TMI Blog2021 (3) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... on this account. In the case of loan from MAKs and from Pratap Chandra jena we find that the loan has been brought in cheque and repayment was also made in cheque through banking channel. In this regard, bank statements were furnished but the AO has not issued notice to the creditor u/s. 133(6) of the Act to know the truth and added the same to the income of the assessee. Hence, we also find no justification to confirm the said amount and delete the same. - Decided in favour of assesee. - ITA No. 436/CTK/2019 - - - Dated:- 18-1-2021 - Chandra Mohan Garg , Member ( J ) And Laxmi Prasad Sahu , Member ( A ) For the Appellant : D. Parida and C. Parida , ARs For the Respondents : J. K. Lenka, DR ORDER Per C. M. Garg , JM This is an appeal filed by the assessee against the order of the CIT(A)-1, Bhubaneswar dated 20.9.2019 for the assessment year 2006-07. 2. The appeal is time barred by 19 days. The assessee has filed condonation petition dated 19.12.2019 supported by affidavit sworn by Sri Prasant Satpathy, Managing Director of the assessee company, stating the reasons that the A.R. of the assessee kept the appeal order and did not file the appeal within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this office notice u/s. 133(6) dated 13.12.2013. Further, the copies of bank accounts submitted by the assessee and confirmation from M/s. Sinclair Builders Pvt. Ltd., depict a complete different set of transactions. Hence, cash credit of ₹ 39,76,766/- claimed as loans from M/s. Sinclair Builders Pvt. Ltd., remained unexplained. 2. In case of M/s. Suburban Ind. Ltd., M/s. MAKS International and Sri Pratap Chandra, no confirmations were received. Hence, the genuineness of loan transaction could not be verified. In other words, credits of ₹ 8,60,655/- remained explained. Considering the above facts, the addition made by the then AO is justified. On this account, I am of the opinion that the sundry creditor of ₹ 48,36,421/- are not genuine and hence not acceptable. 5. The CIT(A) sent the remand report of the AO to the assessee for rejoinder and after considering the reply to remand report, the Ld. CIT(A) confirmed the action of the AO, inter alia, observing as under : 5. I have considered the matter. In the remand report, the AO in order to examine the genuineness of the sundry creditors, called for information u/s. 133(6) from M/s. Sinclair Build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC) which held that: 'Assessment of cash credits on rejection of assessee's explanation relating thereto as false. Cash credits appearing in the books of account of the assessee-Burden of proof that amounts credited in books did not constitute income, whether lies on the assessee-Held, yes-Assessee explaining amounts credited as race winnings-rejection of explanation furnished by assessee as false after consideration of surrounding circumstances and applying the test of human probabilities-amounts credited in the accounts, whether could be assessed under section 68 of the Income tax Act, 1961, as income of the assessee-Held yes.' In view of the above, I am of the opinion that there is no infirmity in the action of the AO to add ₹ 48,36,421/- on account of unsecured loan sundry creditors u/s. 68 of the Act. Hence, the addition of ₹ 48,36,421/- is confirmed and the grounds of appeal are dismissed. 7. At the time of hearing, Ld. A.R. of the assessee submitted the AO has grossly erred in making the addition and Ld. CIT(A) is also not justified in confirming the same without considering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phool Singh vs. ACIT in ITA No. 2901/Del/2014 for A.Y. 2010-2011 and submitted that on similar facts, the addition made by the lower authorities was deleted by the Tribunal. While relying on the Supreme Court decision in the case of CIT v. Orissa Corporation P. Ltd. [1986] 159 ITR 78, learned counsel argued that the assessee has discharged its onus of proving the identity and credit worthiness of the creditor as well as genuineness of the transaction. By no piece of evidence, the Revenue has held that the loan was not genuine. 8. Replying to above, the learned Departmental Representative supported the orders of lower authorities and further argued that the onus was on the assessee to prove the identity and credit worthiness of the creditor as well as the genuineness of the transaction. As the assessee has failed to do so, the Commissioner of Income-tax (Appeals) was justified in sustaining the addition. 9. We have considered the rival submissions and perused the relevant materials placed on record before the Tribunal. We also find that the decision of ITAT New Deli in the case of Phool Singh (supra) support the case of the assessee, wherein, it has been held as under: W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer without giving any reason but merely reiterating the findings of the Assessing Officer. In view of this the addition made by the Ld. Assessing Officer of ₹ 26,57,303/- from Suresh HYP Enterprises cannot be sustained and hence, deleted. In the result ground No. 2 of the appeal of the assessee is allowed. 10. It is admitted position that the loan from Sinclair Builders Pvt. Ltd., has been obtained by account payee cheque. Confirmation, copy of account as well as the bank statement of the creditor has also been furnished. The assessee has also deducted TDS on the interest amount and the tax has also been deducted at source. The creditor is also assessed to tax. The AO found the difference between the account of the assessee and information obtained through invoking section 133(6) of the Act without considering the reconciliation statement produced by the assessee in regard to TDS. Hence, the issue is squarely covered by the decision of the Supreme Court in the case of Orissa Corporation P. Ltd. (supra). Respectfully following the same, we hold that no addition of cash credit was called for. 11. As regards to the disputed amount of ₹ 5,84,510/- showing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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