TMI Blog2022 (4) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... uent year by repayment and transfer entries. The copy of Income Tax Return and bank statement is also on record. No cash transactions have been observed in the account of lender before transfer of money to the assessee. The last entity Mundhra Bullion Private Ltd. has confirmed the transactions. The transactions are through banking channels only. The copy of PAN and Income Tax return of the lender is on record. The perusal of bank statement would reveal that there are no immediate cash deposits and the payments to the assessee have been sourced out of banking channels only. On the basis of all these documents, it could be well said that the assessee had duly discharged the onus of establishing the identity of the lenders, their respective creditworthiness as well as genuineness of the transactions. So far as the allegations of Ld. AO that the loans are interest free is concerned, the circumstances under which the loans were obtained by the assessee was duly explained before lower authorities and the same has already been enumerated in preceding para 5.1. Therefore, the impugned additions, in our considered opinion, has rightly been deleted by Ld. CIT(A). Accordingly, the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer. Further as Sri P.Ravi sought adjournments and did not appear before the AO, it is clear that the assessee failed to prove the identity, creditworthiness of the creditor and thereby the genuineness of the transaction. 3. As Sri Abhishek Mundra representing his HUF from which the assessee received ₹ 70,00,000 as interest free loan could not explain the reasons for borrowing sums from his individual and lending to the assessee without obtaining any security as evident from his statement, it cannot be said the assessee proved the creditworthiness of the loan creditor and consequently the genuineness of the transaction. Thus, the Ld CIT(A) ought to have upheld the addition made by the Assessing Officer. 4. As Sri Abhishek Mundra representing M/s Mundra Bullion Pvt Ld from which the assessee received ₹ 3,69,00,000 as loan could not explain the reasons for lending such huge amount without obtaining any security and without any interest, it cannot be said that the transaction is a genuine one for it is beyond any human probability and that too, when the creditor happens to be a company. Thus, the Ld CIT(A) ought to have upheld the addition made by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 1 to 2 has been accepted by Ld. AO. However, the subject matter of dispute before us is credit received from parties listed at serial nos. 3 to 5. 4.2 During assessment proceedings, the assessee filed confirmatory letters. In response to summons issued by Ld. AO, Shri P.Ravi confirmed the transactions. However, the copy of ITR, Bank statement or Balance Sheet was not filed. The assessee maintained that the moneys were received through banking channels and the genuineness of the transactions stood explained. However, rejecting the same, Ld. AO held that the credit received from Shri P.Ravi was non-genuine. 4.3 Shri Abhishek Mundhra filed confirmatory letters along with copy of Income Tax Return, Balance Sheet, Computation of Income and Bank Statement etc. However, it was noted that the moneys were deposited in the loan creditor account and on the same day, the same was given as loan to the assessee. Therefore, the amount so received was held to be unexplained cash credit. 4.4 The Managing Director of last creditor i.e., Mundhra Bullion Pvt. Ltd. appeared before Ld. AO and produced copy of ITR and Balance Sheet. In sworn statement, he confirmed to have lent ₹ 369 L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation of balance for the year ending 31.03.2014 and 31.03.2015 (few repayments can be seen in subsequent AY 15-16) and iii. Copy of his ITR V for the AY 14-15 and iv. Copy of his Axis Bank statement (Account No.238380, Sowcarpet Branch, Chennai-19) which reflect the transaction. M/s. Mundra Bullion Pvt. Ltd i. Copy of PAN AAFCM0519C ii. Copy of confirmation of balance for the year ending 31.03.2014 and iii. Copy of his ITR v for the AY 14-15 and iv. Copy of its Axis Bank statement (Account No.10511) which reflect an amount of ₹ 80 Lakhs on 19.03.2014 and ₹ 175 Lakhs on 25.03.2014 v. Copy of its IDBI bank account which reflect an amount of ₹ 90 Lakhs on 19.03.2014 and vi. Copy of Standard Chartered Bank No.42580 which reflect an amount of ₹ 24 lakhs on 19.03.2014. It was also noted that the moneys were advanced by these parties towards purchase of property situated at 110/82, P.S.Sivasamy Salai, Mylapore, Chennai in a joint venture arrangement with the assessee.These parties were disclosed under the head Current Liabilities / Sundry Creditors. The amount received from such creditors had straightway gone towards the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and the sum so credited consists of share application money, share capital, share premium etc., the explanation furnished by the assessee shall be deemed to be not satisfactory unless the person in whose name such credit is recorded also offers an explanation about nature and source of sum so credited and such explanation is found to be satisfactory. However, this proviso is applicable only in the case of credit by way of share application money, share capital, share premium etc. In other words, in case of unsecured loans, the assessee is required to prove the source of credits only besides establishing the identity of the lender and genuineness of the transactions. In such cases, the assessee is not required to prove the source of source as held by Hon bleBombay High Court in its decision tilted as Gaurav Triyugi Singh V/s ITO (ITA No.1750 of 207, dated 22/01/2020) which also consider its earlier decision of Pr. CIT V/s Veedhata Towers Pvt. Ltd. (2018; 403 ITR 415). It was held that there was no requirement under law to explain the source of source. Once the identity of the lender as well as their creditworthiness is established by the assessee and the transactions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No cash transactions have been observed in the account of lender before transfer of money to the assessee. The last entity Mundhra Bullion Private Ltd. has confirmed the transactions. The transactions are through banking channels only. The copy of PAN and Income Tax return of the lender is on record. The perusal of bank statement would reveal that there are no immediate cash deposits and the payments to the assessee have been sourced out of banking channels only. On the basis of all these documents, it could be well said that the assessee had duly discharged the onus of establishing the identity of the lenders, their respective creditworthiness as well as genuineness of the transactions. So far as the allegations of Ld. AO that the loans are interest free is concerned, the circumstances under which the loans were obtained by the assessee was duly explained before lower authorities and the same has already been enumerated in preceding para 5.1. Therefore, the impugned additions, in our considered opinion, has rightly been deleted by Ld. CIT(A). Accordingly, the impugned order could not be faulted with. 8. The revenue has relied on the decision of Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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