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2016 (9) TMI 402

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..... by the assessee:- 1. That, the learned CIT(A) has not given proper opportunity of being heard and confirmed the addition. 2. The addition is based on statement recorded behind the back of the assessee, The Ld. CIT(A) has called for statement vide letter dated 16/01/2013, no statement is provided by Id. AO and still the appeal is finalized against the assessee. 3. That, the learned CIT(A) has wrongly confirmed the addition of ₹ 4,99,600/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961. 4. That, the finding of the learned CIT (A) are not justified in law as well as facts of the case and required to be deleted The appellant craves to add, alter, amend or delete any of the above grounds of appeal. 2. Brief facts of the case are that the assessee is a firm and engaged in the business of warehousing, transportation, manufacturing export of plastic bags, strings, etc. Return of income was filed on 29.9.2009. Case was selected for scrutiny assessment and notice u/s 143(2) of the Act dated 21.9.2010 was issued and duly served. Due to change of incumbent a notice u/s 142(1) questionnaire dated 9.6.2011, 30.06.2011, 24.10.11 143(2) r .....

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..... ce in one or two cases but apart of wellcalculated design to first deposit matching amounts in the bank accounts of creditors and thereafter have the cheques issued in favour of the assessee from those bank accounts with a view to show that the transactions have been routed through banking channels and thereby create a cloak about the genuineness to the impugned transactions. If the creditors had requisite cash available with them, there was no reason as to why they would hold them back in cash and deposit the same just before issuing cheques in favour of the assessee. The whole story manufactured by the assessee, rings false from beginning till end. The Assessing Officer has brought sufficient materials on record to show that the impugned cash credits were not at all genuine. His order deserves to be confirmed and is accordingly confirmed. 8. The Ld. CIT (A) has proceeded on the basis that the capacity of a creditor may be presumed to be there to advance loan to appellant if such creditor is an income tax assessee and nothing advance has been proved from her income tax return of income against her capacity. We are unable to agree with the aforesaid observations made by .....

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..... the part of the assessee to prove the source of source in a situation when both the loan creditors were assessed to tax. Ld. AR placed reliance on following judgments decisions :- 1. CIT vs. Ranchod Jivabhai Nakhava Tax Appeal No.50 of 2011 Gujarat High Court. 2. ACIT vs. Radhey shyam Bansal 68 TTJ 436, Rajkot. 3. CIT vs. Mehrotra Brothers 270 ITR 157 (MP) 4. CIT vs. Oasis Hospitalities (P) Ltd. 238 CTR 402 (DDelhi HC) 5. CIT vs. Value Capital Service P. Ltd. (2008) 307 ITR 334 (Delhi) 6. CIT vs. Real time Marketing (P) Ltd.221 DTR 716(Delhi HC) 6. On the other hand, ld. DR supported the orders of lower authorities and submitted that in both the unsecured loans, the loan creditors had deposited cash just before issuing the cheque to the assessee and the source of income of the loan creditors was too meager to suffice the deposit of cash in the bank account and, therefore, the impugned credit of ₹ 4,99,600/- is the income of the assessee itself which has been brought in by way of unsecured loans and, therefore, ld. CIT(A) has rightly confirmed the addition. 7. We have heard the rival contentions and perused the material on record. As .....

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..... d by the assessee but the facts dealt therein are different from the facts of the case before us in this appeal. We further find that Hon. Jurisdictional High Court in the case of Umesh Krishnani vs. ITO in Tax Appeal No.800 of 2012 has dealt with similar issue in which cash was deposited just a day before the date of issuing account payee cheque as loan. Hon. High Court dismissed the appeal by observing as under :- 18. Three basic ingredients viz., [a] identity: [b] creditworthiness and [c] genuineness of the transaction, when are considered, it cannot be disputed that all the three of them require independent consideration and yet they are not mutually exclusive or can be considered in isolation. It hardly needs to be specified that the well recognized principle of not insisting upon source of the source needs no elaboration. Upon appreciation of materials on record and totality of facts and circumstances of the case, the revenue authorities and the Tribunal came to the conclusion that the entire transaction was a circuitous route to bring on books the assessee s own accounted money. The factor that the donors did not possess independent source to make such deposits must be v .....

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..... to first deposit matching amounts in the bank accounts of creditors and thereafter have the cheques issued in favour of the assessee from those bank accounts with a view to show that the transactions have been routed through banking channels and thereby create a cloak about the genuineness to the impugned transactions. If the creditors had requisite cash available with them, there was no reason as to why they would hold them back in cash and deposit the same just before issuing cheques in favour of the assessee. The whole story manufactured by the assessee rings false from beginning till end. The Assessing Officer has brought sufficient materials on record to show that the impugned cash credits were not at all genuine. His order deserves to be confirmed and is accordingly confirmed. 8. The Ld. CIT (A) has proceeded on the basis that the capacity of a creditor may be presumed to be there to advance loan to appellant if such creditor is an income tax assessee and nothing advance has been proved from her income tax return of income against her capacity. We are unable to agree with the aforesaid observations made by the CIT (A). The creditworthiness of a creditor is not a matte .....

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