TMI Blog2016 (5) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... aidby lower authorities. Therefore in the case of these 8 ladies wherein the identicalmodus operandi has been adopted for giving alleged loan to the assessee who are having their meager income and has meager cash in hand and have minimum bank balance with them. We are of the view that the assessee has miserably failed to prove the creditworthiness of these lenders. Coming to the issue of genuineness of these transaction because loan is through banking channel it cannot surpass the test of genuineness of the transaction on the facts narrated above in the case of the assessee. Similarly, in the case of other two other assesses who have deposed before the AO regardingdeposit ₹ 5 lacs each are also dealt in a similar manner. In case of Mr. Ashique Elahi the income of ₹ 210,000/- has been shown however, there is no narration in the computation of total income about the activities of these persons. In the statement of affairs cash at hand of ₹ 170,000/- has been shown, further in his bank account only cash of ₹ 25,000/- is available. In the case of Rehmat Elahi, the facts are also identical. Therefore all these evidences in case of lenders lead that theidentity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious observations and findings made are incorrect and untenable in law and the facts of the case and the submissions of the appellant have not been considered in the right perspective thereof. 2 That the Id. CIT-(A) has erred in law and in facts of the case by confirming the addition of ₹ 61,25,000/- u/s 68 of the Income Tax Act, 1961, confirming that the loans received by the appellant during the relevant were not genuine and that the creditworthiness of the lenders is not proved, when the same was duly established by the documents placed on record and through affidavits and statements on oath. The facts of the case and the submissions of the assessee are not considered in the right perspective and various findings made by the Id. CIT(A) including that all the 10 unsecured lenders were apparently unconnected persons are either factually incorrect or untenable in law. 3. That the Id. CIT(A) has grossly erred in law as well as on the fact of the case by confirming the addition of ₹ 11,09,350 u/s 41(1) of the Income Tax Act, 1961, for various reasons including the following: a) The Id. CIT(A) ignored the fact that Mr. Ashaf Sohail, the alleged bogus cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was submitted that out of these 10 persons eight are women are Pardanashin as per section 132 of the Code of Civil Procedure, 1908 and therefore they are exempt from personal attendance. Assessee submitted duly sworn affidavit of these eight women in which they have confirmed thatthey have given the above-unsecured loan through their own income and savings of the previous year. The AO noted that the source of income of these 8 ladies were from embroidery and knitting, trading of sarees and handloom clothes and therefore the AO was of the view that as these ladies are engaged in the business they should have made themselves available for verification before the AO. Regarding the other two persons, both of them are male and are earning commission from the sale of animals to meat factories. Both of them have advanced Rs.Five lacs each to the assessee company. Both persons have stated that their savings of earlier years for AY 2009-10 and 2010-11 are put into bank account in cash and then cheque for loan was given. On these facts, the AO made an addition of ₹ 61,25,000/- u/s 68 of the Act. On appeal before the ld.CIT (A), the same arguments were reiterated. 4. The ld.CIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further submitted that the issue is now squarely covered in favour of the assessee by the decision of the Hon ble Madras High Court in the case of CIT vs. Mark Hospitals Pvt. Ltd. 373 ITR 115. He submitted that merely about the deposit of cash in the bank account of the lenders on previous day, issue of cheques on next day is a legal transaction, and it cannot be doubted. He further relied on the decision of Rajasthan High Court in the case of CIT Vs. Jai Kumar 267 CTR 396. 6. The ld. DR relied on the orders of the lower authorities and he submitted that addition u/s 68 has rightly been made as the assessee has failed to prove the creditworthiness and genuineness of the transaction. 7. We have carefully considered the rival contention.we have also perused the paper book containing 67 pages, wherein the assessee has submitted the copies of the confirmation, income tax return, computation of income, statement of affairs, and bank passbook statement of the 10 unsecured lenders. It also contains the affidavit of the 8 ladies and two persons submitted in response to this summons, where they have confirming advance given to the assessee and further copy of the statement of two u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and then deposit these amounts with the assessee as well as its sister concern on the very next day proves more than what is saidby lower authorities. Therefore in the case of these 8 ladies wherein the identicalmodus operandi has been adopted for giving alleged loan to the assessee who are having their meager income and has meager cash in hand and have minimum bank balance with them. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t confirmation of addition of ₹ 11,09,350/- u/s 41(1) of the Act. The brief facts of this addition is that this creditor in response to the summons appearedbefore AO for recording the statement and admitted that he is not engaged in the business of selling of the animals and he is only earning commission. The modus operandi of the assessee was to record his name as creditor in places of the traders who sale the animals. Therefore, AO held that Mr. Asraf Sohail is not a genuine creditor. Against this, the assessee preferred an appeal before the CIT (A), who confirmed the above addition. Before us, the ld. AR submitted that it is modus operandi of the business of the assessee to record the transaction of purchase in the name of the broker and therefore the liabilities is genuine. He further stated that Mr. Asraf Sohail accepted this fact and therefore no addition u/s 41(1) of the Act can be made. Against this, the ld. DR relied on the orders of the AO. 12. We have carefully considered the rival contention it is apparent that Mr. Asraf Sohail appeared before the AO and confirmed that he is a broker and purchase of animals has happened through him. It is also submitted that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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