Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (6) TMI 711

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... n 68 of the Act in absence other corroborative factors. Be that as it may, once creditors’ identity, mode of payment and repayment, assessee’s books of accounts proved the impugned credit transactions, we do not find appropriate to look through the circumstances. The hon’ble jurisdictional high court in Pratapbhai Virjibhai Patel vs. ITO [2014 (3) TMI 152 - GUJARAT HIGH COURT] has upheld a co-ordinates bench order in ITO vs. Counter force [2010 (7) TMI 831 - ITAT AHMEDABAD] deleting a similar addition on the basis of repayment of the impugned credits and supportive ledger account. We reiterate that facts of the present case also do not seem different than those decided by their lordships. Thus when there is no dispute about identity of the creditors, their pan cards, copy of income tax returns, balance sheet, profit and loss accounts are on record along with their cross objections, such an addition does not hold ground. Thus we delete the impugned addition of unexplained cash credit u/s.68 amounting to ₹ 11,90,000/. - Decided in favour of assessee. - ITAs No.125/Ahd/2012 - - - Dated:- 9-6-2015 - Shri N.S. Saini and Shri S.S. Godara,JJ. For the Petitioner : Shri D .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... were prima facie bogus in view of the abovesaid discrepancies. He took into consideration all these overwhelming facts on record to treat the impugned deposits in the assessee s accounts reading ₹ 11.90 lacs as unexplained cash credits liable to be added u/s.68 of the Act. He acted accordingly. 4. The assessee preferred an appeal. The CIT(A) has also upheld the Assessing Officer s findings as under: 6. I have carefully considered both the positions. The basic thrust of the AR is that, the AO was very passionate in trying to prove that the cash credits were bogus, and in the process, he drew inferences which were not only incorrect and baseless but also mischievous, which according to me is a rather strong statement to make. It has also been alleged that the AO summarily rejected all the explanations and evidences furnished by the Assessee during the assessment proceedings. Such allegations however conceal the fact that the AR has not really been able to rebut the findings and observations of the AO, some of which were very crucial to the issue. These are discussed in the following paragraphs. 6.1 Two loans totalling ₹ 11,90,000 were shown to have been take .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... o what sort of business he did, where he had purchased his goods from and to whom he had sold. When questioned about the purchases which he claimed to have been worth ₹ 14-15 lakhs, he stated that he had made such payment in cash which he had got his from village in-Rajasthan. He claimed to have got the money from his father and hence, when asked to explain where his father had got such substantial sum from, he explained that he himself had given it to him. The AR has accused the AO of merging the answers to two different questions and thereby manipulating facts. The point is that there was no need to manipulate the facts since they were crystal clear. In fact, Shri Kailashchandra Meena, in the presence of the manager, Shri Pradeep Agarwal and the C.A. Shri Dinesh Dwivedi was himself confused about where he got the cash from? How he had carried it? What he did with it? How he bought and sold the goods? How much money he got from the business? How much money he got from the sale of left over stocks etc. 6.3 Amidst all such confusion, if we attempt to simplify and draw a clear thread, then it would appear that the Assessee had got approx ₹ 15 lakhs in cash from his .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... had been made by Shri Meena and that, what he had actually, stated was that what is stated in the Statement is correct and that .he never said that what is stated : in the returns were not correct. This is a totally false claim. The answer given by Shri Kailash chandra Meena to Q.No. 42 as reproduced on page-5 of the assessment order is further reproduced hereunder: I have gone through the statement recorded today and understood the same. My. C.A. has also explained the same to me. I hereby confirm in presence of my C.A. Shri Dinesh Dwivedi and Manager of M/s Jindal (India) Textile, Shri Pradeep Agarwal, what is stated on the statement is correct and what stated in the return of income for AY 2006-07 is incorrect. 6.6 Thus, the statement of Shri Meena recorded by the AO u/s 131 of the Act completely exposed the modus operand adopted by the Assessee, and the manner in which the transactions were deliberately structured to give them an appearance of authenticity and genuineness. When confronted by the AO, the manger of the firm and Shri Meena sought to weave a story which however had several loop holes and poor logic, since it was only a story and not the correct narr .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the transactions in view of the facts narrated in the preceding paragraphs. The Revenue strongly refers to the Assessing Officer s findings. However, we tend to disagree with the same. The creditors bank statements maintained with the United Bank of India bearing no. 0521010049760 and 49757 duly proved these loan payments as well as repayments thereof. For instance, the assessee obtained sums of ₹ 4 lacs, ₹ 1 lac and ₹ 2,90,000/- on 27, 28 29th March, 2006; respectively. Thereafter, it transferred sums of ₹ 4 lacs and ₹ 3,90,000/- by the very banking channel in the account of Shri Meena/individual. Similarly, the HUF s bank statement reveals the assessee to have obtained a sum of ₹ 4 lacs on 28.3.2006 and repaid the same on 28.6.2006. The Revenue is unable to controvert this factual position. It refers to the common address of the assessee as well as that of Shri Meena (supra). There is no quarrel about the same. However, the fact also remains that there can be any number of assessees under a single roof. This itself cannot be a ground to invoke section 68 of the Act in absence other corroborative factors. Be that as it may, once creditors i .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates