creditors and genuineness of the transaction - non existence company - Held that:- Merely because of the fact that the payment was received by cheque or that the lender company appears on the file of Registrar of Companies, registered with the stock exchange of the company, it is not proved that the transaction is genuine unless creditworthiness of the lender company is proved. Even during the assessment proceedings as well as first appellate proceedings before the ld. CIT (A), the assessee has not opted to get the physical existence of M/s. Khoobsurat Limited established by moving any application. So AO/CIT(A) have rightly reached at the conclusion that M/s. Khoobsurat Limited is a company existing on paper only and its physical existence has never been established and it also remained unexplained on the file as to why a company in Kolkata would advance unsecured loan of more than ₹ 40,00,000/- to a proprietorship concern of transport contract situated in Orissa. So, we find no illegality or perversity in the findings returned in the impugned order passed by the CIT (A) so far as addition of ₹ 40,06,198/- is concerned. So, the findings returned by the ld. CIT (A) in this regard are hereby affirmed. In view of above the addition made by AO/affirmed by ld. CIT (A) to the tune of ₹ 7,00,000/- (in case of Smt. Usha Agarwal, Ellora Mohanty, Ashutosh Mohapatra & Smt. Urmila Modi of ₹ 2,50,000/-, ₹ 1,50,000/-, ₹ 1,00,000/- & ₹ 2,00,000/- respectively) is hereby ordered to be deleted, however appeal of the assessee qua the remaining addition of ₹ 40,06,198/- made on account of unsecured loan from M/s. Khoobsurat Limited is hereby dismissed. Resultantly, the appeal of the assessee is partly allowed.
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