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TMI Blog2014 (2) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... made u/s 69 of the Income Tax Act, 1961 without appreciating the fact that the assessee failed to give any explanation when confronted with this issue. iii. That on the facts and circumstances of the case, the learned CIT(A) was not justified in not considering the fact that the appeal for the Assessment Year 2006-07 is pending before him and the outcome of that appeal shall have a bearing on the addition made. iv. That the appellant craves to add, amend or alter any ground of appeal. 2. The facts relating to the issue in dispute are that the assessee filed its return of income of Rs. 15,26,210/- for the assessment year in dispute. The Assessing Officer issued notice under Section 143(2) of the Income-tax Act, 1961 (in short "the Act") dated 25.09.2008 which was duly served upon the assessee on 27.09.2008 and in response to the same, the authorized representative of the assessee appeared and requested for adjournment. The Assessing Officer issued statutory notices under Sections 142(1)/129 of the Act which was duly served upon the assessee on 05.08.2009. In response to the same the authorized representative of the assessee appeared from time to time and filed his reply and the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reply filed by the assessee along with the documentary evidence, the Assessing Officer has given his findings, which is at page 3, is reproduced as under: "No details had been submitted by the assessee regarding the repayment schedule mode of payment and the terms of payment in respect of the said loan. It is settled position in law that wherever there are credit entries in the books of the assessee the onus is upon the assessee to establish the identity and the creditworthiness of the donor and the genuineness of the transaction. In the instant case, the assessee has not brought on record any confirmation or documentary evidence to substantiate that the concern M/s Himachal Futuristic Com. Ltd. was indeed having a credit balance of Rs. 15,00,000/- lying with the assessee since F.Y. 2001-02. Since the settlement of this liability had not reached even during the financial year under consideration the said liability of Rs. 15,00,000/- remains unexplained and is accordingly added back to the total income of the assessee u/s 68 of the Income Tax Act, 1961. Initiate penalty u/s 271(A)(C) of the Income Tax Act, 1961 as the assessee has furnished inaccurate particulars of his income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of his income." 7. With the aforesaid additions in dispute, the Assessing Officer completed the assessment year under Section 143(3) of the Act on 18.09.2009. 8. Aggrieved with the assessment order dated 18.09.2009, the assessee filed an appeal before the learned first appellate authority, who vide impugned order dated 28.09.2010 deleted the addition in dispute. Now, the Revenue filed the present appeal against the impugned order dated 28.09.2010. 9. At the time of hearing, learned DR relied upon the order passed by the Assessing Officer and in addition to his argument he has filed his written submission. For the sake of convenience, the same is reproduced as under: "BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR M/s. Kohinoor Enterprises, Srinagar ITA No. 458/Asr/2010 DATE OF HEARING: 27.04.2012 WRITTEN SUBMISSIONS It is submitted that in this case, the first ground of appeal of the department is against the CIT(A)'s deleting the addition of Rs. 1,50,00,000/- on account of fictitious liability by invoking the provisions of section 68 of the Income Tax Act, 1961. The factual matrix of the case is like that the assessee had allegedly rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who receives loan for social purpose generally and for commercial purpose if he does raise loan for commercial purposes. Thus, the Hon'ble Bench may kindly appreciate that in the hands of a firm a loan received become income when the liability on account of the said loan is found to be non-existent as is the case in the case of the assessee. In view of these facts, the learned CIT(A) ought to have confirmed the addition by invoking his co-terminus jurisdiction with that of the A.O. In view of the above, it is prayed that the addition made by the A.O. may kindly be confirmed by holding the amount as income of the assessee firm in the light of the above submission. It is very respectfully submitted that the Hon'ble Tribunal has been vested with powers of very vast amplitude and has also been vested with a final authority as regards appreciation of the facts. It is prayed that it is within the powers of the Tribunal to vary the basis of confirming or deleting an addition, in this case, it is clear that when liability on account of loan was found to be non-existent during the year under consideration, it became the assessee firm's income and it is, therefore, humbly prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was never an income during the year under consideration. As such, the learned CIT(A) was fully justified in the deleting the addition. In this connection, it may be pointed out that under the same and similar circumstances this Bench has accepted the appeal in the case of Ritesh Wadhwa Vs. DCIT in ITA No. 54(Asr)/2013, order dated 20.05.2013 which will speak for itself. Thus, the CIT(A) was fully justified in deleting the addition and the department has got no basis, reasons and justification for coming in appeal before the learned Bench. Again, there is an unsecured loan of Rs. 18,30,000/- in the name of Ghulam Nabi standing from Financial Year 2005-06. In this connection, a copy of account of Ghulam Nabi was duly filed. It is relevant to point out that the addition of this very amount was made in connection with Assessment Year 2006-07 and the matter is pending in first appeal. However, the A.O. made addition during the year under consideration and the same cannot be taxed twice. Once this amount has been treated as Income and this amount has suffered tax in connection with Assessing Year 206-07, the same cannot be taxed twice. Thus, this is against the principle of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s Himachal Futuristic Co. Ltd. in respect of this credit balance. The Assessing Officer called the explanation from the assessee to explain the reasons for loan of M/s Himachal Futuristic Co. Ltd. being stagnant for 3 years and more and also asked mode of payment, terms of payment and repayment schedule. The assessee submitted its reply dated 14.09.2009, wherein it has submitted that non-payment of unsecured loan to M/s Himachal Futuristic Com. Ltd. is only a reason that they are very friendly with the assessee firm and due to the liquidity crunch being faced by the assessee firm for the last so many years, the assessee is not in a position to repay the said loan. 11.2 In our considered view, the reply filed by the assessee is totally baseless and illogical and without any cogent documentary evidence. The assessee has not submitted any documentary evidence on the query raised by the Assessing Officer dated 03.09.2009, as mentioned above. It is settled position in law that wherever there are credit entries in the books of the assessee the onus is upon the assessee to establish the identity and the creditworthiness of the donor and the genuineness of the transaction. In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of this credit balance, unsatisfactory explanation given by the assessee has been accepted by the learned first appellate authority while deleting the addition in dispute. In our considered view, the impugned order on the deletion of addition of Rs. 15,00,000/- is not as per law and record of the case. Therefore, we are unable to sustain the same. In our considered view, the Assessing Officer is within her power to call for explanation of the assessee on any sum which she has found credited in the books of the assessee maintained for any previous years. The Assessing Officer called the explanation which is not satisfactory and as per the provisions of law and without support of any documentary evidence. In our view, the Assessing Officer has rightly rejected the explanation of the assessee on the issue in dispute and has rightly made the addition of Rs. 15,00,000/- as unexplained cash entry made by the assessee in its books of account under Section 69 of the Act because the assessee with mala fide intention has made the entry of this cash credit to avoid the tax liability. 11.5 It is made clear that although the Assessing Officer in the previous year could not catch the wrongs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute has not been established by the assessee with the proof of any documentary evidence. Learned first appellant authority has wrongly deleted the addition in dispute without being any evidence that the assessee has repaid the amount in dispute to Sh. Ghulam Nabi in the assessment year in dispute. 12.2 In our considered view, the learned first appellate authority has wrongly deleted the addition in dispute merely on presumption and assumption and in the absence of any documentary evidence supporting the claim of the assessee. In the present case, the assessee is claiming the benefit of Rs. 18,30,000/- on account of unsecured loan in the name of Sh. Ghulam Nabi and the onus is upon the assessee to establish the identity and creditworthiness of Sh. Ghulam Nabi as well as the genuineness of transactions for which the assessee has failed to establish before the Assessing Officer as well as before the learned first appellate authority and even before us. The assessee has not filed any valid explanation supporting any documentary evidence or filing confirmation from Sh. Ghulam Nabi for the payment of the loan in dispute. Before the Assessing Officer, the assessee has also failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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