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2016 (1) TMI 658 - ITAT KOLKATA

2016 (1) TMI 658 - ITAT KOLKATA - TMI - Addition u/s 69 - addition made in the in sum of ₹ 8 lakhs on protective basis on account of loan advanced - Held that:- We find that the factual transactions have not been properly understood by the ld.AO and the ld.CIT(A). We hold that the assessee only received a sum of ₹ 8 lakhs as loan from his brother and had repaid the same to his brother with interest. Hence, in these facts and circumstances the relevant section, if at all, that could b .....

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ubt based on the findings given hereinabove, that the essential three ingredients of section 68 has been duly proved. Hence, the character of a receipt would not change as admittedly the loan transaction is only capital receipt in the hands of the assessee.

Protective assessment - the circumstances under which a protective assessment could be made has not been properly considered by the revenue. There is absolutely no doubt with regard to the fact that the sum of ₹ 8 lakhs has a .....

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party in the premises of the assessee’s brother. Hence, there is no justification to make any addition in the hands of the assessee for the very sum of ₹ 8 lakhs as cash credit either on substantive or protective basis in the facts and circumstances of the case - Decided in favour of assessee. - I.T.A Nos. 238 & 239/Kol/09 - Dated:- 28-10-2015 - Shri M. Balaganesh, Accountant Member, and Shri S.S. Viswanethra Ravi, Judicial Member For The Appellant : Shri Subash Agarwal Ms. Varsha Jalan, .....

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As the issues involved are identical in nature, they are taken together and these appeals are disposed off by this common order for the sake of convenience 3. Shri Subash Agarwal the Learned AR argued on behalf assessee and Shri Sanjit Kr. Das, JCIT, the Learned DR argued on behalf of the revenue. ITA No.239/Kol/09 A.Y 1992-93 (by the assessee): 4. During the course of hearing before us the ld.AR for the assessee has stated that he would like to withdraw the appeal filed by the assessee for the .....

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earing, the ld.AR for the assessee has stated that he would not like to press all the grounds except ground no.6 regarding the addition made in the in sum of ₹ 8 lakhs on protective basis. The same is taken as a statement from the Bar and accordingly, the other grounds raised by the assessee are dismissed being not pressed by the ld.AR for the assessee. 6. Ground no.6 raised by the assessee is reproduced herein below:- 6. For that, on the facts and in the circumstances of the case, the ld. .....

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nd seized by the search party. In the said loose sheets (seized document reference BAN-6 ) is kept in page 57 of the paper book filed by the assessee. The replica of the said seized documents containing the same loan transaction was found in the premises of assessee s brother, Shri Nandalal Agarwal vide seized document Reference LF/17. The said seized document in LF/17 is kept in page 58 of the paper book filed by the assessee. Both the assessee as well as assessee s brother were assessed by the .....

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as by his brother. But while framing the assessment u/s. 143(3) of the Act in the hands of the assessee for the assessment year 1991-92 the same ld.AO again treated the said loan transaction of ₹ 8 lakhs as if the assessee has advanced the loan amount to his brother as against the fact of assessee having received a loan from his brother. Admittedly, this loan transaction was subjected to interest and assessee has indeed paid interest to his brother and the same interest income was also ta .....

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se would not be applicable in the instant case as the same transaction of ₹ 8 lakhs is kept outside the books of account by the assessee and it is not found credited at all in the books of account, but only found in the loose sheets seized by the department at the time of search, which cannot be construed as books of account. The ld.AR also placed his reliance on the decision of the Third Member s decision of ITAT Mumbai in the case of S.P. Goel Vs. DCIT reported in (2002) 82 ITD 85 (Mum.) .....

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llaneous expenses, etc. The Assessing Officer called for the explanation and it was submitted that the same was in the nature of planning for purchase of gold ornaments and silver utensils, etc. for the marriage of his daughter. The amount was stated to be in anticipation of consignment sales to be made by him of the goods of C(Pvt) Ltd. The Assessing Officer did not accept the explanation and treated the entire amount of ₹ 60 lakhs as undisclosed income of the assessee which was confirmed .....

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rt of a 1992 diary. However, these loose papers consisted of pages torn out from March, April, November and December. There were no closing balances nor opening balances and there was no reconciliation of these entries. Therefore, these could not be termed as books maintained by the assessee during the previous year. Secondly, the assessee had been explaining that the entries were in the nature of planning. The books of account tallied with the items found at the time of search on 14-10-1993. In .....

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s. Therefore, the above decision did not have direct application on the facts of the present case. When it was a mere entry on a loose sheet of paper and if the assessee claimed that it was only a planning, not supported by actual cash, then there had to be circumstantial evidences to support that this entry really represented cash of ₹ 60 lakhs. There was no such evidence found by the revenue in the form of extra cash, jewellery or investment outside the books. In such a case, the explana .....

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1-92 containing various assessment orders and appellate orders passed in the hands of the assessee s brother, Shri Nandalal Agarwal, together with copies of the relevant seized documents, which are kept in pages 41-58 , pages 72-77 and pages 88-92 of the paper book. We find that the factual transactions have not been properly understood by the ld.AO and the ld.CIT(A). We hold that the assessee only received a sum of ₹ 8 lakhs as loan from his brother and had repaid the same to his brother .....

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the Act are namely:- a) Identity of the creditor - it is proved beyond doubt as the ld.AO himself agrees that the money has been given by the assessee s brother to the assessee in the assessment order of the assessee s brother. b) Genuineness of the transaction- it is proved beyond doubt from the contents of the seized documents available in pages 57-58 of the assessee s paper book, which are not disputed by the revenue. c) Creditworthiness of the creditor- this is proved beyond doubt as ld.AO .....

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loan transaction is only capital receipt in the hands of the assessee. 8.4 We find from the assessment order that the addition of ₹ 8 lakhs towards loan transaction has been made in the hands of the assessee by the ld.AO on protective basis, which has been upheld by the ld.CIT(A). In this regard, we would like to state that the circumstances under which a protective assessment could be made has not been properly considered by the revenue. There is absolutely no doubt with regard to the fac .....

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