TMI Blog2016 (10) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... emonstrated 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 : Shri B.T. Thakkar For The Revenue : Shri Satish Solanki, Sr.DR ORDER Assessee is in appeal against order of the ld.CIT(A)-III, Ahmedabad dated 20.9.2013 passed for the Astt.Year 2006-07. 2. Grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of ₹ 25,26,149/- which was added by the AO with the aid of section 68 of the Income Tax Act, 1961. 3. In the second fold of submissions, the assessee has pleaded that the ld.CIT(A) has erred in confirming the disallowance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onse to summons, her legal heir 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. 124 to 127 of Paper Book 11) 2 Manhar P. Vora, Bhavnagar ₹ 3,50,000/- Assessee 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 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 to summons-, she has replied vide letter dated 17 11.2012 inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 15,000/- p.m. presently has failed to prove credit worthiness and genuineness of transaction 7. Vikram M. Patel, ₹ 1,07,772/- As per statement recorded and looking to the source of income and sized of family he has failed to prove credit worthiness and genuineness of transaction Following documents were already on records: (a) confirmation (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 during the year. He has explained that he is a partner in Mangalmurti Dye Chem and receiving ₹ 15,000/- p.m. The Id. A.O. did not ask him about his profit share in the above firm. He has clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhi Enterprise (g) copy of account of Bharat Foundry As per statement recorded depositor is job worker and earned ₹ 4,500/- 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. 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 family owns agricultural land and he is drawing a salary of ₹ 4,500/- 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 hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily 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 ₹ 12,500/- p.m. 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.113 to 123 of paper book-II) 13. Ashwin M. Patel, A'bad ₹ 74,409/- As per statement recorded depositor is Job worker and earned ₹ 20,000/- per month. Looking to the source of income of depositor and size of family he has failed to prove credit w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained 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 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 transaction. Following documents were already on records : (h) confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Sr.No.1, 2, 3, 4, 5, 6, 12, 13 and 14 are assessed to tax. 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
