TMI Blog2018 (5) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... itors may be examined to explain the credits; and that so far as regards the source of the deposit in the account of the assessee. In the present case the creditors chose not to appear in response to the summons, but they filed replies, again filing the documents filed by the assessee. Now, for the non-appearance of its creditors, the assessee cannot be faulted. If the AO was not satisfied with the creditors’ replies, it was well within his powers to ensure their presence. This, however, was not done and the matter was decided against the assessee, holding that the assessee could not prove the source of the source of the loans received by it. This is not tenable in law - Decided in favour of assessee. - I.T.A No. 171/Agra/2016 - - - Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, it was entitled to file the present appeal, which was filed within one month of the dismissal of the cross-objections. 4. In this view of the matter, the delay incurred in filing the appeal is condoned. 5. On merits, the AO made the addition, holding that the assessee had filed to prove the creditworthiness of its creditors. The AO observed as follows: 3.5 On perusal of the bank Statement of the creditor (Radha Rani Mangal it is seen that the bank account is in joint name along with Rajendran Kumar Mangal. Further, it is seen that there are cash deposits of ₹ 1,00,000/- each on 13/11/2009 and then on 18/11/2009, before the amount of ₹ 2,00,000/- has been given as loan to the assessee on 20/11/2009. Similarly, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2009-10. 3.6.1 It is further seen that the creditor Ram Krishna Mangal has shown income of only ₹ 1,57,108/-, which is well below taxable limit. No supporting documentary evidence was produced so as to establish that the amounts deposited in the form of cash etc. in the bank account of the creditor was the income earned by the creditor itself. 3.6.2 Further during the year under consideration, the creditor has not received any interest on the amount given to the assessee as loans. It is highly unlikely that a person having income of only ₹ 1.5 lakh which is well below taxable limit shall advance loan of ₹ 3.5 lakhs to a person that too without any interest. 3.6.3 Therefore genuineness of transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the assessee, as has been done in the present case, when the assessee has discharged its onus u/s 68 of the Act. Reliance has been placed on the following case laws: i. CIT vs. Anurag Agarwal , 54 Taxmann.com 75 (All.) ii. CIT vs. Vaibhav Cotton Pvt. Ltd. , 36 Taxmann.com 429 (M.P.) iii. CIT vs. STL Extrusion Pvt. Ltd. , 11 Taxmann.com 125 (M.P.) iv. Nemi Chand Kothari vs. CIT , 136 Taxmann.com 213 (Gau.) v. Sarogi Credit Corpn. Vs. CIT , 103 ITR 344 (Pat.) vi. CIT vs. Jauharimal Goel , 147 Taxman 448 (All.) vii. Kalyan Memorial and Charitable Trust vs. ACIT , ITAT, Agra 121 ITD 525 (Agra) (TM) viii. Umesh Electricals vs. ACIT , 12 Taxmann.com 5 (Agra) (TM) ix. Vishnu Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to have failed to prove the creditworthiness of its creditors. 10. In Kalyan Memorial , (supra), like in the present case, the AO found from the bank statements of the creditors, that immediately before the deposit was given, there were deposits in the accounts of the creditors. The AO held that the creditworthiness of the creditors was not proved. The Third Member Bench of the Tribunal held that when the particulars regarding Income Tax Assessment and bank accounts had been filed, the initial burden on the assessee stood discharged and no material had been brought by the Department to show that what was explained by the assessee was not the correct state of affairs; that if any sum is found credited in the accounts of the creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty; and that the AO did not examine the parties and proceeded on the assumption that the creditors would not have saved any money to advance the loan. It was held not to be a fit case to make addition. 13. The other decisions relied on by the assessee are to the same effect. 14. In none of the decisions relied on by the Department, extracts whereof are stated filed, however, the issue of the assessee having discharged his onus u/s 68 of the Act by producing evidence, is shown as involved. 15. In view of the above, the grievance of the assessee is accepted. The addition made is, accordingly, deleted. 16. In the result, the appeal is allowed. Order pronounced in the open court on 10/05/2018. - - TaxTMI - TMITax - Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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