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TMI Blog2016 (10) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... time, he was doing sharafi business i.e. he used to earn interest on giving petty loans etc. It appears that Shri Nemchand Shah was expired during the pendency of the proceedings, and he is being represented by his wife Kokilaben S. Shah who is legal representative. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has borrowed money from 15 persons aggregating to Rs. 25,26,149/-. These amounts have been taken during the year on different dates by account payee cheques. The ld.AO has noticed details in para-4 of the assessment order. The AO has confronted the assessee to show as to why these amounts should not be treated as unexplained cash credits. In response to the query of the AO, the assessee has filed various details, but that could not satisfy the ld.AO, and he accordingly, made addition. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 5. Before me, the ld.counsel for the assessee made reference to the details submitted by the assessee before the ld.CIT(A), which have been reproduced from page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 160 to 163 of Paper Book-II) Jaysukhlal A. Doshi, Mumbai Rs. 1,00,000/- Assessee failed to produce depositor and failed to prove identity and genuineness of transaction In response to summons , he has replied vide letter dated 17.11.2012 inter alia stating that that he had given loan bearing interest @12%, no books of account were required to be maintained by him, copies of bank statements for the period 01.04.2005 to 31.03.2006 were enclosed alongwith copy of ledger account of Suryakant Shah. In response to summons, he vide his letter dt. 21.11.12 has further replied that he could not get reservation and therefore a commission can be issued as distance to be covered is more than 200 kms. (kindly see page No. 170 to 173 of Paper Book-II) 5 Ashwin J. Doshi, Mumbai Rs. 1,00,000/- Assessee failed to produce depositor and failed to prove identity and genuineness of transaction In response to summons , he has replied vide letter dated 17.11.2012 inter alia stating that that he had given loan bearing interest @12%, no books of account were required to be maintained by him, copies of bank statements for the period 01.04.2005 to 31.03.2006 were enclosed alongwith copy of ledger a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before 01.4.2003 and the same had been carried forward from year to year with interest. Accordingly, there were accretions to the amount of loan in form of interest from time to time. The above loan was transferred first to Vidhi Enterprise and later on the same was transferred to the appellant during the year. He has explained that he owns 10,313 Sq. Meter agricultural land. Besides above, he is drawing a salary of Rs. 25,000/- p.m. He used to file return of income regularly. He has confirmed again deposit and also explained source of deposit. In view of the above, his credit worthiness has been established and as loan transaction had taken place through cheques, there should not be any doubt about genuineness of the transaction. (kindly see page No.140 to 144 of the Paper Book-II) 10. Naresh Kanti Patel, A'bad Rs.1,27,021/- Following documents were already on records : (a) confirmation (b) copy of account (c) copy of bank statement (d) copy of death certificate of his father (e) copy of Form No. 7/12 (f) copy of account of Vidhi Enterprise (g) copy of account of Bharat Foundry As per statement recorded depositor is job worker and earned Rs. 4,500/- per month. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again deposit and also explained source of deposit. When the father of the creditor died on 18.08.2005 (copy of death certificate was already filed), how his confirmation could have been filed. In view of the above, his credit worthiness has been established and as loan transaction had taken place through cheques, there should not be any doubt about genuineness of the transaction. ( kindly see page No. 178 to 179 of Paper Book-II) 12. Shailesh K. Patel, A'bad Rs. 2,17,791 As per statement recorded depositor is Job worker since 2005 and earned Rs. 12,500/-per month. Looking to the source of income of depositor and size of family he has failed to prove credit worthiness and genuineness of the transaction. It would be evident from the copies of a/c of Bharat Foundry that the creditor had advanced them money even before 01.4.2003. Accordingly, there were accretions to the amount of loan in form of interest from time to time. The above loan was transferred first to Navdeep Enterprise and later on the same was transferred to the appellant during the year. He has explained that he is 38 years old person drawing a salary of Rs. 12,500/- p.m. He has confirmed again deposit and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agriculture. His family owns 6 bighas of land. He used to file return of income regularly. The Id. A.O. did not ask him about his profit share in the above firm. He has confirmed again deposit and also explained source of deposits. In vie of the above, his credit worthiness has been established and as loan transaction had taken place through cheques, there should not be any doubt about genuineness of the transaction. (kindly see page No.128 to 131 of Paper Book-II) 15. Manguben M. Patel, A'bad Rs. 99,811/- As per written submission enclosed Manguben M. Patel is housewife. She has claimed deposit of Rs. 99,811/- with Harshadrai Maheshkumar & Bros. His husband named Mohanlal Jethadas Patel is agriculturist having land of 79 yard and 93 Sq. Meter with another one partner. On verification of 7/12 abstracts it is noticed that it was unsigned and also found that no crops grown during F.Y.2005-06. Shri Vikrambhai M. Patel depositor at Sr. 7 and Shri Ashwinbhai M. Patel depositor at Sr. 13 are son of Manguben M. Patel. She has not submitted confirmation of his husband regarding deposit. In view of above, I think that she has not proved her credit worthiness and genuineness of transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced their statement of accounts, confirmation, bank statements, and PANs. In other words, the assessee has proved their identities. She has also proved genuineness of the transactions, because amounts have been taken through account payee cheques. The ld.CIT(A) has doubted the credit-worthiness of the creditors, but the assessee has alleged that out of 15 creditors, 9 creditors are assessed to tax. Therefore, inquiry in their hands could be made about the source of funds. Once they are alleging that they have advanced money to the assessee, then, merely on surmises it cannot be inferred that they were not having any means. Some of the creditors appeared before the AO and have re-affirmed the transaction. Thus, flaw pointed out by the ld.Revenue authorities is based on an inference drawn according to their understanding. The assessee has submitted sufficient evidences on the record which demonstrated that these amounts are genuine loans. In some of the cases, amounts were swollen to this figure on account of accumulation of interest from the past. Considering all these facts, I allow the appeal of the assessee and delete the additions made by the AO with the aid of section 68 of ..... 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