TMI Blog2022 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.68 of the Act in the hands of the assessee. Amount received vide A/c payee cheque from Smt. Rajkumari Gidwani - On the one hand it is stated by the AO that the loan amount of Rs.3 lac that was advanced by the aforementioned person was sourced out of the KCC proceeds of Rs.2,22,086/- while for, on the other hand contradicting his own observation he had drawn adverse inferences qua the credit worthiness of the lender and, had, inter alia, held that she could not have been in possession of a substantial amount of cash savings. As the facts narrated by the AO leading to the addition of Rs. 3 lac under Sec. 68 in the hands of the assessee are in clear contradiction of his observations recorded in the assessment order, therefore, we are of the considered view that the matter requires to be restored to the file of the A.O with a direction to re-adjudicate the same after making necessary verification qua the correct factual position and examining the lender in question Amount received from Smt. Sashikala Dubey an existing income-tax assessee who was deriving income from hiring of a vehicle (Tata sumo) to NTPC had categorically admitted of having advanced a loan of Rs. 2 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.03.2016, which in turn arises from the order passed by the A.O under Sec 143(3) of the Income-tax Act, 1961 (in short the Act ) dated 26.03.2013 for assessment year 2010-11. Before us the assessee has assailed the impugned order on the following grounds of appeal: 1. That Ld. CIT(A) erred in law as well as facts while confirming addition of Rs.1200000/- u/s.68 without considering the facts and legal issue involved in the case. 2. That the assessee craves leave to add, alter and amend modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before the final hearing. 2. Succinctly stated, the assessee firm which is running a hospital had filed its return of income for AY 2010-11 on 06.10.2010, declaring an income of Rs.4,19,610/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. 3. Assessment was thereafter framed by the A.O vide his order passed u/s.143(3), dated 26.03.2013, wherein, after inter-alia treating the unsecured loans of Rs.12 lacs claimed by the assessee to have been received from 5 parties as unexplained cash credits u/s.68 of the Act the income of the assessee was determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain. For A.Yr. 2009-10 total gross receipt of the lender had been 1066670/- only and had shown income of Rs. 1,60,000/-. Similarly for A.Yr. 2008-09 the gross receipt was 786670/- and income was computed at Rs. 1,18,000/-. During the year of advancing loan to the assessee no return had been filed by the lender. After analyzing the savings which the lender could have with him the AO found the Rs. 2,00,000/- cash is not possible for the lender so as to deposit in his account. The learned AR had reiterated the same argument as he advance for Anil Gidwani. In case of Smt. Rajkumari Gidwani the AO has mentioned that she is government employee and she has deposited cash on 24.02.2010 Rs. 2,22,086/- and on 16.03.2010 she had advanced loan to the assessee. She had availed KCC facility and Rs. 57757/-, Rs. 72530/- and Rs. 91999/- were credited in her account. After analyzing the facts the AO concluded that she is not able to advance the money to the assessee because she could not state as to why KCC facility had to be availed by her. The learned AR had reiterated the arguments as in earlier two cases. In case of Smt. ShashikalDubey the statement was recorded by the AO and lender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wife which was given to the assessee as a loan on 18.03.2010. She agreed to have advanced the loan to the assessee. The AO has found that the depositor have to take the loan from her husband to give the loan to the assessee which is not supported by any exigency. However he did not make any addition, looking to the facts and circumstances of the case and so is the case with the M/s Yugawari Marketing Pvt. Ltd and Shri Vishal Bhagmare. In the facts and circumstances of the case and material available on the record I am satisfied that the above depositors are not having capacity and genuineness for advancing of money to the assessee. wo depositors are government employee and they have to intimate to government for the transaction and two are having income u/s 44AD and 44AE respectively. In case of Shri Shaiyad Abdul Mazid his total turnover is only Rs. 1066670/-and Rs. 786670/- for A.Yr. 2009-10 and 2008- 09. He also filed return of income u/s 44AD and did not file return for A.Yr. 2006-07 which shows that he is not regularly been earning income and suddenly on 20.03.2010 he deposited Rs. 2,00,000/- in his account and advanced the loan to the assessee and this is not comprehendib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns of income since A.Y2011-12. On being specifically queried about the persons to whom he had during the year under consideration advanced loans, it was stated by him that he had advanced a loan of Rs.1 lac vide cheque No.391016 dated 02.12.2009 drawn on his bank account with SBI Bank, Indore to M/s. Krishna Hospital. On being queried by the A.O about his source from where the aforesaid loan of Rs.1 lac was advanced to the assessee, it was categorically stated by him that he as a government employee was drawing salary and had advanced the loan out of the accumulated funds which he had garnered over the years from his said source of income. It was, however, admitted by him that he was not in a position to furnish complete details of the accumulated funds out of which the aforesaid loan was advanced. 9. Observing that the aforesaid person had made cash deposit of Rs.1 lac in his bank account prior to advancing of the loan on 09.04.2010, the A.O carried doubts in his mind as regards the authenticity of the impugned loan transaction. It was further observed by the A.O that as the salary of the lender was not substantial to source the impugned loan, therefore, his claim of havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orementioned person and had failed to place on record any such concrete material which would prove to the contrary. Our aforesaid view that now when the lender had duly admitted on oath before the A.O of having advanced the loan in question to the assessee, then, no adverse inferences as regards authenticity of the loan transaction could have validly been drawn is fortified by the judgment of the Hon ble High Court of Chhattisgarh in the case of CIT Vs. Shri Abdul Aziz (2012) 251 CTR 58 (C.G.). It was observed by the Hon ble High Court that now when the loan creditors had in their statements and depositions admitted the loan transactions, then, the A.O without placing on record any such material which would disprove the creditworthiness of the said creditors could not have dubbed the loans so received as unexplained cash credits u/s.68 of the Act. Also, a similar view had been taken by this Tribunal in the case of Amit Kumar Bansal Vs. ITO, Ward-1 in ITA No. 130/RPR/2013, dated 20.05.2017, wherein, the adverse inferencesas regards the authenticity of the loan transactions that were drawn by the A.O on the ground that the lenders had deposited cash prior to issuance of the cheques t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited the said amount out of his accumulated savings which were lying with him in his house. On being queried about the scale of his business, it was submitted by him that he had in the preceding year executed contract work of Rs. 10 lac (approx.). On being queried as to how the savings of Rs.2 lac considering the status of his business and the size of his family was justified, it was submitted by him that his wife Smt. Sabana Begum (PAN ASDPB9584H) was also since AY 2006-07 a regular income-tax assessee and the accumulated savings of Rs.2 lac belonged to both of them. On being queried that as to why they had kept the aforesaid amount of cash in their house, it was submitted by him that as cash in the normal course of his business would be required by him, therefore, for the said reason he had kept the said amount in his house. On being queried as to how he was acquainted with the assessee firm i.e. M/s. Krishna Hospital, it was stated by him that Shri Vishal Upadhaya, partner of M/s. Krishna Hospital was known to him for the past 23-24 years. On being queried as to how he was able to run his business after advancing a loan of Rs.2 lac to the assessee, it was stated by him that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by the Ld. AR, and rightly so, in case if the A.O had any doubts as regards the source of the cash deposit in his bank account, then, it was open for him to have taken necessary action in the case of the said lender. Be that as it may, drawing support from the aforesaid judicial pronouncements as have been relied upon by us while adjudicating the case of the aforesaid lender, viz. Shri Anil Gadwani (supra), we are of the considered view that as the assessee before us had duly discharged the onus that was cast upon him as regards proving the authenticity of the loan transaction in question, therefore, the same could not have been added as an unexplained cash credit u/s.68 of the Act in the hands of the assessee. (C). Smt. Rajkumari Gidwani : Rs. 3 lacs 15. The assessee had claimed to have received an amount of Rs. 3 lac vide A/c payee cheque dated 16.03.2010 from the aforementioned person. As is discernible from the assessment order, the aforementioned person who is a lecturer by profession had advanced the aforesaid loan primarily out of the KCC proceeds of Rs.2,22,086/- that were credited in her bank account on 24.02.2010. However, the AO observing that the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person was recorded on oath by the A.O in the course of the assessment proceedings. On being queried as regards the source of her income, it was submitted by her that she was deriving income of Rs.1 lac to Rs. 1.10 lac from hiring of a vehicle (Tata Sumo) to NTPC. On being specifically queried by the A.O as to whether she had entered into any loan transaction with M/s. Krishna Hospital during the year under consideration, she had answered in the affirmative. Elaborating as regards the loan transaction, it was stated by her that as Smt. Preeti Upadhaya, partner of the assessee firm, a family friend, being in need of money had approached her for financial assistance, therefore, she had advanced to her a loan of Rs. 2 lac out of the funds which were available with her as accumulated savings. On being queried as to whether she was having substantial financial means for advancing a loan of Rs.2 lacs, it was submitted by her that she in the normal course would either deposit her savings in the bank account or keep the same in cash with her. Once again she had in her statement categorically admitted of having advanced a loan of Rs. 2 lac vide cheque No.528769 dated 23.03.2010 to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the transaction in question, therefore, the same could not have been dubbed as a bogus loan and added as an unexplained cash credit under Sec. 68 in the hands of the assessee firm. (E) Shri Sudhakar Wankhede : Rs. 4 lacs 19. The assessee had claimed to have received a loan of Rs.4 lac from the aforementioned lender. Statement of the aforesaid lender was recorded on oath by the A.O in the course of the assessment proceedings. It was stated by the lender that he was encaged in the business of a petty contractor under the name and style of M/s. Puja Constructions and was regularly being assessed to income-tax (PAN AVPW4702G). Copy of the return of income for the A.Y.2011-12 was filed by him. On being queried as to which all persons he had advanced loans during the year under consideration, it was stated by him that he had in two tranches of Rs. 2 lac each advanced a loan aggregating to Rs.4 lac to M/s. Krishna Hospital, Korba, viz. (i) vide A/C payee cheque No.97215 dated 20.03.2010: Rs.2 lac; and (ii) vide cheque No.97216 dated 31.03.2010: Rs. 2 lac. On being queried as regards the cash deposits of Rs.2 lac each on 20.03.2010 31.03.2010 i.e. prior to advancing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the fact that the lender was residing in an urban area which was well catered by banking facilities, the A.O was of the view that it was beyond comprehension that the lender would have kept the substantial amount of cash in his house. Considering the aforesaid facts the A.O was of the view that the loan transaction in question was clearly an accommodation entry provided by the lender at the instance of the assessee firm. Accordingly, the A.O dubbed the loan transaction as an unexplained cash credit u/s.68 of the Act and made an addition of Rs. 4 lac in the hands of the assessee firm. 21. After having given a thoughtful consideration, we are unable to persuade ourselves to subscribe to the view taken by the lower authorities. Admittedly, it is a matter of fact borne from the record that the A.O in the course of the assessment proceedings had recorded the statement of the aforesaid lender on oath. In his statement, the aforesaid lender had not only admitted of having advanced a loan of Rs. 4 lacs (in two tranches) to the assessee firm, but had in fact gone a step further and had explained the source out of which the said amount was so advanced. Considering the fact that the lend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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