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2016 (10) TMI 919 - ITAT AHMEDABAD

2016 (10) TMI 919 - ITAT AHMEDABAD - TMI - Addition u/s 68 - cash credit - genuineness and creditworthiness of creditors - disallowance of interest expenses in respect of alleged cash credit - Held that:- The assessee has produced 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 .....

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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. Delete the additions made by the AO with the aid of section 68 of the Act. - Decided in favour of assessee - ITA.No.2685/Ahd/2013 - Dated:- 6-10-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER For The Assessee .....

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wance of interest expenses of ₹ 94,466/- in respect of alleged cash credit. Since both the issues are interconnected, therefore, we take both the issues together. 4. Brief facts of the case are that Shri Suryakant Nemchand Shah was running a proprietorship concern in the name and style of M/s.Shah Harshadrai Maheshkumar & Bros. He has filed his return of income on 7.12.2006 declaring total income of ₹ 81,537/-. At the relevant time, he was doing sharafi business i.e. he used to e .....

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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 m .....

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failed to produce depositor and failed to prove identity and genuineness of transaction Summons u/s 131 of the Income Tax Act, 1961 were issued in the name of deceased creditor. In response to summons her legal heir Ashwin Doshi has replied vide letter dated 17.11.2012, inter alia stating that Smt. Nirmala Doshi had given loan bearing interest @12%, no books of account were required to be maintained by her, copies of bank statements for the period 01.04.2005 to 31.03.2006 were enclosed alongwit .....

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ued in the name of deceased creditor. In response to the summons his legal heir Smt. Ushaben M. Vora has replied vide letter dated 23.11.2012 inter alia enclosing therewith extracts of accounts of Suryakant Shah , copy of return of income and copy of bank statement and a copy of death certificate. (kindly see page No. 145 to 155 of Paper Book-11) 3. Malpa A. Doshi, Mumbai ₹ 50,000/- Assessee failed to produce depositor and failed to prove identity and genuineness of transaction In response .....

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is more than 200 kms. ( kindly see page No. 160 to 163 of Paper Book-II) Jaysukhlal A. Doshi, Mumbai ₹ 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 along .....

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1.2012 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. 182 to 185 .....

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on (b) copy of account (c) copy of account of Vidhi Enterprise (d) copy of account of KDP Casting (e) copy of return of income and (f) copy of PAN card It would be evident from the copy of a/c of KDP Casting that a sum of ₹ 2,41,466/- was advanced as loan on 21.04.2003. Moreover, there were accretions to the amount of loan in form of addition and interest from time to time. The above loan was transferred first to Vidhi Enterprise and later on the same was transferred to the appellant durin .....

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ineness of the transaction. (kindly see page No. 174 to 177 of Paper Book-11 8. Kanabhai B. Patel, A bad ₹ 4,90,122/- Following documents were already on records : (a) confirmation (b) copy of account (c) copy of bank statement (d) copy of Form No. 8-A (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 and looking to the source of income and sized of family he has failed to prove credit worthiness and genuinenes .....

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nd. Besides above, he is drawing a salary of ₹ 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 .....

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action. It would be evident from the copies of a/c of Bharat Foundry that the father of the creditor had advanced them money 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 during the year and after death of his father the amount was divided and transferred to the appellant. He has explained that the famil .....

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132 to 139 & 180 and 181 of Paper 11 Bhikha K. Patel, A bad ₹ 1,27,020/- Following documents were already on records: As per statement recorded; depositor is Job worker and earned ₹ 15,200/- per month. He has failed to produce confirmation of his father. Looking to. the source of income of depositor and size of family he has failed to prove credit worthiness and genuineness of the transaction. /- (a) confirmation (b) copy of account (c) copy of bank statement (d) copy of death ce .....

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e year and after death of his father the amount was divided and transferred to the appellant. He has explained that the family owns agricultural land and he is drawing a salary of ₹ 15,200/- p.m. He has confirmed 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 transactio .....

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ndry 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 ₹ 12,500/- p.m. He has confirmed again deposit and also explained source of deposit. In view of the above, his credit worthiness .....

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ready on records : (a) confirmation (b) copy of account (c) copy of bank statement (d) copy of PAN (e) copy of account of Vidhi Enterprise (f) copy of account of Bharat Foundry It would be evident from the copies of a/c of Bharat Foundry that the creditor had advanced them money on 13.07.2004. 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 appella .....

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working as Supervisor and earned ₹ 6,500/- per month. Looking to the source of income of depositor he has failed to prove credit worthiness and genuineness of the transaction Following documents were already on records : (a) confirmation (b) copy of PAN (c) copy of account (d) copy of bank statement (e) copy of account of Navdeep Enterprise (f) copy of account of Bharat Foundry It would be evident from the copies of a/c of Bharat Foundry that the creditor had advanced them money on 07.01. .....

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ed 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 ₹ 99,811/- As per written submission enclosed Manguben M. Patel is housewife. She has claimed deposit of ₹ 99,811/- with Harshadrai Maheshkumar & Bros. His husba .....

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ess and genuineness of transaction. Following documents were already on records : (h) confirmation (i) copy of account (j) copy of bank statement (k) copy of Form No. 8-A (I) copy of Form No. 7/12 (m) copy of account of Vidhi Enterprise (n) copy of account of Bharat Foundry It would be evident from the copies of a/c of Bharat Foundry that the creditor had advanced them money on 23.07.2004 and the same had been carried forward from year to year with interest. The above loan was transferred first .....

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ese details, the ld.counsel for the assessee contended that the assessee has discharged the burden puts upon her by section 68 of the Income Tax Act, and therefore, no addition ought to have been made. On the other hand, the ld.DR contended that no doubt the assessee has produced documentary evidence demonstrating identity of the creditors. The amounts have been received through account payee cheque, but the assessee failed to prove credit-worthiness of the creditors. He took me through the find .....

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