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2023 (5) TMI 827 - AT - Income TaxAddition u/s 68 - cash deposit/time deposit by the assessee in its cooperative credit society and IDBI Bank account - HELD THAT:- When the assessee has not given the detail viz. name, address and PAN of the person from whom the cash in question was received along with confirmation neither before the AO nor before the Ld. CIT(A) nor the assessee has come up before the Tribunal to furnish any such detail, the identity and creditworthiness of the depositor has not been proved nor the genuineness of the transaction is proved as required under section 68 of the Act, we find no illegality or perversity in the impugned findings returned by the Ld. CIT(A). So ground No.1 raised by the assessee in its appeal is hereby dismissed. Unexplained/ unsecured loans - HELD THAT:- No doubt the assessee has brought on record PAN, bank statement, ledger account of the lender etc. but in the given circumstances their creditworthiness has not been proved by the assessee when specifically called upon by the AO to prove as required under section 68 of the Act. Merely because of the fact that transaction is through banking channel does not absolve the assessee to prove the creditworthiness of the lenders. Financials of any of the creditors have not been brought on record. When such transactions are surrounded by unexplainable facts and suspicious circumstances the onus is on the assessee to explain and to dispel all the suspicious circumstances which the assessee has miserably failed to prove. No doubt income of the lending entities is not the requirement of the law or they should have sufficient balance in their account to lend the loan. But we are of the considered view that when transactions themselves are surrounded by unexplainable and suspicious circumstances, income of the lending parties and their business profile do become a requirement to be explained by the assessee. No income or meager income of the lender itself speaks volume of the creditworthiness of the lenders which is the requirement of section 68 to prove.When the assessee has failed to discharge the onus by proving genuineness of the transactions and creditworthiness of the creditors as required under section 68 of the Act, the impugned deletion made by the Ld. CIT(A) is not sustainable - Decided in favour of revenue. Estimated addition @ 25% of the advance booking receipt on shops/flats by the AO u/s 68 - HELD THAT:- Assessee being a builder & developer received an amount as advance booking of low cost housing flats. It is also not in dispute that at the time of applying for conversion of use of the land in question from agriculture to residential the assessee was informed that sole plot reserved for a project called “Virar Alibag Corridor Project” on which no construction activity can be carried out. Assessee was to refund the advance to the investors. Since the project could not be further carried out due to legal bar the assessee was under legal obligation to refund the amount to the investors after receiving compensation from the government. Estimated addition @ 25% of the advance booking received by the assessee by the AO is not sustainable, hence rightly deleted by the CIT(A). Consequently grounds raised by the Revenue are hereby dismissed.
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