Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (8) TMI 330 - ITAT PUNE

2015 (8) TMI 330 - ITAT PUNE - TMI - Unaccounted cash credit - addition u/s 68 - Held that:- In the instant case, although the loan creditors are Private Limited Companies neither they have maintained accounts nor filed their return of income on the ground that the entire financial affairs of the companies/entities of the group were in the total mess, therefore, the genuineness of the transactions and capacity of the loan creditors are doubtful. Therefore, the various case decisions relied on by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

espect of the 3 parties from whom the assessee had made purchases and which was doubted by the AO - Held that:- As find from the assessment order that the main grievance of the AO in the assessment order that although the assessee had made the payments to the above parties by account payee cheque, however, since the assessee could not produce the bank account of those suppliers, therefore, it is not clear as to whether cash has been withdrawn after the cheques were deposited. We find the AO in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oncerned, we find this was not the case of the AO. It was the doubt of the AO that the assessee might have withdrawn cash from those bank accounts after making payment through account payee cheques since 133(6) notices were returned unserved. He has no other doubts. Since the AO in the remand report has specifically mentioned that the assessee has filed the complete details/evidence in respect of the purchases effected from the said 2 concerns, therefore, we do not find any infirmity in the orde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and the second one filed by the Revenue and are directed against the order dated 11-07-2011 of the CIT(A)-II, Nashik relating to Assessment Year 2007-08. For the sake of convenience, these were heard together and are being disposed of by this common order. 2. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacture and selling of Rolled, Figured and Wired Glasses. It filed its return of income on 29-11-2007 declaring income of ₹ 51,27,037/-. D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n filed in respect of the following 5 parties from whom loans have been obtained : 1. Shri Anekant Shares & Securities Pvt. Ltd., Mumbai 2. Palasia Leasing & Investment Pvt. Ltd., Mumbai 3. Samyak Shares & Stock Broker Pvt. Ltd., Mumbai 4. Sky Touch Infrastructure Pvt. Ltd., Mumbai 5. Unno Industries Ltd., Mumbai Therefore, the AO issued another letter to the ADIT(Investigation) Mumbai seeking further enquiry in the case of 14 creditors which included the above 5 creditors. Thus, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

her 21 creditors the ADIT(Investigation) Mumbai reported that the addresses given are bogus/non-genuine and no concern with the stated name is running on these addresses. 3. It was further stated that in respect of parties at Sl.No.1 to 9 these companies form part of the Khandar Group of cases and are income-tax defaulter companies with huge arrears of tax and no source of income. On being confronted by the AO, the assessee filed the copies of income-tax return/acknowledgement form in respect of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Stock Broker (P) Ltd., 352/- 20,00,000/ 5 Shri Anekant Shares & Securities (P) Ltd., 777/- 20,00,000/ He observed that similar is the case with other creditors whose tax return acknowledgments have been filed. Therefore, applying the provisions of section 68 of the I.T. Act, the AO made addition of ₹ 4,72,15,000/- in respect of 21 parties on the ground that the assessee failed to discharge the onus cast on him by proving the identity and capacity of the creditor and genuineness of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

crap Center, Pune,(2) M/s. M.V. Glass and Minerals, Mumbai, (3) M/s. Abdullah Traders, Rampur (UP) and (4) M/s. Siddiqui Enterprises (Uttaranchal) notices were issued but no responses were received till the date of assessment. Similarly, in respect of the remaining 3 parties notices were returned unserved with the noting "not known". The AO, therefore, asked the assessee to furnish bank account of these parties and their confirmations. 5. However, the assessee furnished its own bank ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se, Amit Traders and Raja Traders as inflation of purchases and made addition of ₹ 1,93,66,348/- the details of which are as under : M/s. Raja Traders Rs.1,18,16,453/- M/s. Amit Traders Rs.27,13,144/- M/s. Ajay Enterprises Rs.48,36,751/- Total Rs.1,93,66,348/- Thus, the AO made addition of ₹ 7,09,38,357/- to the total income of the assessee. 6. Before CIT(A) the assessee filed detailed written submission along with certain new evidences. It was submitted that the AO asked the assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Y. 2007-08. Accordingly, the assessee was called upon to substantiate the loan receipts and prove the genuineness and identity of the loan creditor with the help of bank account statements of the lenders. Similarly, the assessee was asked on 23-12-2009 to substantiate certain purchases by producing confirmation letters and bank account statements. Since the time given by the AO was very little the assessee could not furnish all those details/evidences and the order was passed by the AO on 31-12- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons u/s.131 of the I.T. Act were issued to the loan creditors and trade creditors in whose cases the additions were made to the total income of the assessee. The principal officers of the 21 companies from whom loans were taken and the 3 trade creditors were summoned u/s.131 of the I.T. Act. The loan creditors were asked to produce the evidences to substantiate their identity and capacity to extend such loan and the genuineness of the transactions by producing relevant I.T. return with balance s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee. 9. However, the AO noted that although the creditors have furnished copies of their bank accounts, income-tax particulars and other documents substantiating their identity and have confirmed to have received the interest, however, the loan received from Khandar group of companies cannot be accepted since these companies were not maintaining the books of account and the last return filed by these companies was for A.Y. 2000- 01. The AO further noted that these assessees deposed before t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s a fire in the office at Masjid Bandar of Mumbai on 02-11-2001 which damaged all the books of account. In respect of this claim copy of the FIR report was submitted. It was accordingly claimed that after that incident none of the group companies have finalized their accounts nor filed their incometax returns. On a query in respect of the credits seen in the bank accounts prior to advancing loans, it was deposed before the AO that the same are through internal fund arrangements. 10. The Ld.CIT(A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ief of ₹ 2,21,50,000/- on account of addition made on account of unexplained cash credit u/s.68 of the I.T. Act. 11. So far as the disallowance of interest on unsecured loan is concerned, he held that since an amount of ₹ 2,21,50,000/- have been accepted as genuine loan in the hands of the assessee, therefore, interest relatable to such cash credits on ₹ 2,21,51,000/- cannot be sustained. Hence, he deleted that. He however sustained interest of loan amounting to ₹ 2,40,00 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ers. He further noted that one of the suppliers namely M/s. Raja Traders responded to the summons by his personal attendance and produced the desired records including VAT and Audit report etc. in support of the supplies made by him. However, 2 other creditors namely Ajay Enterprises and M/s. Amit Traders did not personally attend but asked for adjournment. However, the assessee had furnished complete details/evidence in respect of the purchases effected from the said concerns at ₹ 27,13,1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

spect of the purchases made he held that the disallowance of purchases aggregating to ₹ 1,33,66,348/- cannot be sustained. He accordingly deleted the addition. 13. Aggrieved with such part relief given by the CIT(A) the Assessee as well as the Revenue are in appeal before us with the following grounds : Grounds by Assessee : "Wherever context so require, the following grounds of appeal & prayers are without prejudice to one another and in alternative - 1 . In view of the facts and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0/-, confirmed by the learned CIT (A) u/s 68, may please be cancelled/deleted. 2. The learned CIT(A) erred in observing that - "The appellant's own admission that the entire financial affairs of the companies/entities of the group were in the total financial mess ........" to justify the conclusion that ".......this admission of appellant itself is a sufficient ground to doubt the genuineness of the transactions between the appellant and the said companies", when in fact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed CIT (A) erred in confirming the addition of ₹ 2,40,00,000/-, made u/s. 68, by rejecting the numerous evidences available on record, supporting the credit worthiness of the loan creditors and the genuineness of the loan transactions and without bringing on record any material against the authenticity of any of them. 5. The learned CIT (A) erred in upholding the disallowance of interest paid by account payee cheques, after making due TDS, on the loans from the Kandhar Group of companies. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

account of inflation of purchases? 3. The appellant prays the order of the Assessing Officer may be restored. 4. The appellant prays to adduce such further evidence to substantiate his case. 5. The appellant prays leave to add, alter, clarify, amend and or withdraw any grounds of appeal as and when the occasion demands." 14. The Ld. Counsel for the assessee while arguing the disallowance confirmed by the CIT(A) on account of loan taken amounting to ₹ 2,40,00,000/- from the Khandar gr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t in the case of Kapil Marketing Pvt. Ltd. and Kushal Dye-Chem Pvt. Ltd. the PAN Number of all the creditors are furnished in the paper book, copy of bank statements of all the creditors are also placed in the paper book. He submitted that the loan taken from these parties have been received through bank cheques. All the above parties have appeared before the AO and confirmed to have given the loans to the assessee company and this fact is also noted by the AO at para 4.4 to 4.6 of the remand re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s of the above creditors for which he has made the addition. He submitted that the repayments of these loans are also made by bank cheques. 15. Referring to the decision of the Pune Bench of the Tribunal in the case of ITO Vs. Jai Bajrang Ginning and Pressing Pvt. Ltd. vide ITA No.1430/PN/2009 order dated 23-12-2011 for A.Y. 2006-07 he submitted that the Tribunal in the said decision has dismissed the appeal of the revenue where the CIT(A) has accepted the loans obtained from various agriculturi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eir own source and if at all the AO is not satisfied regarding the availability of monies with the creditors, same cannot ipso facto mean that assessee has failed to discharge the burden cast on it u/s.68 of the Act qua the credit appearing in the assessee s accounts books. Referring to the said decision he further submitted that the Tribunal further held that in case where the creditor appears, confirms advancing of loan to the assessee and also explains the source of income, there is no requir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition, if any, has to be made in their hands and no addition can be made in the hands of the assessee since the assessee has discharged the burden cast on it. The assessee is not required to prove the source of the source. He accordingly submitted that the addition made by the AO and sustained by the CIT(A) is not justified since the assessee has proved the source of the cash credit and he is not required to prove the source of the source. 16. So far as the appeal of the Revenue is concerned he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the remand report, the Ld. Counsel for the assessee drew the attention of the Bench to the findings given by the AO in the remand report and submitted that although the 2 trade creditors, i.e. Ajay Enterprises and Amit Traders did not attend the proceedings by filing the adjournment letters, however, complete details/evidences in respect of all the purchases effected from the said concerns were furnished by Shri Ravindra Kumar Jain of Bharat Glass Tube Ltd. He submitted that based on the vari .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the sales and furnished the inventory of stock. This according to the Ld. Departmental Representative does not absolve the assessee to prove expenses made on account of purchases from Ajay Enterprises at ₹ 27,13,144/- and Amit Traders at ₹ 48,36,751/-. He submitted that despite giving opportunities during assessment proceedings the suppliers did not furnish any evidence. The evidences to support the purchases effected from the said parties were not furnished by the assessee s represe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be restored. 18. So far as the amount of ₹ 2,40,00,000/- sustained by the Ld.CIT(A) is concerned he submitted that the Ld.CIT(A) has thoroughly discussed the issue. The assessee has not proved the capacity of the loan creditors and the genuineness of the loan transaction. Since for allowing cash credit the assessee has not only to prove the identity but also has to prove the genuineness of the transaction and the capacity of the loan creditor, therefore, merely by filing the documents like .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. So far as the appeal filed by the assessee is concerned, we find the AO made addition of ₹ 4,72,15,000/- u.s.68 of the I.T. Act in respect of 21 creditors on the ground that the assessee failed to discharge the onus cast on it regarding the ingredients of section 68 such as the identity and capacity of the creditors and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the above. 2, As directed by the Ld CIT(A)-II Nashik, summons u/s. 131 of the Income Tax Act, 1961 were issued to the Loan Creditors and Trade creditors in whose cases the additions were made to the total income of Bharat Glass Tubes Ltd., Sinnar (BGTL) as per details furnished in the report submitted under letter of even no. 2128 dated 14/02/2011. Party wise details and the amounts involved in the impugned transactions are as given below. (a) Loan Creditors : Sr.No. Name of parties Amount i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rivate Limited, Mumbai 2500000 10 Samayak Shares & Stock Brokers Pvt. Ltd., Mumbai 2000000 11 Skytouch Infrastructure Private Limited, Mumbai 1000000 12 Unno Industries Limited., Mumbai 6500000 13 Amrut Marketing Private Limited, Mumbai 5050000 14 Kapil Marketing Private Limited, Mumbai 2600000 15 Kausal Die Chem Private Limited, Mumbai 900000 16 Mona Traders Private Limited, Mumbai 2600000 17 Senior Marketing Private Limited, Mumbai 3100000 18 IndiaGate Soft Tech Ltd., Mumbai 2500000 19 Nah .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

11 and 08/03/2011. BGTL was also informed about the above proceedings vide this office letter dated 25/02/2011 and the presence of their representative was requested for, in case they would like to cross examine any of the above persons. The loans creditors were asked to attend this office with the following details/evidence. (i) Evidence with respect to their identity. (ii) Copy of the relevant income tax return along with the Balance sheet / schedule, reflecting the above loan. (iii) Copy of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

receipts related to the purchases. (iv) Copy of bank account reflecting the receipts related to the above purchases (v) Books of accounts pertaining to the above period, (vi) Bills, Transport/octroi receipts pertaining to the purchases. 4. All the above, mentioned persons except two of the Trade creditors i.e. M/s. Ajay Enterprises and M/s.Amit Traders attended in compliance to the summons as mentioned above. The details indicating the factual report of the proceedings are submitted as below. 4. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion, certificate of incorporation, copy of MCA- 21, copies of bank accounts relating to advancing the loan, repayment, audited financial statements, copy of income tax returns, duly confirmed account extracts etc were submitted during the proceedings. Books of accounts were produced and the ledger accounts were submitted. The company is regularly assessed to tax. The deponent has further furnished information of the loans advanced, repayments during the. year under consideration which are given .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. His statement was recorded u/s.131 of the I.T. Act. The deponent confirmed that loan amount as mentioned in para 2 above was advanced to the BGTL and also confirmed receipt of interest. In support of the identity and genuineness of the transactions, Memorandum and Article of association, certificate of incorporation, copies of bank accounts relating to advancing the loan, repayment, audited financial statements, copy of income tax returns, duly confirmed account extracts etc were submitted dur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4375961 1500000 459240 375961 5959240 Duratex India Pvt. Ltd., Mumbai 3115979 3000000 388989 215979 6288989 4.3 Name of company Details of filing of returns Shri Anekant Shares and Securities Private Ltd., Mumbai (AAKCS4932J) In compliance to the summon issued Shri Saniay A Choudhary, C.A authorized by the Director of the company attended. His statement was recorded u/s 131 of the I.T. Act 1961. The deponent confirmed that loan amount as mentioned in para 2 above was advanced to the BGTL In supp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

advanced, interest received, repayments of the year under consideration which are given in the note (**) below Palasiya Leasing and Investment (P) Ltd., Mumbai (AABCP4363M) -do- Samayak Share and Stock Brokers Pvt. Ltd., Mumbai (AAKCS3497C) -do- Skytouch Infrastructure Pvt. Ltd. Mumbai (AAJCS9934R) -do- (**) Name of company Details of Loans Opening Addition Interest (Net) Repayment Total as on 31/3/2007 Shri Anekant Shares and Securities Pvt. Ltd., Mumbai 00 2000000 00 00 2000000 Palasiya Leasin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Act, 1961. The deponent confirmed that loan amount as mentioned in para 2 above was advanced to the BGTL and also confirmed receipt of interest. In support of the identity and genuineness of the transactions, Memorandum and Article of Association, certificate of incorporation, copies of bank accounts relating to advancing the loan, repayment etc were submitted during the proceedings. The company has not maintained books of accounts and the last return filed by the company was of A.Y. 2000-01. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

her, it was also deposed that there was a fire in the office at Masjid Bandar, Mumbai on 02-11-2001 which damaged all the books of accounts. In support of this claim, copy of the Fire report is also submitted. Hence, after that incident, none of the group companies have finalised their accounts/not filed their IT returns. On a query in respect of the credits seen in the bank accounts prior to advancing loans, it is deposed that the same are through internal fund arrangements. The deponent has fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

50000 605874 2060302 7148334 Senior Marketing Pvt. Ltd., 1755674 3100000 294018 2005674 3144018 Kapil Marketing Pvt. Ltd 2009052 2600000 346887 1509052 3446887 Kausal Dyechem Pvt. Ltd., 501275 900000 123645 1275 1523645 Mona Traders Pvt. Ltd., 1004080 2600000 293444 504080 3393444 4.5 Name of company Details of filing of returns Indiagate Softech Limited (AABCI2456G) In compliance to the summon issued Shri Prafulla Mansukhlal Kandhar, Director of the company attended. His statement was recorded .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of A.Y. 2000-01. In this regard, it is deposed that consequent to search action u/s.132 in their group of cases (Kandhar Group) conducted in the year 1992 at Mumbai, the group offered to tax an amount of ₹ 2.10 crores in 108 entities which was accepted by the Hon ble High Court of Bombay. After the search, the entire financial affairs of the companies/entities of the group were in the total mess, as a result of which none of the companies of the group have filed their income tax returns s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e deponent has further furnished information of the loans advanced, interest received, repayments during the year under consideration which are given in the note (**) below. Saffron Surgical Systems Pvt. Ltd., Mumbai (AAACS9165R) -do- Naheshri Marketing Ltd., Mumbai (AAACN2080Q) -do- (**) Name of company Details of Loans Opening Addition Interest (Net) Repayment Total as on 31/3/2007 Indiagate Softech Ltd 2261157 2500000 322628 2011157 3072628 Saffron Surgical Systems Pvt. Ltd. 502805 1100000 10 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d receipt of interest. In support of the Identity and genuineness of the transactions, Memorandum and Article of Association, certificate of incorporation, copies of bank accounts relating to advancing the loan, repayment etc were submitted during the proceedings. The company has not maintained books of accounts and the last return filed by the company was of A.Y. 2000-01. In this regard, it is deposed that consequent to search action u/s.132 in their group of cases (Kandhar Group) conducted in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ks of accounts. In support of this claim, copy of the Fire report is also submitted. Hence, after that incident, none of the group companies have finalised their accounts/not filed their IT returns. On a query in respect of the credits seen in the bank accounts prior to advancing loans, it is deposed that the same are through internal fund arrangements. The deponent has further furnished information of the loans advanced, interest received, repayments during the year under consideration which ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the summons issued was made only by M/s. Raja Traders, Prop. Shri Rajomal A. Dhodeja (HUF). Shri Vishnu R. Dhodeja, member of HUF attended. His statement was recorded u/s.131 of the I.T. Act, 1961. The deponent confirmed the transaction, i.e. sales made by the M/s. Raja Traders to BGTL during the year under consideration. Books of accounts of the relevant period were produced and ledger account, VAT audit report, audited financial statements, copy of Income Tax returns and copies of all the s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons, the proprietors have requested for date after 21/04/2011. Shri Ravindra Kumar Jain of BGTL was shown the above mentioned adjournment letters and in the matter of the transactions with the said concerns, his statement was recorded on 08/03/2011. In support of the impugned transactions, Shri Ravindra Kumar Jain furnished copies of confirmation of the accounts of the said parties, copy of income tax return of the said persons obtained by him from them for the purpose of the submitting the same .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the transactions and credit worthiness of the loan creditors as regard the creditors in paras 4.1 to 4.3, the books of accounts produced and copies of I.T returns/Balance sheet, etc,, submitted during the course of the proceedings, substantiate the above parameters. However, the loan credits discussed in para 4.4 to 4.6 pertaining to the Khandar Group of cases of Mumbai, the above parameters are not supported by books of accounts/IT returns etc., for the reasons given by the deponents discussed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Evidence in the form of books of accounts, VAT audit report, audited financial statements, copies of sale bills etc were produced/submitted during the proceedings in support of the impugned purchases. The other two Trade, creditors i.e. M/s Ajay Enterprises and M/s. Amit Traders did not attend the proceedings as discussed in para 5.1 above. However, complete details/evidence in support of the purchases effect from the said concerns at ₹ 27,13,144/- and ₹ 48,36,75l/- respectively, we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome after A.Y. 2000-01. It is also an admitted fact that in the statement recorded during the course of remand proceedings the authorised persons of these companies have confirmed that the financial affairs of the companies/entities of the group were in total mess for which these companies have not filed their return of income. Therefore, in our opinion, in absence of any financial statements and audited books of account, it is not possible to find out the assets and liabilities of the credito .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

loan creditor and the genuineness of the transaction. Although in the instant case by producing various documents such as ROC Incorporation Certificate, PAN No., bank statement of the lender company and producing the directors of the respective companies, the assessee has discharged the onus so far as identity of these companies are concerned, however, the capacity of the loan creditors and genuineness of the transactions remain unproved especially when these companies have not filed their retur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tor companies especially in absence of maintenance of books of accounts and filing of income-tax returns. Therefore, we concur with the finding of the Ld.CIT(A) that the assessee has failed to establish the genuineness of the loans received from the companies and the capacity of those loan creditors. 19.4 It is the argument of the Ld. Counsel for the assessee that the assessee is not required to prove the source of the source in view of the decision of the Pune Bench of the Tribunal in the case .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the lenders primarily on the ground that before advancing of loans by account payee cheques the lenders have deposited cash in their bank accounts. Further, the AO had observed that during the course of examination some of the lenders could not explain as to who had filled up pay in slips of the cash deposited in the bank account apart from other things. The Tribunal while allowing the claim of the assessee has observed as under : "9. In the present case, in so far as 16 persons are conc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n produce to the assessee company, which is engaged in the business of ginning and pressing of cotton. It is also a stated position that the lenders are not strangers to the assessee company, inasmuch as they are its shareholders. Moreover, it is also found by the Commissioner of Income-tax (Appeals) that all the creditors have been repaid subsequently through account payee cheque. Considering the entirety of the aforesaid circumstances, in our view, the assessee had duly discharged its burden c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income on the ground that the entire financial affairs of the companies/entities of the group were in the total mess, therefore, the genuineness of the transactions and capacity of the loan creditors are doubtful. Therefore, the various case decisions relied on by the Ld. Counsel for the assessee including the decision of the Pune Bench cited (Supra) are not applicable to the facts of the present case. In view of the above, we uphold the order of the CIT(A) on this issue and the grounds raised .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Ld.CIT(A) called for a remand report from the AO. On the basis of the appearance of the proprietor of M/s. Raja Traders before the AO and the documents in respect of the other 2 parties having been filed before the AO, the Ld.CIT(A) deleted the addition in respect of the 3 parties from whom the assessee had made purchases and which was doubted by the AO. We find although Revenue has not challenged the deletion of ₹ 1,18,16,453/- being purchases from M/s. Raja Traders we find the Reven .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version