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2016 (8) TMI 870 - ITAT CHENNAI

2016 (8) TMI 870 - ITAT CHENNAI - TMI - Unexplained investments - non furnishing on clarifications on the Balance loan amount - Held that:- Authorised Representative drew our attention to the certificate dated 19.02.2010 issued by the Karnataka Bank Ltd that ₹ 40,29,328/- was received from Standard Chartered Bank towards loan account of assessee on 22.03.2007 and the assessee’s saving bank account was credited with ₹ 66,21,768/- on 30.03.2007 and supported the loan transactions with .....

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amount of ₹ 1,07,00,000/-. Further, the loan source cannot be treated as income for assessment. Therefore, we are of the opinion that Commissioner of Income Tax (Appeals) has elaborately discussed viz-a-viz considered the assessee submissions and the loan documents and allowed the appeal. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) and dismiss the grounds of the Revenue. - Decided in favour of assessee. - I.T.A. No. 2558/Mds/2014 - Dated:- 17-6-2016 - .....

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The Revenue has raised the following grounds of appeal:- 2.1. The learned CIT(A) failed to appreciate that though the loan amount of ₹ 1,07,00,000/- had been sanctioned, only ₹ 66.21 lakhs had been disbursed till 31/3/2007 and hence the source of investment of ₹ 40.78 lakhs made in the financial year 2006-07 has not been proved. 2.2 The Ld.CIT(A) failed to appreciate that the assessee himself had submitted that the source of investment to be the lean of ₹ 1,07,00,000/- a .....

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me has been claimed to have b en spent by the assessee and hence constitutes concealment of the income out of which the investment has been made . 3. The Brief facts of the case is that the assessee is in the business of money lending and filed return of income on 27.12.2007 declaring total income of ₹ 1,03,412/- for the assessment year 2007- 2008 and the return of income was processed u/s.143(1) of the Act and the case was selected for scrutiny under CASS and notices u/s.143(2) and 142(1) .....

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rifications on increase in value of property. The ld. Authorised Representative explained that the assessee is developing House property at Bangalore and has borrowed loans from bank being ₹ 1,07,00,000/- from Standard Chartered Bank and furnished copy of sanction letter dated 15.03.2007. The ld. Assessing Officer found from the loan sanction letter, the assessee alongwith three other applicants had borrowed loan and requested to produce the ownership details of property, approved plan and .....

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clarifications on the Balance loan amount of ₹ 40,78,232/-. Since there was no reply and details are not furnished, the ld. Assessing Officer made addition of ₹ 40,78,232/- to the returned income as unexplained investments and assessed total income ₹ 41,81,644/- and passed order u/s.143(3) of the Act dated 29.12.2009. Aggrieved by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals). 4. In the appellate proceedings, the ld. Commissioner of Income .....

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eals) in dismissing the quantum appeal. The ld. Authorised Representative reiterated the submissions of assessment and appellate proceedings and filed a detailed letter dated 22.03.2012 explaining that there is no concealment of income on the part of the assessee and assessee has fully co-operated with the Department and paid disputed taxes. But ld. Assessing Officer has not accepted the submissions as the assessee could not prove the addition of unexplained investments in assessment proceedings .....

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in quantum appeal and penalty proceedings. The ld. Authorised Representative further substantiated his arguments with written submissions referred at para 9 & 10 by ld. Commissioner of Income Tax (Appeals). Prime facie, the ld. Commissioner of Income Tax (Appeals) considered the findings of the ld. Assessing Officer in assessment and penalty proceedings were the ld. Assessing Officer has made an observation that the assessee could not explain the remaining loan amount of ₹ 40,78,232/- .....

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Karnataka Bank was closed out of the initial advances made by Standard Chartered Bank. The loan amount from Standard Chartered Bank of ₹ 1,07,00,000/- was sanctioned on 15-3-2007 for a period of 108 months and as per the AO himself an amount of ₹ 66,21,768/- was disbursed to the assessee on 30-8-2007 leaving aside ₹ 40,78,232/- which was disbursed later in the next financial year as per the terms of the loan sanction order. Hence, the remaining loan amount of ₹ 40,78,232 .....

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he penalty without considering the facts that out of ₹ 1,07,00,000/- sanctioned amount only ₹ 66,21,768/- lakhs was credited to the assessee bank account before 31.03.2007 and the assessee could not substantiate with the source of investment of ₹ 40,78,232/- though the assessee has disclosed in the Balance sheet ₹ 1,07,00,000/-. The fact that the assessee has a existing loan and was closed after initial disbursement by the Standard Chartered Bank. The ld. Commissioner of .....

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as unexplained investments as the same was not disbursed before 31.03.2007. Further to substantiate the arguments, the ld. Authorised Representative submitted copy of certificate from Karnataka Bank Ltd dated 19.02.2010 certifying ₹ 40,29,328/- was disbursed on 22.03.2007 and the loan account was closed alongwith the sanction copy letter of Standard Chartered Bank dated 15.03.2007, and further explained that ₹ 1,07,00,000/- was disbursed in two installments ie ₹ 66,21,768/- was .....

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before 31.03.2007 is without any verification and authentic report and the assessee has substantial evidence to support the disbursement of loan amount and prayed for dismissal of appeal. 8. We heard the rival submission, perused the material on record and evidence filed. The crux of the issue in appellate proceedings which ld. Departmental Representative is pressing that the assessee has disclosed the loan from Standard Chartered Bank as on 31.03.2007 as ₹ 1,07,00,000/- but substantiated .....

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