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2021 (7) TMI 1021 - AT - Income TaxUnsecured creditors - Addition u/s 68 - Flow of funds inter se the group concerns - loans from directors - Money circulated from one concern to other - HELD THAT:- Why the assessee discharged its obligation to M/s. Modsal Frozen Foods Pvt. Ltd. and why the assessee accepted loan from one of its directors need not be enquired by the Assessing Officer. Suffice it to record that the amount is neither tainted nor unaccounted. It is only the accounted money of the assessee that is used for the purpose of discharge of obligation. Therefore, it cannot be said that the amount paid to M/s. Modsal Frozen Foods Pvt. Ltd. is unaccounted money and on the same analogy amounts in the hands of Mohd. Sayed which was given as loan to the assessee cannot be unaccounted money. In the same way, in so far as Mohd. Naeem is concerned, he is also having inter-banking account with the assessee, M/s. Modsal Frozen Foods Pvt. Ltd. and Modern Enterprises - There is no adverse comment on these accounts of any of these entities. It is not the case of Revenue that whatever the amounts that have been credited in the bank accounts of assessee were raised from any third person other than the group concerns. Further by filing the statement of account of Mohd. Naeem with the bank of Baroda and also with M/s. Modsal Frozen Foods Pvt. Ltd. as well as Modern Overseas Pvt. Ltd., it was established that all the money that is circulated inter se the group concerns is that accounted money well reflected in the books and no any funds other than the withdrawals from the group concerns is found to have been deposited by Mohd. Naeem. Coming to Mohd. Saleem, there is no dispute that for the assessment year 2013-14, he declared an income of ₹ 9,09,008/- and for the current assessment year, it was ₹ 9,83,643/-. This declared sum is much more than the deposit of ₹ 5.55 lacs and even according to the Assessing Officer, there were deposits in cash only to the extent of ₹ 1,48,400/-. In these circumstances, it cannot be said that the unaccounted money of the assessee to the tune of ₹ 1,48,400/- travelled back to the assessee through Mohd. Saleem. Thus the flow of funds inter se the group concerns properly explains the creditworthiness of the creditors and there is no reason to suspect the business transactions which are recorded in the books. Hence, we are of the considered opinion that the identity of the creditors, their creditworthiness and genuineness of transactions are not in doubt and are properly explained - Decided in favour of assessee.
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