TMI Blog2016 (5) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... manner in which the return of income is filed, statement of affairs are prepared and amounts are introduced in the books of assessee which does not commensurate with the income shown by the lenders. In view of our above finding we also hold on the same reasoning as there is no change in facts and evidences produced before us that the loans of ₹ 51,81,500/- has rightly been added by the AO u/s 68 of the Act and confirmed by the ld. CIT(A) - Decided against assessee Disallowance u/s 40a (ia) - non-deduction of tax at source to the persons who are agent of foreign shipping lines - Held that:- The provision of section 172 applies to them and tax is not required to be deducted u/s 194 C of the act. Secondly if the expenses are already paid and not payable in that case the provision of section 40a (ia) is required to be applied and no disallowance is called for to the extent sums are paid, in view of the decision of the Hon’ble Allahabad High Court in the case of CIT Vs. Vector Shipping Pvt. Ltd [2013 (7) TMI 622 - ALLAHABAD HIGH COURT]. In view of this above two directions, we set aside the issue to the file of the AO for verification if the payments are made to the agents of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord and detaifshowing the amount paid by the remaining three parties to foreign shipping line was also placed on record along with the respective shipping bills showing that all the goods were dispatched through foreign shipping lines. b) The Id. CIT-(A) has erred by ignoring CBDT Circular no. 715 dated 8/8/1995 on the issue and also ignoring the judicial pronouncements thereon. c) The Id. CIT-(A) has grossly erred in law and on the facts of the case by not accepting the law laid down by the Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd. [224 ITR 677], and not allowing the benefit of the 2nd proviso to section 40(a)(ia) of the I.T. Act, 1961, to the appellant. d) Without prejudice to the above, the Ld. CIT-(A) ought to have given the benefit of 1s1 proviso to section 40(a)(ia) of the I.T. Act, 1961 as amended by Finance Act, 2014, by restricting the disallowance to 30%, as the same being curative should be treated as retrospective in terms the law laid down by the Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd. [224 ITR 677]. 2. Ground No.1 is against the addition u/s 68 of ₹ 5181500/- for unsecured loan taken from 7 parties. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. AR of the assessee submitted that despite filing the confirmation no summons have been issued to these parties. Hence, the addition has been wrongly made by the AO and the same was wrongly confirmed by the ld.CIT (A). 5. The ld. DR relied on the orders of the lower authorities and submitted that assessee has failed to prove the creditworthiness and genuineness of the transaction. 6. We have carefully considered the rival contention. We have also perused the Paper Book submitted before us containing the details of unsecured loans wherein with respect to all seven lenders their confirmation, Copy of bank account computation of total income and return of income along with statement of affairs are submitted. In ITA No 438/Del/2015 we have dealt with the issue of cash credit of these lenders where they have also lent money to another assessee M/s Fazal FrozenFoods for AY 2010-11 where on identical facts, evidences and circumstances we have decided the issue of addition u/s 68 in the case of the same creditors vide our order of even date as under :- 7. We have carefully considered the rival contention. we have also perused the paper book containing 67 pages, wherein the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 10.94 lacs in the name of Mrs. Mehmooda Begum, Rs, 12.94 lacs in the name of Mrs. Naseem Bano and ₹ 10.66 lacs in the name of Sabana Praveen are shown. In past no loan is given to the assessee and other sister concern of the assessee. In same the statement of the affairs of some of the lenders sundry creditors are shown which are also cannot be identified. From the statement of affairs surprisingly there is no profit and loss account was available no income and expenditure statement has been prepared. While filing the computation of total income along with return of income only income from embroidery and knitting is mentioned. There is no detail of gross income or expenditure incurred by these assesses on their respective business is shown. All the computation of income, statement of affairs and capital account has been prepared in similar fashion. Surprisingly all the 10 lenders have opened their bank account with the same branch of Dena bank i.e. Dena Bank, Subash Bazar, Meerut City. It is also surprising that the address of all the parties is 13 Ismail Nagar, Meerut City. All these lenders have come together and deposited cash in their bank accounts with the same bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of lenders lead that the identity of these creditors have been proved and nothing else. In view of the above facts, we confirm the order of the learned Commissioner of Income tax (Appeals) confirming addition of ₹ 6125000/- with respect to 10 lenders unsecured loan added u/s 68 of the Act. Accordingly, ground No.1 of the appeal is dismissed. 7. In this case in some of the bank accounts there are entries of transfer deposits in the bank account of these persons before the issue of cheque to the assessee. However we could not find any entry of unsecured loan in the statement of affairs of these parties except gift received from the mother of ₹ 50,000/- in some accounts. Therefore there is no source available with the assessee of the sums shown to have been received by the lenders through banking transfer entries in their account. Further the finding of the CIT (A) in a tabular form at page no 9 of his order also depict the modus operandi of the amount deposited in the books of the assessee as unsecured loan from these parties. We are of the view that there is no difference if the amount is deposited by the assessee through cheque or through banking channel as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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