9911796707
TMI Blog2015 (6) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 1.On the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs. 2,99,00,000/- out of the said unsecured loans, which was added to the total income under the head income from other sources and also deleted interest of Rs. 40,37,326/- of account of unsecured loans. In respect of the fact that the assessee had failed to adduce cogent evidence and one of the Chartered Accountant had confessed before the DGIT(Inv.) that he had arranged for bogus loans. 2. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. Assessee-firm, engaged in the business of builders and developers,filed its return of income on 20.09.09, declaring income at Rs. 7.72 lacs.The AO completed the assessment on 26.12.2011,u/s. 143(3) of the Act,declaring the inome of the assessee at 3.40 crores. 2.During the assessment proceedings the AO found that the assessee had shown closing balance of Rs. 4,00,21,842/- in the balance sheet as on 31.3.2009,under the head loans. On verification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amination, that he did not produce any witness, that it did not furnish any supporting documentary evidence to substantiate its claim, that assessee had not denied its relation with DK and VB through whom they had contacted DK for arranging unsecured loans, that DK had elaborated the modus opernadi, that the assessee had not offered any explanation,that in case of JVA the signature on loan confirmation were found to be different from that obtained on spot enquiry, that the assessee was provided with copies of loan confirmation and enquiry report that it had not rebutted the facts mentioned in the notice, that merely showing transaction through bank A/c. payee cheques did not establish the genuineness of the transaction, that in most of the cases cheque books and pass books were not found in possession of the creditors, that the burden of proof was on the assessee.Finally, he held that the explanation of the assessee with regard to unsecured loan of Rs. 3.35 crores was not satisfactory, that same was to be taxed u/s.68 of the Act for the year under consideration.He further held that the assessee had debited interest of Rs. 40.97 lacs in the P&L A/c.,being interest paid on unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties were below the taxable limit, that not a single person was having credit worthiness to advance the loan, that they did not have the capacity, that the creditors' admitted of not knowing the assessee, that they had stated that loans were given through their consultant, the creditors were showing income in the range of Rs. 1 to 1.5 lacs for all the earlier years, that none of them had paid taxes, that in their statement all of them admitted that their withdrawal was from Rs. 1 to 1.5 lacs, that none of them filed capital account, that non-payment of tax by the creditors proves that the loans were mere accommodation entries.About the 13 parties, after considering the remand report and submission of the assessee the FAA held that the parties were in existence, that their identity was not doubted, that unsecured loans had been given by them to the assessee, that they had filed their loan confirmations, that all were having income below taxable limit, that he had gone through the income tax return filed by them, he had considered affidavit filed by Shri Rameshchandra B. Singh who had not filed his return of income, that Rameshchandra B. Singh had simply stated that he was in tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry in those 55 cases were made,that the ratio of cases where findings were adverse to the assessee had to be limited to those specific cases and could not be stretched to hold it against it by treating other unsecured loan creditors as non-genuine in a generalised manners,that the assessee had discharged the primary onus in 55 cases,that the additions,made under section 68 of the Act in those 55 cases,amounting to Rs. 2,00,00,000/-,where no enquiries were conducted was not sustainable.As a result,he deleted that addition of Rs two crores.The FAA further held that the assessee was given the opportunity to produce the witness for examination which he had failed to do so,that it also failed to furnish any further supporting documentary evidence about the genuineness of the loan transaction that were shown in the name of four parties referred in the earlier part of the order,that the assessee had replied in case of each of those persons who found not staying at the address given,that on the reply given by the assessee the AO formed an adverse opinion for the reason that it did not produce them before the AO,that only for the reason that the assessee had failed to produce unsecured cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of the inquiry was properly communicated, that opportunity was given to the assessee by the AO to the assessee to augment its stand by any further supporting evidence,that the assessee had not been produced any evidnence,that the assessee did not choose to cross examine the party and merely relied upon the loan confirmations filed,that the subsequent onus had shifted on assessee was heavier than his primary onus in view of the outcome of the enquiry and evidences collected by the AO,that the assessee failed to discharge, that DK had clearly stated that he had provided entries,that in those transaction there was only name lending and same were not genuine loan transactions,that the list included the name of 18 parties,that all were his clients,that the assessee also could not deny that Bhanushali was not a good acquaintances, that the assessee had not asked for cross examination of those parties and the CA,that out of total 18 parties inquiries were made in seven cases,that in balance 11 cases no enquiries had been conducted or even attempted,that the statement of CA was contradicted by at least three assessees,that addition made merely on the basis of the statements of the DK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uge addition made by him.Departmental Representative(DR)argued that the AO had made on the spot enquiries in some cases,that statement of DK were recorded, that 18 creditors had admitted that loan given to the assessee was routed through DK , that the AO had directed the assessee to produce the creditors before him, that it did not produce any of his creditors, that mere filing of documents was not sufficient to prove the genuineness of the loans, that assessee did not ask for any cross examination,that penalty u/s. 271(1)(b) was imposed by the AO for non-compliance, that assessee had not called for cross examination. 5.We had heard the rival submissions and perused the material before us. We find that there were total 90 loan creditors from whom unsecured cash credit amounting to Rs. 3,35,00,000/- had been introduced in the books of accounts by the assessee,that out of the 90 loan creditors confirmations were submitted only in the case of 77 parties and for the remaining 13 parties confirmation were not furnished during the assessment proceedings,that during the course of appellate proceedings of the remaining loan confirmation were filed along with other supporting documents,tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing in the books of a/cs. of the assessee is considered a proof against him. But,if it produces evidences about identity, genuineness and credit worthiness of the lender onus of proof shifts again to the Revenue.In the matter before us,the FAA-after considering the remand report and reply of the assessee-found that the assessee had failed to discharge the burden cast upon it by the provisions of section 68 of the Act.All those creditors were filing below taxable return and there was dispute about deduction of taxes as well as form no.15G/H.She has specifically held that it had not proved the genuineness and credit worthiness of the lenders.The assessee did not ask for cross examination of DK.In our opinion,the so-called retraction by him also of no help to the assessee. He is a professional and he very well knew as to what statement he had given.Withdrawing the same after a period of nine months,without assigning any reason for retraction,goes against him and the assessee.Neither DK nor the assessee has denied their acquaintance with VB.All these surrounding circumstances,in our opinion strengthen,the stand taken by the FAA.So, confirming her order,we decide the effective gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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