TMI Blog2014 (7) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on 09.11.2003 - the source of the amount stands explained - In respect of the amount of ₹ 3,20,000/-, the lender Shri Deepak G Menda has encashed the mutual fund units and realised a sum of ₹ 3,19,141/- and the same was credited into his bank account on 25- 08-2003 - the lender has used the amount to make a deposit of ₹ 3,20,000/- into Fixed deposit - Shri Vikram G Menda has used the proceeds to advance a sum of ₹ 3,20,000/- to the assessee - the sources for giving the loan of ₹ 3,20,000/- also stands explained - Shri Vikram D Menda is also assessed to Income tax and he has been filing return of income for the past several years - there is no reason to suspect the credit worthiness of Shri Vikram D Mehta – thus, the order of CIT(A) is set aside – Decided in favour of Assessee. Assessment of loan amount - Held that:- The identity of the creditor stands proved since he happens to the son of the assessee and the details of his name, address, bank details, confirmation obtained from him etc. have been furnished - The genuineness of the transaction is also stands proved since the funds were received through banking channels - With regard to the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accountant Member: The appeal filed by the assessee is directed against the order dated 17.02.2011 passed by Ld CIT(A)-33, Mumbai and it relates to the assessment year 2004-05. 2. The assessee is in appeal before us in respect of the following issues:- (a) Assessment of Gift amount of ₹ 1,60,000/- (b) Assessment of Loan receipt of ₹ 6,75,000/- and ₹ 1,45,000/- (c) Assessment of Car Loan amount of ₹ 1,84,819/- (d) Assessment of Sundry creditors balance of ₹ 9,31,896/- (e) Assessment of ₹ 4,84,280/-, being the difference in the cost of Flat. (f) Assessment of ₹ 1,11,180/- as unexplained source in purchase of flat. 3. In this case, the assessment was originally completed on 19-12-2006. When the matter was taken up in appeal to the ITAT, the Tribunal restored all the matters to the file of the AO. Then the assessing officer passed the impugned assessment order by making various additions. The assessee challenged the additions by filing appeal before Ld CIT(A) and the appeal was allowed partly by him. Still aggrieved, the assessee has filed this appeal before us. 4. The first issue relates to the assessment of Gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the Ld A.R, the assessee had received loans from the donor in the earlier years and the said loan was converted into the impugned gift. If that is so, the sources for making gift stands explained. As submitted by Ld A.R, the necessity of receiving gifts from specified relatives have been introduced into the Act only from the succeeding assessment year. Hence, we do not find any reason to assess the impugned gift receipt during the year under consideration. However, as submitted by Ld D.R, the claim of receipt of loans in the earlier years and conversion of the same amounts into gift requires verification. Hence, for the limited purpose of verifying the said claim, we are setting aside this matter to the file of the AO with the direction to verify the said claim and after satisfying himself in that regard delete the addition. 5. The next issue relates to the assessment of loan amount of ₹ 6,70,000/- received from Shri Vikaram D Menda. The AO noticed that the lender was son of the assessee and he was 29 years old. It was stated that the lender was working with a C.A by getting ₹ 500/- p.m and was receiving a sum of ₹ 45,000/- p.a. as tuition fees. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 4.00 lakhs to Shri Vikram G Menda on 03.11.2003. On a perusal of the Bank account of Shri Vikram G Menda, we notice that the said cheque was realised on 06.11.2003 and he has used the proceeds thereof to give a sum of ₹ 3,50,000/- to the assessee on 09.11.2003. Hence, the source of the said amount stands explained. In respect of the amount of ₹ 3,20,000/-, we notice that the lender Shri Deepak G Menda has encashed the mutual fund units and realised a sum of ₹ 3,19,141/- and the same was credited into his bank account on 25- 08-2003. On the same day the lender has used the above said amount to make a deposit of ₹ 3,20,000/- into Fixed deposit. The said fixed deposit was finally closed on 12.11.2003 and the maturity proceeds realised therefrom amounting to ₹ 3,23,047/- was credited to his bank account. Shri Vikram G Menda has used the said proceeds to advance a sum of ₹ 3,20,000/- to the assessee. Thus the sources for giving the loan of ₹ 3,20,000/- also stands explained. We also notice that Shri Vikram D Menda is also assessed to Income tax and he has been filing return of income for the past several years. Under these set of facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we are of the view that the assessee has failed to prove the credit worthiness of this creditor. Hence, we are unable to accept the contentions of the assessee that the receipt of money by way of cheque proves the credit worthiness of the creditor. Considering his age, the level of income declared in his return of income, we are inclined to accept the view expressed by Ld CIT(A) that the assessee has failed to prove credit worthiness of this creditor. Accordingly, we confirm his order on this issue. 7. The next issue relates to the addition of Car loan of ₹ 1,84,819/- on the ground that the assessee has failed to furnish necessary details. We heard rival contentions on this issue. The Ld A.R submitted that the assessee has taken Car loan of ₹ 2.00 lakhs from ICICI Bank and repaid two instalments during the year under consideration. Hence there was a closing balance of ₹ 1,84,811/- as at 31.3.2004. In the paper book, the assessee has furnished a copy of ICICI bank statement. However, as noticed earlier, the AO has made the addition only on the reasoning that the assessee has failed to furnish necessary details. Since the relevant details have been furnished i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly paying money towards labour charges to the said party. Hence, in this case also the assessee did not purchase any material from it. In case of Avni Enterprises, the assessee has made four purchases during the year and the closing balance of ₹ 5,309/- represents last two purchases. When the AO is accepting the first two purchases, in our view, there is no reason to suspect the remaining two purchases. In respect of M/s Gayatri Textiles, the assessee did not furnish the ledger account copy and hence we are unable to analyse the same. The Ld A.R, however, submitted that the AO has made the impugned addition without affording necessary opportunity to the assessee. We find force in respect of the same. Accordingly, we set aside the order of Ld CIT(A) and direct the AO to afford opportunity to the assessee in respect of the addition relating to M/s Gayatri Textiles. With regard to the remaining amount relating to 23 parties, the AO is directed to delete the addition. In respect of M/s Gayatri Textiles, the AO may decide the issue in accordance with the law after affording necessary opportunity of being heard to the assessee. 9. The next issue relates to the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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