TMI Blog2016 (1) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in August and September 2005 would have been used by her for some other purposes. This cannot be considered as a surmise, for a simple reason that assessee had to pay interest on the cash credit account. In such a situation, we are of the opinion that lower authorities were justified in not accepting the withdrawal from the cash credit account, more than one year back, as a source for investment in the property. Case of Meena Nagaraj Naik (supra) of coordinate bench would not come to the aid of assessee since the drawings were from the cash credit account and not a savings account. Accordingly we are of the opinion that lower authorities were justified in making an addition - Decided against assessee Undisclosed loan - Held that:- claim of creditors that they did not have any bank account, since the village they lived viz., Huilgol / Kelur had no bank account cannot be accepted, when there were banks available within a reasonable periphery. It is against the principle of preponderance of probability that huge sums of money would have been kept in cash by them, over a number of years and loaned to the assessee in one go. Assessee might have been able to prove the credit wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDICIAL MEMBER For The Assessee : Smt. Sheethal, Advocate For The Revenue : Shri. Sunil Kumar Agarwala ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by assessee she has altogether raised five grounds. These grounds, except for grounds 1 and 5 which are general in nature, relate to additions made by the AO disbelieving the explanations given by the assessee on the source for acquiring a land measuring 1 acre 25 guntas at Gadag. 02. Facts apropos are that assessee had acquired a piece of land at Gadag for a total cost of ₹ 50,79,755/-. Source of this investment furnished by the assessee along with her return of income read as under : 03. AO verified each of the above source given by the assessee. On the first item of agricultural income of ₹ 18 lakhs, AO found that the family members were altogether holding 52 acres of land at Huilgol. Explanation of the assessee was that the land was cultivated with crops like cotton, groundnut, chillies, Bengal gram and green gram. Assessee s husband Shri. Dheerendra B. Huilgol was examined since he was the largest holder of agricultural land and also since assessee had receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs as unexplained investment in the property. 06. For the hand loan of ₹ 8 lakhs claimed to have been received from Veeramma S. Sajjanar and Smt. Girijadari V. Sajjanar of Kelur village, assessee filed confirmation letters. Assessee also filed certificates from village accountant which inter alia confirmed that these persons were having agricultural land measuring about 29 acres where they were growing mango, banana, maize, sunflower, groundnut, wheat. Shri. Veeranna S. Sajjanar appeared before the AO on 18.02.2009 and stated that he was selling the agricultural produce on the field itself and the buyers had not given any receipts. However the AO viewed confirmation of Shri. Veeranna S. Sajjanar Smt. Giridari V. Sajjanar with caliginosity. According to him, though the village accountant had certified an annual income of ₹ 2,75,000/- for Veeranna S. Sajjanar and his wife, after considering their personal expenditure they would not have had sufficient funds with them to lend a sum of ₹ 8 lakhs to the assessee. Further as per the AO, these persons had also not produced any evidence for sale of agricultural produce and their claim that the money was kept in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his income, a record of rights of the agricultural holdings and certificate by the village accountant were filed. 11.Aggrieved assessee moved in appeal before the CIT (A) against each of the above addition. The very same averments which were made before the AO were repeated before the CIT (A). CIT (A) affirmed the order of AO considering that assessee could not discharge the duty vested on her to establish that loans were genuine. As per the CIT (A) in almost all the cases, receipt of loans were in cash. Claim of the assessee that creditors had kept large amounts of money in their hand without banking could not be accepted and no evidence were produced by the assessee regarding sale of agricultural produce by the creditors or herself. CIT (A) also noted that assessee could have directly loaned the sums from the creditors instead of indirectly doing it through her husband. 12. Now before us, assailing each one of the additions made by the assessee and confirmed by the CIT (A), Ld.AR submitted identity of the creditors, their credit worthiness and genuineness all stood established. Concerned persons had appeared before the AO and confirmed the loans. Concerned persons had also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural income appears as ground no.4. No doubt AO himself has admitted that assessee along with her husband and sons were holding 52 acres of agricultural land. There was a certificate from village accountant also confirming the holding of land. Assessee had also filed records of extracts for the agricultural land. AO had doubted the claim of the assessee for a reason that savings which were made during a period of 5-6 years, if it was real would have been banked. Assessee also could not produce any evidence for sale of the agricultural produce. In our opinion the reasons given by the AO was well justified. In the first place assessee herself was having an account in Punjab National Bank, Gadag. Assessee's husband was also having bank account in Corporation Bank as well as State Bank of India, Gadag, which fact he affirmed in his answer to question no.7 posed by the AO during his examination on 27.02.2009. Assessee's husband had admittedly received some of the loans, claimed by the assessee as a source, through cheques. Thus when assessee and her husband were having bank accounts, it is difficult to believe that savings from agricultural income was kept by them in cash a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2.98 lakhs. Ground 3 of the assessee stands dismissed. 17. Ground taken by the assessee vis-a-vis loans from Kanakadasa Shikshana Samiti, Veeranna S. Sajjanar and Smt. Girijadari V. Sajjanar, Shivappa H. Neeralgi, Allasab H. Kadad and Devappa G. Kadi, appear as ground no.2. Of these persons, loan from Kanakadasa Shikshana Samithi, loan from Shivappa, loan from Allasab and loan from Devappa are claimed to have been taken by assessee's husband, whereas loan from Veeranna S. Sajjanar and Smt. Giridari V. Sajjanar is claimed to have been borrowed directly by the assessee. In all these cases of loans there is no dispute that the concerned persons had appeared before the AO and affirmed the factum of giving loans to the assessee in cash. It is also not disputed that all these persons were having substantial agricultural holdings and they had produced certificates from village accountant for the holdings as well as the income. 18. AO disbelieved the loan from Kanakadasa Shikshana Samithi for a reason that assessee herself could have raised the loan and the loans need not have been taken through her husband. Further, as per the AO there was a gap of 4 5 months between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties and identity of the creditors. However in our opinion genuineness of the transaction has not been proved by the assessee. In such a situation, we are of the opinion that lower authorities were justified in disbelieving the version of loan of ₹ 8 lakhs from Veeranna Sajjanar. 20. Coming to the loan of ₹ 5 lakhs alleged to have been taken from Shivanna, the said transaction was also claimed to be in cash. No doubt here also, the village accountant had certified the holding of the concerned Shivanna to be about 30 acres. As mentioned by us, Shivanna was also a resident of Huilgol village. To believe that he had saved and kept a sum of ₹ 5 lakhs in cash at his residence over various years and loaned it in cash to the assessee is difficult to believe. It is not a surmise but against the principle of preponderance of probability . Just because the creditor had produced evidence in the nature of agricultural holding or income of ₹ 4.5 lakhs per year would not be sufficient to come to a conclusion that they had funds with them to give a loan to the assesee in cash. Here also, in our opinion, genuineness of the loan has not been proved by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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