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2019 (9) TMI 1135 - AT - Income TaxAddition towards unsecured loan - unexplained cash credit u/s 68 - AO not making basic verification with the lenders by using the statutory powers vested in him u/s 133(6) or u/s 131 - HELD THAT:- When the assessee had submitted his bank statements even for the subsequent year to prove that the said loans were duly repaid by him to the concerned lenders. It is not in dispute that these loan creditors are duly assessed to income tax and their income tax assessment particulars together with their addresses were on record. AO without making even the basic verification with the lenders by using the statutory powers vested in him u/s 133(6) or u/s 131 of the Act , cannot simply make an addition towards the unsecured loans as unexplained cash credit merely on surmise and conjecture. Hence we direct the ld AO to delete the addition made in respect of loans received from Arabian Sea Food and Shatrunjaya Estate Pvt Ltd Loans received from Smt Nikita Mahesh Sagar and Smt Usha Chauhan, we find that apart from primary documents , the assessee had also furnished the bank statements of the lenders and an affidavit from them confirming the entire loan transactions with the assessee. We find that the ld AO had merely disregarded this affidavit by stating that the same lacks verification. Even in this case, no verification was carried out by the AO either u/s 133(6) or u/s 131 of the Act to clear the doubts that were in mind of the ld AO with regard to the veracity of the loan creditors. It is not in dispute that these loan creditors are duly assessed to income tax and their income tax assessment particulars together with their addresses were on record. We find that both these parties had duly affirmed in their affidavit that they were engaged in respective businesses for the past 15 and 30 years respectively. Hence the availability of source in their hands stands proved beyond doubt - Decided in favour of assessee Net income under the head ‘Income from Business’ - gross receipts minus direct expenditure - HELD THAT:- We find that the CIT-A in Asst Year 2013-14 had accepted the fact that the assessee was engaged in the actual business of consultancy to SRA projects of Kamla Mills group, wherein he has to negotiate with the slum dwellers / squatters and get them agree/vacated with compensation/ incentive or an alternate accommodation in the constructed SRA tower. For this he used to get the money from the builders which he used to deposit in the bank account. CIT-A in that order categorically observed that assessee was doing similar business in earlier years and nature of business was mentioned as ‘service sector’ in the audit report. Hence it is proved beyond doubt that assessee was deriving business income during the year under consideration. Hence we direct the ld AO to treat the net income of ₹ 2,20,20,125/- as income from business i.e gross business receipts of ₹ 2,57,79,500/- minus business expenditure of ₹ 37,59,375/-
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