TMI Blog2024 (1) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... eration, AO has made additions considering loan as non-genuine by applying section 68 of the Act, however, these loans were examined by the assessing officer during regular assessment proceedings, hence these loans were not incriminating material, therefore, ld CIT(A) deleted the addition. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the ground raised by the revenue. Addition considering the agricultural income as bogus - CIT(A) held that keeping in view of facts that additions made by the Assessing Officer were not based on any incriminating material found during the course of search, even at the third party premises, and the binding judgement of Hon'ble High Court of Gujarat, as mentioned above, the additions made by the Assessing Officer were not found justified, hence, ld CIT(A) deleted the addition. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Addition of unsecured loans - HELD THAT:- We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is owning agricultural land which was used for agricultural purpose during past 2 years before the date of transfer, as seen from 7/12 and 8A form, return of income filed by the assessee and assessment made by the AO for various assessment years u/s 153A of the Act, after search was conducted upon the assessee, on 27.12.2012. Thus, the assessee has satisfied the conditions prescribed about the land sold, despite this fact ld CIT(A) denied exemption under section 54B of the Act. We note that assessee is regularly showing agricultural income for several years in the income tax returns filed and the same was accepted by the department even in the assessment under passed u/s 153A of the Act after search was conducted upon assessee on 27.12.2012. Therefore, we note that assessee has satisfied the condition prescribed u/s 54B of the Act, therefore exemption should be granted to the assessee u/s 54B of the Act, hence, we allow exemption under section 54B. - SHRI PAWAN SINGH, JM DR. A. L. SAINI, AM For the Appellant : Shri Ritesh Mishra, CIT(DR) For the Respondent : Shri Sapnesh Sheth, CA ORDER PER DR. A. L. SAINI, AM: Captioned five cross appeals, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the action of Assessing Officer in making addition of Rs. 10,00,000/- u/s 69A of the I.T. Act, 1961. (iii) Abated assessment year 2014-15, the concise and summarized grounds of appeal in Revenue`s appeal, in ITA No.121/SRT/2021 and Assessee`s appeal in ITA No.118/SRT/2021), are as follows: (i) Ground No. 1: The ld. CIT(A) has erred in admitting additional evidences under Rule 46A of the I.T. Rules by holding that sufficient time was not given to the assessee for submitting the relevant details during the course of assessment proceedings. (This covers ground no.1 raised by Revenue in ITA No.121/SRT/2021 for AY.2014-15) (ii) Ground Nos. 2 and 3: The ld. CIT(A) has erred in deleting the addition of Rs. 13,67,52,800/- made on account of unexplained cash credit without appreciating the findings given by the Assessing Officer in assessment order as well as in the remand report. (This covers ground No. 2 and 3 raised by the Revenue in ITA No. 121/SRT/2021, for A.Y.2014-15 and ground No. 1 raised by the Assessee in ITA No. 118/SRT/2021, for A.Y.2014-15) (iii) Ground No. 4: The ld. CIT(A) has erred in deleting the addition of Rs. 24,27,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-14) 5. The relevant material facts, as culled out from the material on record, are as follows. A search action under section 132 of the Act was carried out in the case of Vijay M. Bharwad Group of Surat on 27.12.2012 and Shri Vijay M. Bharwad, one of the assessees, who were covered under the said search action. A search action u/s 132 of the Income Tax Act was also carried out on 04.09.2015 in the case of M/s Param Properties of Surat. During the course of search action, several incriminating documents and evidences were seized from the premises of M/s Param Properties which contain entries pertaining to and information contained therein related to Gokul Skyline project, developed by Shri Vijaybhai Malabhai Bharwad. Subsequently, notices u/s 153C of the Act, dated 17.10.2017, were issued to the assessee, for various assessment years, including the assessment years (A.Y.) under consideration. In response to the aforesaid notice u/s 153C of the Act, the assessee has filed his return of income for assessment year (A.Y.) 2013-14, on 14.11.2017, showing return of income at Rs. 48,95,910/-. Subsequently, notice u/s 143(2) of the Act, was issued on 15.11.2017, which was duly served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditors, Identity of creditor is required to be established along with creditworthiness and genuineness of transaction, is equally important for proving the actual/undisputable transactions. But in the instant case, the assessee failed to prove the existence of the above depositor and thus the genuineness of transactions and even the creditworthiness. The assessee merely by filing confirmations returns of income, balance sheet etc. that too partial and merely existence of transactions through banking channel has not discharged the onus cast upon him. Looking into the facts and circumstance of the case; the failure was on the part of the assessee to prove the genuineness and creditworthiness of the parties from whom the assessee has taken unsecured loans. Hence, fresh loan shown to have been received in the name of various persons, whose creditworthiness has already been disproved in the A.Y.2014-15, are being treated as non-genuine and accordingly added to the total income of the assessee on account of unexplained cash credit. The assessing officer noted that since the matter is already in Appeal for AY.2014-15, and the loan amounts appear for the year under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A), the Revenue is in appeal before us. 10. The Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue, argued that there is a concrete reasons for assessing officer to make addition of Rs. 4,36,02,522/- based on incriminating material found. Similarly, as regards the addition of Rs. 31,55,500/- on account of bogus agricultural income, the assessee during the assessment proceedings, was specifically asked to provide the evidences in the respect of claim of agricultural income. However, assessee had totally been failed in providing a single evidence. The assessee could not even produce the details of agricultural land from where the assessee had claimed to have earned the agricultural income. However, the Ld.CIT(A) without discussing the issue on merits, deleted the addition merely stating that the addition is not based upon the incriminating seized documents, which is not acceptable. Therefore, ld DR contended that addition made by the assessing officer may be upheld. 11. On the other hand, Ld Counsel for the assessee contended that the additions made by the Assessing Officer are not based on any incriminating document found during the course of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment proceedings, hence these loans were not incriminating material, therefore, ld CIT(A) deleted the addition. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the ground raised by the revenue. 14. As regard second addition of Rs. 31,55,500/-, which was made by the assessing officer considering the agricultural income as bogus. We note that assessment has been made u/s 153C of the Act, as the search was conducted on 04.09.2015, in the case M/s Param Properties and during the course of search, some documents belonging to the assessee were found pertaining to few assessment years. However, for the assessment year under consideration, there is no mention of any incriminating document found during the course of search/which has been made basis for making these additions by the Assessing Officer. Therefore, ld CIT(A) observed that it is undisputed fact that the additions made by the Assessing Officer are not based on any incriminating material found during the course of search even at the premises of third party. Before, ld CIT(A), the assessee cited several case laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Act on 09.03.2022. As such the appeal against the said order should have been filed on or before 08.05.2022. However, I could not file appeal before the above date and there is delay in filing appeal owing to reasons beyond my control. 2. In this regards it may please be noted that my parents are old and I have to frequently visit out of station with them for their treatments and medical related reasons. They have various health ailments to take proper treatment, I have to go out of station. Due to their health problems, I was under mental tension lost sight of the above deadline for filing of appeal. However, I have no intention in not complying with laws of the Statute delay in filling appeal is purely due to bona fide reasons only. 3. Here, it is also pertinent to refer to the judgement of Honourable Supreme Court in the case of Collector, Land Acquisition V. MST. Katiji Ors. - 167 ITR 471. wherein it was held that sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even-handed justice on merits in preference to approach which scuttles a decision on merits. This decision of Supreme Court is applied by Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the Assessing Officer u/s 143(3) r.w.s. 153C of the I.T. Act, 1961. (ii) Ground No. 3: The Ld. CIT(A) has erred in confirming the action of Assessing Officer in making addition of Rs. 10,00,000/- u/s 69A of the I.T. Act, 1961. 22. Brief facts qua the issue are that the assessee had filed his return of income u/s 139 of the Income Tax Act, 1961 for A.Y.2014- 15 on 31.03.2015, declaring total income of Rs. 1,07,43,930/-. The assessee s case was selected for scrutiny under CASS and order u/s 143(3) of the Act for A.Y. 2013-14, was finalized on 30.12.2016, assessing the income at Rs. 19,38,03,255/-. Further, a search action u/s 132 of the Act was carried out on 04.09.2015, in the case of M/s Param Properties of Surat. During the course of search action, several incriminating documents and evidences were seized from the premises of M/s Param Properties, which contain entries pertaining to and information contained therein related to Gokul Skyline project, developed by Shri Vijaybhai Malabhai Bharwad. Consequent to the said search-action, jurisdiction over this case was transferred to another AO, vide order u/s 127(2) of the Act bearing No. SRT/Pr.CIT- 1/HQ/Juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the document seized assumes much greater value than what it would have been otherwise. Moreover, the assessee could not put forth a single argument to contradict the findings of the search and even did not file any submission to explain the transactions reflecting in the seized documents. Accordingly, receipts in respect of Gokul Skyline project reflecting in the seized material at Rs. 10,00,000/- was added to the total income of the assessee on account of unexplained cash receipts. 25. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before ld. CIT(A), who has confirmed the action of Assessing Officer, observing as follows: 5. DECISION: Submission of the assessee and the assessment order has been carefully considered. The facts of the case in brief as mentioned in assessment order are that a search action u/s 132 of the Act, 1961 was carried out on 04.09.2015 in the case of M/s. Param Properties of Surat. During the course of search action, several incriminating documents and evidences were seized from the premises of M/s. Param Properties which contained entries pertaining to and information therein related to Gokul Skyl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of initiation of the search under section 132 or making of requisition under section 132 A in the second proviso to sub-section (1) of section 153 A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-:; section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .w.s. 143(3) of the Act may be quashed. The ld Counsel took us through the satisfaction note, which is reproduced below: 28. On the other hand, ld DR for the Revenue, stated that satisfaction note dated 16.10.2017, for initiating the proceedings under section 153C of the I.T. Act, 1961, does not contain any defect and satisfaction note has been recorded as per the provisions of the Act. 29. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that search was conducted in case of assessee (Vijay M. Bharwad) on 27.12.2012. Thereafter, search was conducted in case of Param properties on 04.09.2015 and during such search documents related to Gokul Skyline Project, (as per Department, the said project, namely, Gokul Skyline Project, was developed by assessee - Vijay M. Bharwad) was found. The satisfaction note was recorded on 16.10.2017, which is after two years from the date of search in case of Param properties, on 04.09.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf are quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous. 33. In the result, grounds Nos. 1 and 2 of Assessee`s appeal, in IT(SS)A No. 90/SRT/2022, for AY.2014-15, are allowed. 34. Now, coming to the summarized ground nos.(i), (ii) and (iii) of the appeal in ITA No. 121/SRT/2021 for AY.2014-15, in Revenue appeal and in ITA No. 118/SRT/2021 in assessee s appeal, these grounds are reproduced below for ready reference as follows: (i) Ground No. 1: The ld. CIT(A) has erred in admitting additional evidences under Rule 46A of the I.T. Rules by holding that sufficient time was not given to the assessee for submitting the relevant details during the course of assessment proceedings. (This covers ground no. 1 raised by Revenue in ITA No. 121/SRT/2021 for AY.2014-15) (ii) Ground Nos.2 and 3: The ld. CIT(A) has erred in deleting the addition of Rs. 13,67,52,800/- made on account of unexplained cash credit without appreciating the findings given by the Assessing Officer in assessment order as well as in the remand report. (This covers ground no. 2 and 3 raised by the Revenue in ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of assessee, the assessee was asked to furnish the details of the unsecured loans vide letter of this office No. ACIT/Cir- 1(2)/SRT/VMB/453/Scru.14-15/2016-17 dated 04.11.2016. In response to the notice, the assessee submitted written submission about the new unsecured loans of Rs. 18,68,19,561/-. The AO noted that books of the assessee are also not audited so the transactions of the loans are not verified by the certified auditor either. The assessee submitted few details vide letter dated 16.12.2016. As per the submission filed by the assessee it was noted by Assessing Officer that the assessee had shown names of the alleged lenders. On the basis of examination of the returns of income, bank account statements, nature of transactions, it was found necessary to examine the real nature of the transactions apparently shown as unsecured loans. It was observed by Assessing Officer that all the parties except in the case of Juliben V. Bharwad and Vijay Bharwad HUF and Jagdish Bhadyadaria, having no apparent business connection with the assessee and are shown lending substantial amounts. The assessee has not given complete details of these parties, a general analysis also reveals th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014-15, in which returned income shown is Rs. 82,36,063/-. Apart from this returned income, Shri Manharbhai had exempt income of Rs. 81,29,185/- as share of profit from partnership firm. Thus gross income of Manharbhai FY 2014-15 is Rs. 1,63,65,245/- and capital balance is of Rs. 27,94,09,173/-. In the assessment order, the AO gave the reason as small income of the creditors for making the addition of this loan, but the same proved factually incorrect by the documents filed before the AO even during the assessment proceedings. In the remand report (Page 18 19 Sr. No. 1), the AO stated that there was credit of amount in the bank account of Shri Manharbhai C. Patel immediately before issuing cheque to the assessee through transfer/clearing. No cash deposit has been found by the AO in the bank account of the ceditor. The assessee stated that first cheque of Rs. 2 cr was given on 16.05.2013, against which only Rs. 23 lacs is credited into bank account of Manharbhai C Patel and remaining amount was from his credit balance already lying in the account. The creditor was having credit balance of more than Rs. 2 cr. for last one month. The assessee further stated that even after issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly incorrect. The AO is silent on cash deposits in the creditor's bank account in the remand report. The AO stated small income as reason for the additions, but the assessee's returned income is Rs. 17.04 lakh apart from Rs. 4.35 lakh an exempted agriculture income for AY 2014-15. The facts stated above clearly prove that the assessee and creditor have regular financial transactions. There are 26 transactions during the year. The opening balance was there, which has not been disturbed by the AO by reopening of the assessees case by issuing notice u/s 148 of the Act. The entire loan was repaid by the assessee from his account maintained with Kotak Mahindra Bank during FY 2014-15 i.e. immediate next year through 7 transactions. As the creditors presented himself before the AO, submitted all necessary documents to prove identity, genuineness of the transaction his creditworthiness, therefore, it is held that the assessee has proved identity of creditor, genuineness of the transaction creditworthiness of the creditor. Thus, additions of Rs. 1.68 cr. are deleted. iii) Balvantbhai D. Patel: The assessee obtained loan of Rs. 1 cr. from Shri Balvantbhai D. Patel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Page No.34 of the assessment order). During remand report proceedings, Shri Nareshbhai B. Patel was summoned and his statement was recorded u/s 131 of the Act on 30.05.2018. (Page 19 to 21 of the remand report). Shri Nareshbhai Bhagubhai Patel stated before the AO on oath that he has given loan of Rs. 1 cr to the assessee. He further stated that he obtained loan from M/s DRB Ravani Developers to give loan to the assessee. Thus, the source of source has also been explained before the AO. He submitted copy of ledger account of the assessee from his books of accounts, copy of his bank statement copy of ITR filed. He also stated that the entire loan was repaid by the assessee through regular banking channel. But the AO did not find the explanation satisfactory stating that interest was not charged by the creditor income returned of the creditor is too small, therefore, creditworthiness genuineness has not been proved by the assessee. Assessee stated in the rejoinder that Shri Nareshbhai B. Patel has explained that he is known to the assessee and because of his personal relations, he did not charge interest. Charging of interest is not mandatory requirement to prove the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine and creditworthiness is proved. This clearly raises suspicion. The assessee stated that he had opening balance of Rs. 89,61,058/- from Shri Mukesh J. Bhadiacira, which has been accepted by AO, as no action u/s 148 of the Act has been initiated for the relevant assessment year. When the transaction has been accepted for one financial year, it cannot be said non-genuine from the same person without proper investigation for other financial year. During the year, the assessee paid back Rs. 20 lacs to Shri Mukeshbhai. All these transactions are through normal banking channels. The assessee took further loan of Rs. 14.50 lac during FY.2014-15, immediate next financial year Rs. 76,00,000/- in FY.2018-19. All these facts were before the AO while submitting remand report. The assessee repaid Rs. 31.50 lacs during FY 2018-19. These facts show that assessee is having continuous and regular financial transactions with Shri Mukesh j. Bhadiadra. The transactions have been confirmed by the creditor by appearing personally before the AO and giving statement on oath u/s 131 of the Act, the transaction are through regular banking channels and there is no cash deposit found in the bank acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor. Shri Rakesh Jangid submitted confirmation of the transaction with the assessee, filed copy of ITR for AY 2014-15 in which returned income shown was Rs. 9,00,830/-. Ibis books of accounts have been audited in which loan has been shown to the assessee. In remand report, the AO stated that as no interest was charged hence, transaction was not genuine. The assessee stated that gross income as per computation of income is of Rs, 12.32 lacs of the creditor for the year under consideration. Rs. 35 lacs have been repaid during 2018 19. Keeping in view the fact that the creditor has confirmed the transaction, his books of accounts are audited, he is filing regular return of income, transaction is through normal banking channel and major part has been repaid in 2018-19. The assessee has proved identity of creditor, genuineness of the transaction and creditworthiness of the creditor. Thus, addition of Rs. 40 lakh made by the AO are deleted. viii) Maheshwari Sales Prop. Smt. Pravinaben R. Shah: The assessee obtained loan of Rs. 43,00,000/- from the above named creditor. During the assessment proceedings, the assessees submitted confirmation, copy of ITR and bank statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee further stated that depositor is a partnership firm and advanced money against purchase of land situated at survey number 91, Plot Number 4. As the registration of sale deed was pending, the amount was shown as loan in the books of accounts. Subsequently registration was made on 24.06.2013 and the loan was taken to the sale account by passing the journal entry. The assessee filed copy of registered sale deed in which name of the creditor and assessee are mentioned. In the Sale deed, narration of the amount given to the assessee has also been mentioned. Thus, the fact stated by the assessee have been found factually correct, therefore, the addition of Rs. 30,62,800/- lakh made by the AO are deleted. x) Bhavik D. Shah:- The assessee obtained Rs. 25,00,000/- from Shri Bhavik Shah. During the assessment proceedings, the assessee filed confirmation, copy of ITR and copy of bank statement. The AO stated that creditor has small returned income and made the addition. During remand report proceedings, the AO issued notice u/s 133(6) of the Act, which was responded by Shri Bhavik Shah confirming the transaction with the assessee. Shri Bhavik Shah submitted his copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partner. But the AO did not find these explanations satisfactory stating that the creditor could not provide any documentary evidence in support of withdrawal from M/s Astha developer. This finding of the AO is factually incorrect as the creditor's bank account was in front of the AO during the assessment proceedings as well as during remand report proceeding. Credit by transfer contains name of the person from whose account money is transferred. Thus, documentary evidence was very much with the AO. The assessee stated that creditor has capital balance of rupees 13.45 cr. Moreover the entire loan was the repaid in FY 2014-15 i.e. next financial year. From the discussion above, it is clear that the assessee has discharged his onus of proving identity of the creditor, genuineness of the transaction and creditworthiness of the creditor, thus addition of Rs. 25,00,000/- made by the AO are deleted. xii) Shri Nathji Trading Prop. Rohit Kumar B. Shah:- The assessee obtained loan of Rs. 25 lakh from the above named person. During the assessment proceedings, the assessee filed confirmation, bank account and ITR of the creditor. The assessee explained the credit entry in the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was explained. The AO asked assessee to submit copies of bank account from where creditor got credit through normal banking channel before issue of cheque to the assessee. During the remand proceeding, notice u/s 133(6) was issued to the creditor which was complied with Shri Ishwarbhai confirmed the transaction with the assessee. He filed copy of his and Bank account before the AO. The AO stated that creditor has returned income of Rs. 1.97 lakh only and does not maintain books of accounts. He obtained loan from others and passed it on to the assessee. Thus genuineness and creditworthiness are not proved by the assessee. The assessee contended that the creditor has confirmed the transaction, creditor is assessed to income Tax, transaction is through regular banking channel, credit in the bank account of the creditor stands explained which is /through normal banking channel (Rs. 13 lakh from Dhaval Gem, Rs. 10 lakh from Shri Chetan Kr and Rs. 2 lakh in cash from past saving) and the entire loan has been repaid during FY 2015-16 with interest. On going through the facts above, it is found that the assessee has discharged his onus of proving the Identity of the creditor, as lie replie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan was repaid in next financial year. Creditworthiness is proved from the fact that there is no cash deposit found in the bank account of the assessee immediate before issue of cheque to the assessee. Although the assessee is not required to prove source of source but he explained with the help of bank accounts of the creditors. Hence the addition of Rs. 24.50 lakh made by the AO is not found justifiable, thus deleted . xv) Shri Khangerbhai M. Bhadiadra: The assessee obtained loan of Rs. 20,90,000/- from the above named creditor. The assessee filed confirmation, Bank assessment and during the assessment proceedings. The assessee also explained that credit entries of the bank account are explained, as these are through transfer/clearing. The AO stated that Income returned is small, hence additions were made. During the remand reportproceeding, no enquiry has been made by the AO. The assessee stated that creditor is real brother, who had opening balance of Rs. 2,56,61,000/- at the start of the year and the same has been accepted by the AO. Moreover, the entire loan has been repaid during FY 2014-15. From the fact narrated above, it is clear that the assessee has charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he creditworthiness of the creditor. Thus, addition of Rs. 7,00,000/- are confirmed and remaining addition of Rs. 11 lakh are deleted. xviii) Ambaji Trading Prop. Shri Sunil Vishwakarma:- The assessee obtained loan of Rs. 15,00,000/- from M/s Ambaji Trading. The AO stated in the assessment order that only ROI has been filed and as complete details not filed, addition were made. During the remand report proceeding, notice u/s 133(6) of the Act was issued, which was responded by the Prop. Of M/s Ambaji Trading. He filed confirmation of the loan given to the assessee (S. N. 14 at page No. 12 of remand report). The AO stated that as the creditor has returned income of only Rs. 276990/- for AY 2014-15 and no interest was charged, it is sham transaction. The assessee contended that confirmation, copy of ITR and bank account of the creditor were directly submitted before the AO by the creditor. Amount was received through normal banking channel no cash was found deposited in the bank account of the creditor immediate before issuing cheque to the assessee and entire loan has been repaid during FY 2014-15. Interest of Rs. 22192/- @ 9% per annum was given to the creditor. Thus, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO stated that complete detail was not filed, hence addition were made. During remand report proceedings, the creditor was issued notice u/s 133(6) of the Act, which was replied by him confirming the transaction with the assessee. The creditor had returned income of Rs. 216320/- for AY 2014-15. Copy of bank statement of the creditor was not filed before the AO during the assessment proceedings in spite of specific mention by the AO on the order 4 sheet. It is not filed even during the remand report proceedings and even during appellate proceedings. The AO did not find the explanation satisfactory stating that returned income is small, copy of creditors bank account not filed and interest was not charged. The assessee stated that transaction has been confirmed, entire loan was repaid during next FY 2014-15, therefore, addition may be deleted. The contention of the assessee are not found acceptable for the reason that during the assessment proceedings, the AO specifically asked about, the bank account of the creditor these facts have been mentioned on the order sheet reproduced in the assessment order. Even during the remand report proceedings, copy of bank account of the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered in totality. The assessee had opening balance of Rs. 1,01,25,000/- at the start of the FY and obtained further loan of Rs. 10.70 lakh during the year. But no repayment has been made during the year. No interest has been credited or paid to the creditor. The loan was taken in FY 2013-14 earlier year, but not a single rupee has been repaid by the assessee till date i.e. even after more than 8 years. Moreover, the assessee failed to file copy of the bank account of the creditor. All these facts clearly prove that the assessee failed to discharge onus of proving genuineness of the transaction creditworthiness of the creditor. These additions of Rs. 10.70 lakh made by the AO are confirmed. xxiii) Shri Dhaval Pankaj Patel: During the assessment proceedings, the assessee submitted bank account but it was only showing debit entry for the amount given to the assessee. The assessee did not produce copy of bank account showing credit entry to the creditors account. It was specifically pointed to the AR of the assessee as noted on order sheet and the same has been reproduced in the assessment order. During the remand report proceedings, copy of bank account was submitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is factually incorrect. The assessee paid interest of Rs. 51781/- for FY 2013- 14, Rs. 94638/ for FY 2014-15 and Rs. 62301/- for FY 2015-16 alongwith principal amount. Therefore addition made by the AO may be deleted. Ongoing through the facts mentioned above, I inclined to agree with the contentions of the assessee, thus additions of Rs. 10 lakh are deleted. xxv) Radhika Enterprise Rudhik Enterprise Prop. Sanjay G. Shah: obtained loan of Rs. 350000/- 1000000/- respectively from the two concerns. During the assessment proceedings, documents submitted by the assessee were found insufficient by the AO stating income of the creditor is small and document submitted at the fag end. During the remand report proceedings, notice u/s 133(6) of the Act was issued which was complied. The creditor confirmed by transaction. Copy of the ITR bank account was submitted before the AO but AO stated that income returned is only Rs. 179304/- and interest has not been paid, hence transaction was not genuine. The assessee contended that creditor has confirmed the transaction before the AO in response to the notice issued u/s 133(6) of the Act. The creditor is assessed to tax. Transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additions. During remand report proceedings, the creditor filed confirmation, copy of ITR and bank statement before the AO, in response to the notice issued u/s 133(6) of the Act. The AO stated that the creditor having returned income of Rs. 2.16 lakh only, no interest has received by the creditor and he is not liable to maintain books of accounts, thus additions were made. The assessee contended that confirmation, copy of ITR bank account was directly filed before the AO by the creditor. Transaction is through regular banking channel and i (ash deposit was found in creditors account immediately before issue cheque to the assessee. Moreover, the entire loan was repaid in FY.2015-16 alongwith interest of Rs. 69904 for FY.2013-14, Rs. 87282/- for FY.2014-15 and Rs. 54482/- for FY 2015-16. The AOs findings stating non-charging of interest is factually incorrect. Fact of the issue has been considered in totality I agree with the contention of the assessee that he discharged onus to prove identity of the creditor genuineness of the transaction by payment of entire loan alongwith interest and creditworthiness of the creditor as no cash was found deposited in the bank account of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transaction creditworthiness of the creditors. Thus additions of Rs. 70.80 lakh made by the AO, considering loan from these persons as non-genuine are deleted. xxx) The assessee also obtained loan from the following persons during the year: In respect of the above named creditors, the assessee failed to submit confirmation from the creditors, their ITR bank statement. Thus, assessee failed to discharge onus of providing identity of creditor, genuineness of the transaction creditworthiness of the creditors. Hence, additions of Rs. 1,86,65,000/- made by the AO considering loan from the above person as non-genuine are confirmed. xxxi) The assessee obtained loan from the following persons. The assessee submitted confirmation, ITR and bank statement to support these transactions. But it is found that the assessee neither paid any interest to these creditors nor repaid loan entirely or partly during the period of more than 8 years. Because of this fact, it is clear that these transactions are held as non- genuine. Thus, the assessee failed to discharge onus to prove genuineness of these transactions. Hence, the additions of Rs. 47,25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering loan taken from the following creditors as non-genuine, were deleted by ld CIT(A), as the assessee has discharged onus to prove identify of the creditors, genuineness of the transactions and creditworthiness of the creditors. 44. Therefore, we note that total amount of Rs. 13,67,52,800/- considered by AO as non-genuine loan, were deleted by ld CIT(A), for the reasons mentioned against each name in the findings of ld CIT(A), which we have reproduced in above paras, of this order. Further, the deletions of these additions have been found covered by the following binding judgment of the Hon'ble Jurisdictional High Court of Gujarat, Ahmedabad in the following case laws: i) CIT V/s Rohini Builders 256 ITR 360 ii) CIT V/s Ranchodbhai Jivabhai Nakhare 208 Taxmann 35 (Guj) iii) CIT V/s Pankaj Enka in ITA No. 967 (215 dated 05.01.2016) iv) PCIT-1 v/s Ridhi Sidhi Corporation in ITA No. 69 of 2018 dated 14.02.2018 45. Therefore, considering the facts of the assessee`s case and case law relied on by the ld CIT(A), we note that ld CIT(A) has passed reasoned and speaking order, therefore we confirm the findings of ld CIT(A). 46. However, we note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that this ground of appeal is against the addition of Rs. 24,27,410/ made by the AO considering agricultural income as bogus. Brief facts of the issue are that during the assessment proceedings, assessing officer (AO) sought detail from the assessee, about the agricultural activities and income generated during the course of assessment proceedings. The assessee submitted before AO the part details, which the AO did not find satisfactory and therefore made the addition. 50. During the appellate proceedings, the ld CIT(A) sought remand report. During the remand report proceedings, the assessee filed copies of land holding documents, profit and loss account of agricultural activities and contract with the other persons, who do agricultural activities on the land owned by the assessee. However, AO did not find these documents satisfactory. The assessee contended before ld CIT(A) that he is a farmer and owning agricultural lands for years, he has returned agricultural income for past several years and the same has been accepted by the department. He filed documents i.e. 7/12 and 8A which are the proof of land holding and crop cultivated on his lands. The assessee filed copy of cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee could not file detail of agricultural activities carried out by him, as required u/s 54B of the Act, hence the AO disallowed the exemption made the addition of Rs. 1,01,41,034/-. 54. On appeal, ld CIT(A) has confirmed the action of the assessing officer. Aggrieved, the assessee is in further appeal before us. 55. Learned Counsel for the assessee, argued that assessee has claimed exemption u/s 54B of the Act, at Rs. 1,01,41,034/-. The said exemption is claimed from the capital gain accrued to the assessee on the Sarsana-347 land. The land was purchased by the assessee on 03.02.2010 of Rs. 10,36,466/-. The said land was sold on 27-12-2013 with consideration of Rs. 1,11,77,500/-. The ld Counsel argued that assessee sold agricultural land which was used for agricultural activities during previous two years. The assessee filed copy of 7/12 8A of the land sold, which prove that agricultural activities were carried out. The ld Counsel further stated that assessee is regularly showing agricultural income for several years in the income tax returns filed and the same was accepted by the department even in the assessment under passed u/s 153A of the Act after search was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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