TMI Blog2020 (9) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... SAHU, AM Assessee by : Shri G. Nayak, AR Revenue by : Shri Subhendu Datta, DR ORDER Per L.P.Sahu, AM This is an appeal filed by the assessee against the order passed by the CIT(A), Cuttack, dated 22.01.2016 for the assessment year 2007-2008 on the following grounds :- 1. The order of Assessment as well as the appellate order is against law, weight of evidences and probabilities of the case. 2. The learned Assessing Officer most arbitrarily added to the total income of the assessee the amount of ₹ 29,00,000/- received as loan on different dates from friends, relatives and staff at the time of constraint of funds and utilized in the business of M/S Chaitanya Minerals, a proprietory concern of Shri Bharat Bhusan Deo, for the running and survival of the business, without considering the facts and circumstances under which the same was taken. 3. The learned Assessing Officer most arbitrarily added the amount of ₹ 29,00,000/-U/S 68 of the Income Tax Act as income from undisclosed source without accepting the fact of creditworthiness of the persons giving loans and the genuineness of the transactions. 4. ₹ 29,00,000/- received a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Details/documents to substantiate the creditworthiness of the loan creditors. Thereafter the hearing of the appeal was fixed on 31.10.2013, 19.11.2013, 09.01.2014 24.01.2014, respectively. It is evident from the fixing the date of hearing that none appeared on behalf of the assessee, therefore, the AO initiated the penalty proceedings u/s.271(1)(b) of the Act and also completed the assessment u/s.144 of the Act after issuing show cause notice to the assessee thereby making addition of ₹ 29 lakhs for non-compliance of the notices as stated above. The AO noticed that identity of loan creditors and their creditworthiness was remained unestablished and genuineness of the transaction were also remained unsubstantiated. Accordingly, the assessee could not discharge the onus cast upon him to prove the genuineness of the transactions, identity of the creditors and also creditworthiness of the loan creditors, therefore, the AO added the entire ₹ 29 lakhs u/s.68 of the Act to the total income of the assessee. 4. Feeling aggrieved from the above order, the assessee appealed before the CIT(A). The CIT(A) after considering the order of AO and documents produced before hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an creditors are not explained. The .important aspect still remains that the appellant was given sufficient opportunities by the AO for furnishing the details and verification of the same which the appellant has avoided to comply with. The Hon'ble Supreme Court in the case of Smt. Sumati Dayal have held that the maxim, the apparent is real is not always sacrosanct. If facts and circumstances so warrant that the same do not accord with the best of human probabilities, transfers are to be held as non-genuine. 10. From the above discussion, it is quite apparent that the contention of the appellant does not carry the evidentiary value to establish the identity of the loan creditors, the genuineness of such transaction and the creditworthiness of the loan creditors.' I am therefore, inclined with the finding of the AO that the appellant has failed the test as mentioned above and the amount of ₹ 29,00,000/- should be treated as unexplained cash credit u/s. 68 of the Act. The action of the AO is therefore sustained. 5. Ld.AR filed the paper book containing page Nos.1 to 102 and also filed the written submissions, which read as under :- That the instant appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y heard and disposed of by the learned Commissioner of Income Tax (Appeals), Cuttack, Odisha vide order dt. 22.01.2016. The learned Commissioner while dealing with the issue only relied on the order of assessment passed by the Assessing Officer in respect of aforesaid amount of ₹ 29,00,000/- which was received by the appellant from different persons on account of loan and without considering the facts and evidences properly brought out on record at the time of hearing before him and finally upholding the additions made by the AO and dismissing the appeal. 3, On an opportunity given to the assessee, the confirmation letters of the loan creditors confirming the loans were filed before the CIT(A). As a result the assessee had discharged the onus which lay upon him. Nemi Chand Kothari Vs CIT (2003) 264-ITR-254(Gauhati) Once the assessee has proved the identity of his creditors, the genuineness of the transactions, which he had with the creditors and the creditworthiness of his creditors vis-a vis the transactions which he had with the creditors ,the burden stands discharged and the burden then shifts to the revenue to show that the amounts in question actually b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the transactions and (iii) creditworthiness of each of the creditors were proved to the satisfaction of the CIT(A). Since the confirmation letter from creditors (lenders) were also submitted to CIT(A), identity of the creditors can not be disputed. [ACIT vs S.S. Pharmaceuticals Pvt Ltd. (ITAT Allahabad Bench. ITA No.742/AII/1995 dt.18/09/2002)] SUBMISSION The moot question involved in the present appeal for consideration is as to whether the respondent is entitled to be assessed for receipt of loan of ₹ 29,00,000/- as income in consonance with section 68 of the' Income Tax Act, 1961, in as much as the impugned order against which the present appeal has been preferred by the appellant part of the loan amount has already been repaid. l. That the factual matrix as is admitted by the parties is that the appellant/Bharat Bhusan Deo during the assessment year 2007-08 had received loan from different parties to the tune of ₹ 29,00,000/-and the enforceable liability is treated as income while passing the assessment order. The observation arrived at by the learned assessing officer is nothing but perverse in as much as based on absolute -surmises, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the loans received in cash and he also further submitted that the assessee has repaid the loans by way of cheques in the subsequent years which has not been considered by any of the authorities. 6. On the other hand, ld. DR relied on the order of AO and submitted that the assessee did not appear before the AO even in the second round of proceedings to prove the genuineness of the loan taken in cash from various persons and the AO completed the assessment u/s.144 of the Act. The assessee did not appear on any dates before the AO and he only produced the documents before the CIT(A). He also submitted that in the confirmation submitted by the assessee there is no complete address provided for making correspondence by the revenue authorities viz. house no. street, area etc. In many cases there was no PAN Number mentioned in the loan confirmation and also there is no creditworthiness of the loan creditors proved by the assessee and all the loans were taken in cash, therefore, the genuineness of transactions are completely in doubt. The refund of loan by way of cheque will not effect to the loan taken, both are separate and distinct in nature. Therefore, it should not be correla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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