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Dr. Gaurang Kiritbhai Shah Versus ITO, Ward-5 (1) , Surat

2015 (6) TMI 595 - ITAT AHMEDABAD

Unexplained cash credits u/s.68 - AO disputes the creditor’s version on the issue of capacity/genuineness/creditworthiness - Held that:- This creditor had duly filed written confirmation and also placed on record his land ownership documents to depose in the assessee’s favour.

A perusal of his statement demonstrates that one of his son studies in USA as well. He quotes the assessee to be his school friend. The document reveal the creditor and his family income from various sugar co-o .....

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T High Court] holding that an assessee can be asked to prove the source of credit and not to prove the source of the source. Be that as it may, we have already held that the assessee’s creditor and his family had sufficient means from agricultural income so as to lend the impugned sums amounting to ₹ 3.3 lac deposited in the assessee’s account through cheque payments. The assessee’s arguments are accepted. - Decided in favour of assessee. - ITA No.3218/Ahd/2011 - Dated:- 9-6-2015 - Shri Pr .....

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e-individual is a doctor. He filed his return on 26th March, 2009 admitting income of ₹ 2,79,840/-. The Assessing Officer in the course of scrutiny noticed a sum of ₹ 3.3 lac deposited by way of three separate cheques of ₹ 1.10 lac each from the savings account of Shri Mukesh Patel. He sought to confirm identity, genuineness and creditworthiness of these deposits. Shri Mukesh Patel appeared and confirmed these deposits. He filed a written confirmation on 25.11.2010 and also got .....

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ound No.l: A.O.'s Arguments: During the year under consideration the assessee has received unsecured loan from Shri Mukesh T. Patel, the said loan received by the assessee in three cheques each of ₹ 1,10,000/-. Shri Mukesh Patel issued three cheques from his three bank accounts which are maintained with The Surat District Co. Op. Bank Ltd., Vav Branch, Surat. In view of the above, the assessee has requested to submit the contra confirmation from Shri Mukesh Patel with necessary materia .....

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010 at 12.30 P.M. During the year you have shown unsecured loan of ₹ 3.30.3000/- from Mukesh Patel, the same is not verifiable. Therefore you are requested to produce the said person with necessary evidence. • You had shown cash receipts of ₹ 90,000/- in your cash book for car sold, but on verification of the sale deed it is found that the car was in the name of your wife. She is also by profession a doctor and filed her return of income separately. Therefore, the said sale amou .....

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wn unsecured loan from Mukesh Patel. Please produce all register which are required to maintain as per provision of health department. • Please produce register regarding Outdoor patient and Indoor patient, and also produce the consent letter which was given by the indoor patient for operation purpose. 2. Please note that if you fail to comply with this letter on the date of hearing, then you are hereby show cause .... (i) why the amount shown under the head of unsecured loans should not tr .....

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necessary proof on this issues had been already submitted on 19.8.2010 & 9.9.2010. After going through the said details, the submission filed by the assessee is not tenable on the ground that Shri Mukesh Patel issued the aforesaid three cheques from his saving account of The Surat District Co. Op. Bank Ltd., in which he has joint holder. Further, it is noticed that before issuing cheques Shri Mukesh Patel had deposited cash of ₹ 90,000/- on 5.2.2008 and ₹ 45,000/- on 14.3.2008 i .....

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oan in his books of accounts. For the verification of the genuineness of the loan transaction, a summons was issued on 29.11.2010 to Shri Mukesh T. Patel with a request to attend the office on 2.12.2010 with his sale/purchase bill, various labour charges expenses and other expenditure details in regards his claim of agriculture income. In response to the said summons, Shri Mukesh T. Patel attended on 2.12.2010 and his statement on oath was recorded. During the course of statement it was analyzed .....

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of cash but he is unable to produce the evidence in support of his claim. Further, he stated that the said cash was deposited for giving loan to the assessee. In view of the above, it is clear that the assessee has managed his undisclosed/unaccounted income for receiving unsecured loan from his friend Shri Mukesh T. Patel. To prove the same, books of accounts of the assessee was thoroughly verified on 29.11.2010 and it is noticed that the assessee has suppressed his 'sonography income' .....

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patients it is noticed that the assessee was not shown total receipt from his operation activity i.e., in some cases the same were not accounted for by the assessee in his books of accounts. The discrepancy was found during the course of verification of books of accounts and confronted by the assessee himself. Therefore clear that the assessee has suppressed his income by way of not disclosing correct income earned by way of sonography income as well as income from surgery. Further, the assesse .....

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tient as well as indoor patient. The assessee has also not produced any fees receipts which were issued by him for consulting charges as well as his operation charges. Therefore, it is crystal clear that the assessee had suppressed his receipt and the same is introduced by him in his books of account by way of unsecured loan. Therefore, the loan received from Shri Mukesh T. Patel is treated as 'non-genuine' and the same is undisclosed receipt of the assessee came in his account through S .....

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she filed her return of income separately, therefore, the said loan is required to be shown in the books of accounts of Smt. Ketki G Shah. As per accountancy principle, the cheque issued in the name of the person the same should be accounted for in the books of accounts of the same person. In this case, the assessee has failed to do so and shown his wife's loan in his books of accounts as unsecured loan which is not correct, therefore, the amount of ₹ 1,10,000/-is added to the total i .....

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ted 09.09.2010 and 29.11.2010. The appellant had received the three cheques of ₹ 1,10,000/-each from Shri Mukesh T. Patel, who is an agriculturist by business. The appellant has given the following documentary evidences to the LAO during the course of assessment proceedings. (i) Photostat of copy Election Card to prove the identity (ii) Copies of Bank passbook showing the debit entries of three cheques of ₹ 1,10,000/- each. (iii) Copies of Form 7 & 12 and 8 A showing the land hol .....

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ived by the LAO'S office on 25.11.2010 vide Receipt No. 2510025671. (i) In the said letter Shri Mukesh T. Patel had categorically stated that, he has given total amount of ₹ 3,30,000/- by three account payee cheques to his friend Dr. Gaurang K. Shah as a interest free loan. The details of cheques and other relevant particulars were given in the said letter (Photostat copy of letter dated 25.11.2010 is enclosed). (ii) He has also stated in the letter that he is holding huge amoi agricul .....

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1.2010 in compliance to the show cause notice dated 18.11.2010 issued by the LAO. During the course of hearing on this date the LAO orally asked few questions to Shri Mukesh T. Patel, regarding the loan given by him to the appellant. Shri Mukesh T. Patel while replying to the LAO'S questions orally confirmed that he has given the loan of ₹ 3,30,000/- to the appellant. The LAO was not satisfied with the submission of appellant, confirmation given orally by Shri Mukesh T. Patel at the of .....

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ukesh T. Patel recorded in Gujarati on oath in Room 313 at 11.50 a.m. U/s. 131 of the Income Tax Act. From the above your honor will find that Shri Mukesh T. Patel had once again confirmed that he has given the loan of ₹ 3,30,000/- to the appellant by three account payee cheques. The said loan was given out of his agriculture income. He has also said that the agriculture income was received by him from various co-operatives societies and said income was received either by cash or by cheque .....

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tated that, he has received the loan back in installment. He has assured the LAO to file the details of refund of loan before 07.12.2010. As per the assurance, Shri Mukesh T. Patel had submitted the details of repayment of loan by Dr. Gaurang K. Shah by letter dated 06.12.2010 received by the LAO office on 06.12.2010 vide acknowledgment No. 2510026709 (Photostat copy of letter is enclosed). He has also attached the Photostat copies of Membership Passbook issued by the Sugar Factory showing the d .....

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has not managed his undisclosed / unaccounted income for receiving unsecured loan from his friend Shri Mukesh T. Patel as observed by the LAO in Para 3.3 of the assessment order. In view of the above, your honor will appreciate the fact that the appellant has duly established. (i) The identity of Shri Mukesh T. Patel (Depositor) (ii) Credit worthiness of Shri Mukesh T. Patel and (iii) The genuineness of loan transactions. Decision: Arguments of AO as well as appellant has been considered. There .....

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