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2022 (4) TMI 1387 - AT - Income TaxAddition u/s 68 - unexplained Cash credit - HELD THAT:- The assessee has been able to reasonably demonstrate that he has substantial landholding capable of earning regular agricultural income and also received a sum by way of cash and jewellery from his father. This fact was also affirmed by the village Panchayat. The assessee also produced inheritance certificate in support of the above contention as proof of inheritance of the above sum. Further, vide Panchrojkam dated 09-01-2018, the Talati cum Mantri of Kukad Gram Panchayat gave a declaration that the assessee is owner of considerable landholding from which yearly income is ₹ 3 to 4 lakhs. The assessee also filed copy of Form 7/12 giving details of landholding and details of crop grown on the same. CIT(A) made a specific note of these facts in the appellate order and Revenue has not challenged the above facts stated by the assessee. Even during the impugned assessment year, the assessee has declared agricultural income. Thus, in our view, the assessee has been able to demonstrate ability to invest the sum from his personal savings to buy the immovable property. Unexplained unsecured loan u/s.68 in respect of loan taken from lenders - The assessee though has been able to establish the identity of creditors / lenders, but has not been able to establish their creditworthiness. The Courts have taken a consistent position that the assessee is expected to establish proof of identity of creditors, capacity of creditors and genuineness of creditors in order to discharge onus cast on assessee. Mere production of parties or confirmation from parties will not suffice, unless the assessee is also able to substantiate their creditworthiness i.e. ability to advance the sum to the assessee. Assessee has not been able to establish the creditworthiness of lenders nor has he been able to establish the genuineness of transaction. The lenders could not produce bills of agricultural produce, landholdings have been found to be insufficient to enable the lenders giving loan ranging from ₹ 11 lakhs to ₹ 15 lakhs to the assessee, the lenders are residing in mud houses, the lenders have granted loan in cash, land owned by the lenders are under charge of concerned banker against loan taken by them, the lenders are first time lenders who have given ₹ 11 lakhs to 15 lakhs without charging any interest from the assessee, the assessee has not repaid the loan till date back to the lenders, at the time of giving loan there was no proof in writing to the effect that such a huge loan and purpose why such loan was given to the assessee- all these facts raise serious doubt both on the creditworthiness of the parties and genuineness of the transaction. In our considered view, since the assessee has failed to establish the creditworthiness of parties, he has not been able to discharge the onus cast upon him u/s 68 of the Act. Therefore, we are of the considered view that Ld. CIT(A) has not erred both in law and on the facts of the case in confirming the action of AO of making an addition as unexplained unsecured loan u/s.68 of the Act in respect of loan taken from lenders.
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