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TMI Blog2019 (12) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the Ld. CIT(A) was justified in ignoring the decision in the case of Kamal Motors v CIT[20031131 Taxman 155(Raj.), where it was held that the responsibility is on the assessee to discharge the onus that the cash creditor is a man of means to allow the cash credit. (iii) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the clear rotation of cash which is evident from the bank accounts of loan providers and duly established by AO during assessment proceedings. (iv) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the loan providers were not the persons of sufficient capacity therefore, creditworthiness is not proved. (v) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the additions were made by AO after conducting discreet enquiries u/s 131 of the I. T. Act. (vi) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the financial strength of the creditors do not have any match with the sums provided as loans. (vii) Whether in the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken from account pay cheque. The assessee file various details including confirmation, bank statement, proof of land holding for source of funds from a few of the loan providers and income tax return, copy of the loan providers assessed to tax. Summons were also issued by the Ld. AO u/s 131 of the Act for the personal presence of the cash creditors, Except one creditor namely Ragini, rest all the cash creditors appeared personally before the Ld. AO stating on oath that they had sufficient funds in their account and have given the loan to the assessee. However, the Ld. AO was not satisfied and proceeded to make the addition u/s 68 of the Act at Rs. 1,94,98,000/- observing as follows: 4.8 From the above, it is seen that the assessee has failed to produce Income tax Returns, bank statements or any proof with regard to then creditworthiness in respect of 4 cases totaling to Rs. 29,20,000/- mentioned in Table-1 in the preceding part of this order. The assessee has just filed the confirmation in respect of these parties and has even not produced them for examination. Hence, the identity and genuineness of the transaction also remains to be proved. Hence none of the ingredients as req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e immediate preceding year also. Given their declared sources, they could not have lent so much to the assessee. Therefore, it can be said the cash deposits before the loan is nothing but assessee's unaccounted money brought in the books in the guise of unsecured' loans from sundry lenders. 4.10 Given the above, the source of cash deposit totaling to Rs. 1,65,78,000/- in the bank accounts of the 18 persons as per Table-2 above immediately preceding the loans given to the assessee remains unexplained. The creditworthiness of such lenders is not proved and hence, the amount of Rs. 1,65,78,000/- is liable to be added to the income of the assessee u/ s 68. 4.11 Therefore, total addition of Rs. 1,94,98,000/- (29,20,000+1,65,78,000) as unexplained cash credit u/s 68 is made to the income of the assessee 5. Accordingly income assessed at Rs. 1,98,40,620/-. 6. Aggrieved assessee preferred an appeal before the Ld. CIT(A) challenging the addition u/s 68 of the Act at Rs. 1,94,98,000/- and gave detailed submissions along with documentary evidences to prove identity, genuineness and creditworthiness of the cash creditors. Ld. CIT(A) was satisfied with the submissions and details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00000 18 Maya Patel 600000 Total 1,65,78,000 12. Ld. AO made an addition for all the cash creditors referred in table 1 of Rs. 29,20,000/- and with regard to table 2 addition was restricted only to the amount of Rs. 1,65,78,000/- totalling to Rs. 1,94,98,000/-. 13. We observe that the assessee in order to prove identity, genuineness and creditworthiness of the cash creditors has given details for each cash creditor in the following manner. (i) Smt. Anusuiya Patel (Rs. 7,00,000/-) (a) She is having 21.18 Bighas of agricultural land. Market (Guideline) value of said property is 9.26 crores as on today. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which she confirmed the transaction. (ii) Beniram Patel (Rs. 6,25,000/-) (a) He is having 21.82 Bighas of agricultural land. Market (Guideline) value of said property is 11.36 crores as on today. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction. (e) He is an Income Tax assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction (e) He is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (ix) Babulal Patel (Rs. 6,00,000/-) (a) He is having 89.424 Bighas of agricultural land jointly with Gulab Singh Patel. Market (Guideline) value of said property is 33.53 crores. (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction (x) Ravi Nagar (Rs. 5,00,000/-) (a) He is having 16.344 Bighas of agricultural land. Market (Guideline) value of said property is 12 crores as on today (b) Loan taken through account payee cheque and repaid through account payee cheque (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction (e) He is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (f) Holding 9% shares (xi) Vinod Nagar (Rs. 8,00,000/-) (a) Loan taken through account payee cheque and repaid through account payee cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- (i) Hitesh Bhargava (Rs. 2,00,000/-) (a) He is an Income Tax assessee and getting a salary of Rs. 12,00,000/- P.A. (b) He has not deposited cash while giving loan (ii) Pankaj Nigoskar (Rs. 3,20,000/-) (a) Getting a salary of Rs. 17 lac P.A. from Bharti Airtel Ltd. (iii) Nikhil Maheshwari (Rs. 22,50,000/-) (a) Income tax payee having an income of Rs. 6,00,000/- P.A. (b) No cash was deposited in his account when loan was given. (iv) Laxmi Narayan(Rs. 3,00,000/-) (a) Agriculturist having 18.35 Hectares of land. 14. We, further observe that Ld. CIT(A) after appreciating the documents placed on record by the assessee, deleted the addition of Rs. 1,94,98,000/- made u/s 68 of the Act observing as follows: On careful consideration of the points in issue as brought out in the assessment order, the grounds of appeal and the submission of appellant the various grounds raised by the appellant are decided hereunder:- Ground Nos.l & 2: Through these grounds of appeal, the appellant has challenged the addition Rs.l,94,98,000/- on account of bogus loan u/s 68 of The Act. 4.1.1 The appellant furnished the correct addresses of the loan parties and confirmations were fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor on the same day, does not establish that the loan is not genuine-Assessee has proved the source of credit and also the source of source -Addition cannot be made. 11. Aseem Singh vis Asst. CIT (2012) 19 IT.1 52 CTrib.-Indore) Identity and credit-w0l1hiness proved-Assessee took loan of Rs. 1,00,000/- confim1ation of creditor was filed-Lower authorities made addition u/s 68 holding that amount was deposited in cash in the bank account of lender immediately prior to date of loan HELD- Assessee has established the identity- The party has confirmed the transaction-If AO doubted the transaction, AO should have called creditor u/s 131- Addition cannot be made. Therefore, the AO is not justified in making the addition. Therefore. the addition made by the AO amounting to Rs.l,94,98,0001- is Deleted. Therefore, the appeal on this ground is Allowed. 15. The above finding of fact by the Ld. CIT(A) remains un-rebutted to the extent that identity of the cash creditor is not in dispute, Almost in all the cases the Ld. AO has himself recorded the statement on oath wherein the cash creditors have clearly stated that they had sufficient funds to provide loan to the assessee. Bank statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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