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2016 (8) TMI 679 - ITAT KOLKATA

2016 (8) TMI 679 - ITAT KOLKATA - TMI - Addition on advance from customer as unexplained cash credit u/s 68 - Held that:- As rightly contended by the ld. DR there was complete failure on the part of the assessee to furnish any evidence either before AO or before CIT(A) and even before the Tribunal. The request for a remand is made without any basis or evidence being shown to the Tribunal to justify the order of remand. We have already seen that the AO afforded as many as 8 opportunities in the c .....

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nfirmation of having given the loan has not been filed. It is therefore not possible to remand the issue on the presumption that Mr.Hakimuddin Behmat would file the confirmation to enable to the AO to make proper investigation. The request made by the ld. Counsel for the assessee in this regard is therefore rejected. As far as the cash deposits in the bank account of S.D.Dugar and M.K.Dugar & Sons HUF is concerned, we are of the view that the AO ought to have summoned and examined those two pers .....

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nt in which the credit facility in question was availed by the assessee. There are two questions that need to be answered before accepting the claim of the assessee namely what is the outstanding amount of interest and whether the sum of ₹ 26,00,000/- paid would cover the interest of ₹ 8,86,927/- which was claimed as deduction by the assessee in computing its total income. The second aspect that needs to be seen is as whether this deposit of ₹ 26,00,000/- was prior to the accru .....

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devan, JM And Shri M.Balaganesh, AM For the Appellant: Shri K. M. Roy, CA For the Respondent: Shri Debasish Banerjee, JCIT, Sr.DR ORDER Per N. V. Vasudevan, JM This is an appeal by the assessee against the order dated 07.03.2014 of CIT(A) XX, Kolkata, relating to AY 2009-10. 2. Ground No.1 raised by the assesee reads as follows :- l. That on the facts and circumstances of the case Ld. Commissioner (Appeals) erred in making addition ₹ 3142138/- received advance from customer as unexplained .....

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nfirmations of Advance from Customers with their party ledger, I.T.Return, Profit & Loss and Balance Sheet. (ii) Present address, telephone number, fax number and PAN of the said customers. (iii) Details of transactions with supporting documents when such credit balances started and subsequently adjusted. 4. AO has set out in paragraph 3.2 of his order, the opportunities given to the assessee to explain the receipt of advances from the customers. There were as many as 8 opportunities afforde .....

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idences that was called for by the AO. The CIT() allowed opportunities to the assessee to produce such evidence and called upon the AO to examine the evidence and file a remand report. In the remand proceedings, the AO called for certain details which are listed in paragraph 3 of the CIT(A) s order in sub-paragraph 4.4. AO in the remand report further submitted that the assessee had filed only the copy of its own bank statement in support of its claim but did not file any evidence in respect of .....

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sel for the assessee submitted that the assessee had made supplies to the aforesaid two persons from whom advance was received in the subsequent financial years and that the advance was adjusted against the supplies made subsequently. It was submitted by him that the one of the aforesaid parties is resident of Bangladesh and the other resident of Dubai. It was his submission that it was not possible for the Assesee to comply with the request of the AO to file evidence regarding creditworthiness .....

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tion. 8. The ld. DR while pointing out that the assessee already had enough opportunity, further submitted that the assessee has not even placed documents in support of its claim before the Tribunal so that another opportunity can be afforded to the assessee. 9. We have considered the rival submissions. As rightly contended by the ld. DR there was complete failure on the part of the assessee to furnish any evidence either before AO or before CIT(A) and even before the Tribunal. The request for a .....

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see is dismissed. 10. Ground No.2 raised by the assessee reads as follows :- 2. The CIT(Appeals) erred in making addition of ₹ 100000/- received as unsecured loan as un explained cash credit u/s68 of the income tax act 1961. 11. The assessee during the previous year received unsecured loans totalling ₹ 10,00,000/- from the following three parties :- (a) S.D.Dugar : ₹ 75,000/- (b) Hakimuddin Bemat : Rs.8,00,000/- (c) M.K.Dugar & Sons HUF : Rs.1,25,000/- Rs.10,00,000/- The AO .....

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ee to explain the aforesaid unsecured loans and the failure of the assessee to comply with the request of the AO. The AO had afforded about 8 opportunities to the Assessee in this regard. The AO accordingly treated ₹ 10,00,000/- as unexplained cash credit u/s 68 of the Act. 13. Before CIT(A) the assessee filed the following details :- i) Own bank account in support of claim. ii) Loan confirmations, acknowledgement of ITR, Bank statement and P&L A/c of loan creditors: S.D. Dugar ₹ .....

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ed to have advanced the assessee a sum of ₹ 8,00,000 did not reply to the letter issued by the AO. ii) The following parties confirmed the claim of the assessee: S.D. Dugar ₹ 75,000/- M.K. Dugar & Sons HUF ₹ 1,25,000/- The AO however reported that the claim of the Assessee explaining the credits cannot be accepted for the following reasons: i) Mr Hakimuddin Behmat the loan creditor who was claimed to have advanced assessee the sum of ₹ 800000 did not reply to the lett .....

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amp; Sons HUF just before issue of cheque of ₹ 1,25,000/- by the said party. Similarly, there was cash deposit of ₹ 61500 in the bank account of SD Dugar just before issue of cheque of ₹ 75000/- by the said party. The AO accordingly submitted that the addition made by the AO should be sustained. 15. On a consideration of the remand report of the AO, the CIT(A) was of the view that the genuineness of loan transactions and creditworthiness of loan creditors was not been proved by .....

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summons issued by the AO owing to strained personal relationship. It was submitted by him that the aforesaid party was now willing to extend necessary cooperation. He therefore prayed that one more opportunity may be afforded to the assessee to satisfactorily explain the unsecured loans received from Mr.Hakimuddin Behmat. As far as the other two unsecured loan creditors are concerned S.D.Dugar and M.K.Dugar & Sons, HUF the ld. Counsel submitted that the AO was always at liberty to examine t .....

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tion to the AO to examine of the three creditors. The ld. DR submitted that the assessee had enough opportunity and the request made before the Tribunal should not be accepted. 17. We have given a careful consideration to the rival submissions. As far as the loan received from Shri Hakimuddin Behmat is concerned the position remains the same that even today confirmation of having given the loan has not been filed. It is therefore not possible to remand the issue on the presumption that Mr.Hakimu .....

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er for remanding the issue to the AO in so far as the two creditors are concerned. The AO will examine those two aforesaid parties and decide the issue in accordance with law. Thus ground no.2 raised by the assessee is partly allowed., 19. Ground No.3 raised by the assessee reads as follows :- 3. The CIT (appeals) erred in disallowing expenditure towards interest on cash credit loan of SBI amounting to ₹ 886927/-. 20. The AO noticed that the assessee while computing the total income had cl .....

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ally paid. The AO further noticed that the assessee had not produced any evidence with regard to the payment of interest but noticed that there was a settlement between the assessee and the bank during the previous year 2010-11 and the assessee obtained benefit of ₹ 3,48,806/- by way of such settlement with the bank and the same was offered to tax as income in that year. The AO also referred to Explanation 3C and 3D to section 43B of the Act which provides that even if interest payable on .....

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ions in the cash credit account of the assessee.:- Details of Bank transactions of S.B.I. Martinier Branch, Kolkata A/c No.00000011187485784 O.D.Balance on 01.04.2008 Rs.8,786,087.21 Less : Deposits Rs.2,600,000.00 Rs.6,186,087.21 Add : O.D. Intt. 886,927.00 Bank Charges & Other Charges 16,500.00 O.D.Balance on 31.03.2009 Rs.7,089,564.21 23. The ld.counsel for the assesse pointed out that a sum of ₹ 26,00,000/- has been paid by the assessee towards outstanding balance due and payable t .....

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