TMI Blog2015 (9) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee made a plea that given an opportunity the assessee is in a position to produce the loan creditors before the AO with documentary evidence to his satisfaction regarding the credit worthiness of the loan creditors, therefore, we in the interest of justice, deem it proper to restore the issue to the file of the AO with a direction to give one more opportunity to substantiate with evidence to his satisfaction regarding the credit worthiness of the loan creditors for the loan of ₹ 84,99,237/-. The assessee is directed to produce the parties before the AO for his examination. - Decided partly in favour of assessee for statistical purposes. - ITA Nos.1370 & 1371/PN/2012 - - - Dated:- 26-8-2015 - SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ. For The Appellant Shri C. H. Naniwadekar For The Respondent Shri Rajesh Damor ORDER PER R.K. PANDA, AM : The above two appeals filed by the assessee are directed against the separate orders dated 30-04-2012 15-05-2012 of the CIT(A)-II, Nashik relating to Assessment Years 2006-07 2009-10 respectively. For the sake of convenience, these appeals were heard together and are being disposed of by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parate documents like confirmations, PAN, and bank statement extracts for most of the loan accounts were submitted for verification and were accepted by the AO. It was submitted that in 9 cases on which addition has been made u/s.68 the required information could not be obtained in time due to various reasons, viz., the party was not available at the relevant time, party being non cooperative etc. It was argued that during the assessment proceedings the AO was urged on several occasions to summon the parties for verification of the unsecured loans obtained from them which he failed to do and made the addition of ₹ 1,43,48,308. It was argued that the assessee is able to obtain confirmations from 7 parties and only parties namely Smt. Archana Shah and Shri Suresh K. Shah have not responded inspite of repeated reminders. 6. Based on the arguments advanced by the assessee and details furnished, the Ld. CIT(A) called for a remand report from the AO. The AO submitted that out of the 9 persons to whom loans/summons were issued only the below mentioned 4 persons sent their confirmations, the details of which are as under : Sr.No. Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (HUF), Flying Horse Solution and Archana Shah, it was revealed that there were cuttings in the balances (Dalal Enterprises (HUF) and Flying Horse Solution). Confirmation of Dalal Enterprises (HUF) did not mention PAN. In the case of Gunjan Shah no address was mentioned, in the case of Flying Horse Solution while the confirmation letter has shown a balance of ₹ 9,61,644/, the appellant has shown a closing balance of ₹ 8,86,096/as on 31/03/2006. Addresses of Suresh K. Shah (HUF) and Archana Shah are same. Similarly addresses reflected in the confirmations letters of Dalal Enterprises (HUF) and Flying Horse Solution are same. The appellant has not furnished any other evidence in support of genuineness of these cash credits except xerox copies of the confirmations which too are full of discrepancies as mentioned above. While letters sent to Suresh K. Shah and Archana Shah by the AO u/s.133(6) of the Act during remand report proceedings returned undelivered with a remark 'not known', others did not respond to the summons/letters of the AO. The appellant did not produce any evidence to rebut the presumption drawn against him u/s. 68 of the Act by producing the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Rs. 84,99,237 The AO was therefore, justified in treating the same as unexplained cash credits and making the addition u/s 68 of the Act. Additions of ₹ 84,99,237/as mentioned above and ₹ 10,08,079/on account of difference in the amounts of 3 creditors namely Shri. Karnik Kantilal Parikh (HUF), Shri. M. M. Gandhi (HUF). Smt. Shobhana Seth (Total ₹ 95,07,316/) u/s 68 of the IT Act are confirmed. The appellant gets a relief of ₹ 48,40,992/( 1,43,48,308 ₹ 95,07,316). 9. In the result, the appeal of the appellant is partly allowed. 9. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 10. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A). He submitted that the assessee has taken the loans from the loan creditors by account payee cheque and has also returned the loans by account payee cheque. Thus, the entire transactions are through banking channels. The parties had submitted their confirmations along with their PAN numbers and their bank details. Therefore, there is no justification on the part of the CIT(A) in not accepting the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Smt. Shobhana Seth Rs.6,13,775/ ₹ 3,99,629/ ₹ 2,14,146/- 4 Smt. Anita Kapur Rs.17,15,165/ ₹ 17,15,165/ Total Rs.48,40,992/ 10,08,079/- Therefore, the Ld. CIT(A) while accepting loan to the tune of ₹ 48,40,992/- in respect of 4 persons sustained the addition of ₹ 10,08,079/- which is the difference between the figures shown by the assessee and the figures as per the loan confirmation letters filed before the AO by the above 4 parties. Therefore, the order of the CIT(A) sustaining the difference of ₹ 10,08,079/- is upheld. 14. Now coming to the balance amount of ₹ 84,99,237/- taken from the 5 parties, it is a fact that despite letters issued by the AO, the above loan creditors did not respond to such letters during the remand proceedings. It is the settled position of law that for accepting any cash credit, the onus is always on the assessee to substantiate with evidence rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Varsha Dalal Rs,10,15,716/- Total Rs.27,67,599/- 16. We find in appeal the Ld. CIT(A) upheld the action of the AO since the assessee failed to produce any evidence to rebut the presumption drawn against the assessee u/s.68 of the Act by producing the parties in whose names the amounts in question had been credited by the assessee in its books of account. It is the submission of the Ld. Counsel for the assessee given one more opportunity the assessee will produce the loan creditors before the AO to prove the identity and credit worthiness of the loan creditors and the genuineness of the transactions. Considering the totality of the facts of the case and in view of our finding at Para 14 of this order for A.Y. 2006-07, we restore the issue to the file of the AO with a direction to give one more opportunity to the asessee to substantiate with documentary evidence to his satisfaction regarding the identity and credit worthiness of the loan creditors and the genuineness of the transaction. The assessee is also directed to produce the loan creditors before the AO and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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