TMI Blog2019 (12) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding since loans were repaid within a month. Sufficient material placed on record by the assessee during the course of hearing before both the lower authorities and before us including the statement on oath taken by the Ld. AO and other documentary evidences referred hereinabove, are of the considered view that assessee had proved identity, genuineness and creditworthiness of all the cash creditors beyond doubt for which impugned addition u/s 68 - Appeal of the Revenue stands dismissed. - ITA No.444/Ind/2018 - - - Dated:- 18-12-2019 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Revenue : Shri Rajib Jain, Sr. DR For the Respondent : Shri S. S. Solanki, CA ORDER PER MANISH BORAD, A.M: This appeal at the instance of Revenue pertaining to A.Y. 2014-15 is directed against the order of Commissioner of Income Tax(Appeals)-1, Indore, (in short CIT ), dated 22.02.2018 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(hereinafter called as the Act ) framed on 30.12.2016 by ITO- 3(2), Indore. 2. The Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Ld. CIT(A) was justified in ignoring the decision given by the Hon'ble Delhi High Court in the case of Pro CIT vs. Bikram Singh ITA 55/2017 that the financial strength of the creditors is not sufficient to provide the such huge sum and that is also without any collateral security, without interest and without any loan agreement. (ix) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the proposition laid down by the Hon'ble High Court in the case of CIT vs. Precision Finance Ltd, 1994 208 ITR 465 Cai., that mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. (x) Whether in the facts and circumstances of the case, the Ld. CIT(A) was justified in ignoring the decision laid down in case of CIT vs. United Commercial and Industrial Co. (Pvt.) Ltd (1991) 187 ITR 596 (Cal.) that the onus does not get discharged merely by filing confirmatory letters. 3. Though the revenue has raised 10 grounds of appeal but the sole grievance is with regard to deletion of addition of ₹ 1,94,98,000/- which was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted before giving loan cheques to the assessee remain to be proved. The source of such cash has been stated to be savings out of agricultural income in majority of cases and in remaining it is out of savings from salary or job income. Some of the persons are not even filing returns of income and in cases of others who are filing returns of income, the source of cash deposit or loan given do not commensurate with the declared income. For example in the case of Gulab Sing there is cash deposit of ₹ 60,25,000/ whereas returned income is only ₹ 1,58,600/ and declared agricultural income is just ₹ 3,78,480/-. Hence' even agricultural income cannot justify such large cash deposits. It is noteworthy that there is immediate deposit of cash before giving loans to the assessee. There are no other transactions or deposits in the bank account barring for the transactions undertaken with respect to the loans given to the assessee in majority of above I cases. There is no justification for depositing such huge cash in bank account which was hitherto allegedly kept as cash as savings. There is no explanation or documentary evidence with regard to source of cash lying in hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO and also pointed out that in most of the cases, cash was deposited just a few days before the issuance of cheque to the assessee which creates doubts on the creditworthiness of the cash creditors. 9. Per contra Ld. counsel for the assessee argued at length referring to the submissions made before lower authorities as well as documents filed in the paper book in order to prove identity, genuineness creditworthiness of the cash creditors. He also submitted that confirmation of account has been filed in all the cases. Loan has been taken through account payee cheque. Bank statement have been filed in all the cases except Ruby Jain. Statement on oath recorded by the Ld. AO in all the cases except Ragini, copy of income tax return filed for the loan creditors assessed to tax and land ownership documents and proof of agricultural income supplied by the cash creditors. Reliance was placed on plethora of judgments mentioned in the paper book filed on 03.12.2019. 10. We have heard rival contentions and perused the record placed before us. Though the revenue has raised grounds of appeal running from ground no.1 to 10 but the sole grieva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vinod Nagar 800000 12 Kuldeep Jageshwar Mukati 603000 13 Jayprakash Nareshchandra 625000 14 Ruby Jain 100000 15 Y.D. Trading 450000 16 Ragini 500000 17 Pankaj Lata Gupta 900000 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 ₹ 29,20,000/- and with regard to table 2 addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Affidavit filed (d) Statement on oath taken by the AO in which he confirmed the transaction (v) Laxmi Gulab Patel (₹ 6,50,000/-) (a) She is having 6.476 Bighas of agricultural land. Market (Guideline) value of said property is 1.10 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 (vi) Mahendra Patel (₹ 10,00,000/-) (a) He is having 17.6 Bighas of agricultural land. Market (Guideline) value of said property is 3.06 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 (e) He is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (f) Holding 51% shares (vii) Rachita Patel (₹ 6,00,000/-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Loan taken through account payee cheque and repaid through account payee cheque (b) Affidavit filed (c) Statement on oath taken by the AO in which he confirmed the transaction (d) He is an Income Tax assessee. Copy of computation alongwith acknowledgement filed. (e) Salaried employee getting salary of 2.3 lacs. (xiii) Jaiprakash Naresh Chandra (₹ 6,25,000/-) (a) Loan taken through account payee cheque and repaid through account payee cheque (b) Affidavit filed (c) Statement on oath taken by the AO in which he confirmed the transaction (d) Salaried employee getting salary of ₹ 1.93lacs. (xiv) Ruby Jain (₹ 1,00,000/-) (a) Loan taken through account payee cheque and repaid through account payee cheque (b) Statement on oath taken by the AO in which she confirmed the transaction (c) Salaried employee getting salary of ₹ 2,00,000/- (xv) Y.D. Trading (Yashwant Dhanore) (₹ 5,00,000/-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Ld. CIT(A) after appreciating the documents placed on record by the assessee, deleted the addition of ₹ 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 filed from loan parties. The AO recorded the statement in most of the cases. While recording the statement the loan parties has confirmed that they had advanced the loan to the appellant. By issuing the summon u/s 13] of the 1.T. Act, the above parties becomes the witnesses of the department. It is obligatory on the part of the AO to force the attendance of the witnesses. The AO has all power to force the attendance of the loan parties. Once the AO has issued the summons and the same have been served. he c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved-Assessee took loan of ₹ 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 statement stands filed except in the case of Ruby Jain. Proof of owning agricultural land and earning agricultural income has been filed in the case of the cash creditors to prove the source of funds and in the remaining the income tax returns shown that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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