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The Income Tax Officer Ward-9 (2) Versus. Shri Kishorbhai Chhotalal Parmar

2015 (4) TMI 1095 - ITAT AHMEDABAD

Addition u/s 69 - unexplained source of the credits made in the four undisclosed bank accounts - contention of the assessee is that the accounts were held jointly with other relatives - CIT(A) deleted the addition - Held that:- There is no dispute with regard to the fact the account Nos.9427,61506, 61175 & 61095 with the Surat Peoples Co-operative Bank Ltd., Bhgatalao Branch, Surat, were not disclosed by the assessee to the Income Tax Department while filing the return. The explanation of the as .....

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e and from maturity of mutual funds.

The assessee also furnished certain confirmations from Jayshreeben Parmar, Chandan Parmar, Hansaben Parmar and Bhudarji Mithal. However, the assessee has not furnished the proof of creditworthiness of such creditors. Therefore, the ld.CIT(A) was not justified in deleting the addition being the loan received from friends and relatives without any supporting evidences of the creditworthiness of such creditors.

Further, the ld.CIT(A) obse .....

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same is hereby set aside. The ld.CIT(A) ought to have passed a speaking order in respect of genuineness of the transactions and creditworthiness of depositors. It is also not clear whether the transactions in question had been reflected by other persons or not in their respective books of accounts. And also whether such transactions were reflected in their respective income-tax returns of the parties, if not what action has been taken in their hands. Under these facts, we restore this issue bac .....

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urat ( CIT(A) in short) dated 17/01/2011 pertaining to Assessment Year (AY) 2007-08. The Revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of ₹ 27,96,075/- made by the A.O. u/s.69 of the Act despite the fact that assessee failed to explain the source of the credits made in the four undisclosed bank accounts. 2. On the facts and in the circumstances of the case and in law, th .....

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and in law, the ld.CIT(A) has erred in deleting the addition of ₹ 27,96,075/- made by the A.O. u/s.69 of the Act after accepting the plea of the assessee that an amount of ₹ 6,47,847/- was the loan amount take from four friends/relatives despite the fact that these loans were not reflected in the balance sheets of the lenders. Further the assessee failed to prove the genuineness and the credit worthiness of these transactions. 4. It is therefore, prayed that the order of the ld.CIT(A .....

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from undisclosed bank accounts by invoking the provisions of section 69 of the IT Act. Against this, assessee filed an appeal before the ld.CIT(A), who after considering the submissions of the assessee restricted the addition to the extent of ₹ 10,99,109/-. The ld.CIT(A) further directed the AO to re-examine the case from the angle of reopening the of AY 2006-07 in order to bring the opening cash balance of ₹ 10 lacs and opening bank balance in these bank accounts of ₹ 2,07,231 .....

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facts. He submitted that the ld.CIT(A) ought to have sustained the addition. 3.1. On the contrary, ld.counsel for the assessee submitted that there is no error into the order of the ld.CIT(A). He submitted that the AO failed to take note of the fact that the said accounts were held in joint-names with relatives and the deposits in the said accounts comprised mainly of loans from friends and relatives, cash deposits, redemption of mutual fund and interest income. The assessee had also submitted .....

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n current year. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The contention of the ld.counsel for the assessee is that the accounts were held jointly with other relatives. The amount so credited into the account the accounts generated from cash on hand, past savings and loan received from friends and relatives. He submitted that the amount also comprised of the maturity amount of the mutual funds. We find t .....

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ted before me, it is observed that there was an opening cash balance of ₹ 10,00,000/= which must have been used for deposition in bank account. It is also observed from the current year's cash book that there was a negative cash balance of ₹ 5,37,000/= on 30-11-2006 which was the peak amount of negative balance suggesting the unexplained cash deposit. Since a substantial cash was withdrawn during the earlier year, there is a reason to believe that the same could have been on hand .....

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sh balance and reapplication of ₹ 14,78,000/ = being withdrawals of current year. However, the negative balance of ₹ 5,37,000/= in current year's cash book remains unexplained and therefore, that must be treated as unexplained investment in form of cash deposit. Also, there was an opening balance of ₹ 2,07,231/ = in aggregate in these bank accounts which cannot be treated as unexplained investment of the current year. Regarding loan transactions in the impugned bank account .....

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t of such bank account was made in her case and the said person had given the loan to the appellant from the said bank account only. In respect of other loans, the appellant had submitted the confirmations as well as their pass books from where the loans were given to the appellant and the AO did not give any rebuttal against these loans except that their names were not appearing in the Balance sheet of the appellant. However, since these bank accounts were not shown by the appellant, obviously, .....

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efore, the ultimate position of the sustained addition is worked out as under: Rs. Rs. Addition as per Assessment Order 38,95,184 Less : Deposits stands explained and not treated as income a. Opening Cash Balance, subject to further direction hereinafter 10,00,000 b. Cash withdrawals during the year reapplied for deposition 14,78,000 c. Loans from friends and relatives 6,47,847 d. Opening bank balance in the impugned bank accounts, subject to further direction hereinafter 2.07.231 33,33,078 5,62 .....

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ited therein was out of the savings, loan and maturity of mutual funds. In our considered view, if any, credit entries found in the accounts of the assessee, it is incumbent upon him to explain the source of such credit. In the present case, the assessee has merely made a sweeping statement that these amounts were out of loans from friends and relatives, cash deposits, interest income and from maturity of mutual funds. The assessee also furnished certain confirmations from Jayshreeben Parmar, Ch .....

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