9911796707
TMI Blog2019 (12) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of delay accompanied by an Affidavit. After perusing the contents of the Affidavit as well as the application for condonation of delay and considering the submissions of the learned Authorised Representative, we are satisfied that the delay in filing the present appeal is due to reasonable cause. Accordingly, we admit the appeal for adjudication on merit. 5. Brief facts are, the assessee is an individual. For the assessment year under dispute, he filed his return of income on 1st December 2003, declaring total income of Rs. 8,55,073. During the assessment proceedings, the Assessing Officer noticing that in the year under consideration, the assessee has shown unsecured loan of Rs. 46,53,000, from various parties called upon to furnish loan confirmations. As observed by the Assessing Officer, the assessee was unable to, rather, expressed his inability to furnish any confirmation from the parties. Accordingly, the Assessing Officer treated the amount of Rs. 46,53,000, as unexplained cash credit under section 68 of the Act and added back to the income of the assessee. The assessee challenged the aforesaid addition before the first appellate authority. 6. Before learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs. 7.15 lakh. As regards the addition of Rs. 27.83 lakh representing loan advanced by 11 parties, the learned Authorised Representative submitted, except four of the parties, in rest of the cases notices issued under section 133(6) of the Act were served, but no reply was received. He submitted, before learned Commissioner (Appeals) as well as during the remand proceedings, the assessee has furnished the loan confirmations with PAN. He submitted, some of the creditors are closely related to the assessee. He submitted, Shastri Agencies from whom the assessee has obtained loan of Rs. 1 lakh, is the HUF of the assessee. Therefore, there cannot be any doubt with regard to identity of the party or genuineness of the loan transaction. He submitted, Smt. Theresa Shastri, from whom the assessee has obtained loan of Rs. 30,000, is the wife of the assessee and the amount was given out of her personal income. He submitted, Shri Vinay Padave, who had advanced Rs. 1,98,500, is working as DGM (Finance) with the assessee and has advanced the aforesaid amounts on various dates when the assessee was in need of money. He submitted, in respect of loan of Rs. 20,000 advanced by Smt. Kanchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had called upon the assessee to prove the genuineness of unsecured loan shown at Rs. 46,53,000, by furnishing confirmations of creditor and other supporting evidence, however, the assessee was not able to furnish confirmation from even a single creditor or any other supporting evidence to prove the loan transactions. Therefore, the Assessing Officer treated the entire unsecured loan of Rs. 46.53 lakh as unexplained cash credit and added back to the income of the assessee. In the course of proceeding before the first appellate authority, the assessee furnished confirmation from 22 creditors which were sent for verification and enquiry of the Assessing Officer in remand. On perusal of confirmations filed by the assessee, the Assessing Officer wanted to verify/ascertain the genuineness of loan transactions and creditworthiness of the creditors. Therefore, he issued summons/notices under section 133(6) of the Act to the concerned creditors. As observed by the Assessing Officer in the remand report, out of the 22 creditors representing aggregate loan amount of Rs. 34.98 lakh only 11 lenders responded to the notices issued by the Assessing Officer and confirmed of having advanced loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unath, are related parties. Further, in respect of Smt. Kanchan Devi Kothari, and Smt. Beena Bengani, it is the submissions of the learned Authorised Representative that, though, their Chartered Accountants have furnished reply in response to the query raised by the Assessing Officer, however, they were not considered during the assessment proceedings. Insofar as the related parties are concerned, Shastri Agencies is stated to be the HUF of the assessee. Whereas, Smt. Theresa Shastri, is the wife of the assessee. Similarly, Shri R. Raghunath, is stated to be the brother of the assessee. Therefore, considering their relation and proximity with the assessee and the quantum of loan involved, we are of the view that loan availed from these parties should not be treated as unexplained cash credit. As regards loan availed from Smt. Kanchan devi Kothari and Smt. Beena Bengani, considering the submissions of the learned Authorised Representative that the reply filed by their Chartered Accountants have not been considered, we hold that these loan transactions should not be considered as unexplained cash credit. However, as regards the other creditors, the assessee has not been able to furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the lenders also personally communicated with the Assessing Officer confirming the loan advanced by them. He submitted, the other creditors/lenders in respect of whom the assessee had furnished confirmations did not reply to the notices issued under section 133(6) of the Act according to their own choice. However, that will not lead to conclusion that the assessee had either furnished inaccurate particulars of income or concealed his income so as to impose penalty under section 271(1)(c) of the Act. Thus, he submitted, the penalty imposed should be deleted. 16. The learned Departmental Representative, relying upon the observations of the learned Commissioner (Appeals), submitted that the additions on account of unexplained cash credit was made as the assessee failed to prove the genuineness of loan transactions. Therefore, to this extent, the assessee had furnished inaccurate particulars of income justifying imposition of penalty under section 271(1)(c) of the Act. 17. We have considered rival submissions and perused material on record. It is evident, out of the unsecured loan availed of Rs. 46,53,000, the assessee in course of proceedings before the first appellate authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
