TMI Blog2015 (7) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. We uphold the order of Ld. CIT(A) in respect of Parkash Joshi and Shri Chandra Kanta Joshi and confirm the addition on account of loan for ₹ 2,50,000/- each. However, we set aside the order of Ld. CIT(A) partly by deleing the addition in the case of Champa Lal Baid. Assessee appeal is partly allowed. - ITA No. 68/Chd/2014 - - - Dated:- 3-7-2015 - SHRI BHAVNESH SAINI AND SHRI T.R. SOOD, JJ. Appellant By : Shri Parikshit Aggarwal Respondent By : Shri Manjit Singh ORDER T.R.SOOD, J. The appeal by the assessee is directed against the order dated 31.10.2013 of CIT(A), Shimla. 2. In this appeal the assessee has raised the following grounds:- The ld. CIT(A) is wrong in confirming the additions of ₹ 5,00,000/- u/s 68 on account of unsecured loan taken from Sh. Champa Lal Baid as the assessee had submitted the complete details which show the genuineness of Sh. Champa Lal Baid. 2. The Ld. CIT(A) is wrong in confirming the additions of ₹ 2,50,000 u/s 68 on account of unsecured loan taken from Sh. Parkash Joshi as the assessee had submitted the complete details which show the genuineness of Sh. Parkash Joshi. 3. The Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns that they are not in the capacity to advance huge unsecured loans. This view is further strengthened with the fact that in spite of repeated requests, show-cause issued, the assessee failed to prove the creditworthiness of the creditors and also to produce them for verification of genuineness of the transaction. From the above discussion, it is held that it is nothing but assesseee s own money introduced in the books of accounts in the shape of bogus unsecured loans raised through these persons under section 68 of the Income-tax Act. 1961. The amount of ₹ 10,00,000/-(Rs. Ten Lakh) shown as unsecured loans are treated as bogus creditors under section 68 of the Income-tax Act, 1961 and added back to the total income of the assessee by treating the same as unexplained cash creditors on which no deduction under section 80IC of the Income-tax Act, 1961 shall be allowed, since the assessee has failed to discharge his duty to prove the genuineness, creditworthiness of the creditors. The onus is upon the assessee to prove the genuineness of the transaction / creditworthiness. Reliance is place on the following case laws: 1) Banarsi Prasad Vs. CIT (2008) 304-ITR-239 (All) 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of CIT v Laul Transport Corporation (supra) held as under;- Income Cash credit Genuineness Finding recorded by CIT(A) and the Tribunal that the assessee has discharged its onus to prove the genuineness of cash credits by placing on record sufficient material / evidence Not only the identity of the creditors has been established, asssessee has also discharged its onus of explaining the nature of the source of the cash credits Finding recorded by the CIT(A) as well as the Tribunal after taking into consideration the material and documents and appreciating the evidence on record is a pure finding of fact which cannot be interfered in appeal under s. 260A - Appellant having not pointed out any illegality or perversity in the said finding of fact there is no ground to interfere No question of law, much less a substantial question of law, arises from the order of the Tribunal. 10. In our opinion, this sum cannot be added to the income of the assessee because the depositor is a regular Income-tax assessee. The money was deposited in cheques in his bank and the Revenue cannot investigate the source of source. 11. The second loan was taken from Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 68 of the Act? When and in what circumstances would section 68 of the Act come into play ? A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by an assessee ; such credit has to be of a sum during the previous year ; and the assessees offer no explanation about the nature and source of such credit found in the books ; or the explanation offered by the assessees in the opinion of the Assessing Officer is not satisfactory, it is only then the sum so credited may be charged to Income-tax as the income of the assessees of that previous year. The expression the assessees offer no explanation means where the assessees offer no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessees. It is true the opinion of the Assessing Officer for not accepting the explanation offered by the assessees as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case also, it was mainly contended that Revenue has no authority to examine the source of source. The Hon'ble Court after considering these submissions at para 7 observed as under:- 7. With respect to the legal contention that the Revenue cannot insist on assessee supplying the source of source is impeccable. However, the facts of the present case are vastly different. It is of-course true that some of the observations made by the Tribunal may suggest that the Tribunal did concern itself with the source of the source. However, such observations cannot be picked in isolation as to treat that as the conclusion of the Tribunal. When one reads the_ order of the Assessing Officer that the Commissioner (Appeals)) and also of the Tribunal inescapable conclusion one arrives at is that the Revenue authorities as well as the Tribunal found the entire transaction not genuine. There was sufficient evidence on record to suggest that in case of all the depositors, their bank accounts contained meager balance shortly before sizable amount of ₹ 1 lakh and upward were given to the assessee through such account. In such bank accounts cash amounts were credited and immediately ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re issue of cheque to the assessee and equal amount of the cash credit was deposited in the bank account. He has filed return of income for the assessment year under appeal at ₹ 44972/- (PB-71). In the case of Smt. Keerti Maheshwari, in her bank account, there was balance of ₹ 4688/- only prior to issue of cheque to the assessee and equivalent amount of cash credit was deposited for the purpose of issue of cheque in favour of the assessee. For the assessment year under appeal, she has filed return of income at ₹ 1, 01,000/- only. In the case of Smt. Mithlesh Maheshwari, the bank balance before issue of cheque was ₹ 10, 794/- and equivalent amount of cash credit was deposited in her bank account for issue of cheque in favour of assessee. For assessment year under appeal, she filed return of income at ₹ 1, 02, 476/- only. In the case of Sh. Rampal Singh, it is already noted above that the deposit entry in his case is not explained and prior to issue of cheque, there was bank balance of ₹ 3708/- only. He has filed the return of income for the assessment year under appeal at loss with agricultural income (PB-102). In the case of Shri Shariq Ali Khan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine transaction as genuine transaction. 7. We do not find that the AO failed to exercise his jurisdiction in refusing to summon the file of unsecured creditors other than Shri Abhay Maheshwari, who had appeared and was examined. We also do not find that the AO has committed any error in examining the account books. None of the creditors under examination could prove their creditworthiness. Each one of them had a very small bank balance of a few thousand rupees only and that in all the cases the entire sum given as unsecured loan was deposited on the same day, when it was advanced to the assessee-appellant. 8. We do not find that any of the substantial questions of law framed by the appellant arises for consideration of the Court. The findings recorded by the AO about the creditworthiness of the unsecured loans of ₹ 13, 00, 000/- as against the total unsecured loans of ₹ 78, 75, 249/-, does not suffer from any error of law. 9. The Income Tax Appeal is dismissed. Therefore, onus was on the assessee to prove the creditworthiness of the depositor which has not been discharged. The Assessing Officer after having pointed out that cash was deposited before giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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