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Mahalaxmi Housing and Finstock Pvt. Ltd. Versus The ACIT Central Circle-1 (4) Ahmedabad

2015 (8) TMI 839 - ITAT AHMEDABAD

Unsecured loan as unexplained cash credit u/s.68 - Held that:- Considering the contention of the assessee that the assessee had furnished PANs, addresses, etc. to prove the identity, genuineness of the transaction and creditworthiness of the depositors. We find that the assessee has filed PANs, addresses, etc. for demonstrating that the depositors were assessed to tax. In view of the case-laws as relied upon by assessee more particularly judgement of Hon’ble Jurisdictional High Court in the case .....

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orders of the Ld. Commissioner of Income Tax(Appeals)-I, Ahmedabad [ CIT(A) in short] dated 18/11/2010 and 18/10/2010 pertaining to Assessment Years (AYs) 2006-07 and 2007-08 respectively. Since identical grounds have been raised in both these appeals by the assessee, therefore these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the Assessee s appeal in IT(ss)A No.19/Ahd/2011 for AY 2006-07 as a lead case. The A .....

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/s.153A(1)(b) r. W. S.144 of the Act was framed vie order dated 31/12/2008. While framing the assessment, the AO made addition on account of unexplained cash credit amounting to R.17,87,000/-. Against the assessment order, assessee preferred an appeal before the ld. CIT(A), who after considering the submissions of the assessee, partly allowed the appeal, thereby the CIT(A) directed the AO to verify the facts in case the facts are found to be correct, then the addition to be restricted to ₹ .....

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he almost affairs of the company. Apart from the same, his wife Smt.Deviben Bholabhai Patel is also a Director but the business and other affairs, day-to-day transactions, etc. Are handled by the main Director Mr. Bholabhai V. Patel only. In addition to the same, the Director Mr. Bholabhai V. Patel has been at a very senior post being Rastriya Sachiv of National Congress Party and working at all over India level. Since Director Mr. Bholabhai V. Patel has the responsibilities and duties of his po .....

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s office and given to Director Mr. Bholabhai V. Patel, but meanwhile, the Director was urgently called to Delhi on the party work. So, he urgently went to Delhi along with his many other papers in his bag including the CITA( s order of Mahalaxmi Housing and Finstock Pvt. Ltd. The ld. Counsel for the assessee also submitted that after reaching to Delhi, the Director Mr. Bholabhai V. Patel was much engaged in party meetings and other programs. Meanwhile, during the course of these meetings and pro .....

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bers of the party. When he visited Delhi Office thereafter, he verified all the bunches of the party literatures and documents and found the order between them. He immediately sent such order at Ahmedabad to the company office but meanwhile the time limit of 60 days was already been completed. Due to the above reason, the appeal could not be filed within the stipulated time of 60 days after receipt of the order from CIT(A) s office. This is a bona fide reason due to which there has been a little .....

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of Madras in the case of Sreenivas Charitable Trust vs. DCIT reported at 280 ITR 357 : 154 Taxman 377), we condone the delay in filing the appeal. 3. The only ground in this appeal is against confirmation of addition of ₹ 1 lac. The ld. Counsel for the assessee reiterated the submissions as were made vide written submissions dated 15/06/2015. 3.1 On the contrary, Sr.DR supported the orders of the authorities below. 4. We have heard the rival submissions, perused the material available on r .....

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0. The company has filed the Return of Income has been filed on 05/12/2006 Vide Acknowledgement No.90298074. The books of accounts have been maintained and the same have been audited. 02. At the time of assessment proceedings, the details were submitted to the Assessing Officer including the Profit and Loss Account, Balance Sheet, Audit Report etc. Thereafter, the new Assessing Officer took the charge in the first week of December- 2008 and on 31/12/2008, the Assessing Officer passed the order m .....

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Assessment Order. 04. Honourable CIT(A) after considering the submission of the Assessee, passed the appellate order on 18/11/2010 directing the Assessing Officer to verify whether the facts submitted by the assessee are correct and if the same are found correct then addition of ₹ 16,87,000/- in respect of the two parties namely "Mangaldeep Developers Pvt. Ltd." & "Mangal Sagar Associates & Developers Pvt. Ltd." are to be deleted and the addition in respect of .....

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A) failed to appreciate the following documents which were submitted vide submission dated 16/11/2010. Sr. No. Document submitted Remark 6.1. Return of Income & PAN Revealing the fact that the assessee has been having the adequate identity, Income Tax Return Filer and being assessed to tax. 6.2. Confirmation on the copy of Account of Unsecured Loan Holder s Books Revealing the fact that the assessee has taken unsecured loan which has been confirmed by the unsecured loan holder. 6.3. Bank Pas .....

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e cheque. Such documentary evidences are sufficient enough to prove the identity, capacity, Genuineness, creditworthiness of the unsecured loan holder Popatlal B Patel. Case Laws: 08. Gujarat High Court - CIT V. Sachitel Communications (P.) Ltd. - [2014] 51 taxmann. Com 205 (Gujarat)/[2014] 227 Taxman 219. Section 68 of the Income tax Act, 1961 Cash credit (Loans) Assessment year 2006-07 Commissioner (Appeals) and Tribunal concurrently found that assessee proved identity of creditor and capacity .....

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61 Cash credits (Burden of proof) Various additions were made to assessee's income on account of cash credits It was found that in respect of said credits assessee had filed PAN of creditors, their confirmation and their bank statement which established their creditworthiness. Moreover, transactions were made through banking channels. Whether any addition could not be made to assessee's income under section 68 Held, yes [Para 5] [In favour of assessee]. No addition on account of cash cre .....

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d loss account and computation of total income in respect of all creditors/lenders were furnished and when it had been found that loans were furnished through cheques and loan account were duly reflected in balance sheet, Assessing Officer was not justified in making addition Held, yes [Para 6] [In favour of assessee]. IT : Where name, address, PAN, copy of IT Returns, balance sheet, profit and loss account of all creditors/lenders as well as their confirmation had been furnished, Assessing Offi .....

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ot justified in treating same as undisclosed income and in making addition under section 68 Held, yes (Para 3] [In favour of assessee]. IT: Where transactions were routed through bank and assessee had explained source of income, additions under section 68 could not be made Para 3: 3. Having heard Ms. Mauna Bhatt, learned Counsel appearing on behalf of the appellant and on perusal of the impugned common judgment and order passed by the ITAT as well as the finding given by the CIT(A) while deletin .....

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Bank. Thus, the Assessing Officer was not justified in treating the same as undisclosed income and in making the additions under Section 68 of the Income Tax Act. |l2. Gujarat HC - CIT Vs. Harishbhai Raojibhai Patel HUF - 219 Taxman 125. Section 68 of the Income tax Act, 1961 Cash credit [Deposits] Assessing Officer made certain addition under section 68 on ground that assessee was unable to establish identity and creditworthiness of depositor and genuineness of transaction On appeal, Commissio .....

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hantilal Keshavlal Bhatt Vs. ITO - ITA No. 2919/Ahd/2011. Para 6: 6 After hearing both the parties and perusing the record, we find that there is no dispute about the fact that the assessee received the sum of ₹ 4,00,000/-from Shri N I Vyas through banking channel. In support of his claim, bank passbook of the depositor along with PAN Card and letter of confirmation from Shri Vyas are already on record. Thus, the identity and creditworthiness of the depositor is established. We further fin .....

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Section 68 of the Income tax Act, 1961 Cash credit Assessment year 2005 06. When confirmation of all parties, from which unsecured loans were received by assessee, were furnished along with their permanent account numbers, copy of acknowledgement of income tax returns, etc., and no enquiry was made by Assessing Officer, no addition could be made under section 68 in respect of said unsecured loans [In favour of assessee]. 15 Ahmedabad ITAT - Rohini Builders Vs. DCIT - 117 Taxman 25. Section 68 of .....

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of credits in its books of account but not source of source Held, yes Whether as phraseology employed is 'may' and not 'shall' in section 68, unsatisfactoriness of explanation does not and need not automatically result in deeming amount credited in books as assessee s income Held, yes Whether taking into consideration totality of facts and circumstances of case and, in particular fact that Assessing Officer had not disallowed interest claimed/paid in relation to those credits an .....

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k accounts and depositors had disclosed respective amounts in their voluntary disclosure returns Whether even though it was established that such amounts were undisclosed income of respective creditors, yet as Assessing Officer could not establish any link that amounts in fact belonged to assessee, addition made was not justified Held, yes 17. Ahmedabad ITAT - Dimco Silk Mills Vs. ITO - 107 Taxman 41. Section 68 of the Income tax Act, 1961 Cash credits Assessment year 1989-90 Whether, where asse .....

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fresh loans obtained during the year relevant to A/Y - from the loan creditors, their respective income tax returns and bank statements relevant to the loan transactions but AO had alleged that that creditors had disclosed income at a low level, which had no commensurate with the loan given to the assessee - AO had concluded that the assessee had failed to prove the credit worthiness of few creditor and assessed loan creditors aggregating to specified amount as income of the assessee u/s 68 - On .....

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nt case, since the assessee had furnished their confirmation letters, income tax returns, the identity of all the creditors in both the years stand established -Further, AO had also identified the owners of all the concerns - It was not disputed that the loan transactions were routed through the banking channels and hence the genuineness of the loan transactions were established - AO had not brought any material on record to show that the explanation furnished was in any manner, unsatisfactory o .....

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288 Conspectus: Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 2000-01 - Whether opinion of Assessing Officer for not accepting explanation offered by assessee under section 68, as not satisfactory must be based on proper appreciation of material and other surrounding circumstances available on record; and Assessing Officer cannot reject each and every explanation of assessee - Held, yes - Assessee had taken a loan of ₹ 1.5 lakhs from one 'OP' vide a bank d .....

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y which was unaccounted, in name of creditor, 'OP', and therefore, added ₹ 1.5 lakhs as income of assessee - Whether since assessee had filed confirmation of 'OP' of having advanced loan to assessee and had also submitted copy of bank statement as well as cash book of 'OP', it could be said that assessee had proved genuineness of loan and no addition could be made under section 68 -Held, yes. Thanking You, Yours truly, For, Pritesh Shah & Associates Chartered Ac .....

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