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2015 (11) TMI 854

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..... representative has not been able to place on record for any cogent evidence in the form of bank statement, statement of asset and liability of the assessee, etc., to dispel the shadow of doubts. It is a well accepted principle that to accept a credit as genuine all the three conditions, i.e., identity of person who has accepted the loan, genuineness of transaction and creditworthiness of the person extending loan has to be satisfied. If any of the aforesaid conditions are absent the loan transaction comes under cloud. In the present case the assessee has not been able to establish the creditworthiness of the director of the company who has purportedly extended loan. We concur with the findings of the Commissioner of Income-tax (Appeals) on .....

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..... the case as emanating from records are : The assessee is a private limited company and is engaged in the business of software development. The assessee filed its return of income for the impugned assessment year on January 29, 2009 declaring total income of ₹ 9,58,520. During the course of scrutiny assessment the Assessing Officer made certain additions/disallowance in the income returned by the assessee. 5. Aggrieved by the assessment order dated December 30, 2010, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). Before the first appellate authority the assessee furnished certain documents which were not produced by him before the Assessing Officer. The Commissioner of Income-tax (Appeals) in orde .....

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..... epresentative further submitted that balance outstanding represents accumulated balance on account of series of transactions. The learned authorised representative in support of his submissions placed on record ledger loan account of director Shri Xerces Mullan in the books of the assessee. The learned authorised representative contended that the director of the company had furnished confirmation letter and copy of the permanent account number card. With respect to second ground of appeal the learned authorised representative contended that ad hoc addition of ₹ 5,00,000 was made by the Assessing Officer. The Commissioner of Income-tax (Appeals) has reduced the same to ₹ 2,00,000. The addition has been made without any basis. The .....

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..... ficient opportunity to the assessee to submit the documents in support of its contentions. However, the assessee deliberately withheld the information and relevant documents for the reason best known to it. The Commissioner of Income-tax (Appeals) admitted the documents and granted relief to the assessee in violation of rule 46A of the Income-tax Rules. 10. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. We will first take the appeal of the Revenue. The Revenue has assailed the order of the Commissioner of Income-tax (Appeals) on the ground that the additional evidence produced by the assessee was accepted without recording the reasons and in violation of r .....

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..... ce adduced establishes the identity of the person. However, merely because a creditor has been identified, it is not enough to show that the onus placed on the appel lant is discharged. What is further required is sufficient evidence to show the creditworthiness of the creditors and genuineness of loans. The copy of the return of income filed shows that the creditor has returned a mere total income of ₹ 1,50,820 for the assessment year 2008-09 while the credit balance shown to be outstanding in his name is ₹ 40,00,702. As per the ledger account extract furnished, the entire expenditure is incurred during the year itself. The appellant has also not furnished the bank account extract of the said person from whom the expenditure is .....

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..... The learned authorised representative has not been able to place on record for any cogent evidence in the form of bank statement, statement of asset and liability of the assessee, etc., to dispel the shadow of doubts. It is a well accepted principle that to accept a credit as genuine all the three conditions, i.e., identity of person who has accepted the loan, genuineness of transaction and creditworthiness of the person extending loan has to be satisfied. If any of the aforesaid conditions are absent the loan transaction comes under cloud. In the present case the assessee has not been able to establish the creditworthiness of the director of the company who has purportedly extended loan. We concur with the findings of the Commissioner of I .....

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