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TMI Blog2025 (5) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Ld. AO carried out the assessment proceedings and after considering the submissions of the assessee firstly made addition of Rs. 50.00 lakh u/s. 68 of the Act for the amount received from three parties namely (1) Pawar Sivadas Damu amounting to Rs. 20.00 lakh, Usha Jagdish Tisge amounting to Rs. 1.00 lakh and Rupali Chandrakant Nikam at Rs. 29.00 lakh. Ld. AO also made disallowance u/s. 37 of the Act by not accepting the claim of purchases made from M/s. R.K. Enterprises amounting to Rs. 54,70.246/- and Rahul Dasrath Jagdale amounting to Rs. 11,13,250/-. 3. Aggrieved assessee preferred appeal before ld.CIT(A) and succeeded. Now the Revenue is in appeal before this Tribunal raising following grounds of appeal : "1. On the facts and in circumstances of the case, the CIT(A) erred in deleting the addition of Rs. 50,00,000/-u/s.68 by holding that the payments were routed through banking channels, whereas the creditworthiness of the loan creditors were not satisfactorily established during the assessment as well as during the remand proceedings. 2. On the facts and in circumstances of the case, the CIT(A) erred in deleting the entire addition of Rs. 65.83,496/- u/s. 37 ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in the case law paper book. It was also submitted net profit of the assessee during the year has been declared at 9.34% which is more than the net profit rate of 6.08% declared in the preceding year. 8. We have heard the rival submissions and perused the record placed before us. The first issue for our consideration raised by the Revenue is regarding the addition u/s. 68 of the Act at Rs. 50.00 lakh deleted by ld.CIT(A) which was made by the AO for the following amounts received from three parties : (1) Pawar Sivadas Damu - Rs. 20.00 lakh (2) Usha Jagdish Tisge - Rs. 1.00 lakh (3) Rupali Chandrakant Nikam - Rs. 29.00 lakh 9. We notice that the assessee has furnished complete details for the nature and source of the funds available with all the three parties. Finding of ld.CIT(A) regarding deletion of Rs. 20.00 lakh in respect of loan received from Pawar Sivadas Damu reads as under : "5.8.1 It is noted from the ledger account of 'Pawar Shivdas Damu' in the books of account of the appellant, the appellant had received loan of Rs. 20,00,000/- on 07.08.2017 and the same has been credited in his bank account maintained with Saraswat Co-operative Bank Limited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 lakh received from Rupali Chandrakant Nikam reads as under : S.No. Date of receipt Amount received (Rs.) Mode Source of funds as evident from the bank statement of Smt. Rupali Chandrakanth Nikam 1 14.11.2017 5,00,000 Bank This amount was transferred from the bank account of father of Smt Rupali Chandrakanth Nikam maintained with State Bank of India bearing account numbering 30315426905. On 14.11.2017, there was a premature withdrawal of Fixed Deposit of Shri Vinayak P Rade which was used for transferring to the appellant. Thus, the source is from the father of Smt Rupali Nikam. Chandrakanth Nikam. 2 21.11.2017 5,00,000 Bank This amount was transferred from the bank account of father of Smt Rupali Chandrakanth Nikam maintained with State Bank of India bearing account numbering 30315426905. On 21.11.2017, there was a premature withdrawal of Fixed Deposit of Shri Vinayak P Rade which was used for transferring to the appellant. Thus, the source is from the father of Smt Rupali Nikam. Chandrakanth Nikam. 3 2811.2017 5,00,000 Bank This was transferred from the bank account of Maharashtra account 60130786531. Bank of bearing numbering 60130786531. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above factual finding, it is proved beyond doubt that Smt Rupali Chandrakanth Nikam is having adequate source to lend the amount to the appellant. From the perusal of bank statements of Smt Rupali Chandrakanth Nikam, it is proved beyond doubt that she had received the amounts from her father Shri Vinayak P Rade. The appellant is found to have duly substantiated the source of Smt Rupali Chandrakanth Nikam and is not obliged to prove the source of Shri Vinayak P Rade. Thus, the undersigned is of the considered view that the addition of Rs. 29,00,000/- made in the hands of the appellant u/s. 68 of the Act is unwarranted. Further, pointed out againg that in response to the notice issued u/s. 133(6) of the Act, Smt Rupali Chandrakanth Nikam has submitted that the sum advanced was towards purchase of flat treated as loan, due to delay in registration process. However, subsequently flat was sold by the appellant to her. Since the flat was subsequently registered, the absence of agreement has no impact on the case of the appellant. It is clear from the findings of the FAO that the loan was subsequently converted into a sale. Thus, provisions of section 68 of the Act cannot be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el. Genuineness of the expenses cannot be doubted when the payments are subjected to TDS and paid through banking channel. It is not the case of the JAO that the payments as reflected in the ledger accounts and bank account were false entries. Mere noncompliance to the notice issued u/s. 133(6) can never be a ground to doubt the genuineness expenses claimed by the appellant. There is no report from verification unit to confirm that these entities are not available on the said address. During this remand report the JAO could have verified. There is no material on record such as investigation wing report or information from any other investigating agency such as from GST department etc, which indicates that that the payments made to both the aforesaid two parties are bogus. It is not the case of the FAO and JAO that the parties were not in existence. Non charging of GST by the vendor can never be a ground to disallow the payments in the hands of the appellant. It could have been brought to GST net by subsequent action of GST team. It is further submitted that NP ratio of the appellant for the impugned assessment year is 9.34% which is more than the NP Ratio of 6.08% declared for th ..... 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