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2015 (6) TMI 711 - ITAT AHMEDABAD

2015 (6) TMI 711 - ITAT AHMEDABAD - TMI - Unexplained cash credits u/s.68 - unsecured loans - Held that:- 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 .....

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ver, 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’ 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 - GUJ .....

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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.C. Mishra, Sr.D.R., For the Respondent: Written submission (None) ORDER PER SHRI S.S. GODARA, JUDICIAL MEMBER This assessee s appeal for A.Y.2006-07, arises from or .....

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as copy of books of account. Income Tax Returns and computation statements and bank statement of Shri Kailash Chandra Meena. We proceed ex-parte against the assessee in these circumstance. The abovesaid documents are taken on record subject to all just exceptions. We proceed to deal with the case on merits. 3. The assessee-firm trades in textile items. The sole question in the present case is that of aforesaid addition to ₹ 11,90,000/- as unexplained cash credit. The assessee obtained thes .....

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12.2008. The Assessing Officer inter alia noticed that there were certain chinks in the abovesaid deposition regarding the sale purchase of the sarees and other business items, acquisition of the cash amount in question, source of the opening balance and also the fact that his address was same as that of the assessee. He also found that bank account of the said creditor was introduced by Shri Pradeep Agarwal; manager and son of the assessee firm s partner Shri Ramesh Chandra Agarwal. It further .....

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ordingly. 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 rejec .....

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bank accounts were opened in the names of Shri Kailashchandra Meena, individual and the HUF, both on 09-03-2006 i.e. at the fag end of the financial year. Various sums were deposited towards the end of the month, on 27th, 28th and 29th March, 2006 and on the same days cheques of equivalent amounts were issued to the Assessee as loans. In order to further tie up the transactions and to give them an appearance of authenticity and genuineness, Shri Kailashchandra Meena was made to file returns of .....

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#8377; 80,869 and interest income at ₹ 12,469. With these entries and with the returns of income, it was presumed by the Assessee, as also Shri Kailashchandra Meena, that all the loose ends had got tied up, even though no supporting document was furnished along with the returns of income, even though it was the first time that such returns were field by Shri Kailashchandra Meena and his HUF. 6.2 . However, in course of the assessment proceedings, which commenced much later, when Shri Kaila .....

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he AO in para 4.1, pages 3-5 of the assessment order are very significant. He claimed to have been doing business in sarees and kirana goods, which he claimed to have carried on for seven to eight months and wound it up at the end of 2005 (Q.No.34). Interestingly, he could not state as to 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 ma .....

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esence 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 father to start a .....

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he utilised to purchase the goods for the cloth business, he had also made investment of.Rs 2 lakhs in the ration shop, a further sum of ₹ 8 lakhs in the cloth business, and kept the balance sum of ₹ 5 lakhs with him and Shri Pradeep Agarwal. - . 6.4 Shri Meena stated that the 15 lakhs cash that he got from Rajasthan, he had kept with Shri Pradeep Agarwal until the time of opening the bank accounts, and that, Shri Agarwal had helped him to open the bank accounts. It is also interesti .....

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y as the prop, of M/s Manisha Textiles. He had issued two cheques of ₹ 4 lakhs each to the individual and to the HUF, and both the cheques were deposited in the respective bank account on 27-03- 2006 and 28-03-2006. 6.5 Also of interest is the fact that Shri Kailashchandra Meena had given his address in both the returns of income as 151, Ajanta Shopping Centre, Ring Road, Surat, which is the address of the Assessee. More significantly, what was stated by Shri Meena in his statement recorde .....

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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 .....

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holes and poor logic, since it was only a story and not the correct narration of facts. 6.7 It has also been argued without any effect that the AO did not ask the Assessee to produce the books of account or any document in support of what had been shown in the returns of income of Shri Meena and his HUF, such as a salary certificate. The fact remains that since the Assessee had made a claim of having received loans totalling ₹ 11,90,000/- the onus was entirely on it to produce and bring o .....

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he genuineness of cash credits, and therefore, the ratio of a decided case cannot applied across the board to all cases of cash credits. The facts speak for themselves and the same have been discussed in details and reiterated in the aforesaid paragraphs. The facts of the case clearly establish and confirm the AO's finding that neither Shri Meena nor his HUF had the requisite creditworthiness to give loans totalling ₹ 11,90,000 to the Assessee. The claim of the Assessee was absolutely .....

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re is no dispute that the amount in question has been credited in the assessee s bank account through cheque transfers. There is also no issue about identity of the creditors i.e. Shri Kailash Chandra Meena (Individual and HUF). The assessee s books of accounts with regard to these two creditors are also placed on record. All these payments are duly recorded therein. The sole question in the instant appeal is that of genuineness/creditworthiness of the transactions in view of the facts narrated .....

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