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2015 (7) TMI 835 - ITAT CHENNAI

2015 (7) TMI 835 - ITAT CHENNAI - TMI - Unexplained cash credit - addition u/s 68 - Held that:- The creditors given loans to the assessees through Demand Draft and the assessees furnished the details of the same alongwith confirmation letter and also explained mode of transaction, which is through banking channel and also repaid the said loan through banking channel. Considering these facts, in our opinion the assessee herein had discharged their onus placed on them. The fact that credit entry s .....

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tained in the absence of anything to establish that source of creditors deposit, flew from the assessee itself. In our opinion, creditor having appeared before the Assessing Officer in response to the summons issued u/s.131 of the Act before the Assessing Officer and confirmed by filing of confirmation letter, the transaction cannot be doubted. The assessee discharged onus placed upon them by establishing the identity of the creditor, his credit worthiness, genuineness of the transaction. Being .....

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Tiruchirapali, for the above assessment years. Since issue in these appeals are common in nature, these appeals are clubbed together, heard together, and disposed of by this common order for the sake of convenience. 2. The facts of the case with regard to Shri. Subbiah Ramanathan are that he filed his return of income for the assessment year 2009-10 on 04.03.2010, admitting a total income of ₹ 1,11,320/- and agricultural income of ₹ 1,05,000/-. The return was processed u/s. 143(1) o .....

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rishnan and his son R. Suresh for ₹ 50,00,000/-. On perusal of Balance Sheet, the Assessing Officer found that on the liability side, the Assessee had admitted a fresh loan of E43,90,000/- from R. Balasubramanian equally in the hands of the assessee and his wife for ₹ 27,25,000/- (including stamp duty). In this regard the assessee was asked to produce the creditor on 05.12.2011 for examination. Since the Assessee and his representative failed to produce the creditor, a summon u/s. 13 .....

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ssessed to income tax. Regarding the loan given by him to the assessee he stated that he has given a loan of ₹ 47,00,000/- through Demand Draft out of the loan taken from one Shri. Anandharaman, Chennai. He further stated that no interest was received from the assessee for that loan and Shri. R. Balasubramaninan has not produced any evidence for the loan taken by him from Shri. Anandharaman. The Assessing Officer held that the lender Shri. R. Balasubramanian was not a creditworthy person t .....

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r as unexplained cash credit of the assessee u/s. 68 of the Act and was added to the income returned. 2.1 The facts of the case in respect of R.M.Janaki is that she was deriving salary income from firm and income from tailoring filed her return of income on 21.12.2009, for the year under consideration, admitting income at ₹ 1,85,000/- alongwith agricultural income of ₹ 1,52,000/-. The case was selected for scrutiny through CASS to examine the source for investment in property as per .....

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as not reflected in the return filed. The Assessing Officer conveyed the AIR information and sought for details, which included copy of purchase deed, statement of income, balance sheet and capital account for the assessment year 2009-10 alongwith corresponding details for A.Y. 2008-09. From the details filed, the Assessing Officer found that the assessee had purchased housing plot measuring 1 ground and 400sq ft. at Chennai, jointly with her husband and son. The assessee s share of the plot as .....

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out the creditor, the Assessing Officer, in response to the summons u/s.131 issued. Shri. Balasubramanian, appeared and deposed that he is drawing a monthly salary of ₹ 15,000/- as manager in Mahalakshmi Engineering College, Thudaiyur, and, that he has not given any loan to the assessee Smt. R.M. Janaki. Shri. Balasubramanian also stated that he has no bank account and not assessed to income tax. Since the creditor Shri. R. Balasubramanian, in his deposition, has denied any loan given to .....

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. 3. The ld. Authorised Representative for assessee submitted that Subbiah Ramanathan has received a sum of ₹ 43,90,000/- as loan from R. Balasubramanian, Similarly R.M. Janaki received a sum ₹ 44,00,000/- as loan from R. Balasubramanian by way of bank demand draft and to this effect these assessees filed a confirmation letter from him. Further, he submitted that Shri. R. Balasubramanian had availed loan from Mahalakshmi Estates, Chennai who has confirmed the loan by way of letter wh .....

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proved source of source of credit i.e. Shri. Balasubramanian had advanced the amount out of loan proceeds received from Mahalakshmi Estates, Real Estate Consultants and Flat Promoters, No.1, Srinivasapillai Street, West Mamalam, Chennai who was assessed to tax and its PAN No. AAIFM 2345L. According to the ld. Authorised Representative for assessees, identity of party is proved and the transaction is genuine as it is through banking channel and the creditworthiness is also proved as the Mahalaks .....

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ion of ₹ 43,90,000/- on account of loan received from R. Balasubramanian for non furnishing of details such as identity of the creditors, creditworthiness and assessment particulars of the creditors. The Assessing Officer during the course of assessment proceedings recorded a statement from R. Balsubramanian who deposed before him that he is working as a manager in Mahalakshmi Engineering College, Thodaiyur, Trichy for a monthly salary of ₹ 15,000/- and residing at Srirengam on a ren .....

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see. Thus, the Assessing Officer has doubted the creditworthiness of Balsubramanian and genuineness of the transaction as the loan creditor himself has not shown any evidence that loan taken by him from Shri.Anantharaman. Thus, the Assessing Officer has treated the loan said to have been received from R. Balsubramanian as unaccounted cash credit. The Assessing Officer in his assessment order treated the loan creditor as not genuine lender as he was not a creditworthy person. Shri R. Balasubraman .....

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e return of income filed for the assessment year 2009-10 on 04.03.2010 the assessee has not disclosed these transactions of purchase of property and the borrowal of loan of ₹ 43,90,000/-. Since the source of money for lending has not been proved along with the identity of the creditor and creditworthiness as well as genuineness of the transaction has not been proved by the assessee to the satisfaction of the Assessing Officer, the addition made by the Assessing Officer was thus justified. .....

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ion when the lender was a man of no means and also without charging any interest on the amount said to have been lent to the assessee proves that it was a sham transaction. Hence, the addition may be sustained. 5. Further, in the case of R.M. Janaki, the ld. Departmental Representative submitted that during the course of assessment proceedings the Assessing Officer examined this issue and asked the assessee to prove the genuineness of the transaction, capacity of the lender and creditworthiness .....

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person i.e., R.Balasubramanian, the creditor, who himself has denied having lent the above loan amount of ₹ 44,00,000/- to the assessee. When the said loan creditor, himself deposed before the Assessing Officer, denying any loan amount given to the assessee, and also stated that he is not having any bank account, the defence put forward by ld. Authorised Representative for assessee lack any credible evidence in his hands to support his claim. Hence, the assessee was not able to prove the .....

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t also to prove that creditors had the requisite capacity to advance the loan and also prove the genuineness of the transaction. In the present case, according to the lower authorities the assessee has not discharged the burden cast upon them, even after filing confirmation letter from the creditor and also source of credit from where lender has borrowed money. But now the question whether such onus has been duly discharged by the assessee or as has been shifted to the Revenue can be determined .....

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Consultants and Flat Promoters, No.1, Srinivasapillai Street, West Mamalam, Chennai through Demand Draft and the same was passed on to these assessees as loan. Further, M/s. Mahalakshmi Estates also confirmed that they have advanced money to Shri. R. Balasubramanian whose PAN No. has also been given. Inspite of this, lower authorities were not ready to accept the transaction as genuine. There was a doubt in the mind of the Assessing Officer regarding genuineness of the transaction. In the prese .....

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