TMI Blog2016 (1) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... sole ground that entire statement of Faquir Chand and documents which have corroborated the statement of Faquir Chand, cannot be countenanced. AO has failed to bring on record any deficiency or could challenge the veracity of the documents filed before him. We find that Faquir Chand had enough creditworthiness and the transactions being through account payee need to be taken as genuine in the absence of any other evidences which is not on record. Therefore, we delete the disallowance. For Joginder Mongia, the assessee had brought the creditor before the AO and has also produced the aforesaid documents to discharge its primary onus. We find that the authorities below have not been able to point out any discrepancy or defect in any of these documents produced by the assessee. In the absence of same, simply disallowing and making an assertion by just saying that it is bogus transaction, is legally untenable, therefore, we are inclined to delete the addition. In respect of Satayawanti, we find that she is the mother of the assessee and she deposed before the AO that she is receiving money from M/s. Shree Gian Chand, a commission agent -However, during assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed by the appellant. 1.4 That various adverse findings recorded by the learned Commissioner of Income Tax (Appeals) are contrary to record and law and thus unsustainable. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts and in upholding lump sum addition of ₹ 25,000/- out of the expenses incurred and claimed by the assessee. 3. Ground No.2 is not pressed by the assessee, hence, the same is dismissed as not pressed. 4. Ground Nos.1 to 1.4 are against the sustenance of addition of ₹ 12,50,000/- representing loans received by the assessee as unexplained cash credit u/s 68 of the Income Tax Act, 1961 (hereinafter the Act ). 5. Brief facts relating to the aforesaid ground are that the assessee is a part time accountant and maintain books of account and also dealing in the business of trading of shares during the relevant assessment year i.e. 2008-09. The return of income was filed on 30.09.2008 at a loss of ₹ 1,20,122/- and the same was processed on 29.03.2010. Subsequently, the case was selected for scrutiny and notices were issued. During the year under consideration, the assessee had shown loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uir Chand Godara, who is not an IT assessee, and further no interest has been paid to him even though he is not a relative. The argument of the AR that Sh. Faquir Chand Godara cannot given right statement before the AO due to pressure is without any basis and devoid of any merit. The case laws relied upon by the AR are distinguishable on facts. In view of the above, I hold that the assessee failed to discharge the onus cast on him of proving the genuineness and creditworthiness of the creditor and therefore addition of ₹ 5.00 lacs made by the AO is upheld. 5.2 Loan in respect of Shri Joginder Mongia The AO observed that an amount of ₹ 4,75,000/- was shown as outstanding unsecured loan on 31.03.2008 and fresh unsecured loans of ₹ 3.00 lakhs each were received on 18.08.2007 and 04.10.2007 out of which ₹ 1,25,000/ - was shown as returned on 29.03.2008. The AO recorded the statement of Shri Joginder Mongia produced by the assessee on 23.12.2010. From the perusal of the bank statement of Shri Joginder Mongia, it revealed that cash of identical amount was deposited on the dates of issuing cheques in favour of the assessee. The AO further observed that Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 25,000/- per annum by stitching of clothes did not have any capacity to advance the loan of ₹ 1.50 lakhs to the assessee. The AO also observed that her bank account also revealed that identical cash was deposited on the same date before issuance of cheque to the assessee. The AO also observed that she could not furnish the account copy of M/s Shree Gian Chand, commission agent from whom money was received which in turn was given as loan to the assessee. Accordingly, the AO made the addition of ₹ 1.50 lakhs. The ld. CIT (A) confirmed the addition after going through the submissions of the assessee, the remand report of the AO and the rejoinder of the assessee, by observing as under:- 5.5 I have considered the issue and the submissions made by the AR. It was stated by Smt. Satyawanti before the AO that source of cash deposit of ₹ 1.50 lacs in her bank a/c is the amount received from M/s Shree Gian Chand, commission agent. During the course of enquiry in remand proceedings, the partner/proprietor of M/s Shree Gian Chand, commission agent denied to have had any transactions with Smt. Satyawanti during the year under consideration. Having been cornered on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Lal Ramesh Chander, no adverse inference can be drawn on the basis of statement of Shri Fakir Chand, who duly confirmed the factum of credit but his inability to explain the source of advance at the time of statement on account of his age of 79 years, could not be a justified basis to draw adverse inference by disregarding other evidences and facts on record. He further submitted that non-payment of loan or the interest free loan could not be a ground to state the creditors were not creditworthiness or transaction is not genuine. In this regard, he submitted some facts which are - the creditor owns land measuring 39 acres (page 110 of PB); annual agricultural income of ₹ 10.19 lakhs (page 42 of PB); only confirmed the factum of advance which was received by account payee cheque (page 110 of PB); saving of funds support by J-Form and confirmation; opening loan of ₹ 1 lakh was accepted; and he had deposed that they are having family relations and also it is the prerogative of creditor and assessee. The ld. AR further submitted that certain documents to prove his contention are filed in the PB i.e. copy of ledger account in the books of Banwari Lal Kataria for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Joginder Mongia Ld. AR submitted that the identity is not disputed. As regards that loan is not genuine, the ld. AR submitted that the creditor duly confirmed the loan along with source; loan was duly repaid within one year; transactions are through account payee cheque; creditor was having land measuring 35 acres and his yearly income was ₹ 20 lakhs. He further submitted that this was supported by statement of account of the firm to whom crops had been sold (page 75 to 77 of PB) and also bank statement of the creditor was filed (page 67 to 70 of PB). He submitted that subsequently, even the firm had duly confirmed the sale of crop in a statement (page 116 of PB). He submitted that the loan was paid and for this contention, he relied on pages 115 78 of the PB). He further relied on the documents submitted in the PB and submitted that factual facts were overlooked by the lower authorities while deciding the genuineness and creditworthiness. The assessee also placed on record a chart giving the evidences which is reproduced below :- ii) Joginder Mongia i) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Copy of bank statement of Smt. Satyawanti Kataria (page 82 of Paper Book) iii) Copy of statement of Smt. Satayawanti dated 15.12.2010 (pages 83-84 of Paper Book) iv) Copy of ledger account in the book of Banwari Lal Kataria for the period 1.04.2006 to 31.03.2007 (page 85 of Paper Book) v) Copy of acknowledgement of return of income for Assessment Year 2006-07 (Rs. 75270/- (pages 86-88 of paper Book), 2005-06 (Rs. 49,480/- (pages 89-92 of paper Book), 2007-08 (Rs. 4,640/- (pages 93-95 of Paper Book), 2008-09 (Rs. 1,40,593/- (pages 95-97 of Paper Book) vi) Copy of statement of Shri Amount Kumar dated 8.11.2011 (pages 106-108 of Paper Book) The learned AR submitted that the authorities below have accepted that the identity of the creditors is that established that have held that creditworthiness and genuineness of the creditors was not proved on the ground that there was inconsistency or contradiction in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said to be distinguishable on facts and since in the instant case, the assessee has failed to discharge the onus cast on him of proving the genuineness and creditworthiness of the creditors, the addition made of ₹ 12,50,000/- and sustained by the CIT(A) be upheld. 9. We have considered the rival submissions, perused the material on record. So far as the instant year is concerned, the appellant has raised loan from Shri Faquir Chand Godara of ₹ 5,00,000/-, Shri Joginder Mongia of ₹ 6,00,000/- and Smt. Satyawanti of ₹ 1,50,000/-. All these loans have been raised by account payee cheques. The bank statemenst of each of the creditors have been placed on record by the appellant in support of the credits raised by the appellant. Further, each of the creditors have appeared and accepted the factum of advancing loans to the appellant. In such circumstances, the issue therefore, emerges is whether authorities below were justified in holding that the burden of the appellant remained un-dischanged under section 68 of the Act on the ground that there is inconsistency and contradiction in the statement of the creditors as to the sources of the funds raised by them f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see himself. If there is direct evidence to show that the loan received by the assessee actually belonged to the assessee, there will be no difficulty in assessing such amount as the income of the assessee from undisclosed source ; but if there is no direct evidence in this regard, then, the indirect or circumstantial evidence has to be conclusive in nature and must in such circumstances, unerringly point to the assessee as the person from whom the money had actually flown to the hands of the sub-creditor and, then, routed through the hands of the subcreditor to the hands of the creditor. For this purpose, the circumstantial evidence has to be not only consistent with the hypothesis that the money belonged to the assessee, but that this hypothesis must also be inconsistent with the hypothesis that none other than the assessee owned the said money. If the conclusion be that the money received, as loan, by the assessee may or may not belong to him or if the possibility exists that the money received, as loan, by the assessee may not belong to him, then, in none of such two cases, the loan amount can be conclusively treated as income from undisclosed source of the assessee inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be treated to be the income of the firm for the purposes of income-tax. 13. Further, the Hon be Rajasthan High Court in the case of CIT vs. Jai Kumar Bakliwal (supra) has held as under :- 9. If there is direct evidence to show that the loan received by the assessee actually belong to the assessee, there will be no difficulty in assessing such amount as the income of the assessee from undisclosed source but if there is no direct evidence in this regard, then the indirect or circumstantial evidence has to be conclusive in nature and should point to the assessee as the person from whom the money has actually flown to the hands of the creditor and then from the hands of the creditor to the hands of the creditor. 20. When we peruse the facts herein above, it is an admitted position that all the cash creditors have affirmed in their examination that they had advanced money to the assessee from their own respective bank accounts. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then, in our view, such an addition cannot be sustained and has been ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural produce was sold by Faquir Chand to M/s. Shyam Traders which fact is corroborated by Form-J issued by the said Shyam Traders. Our attention was taken to pages 49 65 of the PB in order to substantiate the said argument. Our attention was also taken to the confirmation from M/s. Shyam Traders which is placed at pages 40 to 42 of the PB. Further, the books of accounts maintained by M/s. Shyam Traders were also produced before the AO. The AO in order to discredit Faquir Chand, the old person on a mistaken statement that he has sold agricultural produce to M/s. Girdhari Lal Ramesh Chander was on an incorrect basis to come to a conclusion that the transactions are bogus. It was brought to our knowledge that the said Faquir Chand owns land measuring 39 acres and in this regard, our attention was taken to pages 110 of PB. Our attention was drawn to page 42 of the PB to show his annual agricultural income of ₹ 10.19 lakhs. Copy of the bank statement of Faquir Chand has also been filed and has been placed at page 41 of the PB. Copy of his statement is found recorded at pages 43 44 of the PB. Thus, we find that the assessee has discharged the primary onus on him to prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
