TMI Blog2016 (6) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ge his initial burden of proving creditworthiness of the parties. The creditors have deposited cash and transferred the same to the assessee bank accounts. Except these two transactions, they are not having any considerable bank transactions in their bank account. Under these circumstances, we are of the opinion that the assessee has not discharged its burden by proving the creditworthiness of the parties. We further observed that although the parties have filed the confirmation letters, the other ingredients of the section i.e. the genuineness of the transactions and creditworthiness of the parties remain in doubtful. The assessee has failed to prove the transaction to be genuine and also failed to establish the capacity of the creditors to advance loan to the assessee. Therefore, we are of the opinion that the CIT(A) has rightly upheld the additions made by the A.O.- Decided against assessee - I.T.A. No. 588/Vizag/2013 - - - Dated:- 6-5-2016 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Shri G.V.N. Hari, AR For the Respondent : Smt. D. Komali Krishna, DR ORDER Per G. Manjunatha, Accountant Member T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the submissions made before the A.O. The assessee further submitted that during the year under consideration it has accepted loans from 4 persons aggregating ₹ 15 lakhs. It is further submitted that it has obtained confirmation from the parties which was furnished before the A.O. The A.O. without examining the confirmation letters simply, disbelieved the confirmation letters and made additions u/s 68 of the Act. It is further submitted that with regard to amount received from two persons namely Sri T. Bosu Babu and G. Vijaya Lakshmi who happened to be husband and wife, shri T. Bosu Babu is working in Antario and the loan has been given out of his past savings. The payment has been made through account payee cheque and the parties have confirmed the loan transactions. Therefore, the A.O. was not correct in coming to the conclusion that the assessee has not discharged initial burden. It is further submitted that in respect of other two creditors, the parties have confirmed the loan by filing necessary confirmation letters. The parties have enough source of income to substantiate the loan given to the assessee. The A.O. without conducting any enquiry with regard to the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o persons namely Shri T. Bosu Babu and Smt. G. Vijaya Lakshmi have confirmed the loan transaction by filing the confirmation letters. It is further submitted that the assessing officer has issued summons to the parties to appear before him on 30.12.2010. However, the fact is that as per the summons, she was required to attend on 30.11.2010 and she was served the summons on 30.12.2010. Therefore, she could not attend. The A.O. without conducting further enquiries with regard to the creditors simply, disregarded the confirmation letters to make additions u/s 68 of the Act. In respect of other two creditors, the parties have enough source of income to explain the loan advanced to the assessee. The parties have filed necessary proof of having agricultural land and also stated that they have advanced the money out of their agricultural income. The transaction has been made in banking channel. Therefore, the A.O. was not correct in doubting the genuineness of the transactions. The assessee has discharged its initial burden by filing the necessary confirmation letters. The identity of the parties has been proved. The genuineness of the transactions and creditworthiness of the parties also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee, we find that although the assessee stated to have filed the confirmation letters, the other two ingredients of the section i.e. the genuineness of the transactions and the creditworthiness of the parties are in doubtful. Out of the four loan creditors, two creditors namely Shri T. Bosu Babu and his wife Smt. G. Vijaya Lakshmi have advanced an amount of ₹ 10 lakhs. It is the claim of the assessee that Shri T. Bosu Babu is working in abroad and the money has been given out of his past savings. The assessee filed a paper book containing the confirmation letters filed by the parties along with their bank statement. On verification of the bank statement filed by the assessee, we noticed that the parties have deposited cash on the same day when the money has been transferred to the assessee bank acount. The parties have not explained how a person working in abroad has deposited cash in to the normal savings Bank account maintained in India, when he is not permitted to operate normal bank account in India. Similarly, his wife Smt. G. Vijaya Lakshmi stated to have advanced the loan out of her husband s savings. On verification of her bank statement, we find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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