TMI Blog2018 (8) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has raised the following grounds of appeal :- 1. That the learned CIT(Appeals) upheld the additions on account of unsecured loan of ₹ 11,42,000/- out of ₹ 34,22,000/- obtained during the year from i) Smt. Smurti Rekha Mohanty of ₹ 1,60,000/-, ii) Dr. Ajit Kumar Rout of ₹ 2,00,000/-, iii) Sri Purna Chandra Swain of ₹ 2,48,500/-, iv) Smt. Nirmala Pani of ₹ 1,45,000/-, v) Sri Amersh Koanr of ₹ 1,30,000/- , vi) Sri Subash Ch Sahoo of ₹ 1,35,000/- and vii) Sri Ranjan Kumar Sahoo of ₹ 1,23,500/- as alleged sum U/s 68 is arbitrary, purely surmise and unjustified in law to the particular facts and circumstance of the case. 2. That the additions on account of unsecured loan ₹ 11,42,000/- by the CIT (Appeals) out of total additions of unsecured loan of ₹ 60,58,018/- to the appellant case since the Appellant is registered under section 12A of the Income tax Act, 1961 and obtaining approval of exemption under section 10(23C)(v) (vi) of the Income Tax Act, 1961 is illegal, unjustified in the eyes of law and prejudicial to the principles of natural justice. 3. That the Appellant craves leave to add or am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding and appellate proceeding the said statement is herewith submitted in paper book page-37 to 40 for your perusal. 3.2 Similarly, there are 14 cases reply have been received by the A.O that they have advanced loan out of the income earned from agricultural activities. One person has refused that he has not advanced any loan to the assessee, the details are submitted in the paper book number 41 to 44. 3.3 Out of 14 cases summon was issued to the aforesaid parties out of which 10 parties are appeared before the A.O. The details of chart have been prepared showing the details of cases affidavit is submitted, the replies were submitted during the assessment proceeding and appeared before in response to summon in separate sheet enclosed in paper book at page 41 to 44. 3.4 A.O stated in his order that out of 31 unsecured loan creditors, some cases the letter were written back as un-served and some cases no reply has been received. From the above observation it is submitted that most of the cases they have changed their address and some cases out fear from Income Tax Department they have not received the letters, but as far as possible on the part of the assessee we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material which may kindly be considered for the sake of natural justice. 3.8 That the assessee has maintained books of account for the financial year 2009-10 and accounts are audited by the Independent Chartered Accountant on programme wise, the audit report are submitted in the paper book at page-15 to 36. 3.9 The details of unsecured loan have been analysed from the chart enclosed in the paper Book page 37 to 40. From the chart it revealed that Sl.no Unsecured Loan AMOUNT in Rs. 1 Opening Balance 2636018 2 Loan taken during the year 3422000 3 Loan repaid during the year relating received during the year 1236400 4. Balance of Loan taken during the year 2185600 5. Loan repayment relating to opening balance 254950 6. Closing Balance 4566668 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order U/s 143(3) for the A. Y 2011-12 are herewith submitted for your perusal. Hence it should be deleted. 5. Presuming but not admittedly, if at loan creditor added, it shall be added to total income and entire income is exempted because the amount was brought for the expenses incurred which were applied for charitable purposes. These entire additions are added in the provisions of Income Tax Act, 1961. The assessee has proved the identity, genuineness of transaction and creditworthiness of all loan creditors and sundry creditors by producing the books of account and affidavit from major loan creditor. Even if creditworthiness of loan creditors has not been proved also, since the activities of the society are proved as genuine and the society has carried out the activities in accordance with the object of the society and registration granted U/s 12A has not been withdrawn, the exemption cannot be denied. 6. That as regards to application of section 115BBC of the Income Tax Act, 1961 by the Learned CIT(A) it is stated that in this case the identity is proved in the provisions of section 115BBC (3), hence the said section is not applicable to the appellant case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard rival submissions and perused the material on record. Prima facie, on perusal of the assessment order we found that the Assessing Officer determined total income at ₹ 70,58,180/-. Being aggrieved to this order, the appeal has been filed before CIT(A). The learned CIT(A) has allowed in partially and deleted an amount of ₹ 59,14,180/- in respect of unsecured loan and sundry creditors and upheld unsecured loan of ₹ 11,42,000/-. Ld. AR s contention is that the amount of loans taken has been utilized towards the activities of the trust and the operation of the activities of 12 units in different places and its utilization have already been submitted during the Assessment proceeding. When there is utilization there must be a fund and sources of funds has been shown in the audited statement of accounts. We find that both the lower authorities have not doubted the utilization of funds, however, the fact remains that there are 31 loan creditors out of which, ld. AR before us has filed affidavits of three creditors confirming the loan amount given to the society, copies of which have been filed in the paper book at pages 55, 57 68, respectively. Ld. AR before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll aspects and also the fact that the Revenue has been accepting the loan creditors in the earlier years and also in the subsequent years as envisaged by the ld AR, we are of the opinion that the loan creditors have substantiated their sources in affidavits which was not disputed and was accepted by the lower authorities. We place reliance on the decision of this Bench of the Tribunal in the case of Gunvantrai Seth in ITA No.517/CTK/2017, order dated 06.08.2018, wherein the Tribunal observed that when the creditworthiness of the loan creditor was accepted by the department in subsequent years, therefore, there is no basis to refuse the same in the assessment year under consideration :- 15. Further, the assessee also pointed out that a further loan of ₹ 2,62,00,000/- in the assessment year 2013-14 and ₹ 1,20,00,000/- in the assessment year 2014-15 was received by the assessee s successor firm in the hands of the said successor firm. These subsequent loans were duly accepted by the Assessing Officer in an assessment made u/s.143(3) of the Act. 16. It was also pointed out that the entire loan alongwith interest thereon was duly repaid by the assessee s successor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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