Income Tax Appellate Tribunal - Delhi
Dcit, Central Circle-19, New Delhi vs Sh. Subramaniam Ashok Kumar, Tamil Nadu on 15 March, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
Before Sh. C. N. Prasad, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 2488/Del/2023 : Asstt. Year: 2018-19
Subramaniam Ashok Kumar, Vs ACIT,
72, Mudali Thottam, Central Circle-31,
Veerappanchatram, S.O. Erode, New Delhi
Erode, Tamil Nadu-638004
(ASSESSEE) (RESPONDENT)
PAN No. AFVPA2246N
ITA No. 2739/Del/2023 : Asstt. Year: 2018-19
DCIT, Vs Subramaniam Ashok Kumar,
Central Circle-19, 72, Mudali Thottam,
New Delhi Veerappanchatram, S.O. Erode,
Erode, Tamil Nadu-638004
(ASSESSEE) (RESPONDENT)
PAN No. AFVPA2246N
CO No. 140/Del/2023 : Asstt. Year: 2018-19
Subramaniam Ashok Kumar, Vs DCIT,
72, Mudali Thottam, Central Circle-19,
Veerappanchatram, S.O. Erode, New Delhi
Erode, Tamil Nadu-638004
(ASSESSEE) (RESPONDENT)
PAN No. AFVPA2246N
Assessee by : Sh. Harshit Srivastava, CA &
Sh. Anil Sethi, CA
Revenue by : Sh. Amit Shukla, Sr. DR
Date of Hearing: 24.01.2024 Date of Pronouncement: 15.03.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals and Cross Objection have be en filed by the assessee and the Revenue against the order of ld. CIT (A)-30, New Delhi dated 06.07.2023 2 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar
2. In ITA No. 2739/Del/2023, following tangible grounds have been raised by the Revenue:
"1. Whether on the facts and circumstances of the c ase , the Ld. CIT(A) has erred in dele ting the addition made u/ s 68 o f the I .T. Act, 1961 of Rs. 2,18,50,000/- on account o f unsecured loan?
........
4. Whether on the facts and circumstances of the c ase , the Ld. CIT(A) has erre d deleting the disallowance of Rs. 15,18,128/- on account o f Interest paid on unsecured loan as per pro visions of se ctio n 36( 1)(iii) o f the Inco me-tax Act?"
3. In ITA No. 2488/Del/2023, following tangible grounds have been raised by the assessee:
"1. The ld. CIT(A) has erre d in law and facts in sustaining the addition of Rs.20,00,000/- made by the A O u/s 68 o f the Income Tax Act, 1961.
4. The assessee, is the proprietor of M/s Ashok Enterprises is engaged primarily in the business of civil construction and having salar y income , filed his return o f income declaring total Income of Rs. 5,32,11,260/-.
5. The return of the assessee was subsequently selec ted for scrutiny in CASS on the aforesaid issues of
(i) Unsecured Loans,
(ii) ICDS Compliance and adjustment and
(iii) Details of assets and liabilities.
6. During the year, the assessee received unse cured loan of Rs. Rs. 13,85,15,386/- and paid interest of Rs.21,22,252/- during the 3 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar relevant previous year 2017-18 on the said unsec ured loan as per the following table:
SL Name PAM Opening Accepted Repaid Closing Interest Bala nce during the during the Bala nce paid year year 1 Concrete AAKFC3000G 0 21000000 0 21000000 0 Solutions 2 PHS infratech AACCF7431K 0 20762443 0 20762443 0 Ltd.
3 Fluid Handling AAAPU6249F 0 17538515 0 17538515 0 Systems 4 Jeganathan & ACGPJ3584L 0 18500000 0 18500000 0 Co.
5 Kalaiselvi & Co BKWPK6092B 0 16000000 0 16000000 0 6 P.K. AADHD7S99E 0 4000000 2000 3998000 0 Duraisamy 7 Margadarsi 0 3114810 0 3114810 0 Chits Pvt. Ltd.1749616 0 1749618 0 8 Magnum AAQFM2210C 0 1000000 0 1000000 0
Investment 9 Meena K. AAJPM9821C 0 2500000 1015000 1485000 187500 Sakariya 10 Metal Impex AAMFM4856G 2S00000 1015000 1485000 187500 11 Nakoda AAMFN1767F 2500000 1015000 1485000 187500 Traders 12 Nishank AEFPN8248A 0 2500000 1015000 1485000 187500 Sakariya 13 Ramalingam AJNPR1672H 0 3260030 0 3260000 0 Kumarsamy 14 Pushp AAUFP3934G 0 1250000 507500 742500 93750 Enterprises 15 Rudra AACCR2292Q 0 2350000 1201945 1148052 205628 Securities and Capital Ltd 16 Sidharth. S CPQPS7017L o 2500000 1015000 1485000 187500 17 Arulmozhiselvi A4GPA1785P 0 4740000 0 4740000 236124 R 18 Bhanu A. Shah AFSPB9673Q 0 1250000 507500 742500 93750 19 Dhanasekar C AEWPQ6845E 0 2500000 0 2500000 150000 20 Keerthana BZKPR2966N 0 4500000 0 4S0O0 O0 219000 Ramalingam 21 Kishone Kumar AAKPK6068J 0 2500000 1015000 1485000 187500 HUF 0 138515386 8 130206438 2122262 4 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar
7. Out of the 21 lenders in above Table, the assessee could not furnish documentary evidences including bank statement, or any document to show the sources of income or the capacity of lenders to lend mone y and thereby establish genuine ness of transaction and. creditworthiness of the following lender.
8. The details of all such lenders form whom the assessee has accepted unsecured loan during the financial year 2017-18, along with the details of repayment of loan and interest paid to such lenders during the relevant financial ye ar, but c ould not furnish documentary evidence to establish genuineness of transaction and creditworthiness of the lenders, are furnished in the fo llowing table:
SL Name PAM Opening Accepted Repaid Closing Interest Bala nce during the during the Bala nce paid year year 1 P.K. AADHD7S99E 0 4000000 2000 3998000 0 Duraisamy 2 Meena K. AAJPM9821C 0 2500000 1015000 1485000 187500 Sakariya 3 Metal Impex AAMFM4856G 2S00000 1015000 1485000 187500 4 Nakoda AAMFN1767F 2500000 1015000 1485000 187500 Traders 5 Nishank AEFPN8248A 0 2500000 1015000 1485000 187500 Sakariya 6 Pushp AAUFP3934G 0 1250000 507500 742500 93750 Enterprises 7 Rudra AACCR2292Q 0 2350000 1201945 1148052 205628 Securities and Capital Ltd 8 Sidharth. S CPQPS7017L o 2500000 1015000 1485000 187500 9 Bhanu A. Shah AFSPB9673Q 0 1250000 507500 742500 93750 10 Kishone Kumar AAKPK6068J 0 2500000 1015000 1485000 187500 HUF 0 138515386 8 130206438 2122262
9. The assessee has furnis hed the PAN & address of the lenders, copy of loan confirmation from lenders a nd his ow n bank 5 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar state ments in respect of unsecured loans accepted from the lenders before the Assessing Officer. The Assessing Officer held that the assessee did not furnish documentary evidences including the bank statement of lenders to prove genuine ness of loan transac tions and creditworthiness of the lenders for unsecured loan accepted by him during the fina ncial year 2017- 18 a mounting Rs. 2,38 ,50,000/- in spite of several oppor tunities offered to him. Hence, the Assessing Officer held that the assessee has failed to discharge his onus to establish by cogent evidence the genuineness of the loan transactions and credit- worthiness of the lenders and thereby to explain the nature and source of the loan amounting Rs.2,38,50,000/- credited in the books of account of the assessee as required under the provisions of Se ction 68 of the Act and hence treated amount as cas h credit u/s 68 of the Income Tax Act, 1961. While making the addition, the AO relied on the fo llowing case laws:
In N anak Chandr a Laxman Das vs. CIT, the Hon'ble Allahabad High Court has taken the view that, "Where any sum is found credite d in the books of the assessee , the initial onus is on the assessee to offer an explanation o f the nature and source of a cash credit. I f the explanation is not found satis factory or reaso nable, the Income-tax Office r can tre at such mone y as the assessee's inco me from undisc losed sources . It is not necessary for the Income-tax Officer to lo cate the exact source of the credits. The assessee can prove the genuinene ss of the c redits by establishing from some plausible evidence the identity of the credito r and his cre ditworthiness."6
ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar Govindaraj ulu Mudalia r vs. CIT (AIR 1959 SC 248, 1958 34 ITR 807 S C), the Ho n' ble S upreme Court came to the conclusion that, "There is ample autho rity for the po sition that whe re an assessee fails to prove sa tis factorily the source and nature of certain amount of c ash received during the accounting year, the Income-
tax Officer is entitled to draw the inference that the receipt are of an assess able nature."
In Ka le Khan Mohammad Hanif vs. Commissioner o f Income-tax, the Hon' ble Supreme Court, in answering the question whether the burden of pr oving the sour ce of the cash credit is o n the assessee o bserved that:
It is well es tablished tha t the onus of pro ving the source o f a sum of money found to have bee n received by the assessee is on him. I f he disputes liability fo r tax it is fo r him to show either that the receipt was not income o r that if it was , it was exempt from taxa tio n under the provisions of the Act. I n the absence o f such proo f the Income-tax Officer is enti tle d to treat to as taxable income.
The langua ge o f section 68 shows that it is general in nature and applies to all credit entrie s in w homsoever name the y may stand, that is, whe ther in the name o f the assesses o r a third party. This section has, there fore , remov ed the distinc tio n w hic h was dra wn in some de cisions between the cre dits held in the name o f the asses see and those he ld in the name of a thir d party. Under Section 68 now the asses see has to prove that suc h third party was in a positio n to le nd such sums and that he did, in fac t, so lend to the asse ssee in o rder to satisfy the Income-tax Officer that the cre dits s hown in the acco unt books we re genuine . This section has laid the onus of proof on the assessee.7
ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar In Siddharth Expo rt Vs. ACIT ( Delhi High Cour t):
The issue under conside ration is whether AO is correct in trea ting unsecured loan received by assesse e as unexplained credit under section 68? In the present case , the assessee r eceived an unsecured lo an of Rs. 26 lacs thro ugh three cheque s is sued by Ms. Jasmine Kochhar Kapoor, a citizen o f GBR ( Unite d Kingdom) . AO treated unsecured lo an rece ived by asses see as unexplaine d credit under sec tion 68. T ribunal in appellate proceedings confirmed additio n made by AO o n the ground that assessee failed to prove creditworthiness of le nders and genuinene ss of concerne d loan tr ansactions. Assess ee challenged this by way of appe al file d under section 260A before High Cour t pleading that on filing o f bank statement and PAN details and c onfirmation, burden s tood discharged and it shifted on to the Re venue. The High Co urt, state s that cre ditworthiness of lender co uld no t be said to be pro ved mere ly on the strength of bank statement. Assessee did no t produce income-tax re turn o f the lender o r any confirmation. The purported confirmation had been found to be only a copy o f unsigne d account of creditor. The sour ce of funds had a lso not bee n explained. F urthermore, stand of assessee that since alleged transaction was made through normal banking channels , it wa s sufficient to prove genuineness of the transac tio n, could not be acce pted. Thus , the credit worthiness and the genuineness of the transaction cannot be s aid to have been prove d so as to shift the onus on the revenue . Hence HC do not find a ny infi rmity in the impugned or der. Therefore, the present appeal file d by assessee is dismissed.
The Hon'ble Supreme Court of I ndia, in the case Princ ipal Commissioner o f Income Tax Vs. Nra I ron And S teel Pvt. Ltd. on 5th March, 2019 has discussed and o bserve d as follows:8
ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar "8.1. The iss ue which arises fo r determination is whethe r the Responde nt/Assessee had disc harged the primar y onus to establis h the ge nuineness of the transaction require d under Section 68 o f the said Act. Sectio n 68 of the I.T . Ac t ( prio r to the Fina nce Ac t, 2012) read as fo llo ws: 68. Cash credits- Whe re any sum is found credited in the book o f an Assessee maintained fo r any prev ious ye ar, and the Assesse e offers no e xplanatio n abo ut the na ture and so urce thereof o r the explanatio n offe red by him is no t, in the opinion of the Assessing Officer, satis fac tory, the sum so c redited may be charged to income-tax as the income of the Assessee of that pre vious year (emphasis s upplied) T he use of the wo rds any s um fo und credite d in the books in Section 68 o f the Act indic ates that the sectio n is wide ly worded, and includes inves tments made by the intro duction of share capital o r share premium.
8.2. As per settled law, the initial onus is o n the Assessee to establis h by co gent ev idence the ge nuineness o f the trans action, and c redit-wo rthiness o f the investors under Sec tio n 68 o f the Act. The assessee is expected to establis h to the satisfac tion of the Asses sing Officer:
Proo f of I dentity of the creditors: CIT v. Prec ision Finance Pvt. Ltd. (1994) 208 ITR 465 ( Cat) Capacity of c reditors to advance money: and Genuineness o f transaction T his Court in the la nd mark case of Kale Khan Mohammad Hanif v. CIT- 3 and, Roshan D i Hatti v. CI T- 4 laid do wn that the onus o f proving the source of a sum of money found to have bee n received by an ass essee is on the assessee . Once the assessee has submitte d the documents relating to identity, genuine ness of the transaction, and credit- worthines s, then the AO must conduct an inquiry, and c all fo r more de tails before invoking Sectio n 68. If the Assessee is not able to provide a s atisfacto ry e xpla nation of the nature and 9 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar source, of the investments made, it is o pen to the Revenue to hold that it is the income of the assesse, and there would be no fur ther burden o n the reve nue to show that the inco me is from any particular source.
8.3. With respect to the issue of ge nuineness of transac tio n, it is for the assessee to pro ve by cogent and c redible evidence, that the inves tments made in share ca pital are ge nuine bo rro wings , since the facts a re exclusively within the assesses kno wledge.
The Hon'ble Delhi High Court in CI T v. Oasis Hos pitalities Pvt. Ltd. [1963] 50 ITR 1 (SC) [1977] 107 ITR (SC), he ld that:
The initial onus is upon the assessee to establish three things necessary to obviate the mischie f of Section 68. T hose are: (i) identity of the investors; (ii) their creditwor thiness / inves tments; and (iii) genuineness o f the transactio n. Only when, these three ingredie nts are e stablishe d prima facie, the department is required to unde rtake further exe rcise . It has been held that merely prov ing the ide ntity o f the investo rs does not dischar ge the onus o f the assesse e, if the capacity or credit- worthines s has no t been established. In Shankar Ghosh v. IT O 6, the assessee faile d to prove the financial capac ity of the person from whom he had allegedly taken the loan. The loan amount w as rightly held to be the assessees own undisc losed inco me.
"11. The pr inciples which emerge whe re s ums of money are credited as Share Capital/Premium are: i. The assess ee is under a legal obligation to pro ve the genuineness of the- transactio n, the identity of the creditors, and cre dit-worthine ss of the inves tors who , s hould have the financial c apac ity to make the inves tment in question, to the satisfaction o f the AO, so as to dischar ge the primary onus. (2007) 158 T axman 440 [2008] 307 ITR 334"10
ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar "14. The practice of co nve rsion o f un-acco unted money thro ugh the c loak of Share Ca pital/Premium must be subjected to care ful scrutiny. This wo uld be particularl y so in the c ase o f private placement of s ha res, where a higher onus is required to be place d on the Assessee since the information is within the personal kno wledge of the Assessee. T he Assessee is unde r h legal obligation to pro ve the rece ipt of share capital/premium to the satis fa ctio n of the A O, fa ilure o f which, would j ustify additio n of the said amount to the income of the Assessee."
10. Aggrieve d, the assessee filed appeal before the ld. CIT(A).
11. The ld. CIT(A) deleted the addition to the extent of Rs.2,18,50,000/- and confirme d Rs. 20 ,00,000/- after admitting the additiona l evidences, ge tting the remand report and examining the rebuttal of the assessee. Consequently, both the parties filed appeal before us. With regard to the issue of the unsecured loans, the examination of the ld. CIT(A) is being mentioned below:
S l. Name of PAN Loan Comments/Remark s Appellant's My observations NO. Lender accepted given by Ld. Response/Rebuttal during the Assessing Officer as year per Remand Report dated 03.01.2023
1. PK ACRPD1392F 40,00,000/- The assessee It is hereby being It is observed Duraisami submitted the ITRs, submitted that , the that confir mat ion and cash cre dit in the immediately bank books of account before the statement of the can be termed as payment of le nde r. undisclosed cash unsecured loan It is observed that cre dit u/s 68 of the of Rs.
par tial bank Act only when the 10,00,000/- statements of identity credit each on account w ort h ine s s and 01.12.2017 and no.(916020042980 source of such 10.01.2018
409) have been cre dit is not cash of submitted. This explaine d by Llie equ ivalen t 11 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar includes the period assessee. H owever, amount was from 04.04/2017 to to show the source deposited by 04/04/2017, of source of such the lender and 01/12/2017 to cre dit is required the funds were 12/12/2017 and on ly in the case of transferred in 11/01/2018 to a company in wh ich the bank 11/01/2018. the public is not account of the On perusal of substan tially appellant. The account statement interested. appellant failed submitted, it is Without prejudice to submit the seen that source of to the above, the evidence amounts of Rs. appellant hereby provided a mp le 10,00,000 and Rs. encloses the opportunity to 10,00,000 undertaking given submit the transferred to M / s by the len der that evidence during Ashok Enterprises the said deposits the remand/ on 01.12.2017 and made in his bank appellat 11.01.2018 accounts were e respectively are from the proceedings but cash deposits done declared source of the source of on the same day. income and was cash deposits Hence, the real duly recorded in his could not be source of these regular books of explaine d. In loans appear to be account and absence of any cash deposited and therefore, the explanation, it then passed as loan source of cash cannot be entry. Therefore, deposited in his presumed that, the bank account may the cash cre ditwor thiness of k in dly be deposits of Rs the len der and verified. Further, it 20 lakhs which genuineness of the is also to be noted was later transactions are that the lender is a transferred to dubious and flow of busine ssman the appellant fun ds prove that it maintaining h is was accounted / is the cash regular books of declared money. deposited (that account which have Hence it is rem a in s bee n au d ite d by th e considered unexplained) which Independent unaccounted is tran sferred. Chartered income of the Hence, genuineness Accountant during appellant routed of the transactions the said through his could not be assessment year. re lative and the established. Even in The copy of such ad d it io n made the t hir d case, audited balance by the AO to where amounts of sheet alongwith the that extent is Rs. 20,00,000/- has detailed sustained.
been computation of Remaining loan transferred on income and ITR is of Rs 20 lakhs 04.04.2017, source be ing enclosed given by Mr. 12 ITA Nos. 2488 & 2739/Del/2023 CO No. 140/Del/2023 Subramaniam Ashok Kumar of Rs. 99,00,000/- here w it h for your Duraisami is deposited has to be kind perusal and accepted as ascertained. It can ready reference. they were paid be seen that more regarding the through banking than 95,00,000/- source of cash channel. The has been deposits. It is appellant has transferred on the further noted that submitted same day it has the lender is close financial been received. re lative of the statement and appellant hence ITR of the These types of collection and le nde r to prove transactions, submission of the further cast doubt evidence of source cre ditwor thiness on the genuineness for the cash of the of the transaction deposits was not appellant. There and is commonly difficult. The is no evidence used in such appellant was on record to accommodation suggest that the entry cases. appellant has Further, it may be taken questioned that why accommodation par tial bank. entry from the said le nde r or the lender is an accommodation entry provider.
Accordin gly,
loan of Rs 20
lakhs received
through banking
channel is
accepted as
genuine.
2. Meena K. AAJPM9821 25,00,000/ The assessee has The Ld. Assessing The
Sakariya C - submitted le dger, Officer has casted observations of
PAN, Bank a doubt on the the AO and the
Statement of the cre dit wor thiness of rejoinder of the
le nde r and ITR (AY the lender which is appellant along
2017-18), of the purely based on with ITR of A.Y.
le nde r. suspicion. Further, 2018-19 h ave
ITR - 1 has been there is no been perused.
submitted for AY requirement to The appellant
2017- 18 but share the ITR for has su bmitted
the case of the the same PAN, ITR,
assessee pertains to assessment year confir mat ion for
AY for which the the lender,
2018- 19. assessment banks
On perusal of the pert a in s. H owever, statements of
bank statement the appellant the lender to
13
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
submitted, which is hereby resubmits explain the loan
for the period the ITR of said taken by it from
01/04/2017 to le nde r for the A.Y. Ms Meena
31/03/2018, it is 20.18-19 as well. Sakaria. On
seen that there are However, the perusal, I find
many credit/ debit appellant hereby that the
entrie s and resubmits the ITR appellant has
assessee is a non- of said len der for satisfactorily
filer by the given the A.Y. 2018 -19 as explaine d the
year. well. From the identity and
Therefore, perusal of ITR of cre ditwor thiness
submission of ITR of re le vant of the lender.
AY 2017-18 whereas assessment year, There is no
transaction is of AY your honour may material on
2018-19, where find that the total record to doubt
assessee is a non - declared income of the genuineness
filer, cast a doubt the appellant is in of the
on the genuineness the tune of Rs. transaction.
of the le nde r. 99.68 Lacs which is Therefore, the
Further , even for much more than ad d it io n made
AY 2017-18 , the the amount of loan u/s 68 is not
returned income is given to the sustainable .
around Rs. 40 lakh s appellant worth Rs.
and in FY 2017 -1 8 25,00,000.
(for which a/c has 2. Further, the
been submitted) doubt of the Id.
assessee has assessing officer
transferred fun ds of that the amount of
more than 5 crores income declared by
during the year . the appellant for
the AY 2017-18
worth Rs.
40,00,000/- is not
in line with the
amount of fund
transferred in his
bank account for
more than 5 crores
during the said
year, is mere a
surmise /
suspicision without
having any base. It
may be noted that
an income of any
person cannot be
judged based on
only turn over or
money in his bank
14
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
account for man y
reasons. Therefore,
the same may not
be considered.
It is hereby being
submitted that , the
cash cre dit in the
books of account
can be termed as
undisclosed cash
cre dit u/s 68 of the
Act only when the
identity credit
w ort h ine s s and
source of such
cre dit is not
explaine d by the
assessee. H owever,
to show the source
of source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
3. Metal AAMFM4856 25,00,000/ The assessee It is hereby being The
Impex G - submitted the submitted that , the observations of
confir mat ion and cash cre dit in the the AO and the
par tial bank books of account rejoinder of the
statement can be termed as appellant along
(01.11.2017 to undisclosed cash with ITR of A.Y.
23.11.2017) of the cre dit u/s 68 of the 2018-19 h ave
le nde r. Act only when the been perused.
The assessee did identity credit The appellant
not submit the ITR w ort h ine s s and has su bmitted
for AY 2018-19 filed source of such PAN, ITR,
by the lender, cre dit is not confir mat ion ,
whereas as per the explaine d by the banks
bank statement of assessee. H owever, statements to
the lender , it is to show the source explain the loan
seen that of source of such taken by it from
transaction of more cre dit is required Ms Metal Impex
than Rs on ly in the case of On perusal, I
19,04,11,679/- has a company in wh ich find that the
been done only in the public is not appellant has
23 days of substan tially satisfactorily
November. interested. explaine d the
It is re iterated that identity and
15
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
such accounts are The Ld. Assessing cre ditwor thiness
widely used to Officer has casted of the lender.
provide a doubt on the There is no
accommodation cre dit wor thiness of material on
entrie s where debit the lender which is record to doubt
/ credit transaction purely based on the genuineness
occur suspicion. Further, of the
simu ltaneously and there is no transaction. The
IT R re mains un file d requirement to remarks of the
even. share the ITR for Ld AO that the
Therefore, the the same account of the
genuineness and assessment year le nde r had h uge
cre ditwor thiness of for which the transaction in
the lender M/s Metal assessment short span of
Impex could not be pert a in s. H owever, time therefore
established. the appellant could have been
hereby resubmits used for the
the ITR of said purposes of
le nde r for the A.Y. accommodation,
2018-19 as well. is not based on
From the perusal of any facts or
ITR of relevan t investigation
assessment year, but surmises
your honour may and
find that the total conjectures,
declared income of which cannot be
the appellant is in accepted for
the tune of Rs. sustaining the
1.40 Crores which ad d it io n.
is much more than Therefore, the
the amount of loan ad d it io n made
given to the u/s 68 is not
appellant worth Rs. sustainable .
25,00,000.
4. Nakoda AAMFN1767 25,00,000/ The assessee The Ld. Assessing The
Traders F - submitted the Officer has casted observations of
confir mat ion of the a doubt on the the AO and the
le nde r. cre dit wor thiness of rejoinder of the
On perusal of the the lender which is appellant along
details, it is purely based on with ITR of A.Y.
observed that the suspicion. Further, 2018-19 h ave
assessee did not there is no been perused.
submit the ITR an d requirement to The appellant
bank statements of share the ITR for has su bmitted
the re le va nt year s. the same PAN, ITR,
Further, it is seen assessment year confir mat ion for
that a le dge r has for which the the lender,
been submitte d assessment bank statement
where it has been pert a in s. H owever, of the lender to
16
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
shown that interest the appellant explain the loan
has been received hereby resubmits taken by it. I
but no supporting the ITR of said find that the
document link bank le nde r for the A.Y. appellant has
statements h as been 2018-19 as well. satisfactorily
shown. And as no It is hereby being explaine d the
ITR submitted, submitted that , the identity and
hence such le dger s cash cre dit in the cre ditwor thiness
appear to h ave le ss books of account of the lender.
re le vance as the can be termed as There is no
interest income in undisclosed cash material on
such cases are cre dit u/s 68 of the record to doubt
never taxed. Act identity the genuineness
In the absence of cre d it of the
suppor ting w ort h ine s s and transaction.
documents, the source of such Therefore, the
genuineness and cre dit is not ad d it io n made
cre ditwor thiness of explaine d by the u/s 68 is not
the len der M/s assessee. sustainable .
Nakoda - Traders However, to show
could not be the source of
established. source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
However, the bank
statement of this
le nde r is being
attached her e w it h
for your kind
perusal and ready
reference.
5. Nishant AEFPN8248 25,00,000/ The assessee The Ld. Assessing The
Sakariya A - submitted the ITR Officer has casted observations of
(AY 2017-18), a doubt on the the AO and the
confir mat ion and cre dit wor thiness of rejoinder of the
bank statements the lender which is appellant along
(for 1 day only) of purely based on with ITR of A.Y.
the len der . suspicion. 2018-19 h ave
been perused.
ITR of AY 2018 -1 9 Further, there is no The appellant
is not submitted, requirement to has su bmitted
hence it appears share the ITR for PAN, ITR,
that assessee is a the same confir mat ion for
non-filer for the assessment year the lender,
re le vant ye ar. for which' the banks
17
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
as se ssm ent ert a in s. statements of
Further, bank However, the the lender to
statement of the appellant hereby explain the loan
le nde r for the resubmits the ITR taken by it. On
complete year FY of said len der for peru sal, I find
2018-19 is not the A.Y. 2018 -19 as that the
available on record well. appellant has
and submitted part satisfactorily,
is n ot even legible. From the perusal of explaine d the
IT R of re le vant identity and
As per ITRs of
assessment year, cre ditwor thiness
previous year,
your honour may of the lender.
le nde r may be
find t hat t he total There is no
considered to have
declared income of material on
cre ditwor thiness but
the appellant is in record to doubt
in the absence of
the tune of Rs. the genuineness
suppor ting
4.92 crores which of the
documents the
is much more than transaction.
genuineness of the
the amount of loan
le nde r
given to the Therefore, the
- M/s Nishank
appellant worth Rs. ad d it io n made
Sakariya could not
25,00,000. u/s 68 is not
be established.
sustainable .
It is he reby be ing
submitted that , the
cash cre dit in the
books of account
can be termed as
undisclosed cash
cre dit u/s 68 of the
Act only when the
identity credit
w ort h ine s s and
source of such
cre dit is not
explaine d by the
assessee.
However, to show
the source of
source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
However, the bank
statement of this
18
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
le nde r is being
attached her e w it h
for your kind
perusal and ready
reference.
6. Pushp AAUFP3934 12,50,000/ The assessee The Ld. Assessing The
Enterprise G - submitted a Officer has caster! observations of
s confir mat ion , which a doubt on the the AO and the
it appears to have cre dit wor thiness of rejoinder of the
been claimed to be the lender which is appellant along
of le nde r. IT R of A Y purely based on with ITR of A.Y.
2018-19 is not suspicion. Further, 2018-19 h ave
submitted, hence it there is no been perused.
appears that requirement The appellant
assessee is a non- pert a in s. H owever, has su bmitted
filer for the relevant the appellant PAN, ITR,
year. hereby resubmits confir mat ion for
the ITR of said the lender,
Further, it is seen le nde r for the A.Y. banks
that a le dge r has 2018-19 as well. statements of
been submitte d From the perusal of the lender to
where it has been ITR being attached explain the loan
shown that interest here w it h taxable taken by it. On
has been received income of the said perusal, 1 find
but no supporting le nde r was in the that the
document like bank tune of Rs.2,1 lacs appellant has
statement has been during the said satisfactorily
shown. And as no assessment year. explaine d the
ITR submitted, Therefore, the identity and
hence , such le dger s doubt on the credit cre ditwor thiness
appear to h ave le ss w ort h ine s s of said of the lender.
re le vance as the le nde r is There is no
interest income in unwarranted and material on
such cases are may kindly be record to doubt
never taxed. accepted. the genuineness
of the
The assessee did transaction.
not submit the ITR Therefore, the
and ban k statement ad d it io n made
of the relevant u/s 68 is not
years. sustainable .
Therefore, the
genuineness of the
transaction as well
as creditworthiness
of the le nde r M/s
Pushp Enterprises
could not be
19
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
established.
7. Rudra AACCR2292 25,00,000/ The assessee The Ld. Assessing The
Secur ities Q - submitted a Officer has casted observations of
confir mat ion a doubt on the the AO and the
whereas no ITR, cre dit wor thiness of rejoinder of the
ban k statement h as the appellant along
been submitted. ITR le nde r wh ich is with ITR of A.Y.
of AY 2018 -1 9 is not purely based on 2018-19 h ave
submitted, hence it suspicion. Further, been perused.
appears that there is no
assessee is a non - requirement to The appellant
filer for the relevant share the ITR for has su bmitted
year. the same PAN, ITR,
assessment year confir mat ion for
Further, it is seen for which the the lender,
that a le dge r has assessment banks
been submitte d pert a in s. H owever, statements of
where it has been the the lender to
shown that interest appellant hereby explain the loan
has been received resubmits the ITR taken by it. On
but no of said len der for perusal, I find
Supporting the A.Y. 2018 -19 as that the
document like bank well. On perusal of appellant has
statement has been said ITR, your satisfactorily
shown. honour may find explaine d the
that th e said le nde r identity and
And as no ITR company had cre ditwor thiness
submitted, hence declared taxable of the lender.
such ledgers appear income in the said There is no
to h ave le ss assessment year material on
re le vance as the was in the tune of record to doubt
interest income in Rs. 48 lacs. the genuineness
such cases are Therefore, doubt on of the
never taxed. the transaction.
cre ditwor thiness of Therefore, the
The assessee did said le nde r is ad d it io n made
not submit the ITR absolute ly u/s 68 is not
and ban k statement unwarranted in this sustainable .
of the relevant case.
years. Therefore, It is hereby being
the genu ine ness of submitted that , the
the transaction as cash cre dit in the
well as books of account
cre ditwor thiness of can be termed as
the len der M/s undisclosed cash
Rudra Securitie s cre dit u/s 68 of the
and Capital Ltd Act only when the
could not be identity cre dit
established. Wort hine ss and
20
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
source of such
cre dit is not
explaine d by the
assessee. H owever,
to show the source
of source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
However, the bank
statement of this
le nde r is being
attached her e w it h
for your kind
perusal and ready
reference.
8. S idhart h S CPQPS7017 25,00,000/ The assessee The Ld. Assessing The
L - submitted the ITR Officer has casted observations of
(AY 2017-18, a doubt on the the AO and the
confir mat ion and cre dit wor thiness of rejoinder of the
bank statement (of the lender which is appellant along
1 day only) of the purely based. on with ITR of A.Y.
le nde r. suspicion. Further, 2018-19 h ave
The assessee did there is no been perused.
not submit the ITR requirement to The appellant
for the AY 2018-19. share the ITR for has su bmitted
In the wake of loan the same PAN, ITR,
of Rs.25 lakhs and assessment year confir mat ion for
one returned income for which the the lender,
of total GTI of 14 assessment banks
lakhs, pert a in s. H owever, statements of
cre ditwor thiness the appellant the lender to
looks dubious. hereby resubmits explain the loan
Further, bank the ITR of said taken by it. On
statement of the le nde r for the A.Y. perusal, I find
le nde r for the 2018-19 showing that the
complete year is not the declared appellant has
available on record. taxable income satisfactorily
A ls o , the closing during the said explaine d the
balance as per assessment year in identity and
le dger submitted by the tune of Rs. cre ditwor thiness
the assessee and 26,29 Lacs. of the lender.
closing balance Therefore, the There is no
declared by the doubt on credit material on
le nde r Sidharth. S w ort h ine s s on the record to doubt
does not match. said le nde r is the genuineness
21
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
A ls o , the source of absolute ly of the
Rs. 25,00,000/- unwarranted. transaction.
loan appears to be It is hereby being Therefore, the
mainly from submitted that , the ad d it io n ma de u
Rs.20,00,000/- cash cre dit in the / s 68 is not
received a day books of account sustainable .
back. It is can be termed as
re iterate d that such undisclosed cash
accounts are widely cre dit u/s 68 of the
used to provide Act only when the
accommodation identity credit
entrie s where debit w ort h ine s s and
/ credit transaction source of such
occur cre dit is not
simu ltaneously and explaine d by the
IT R re mains un file d assessee. H owever,
even. to show the source
Therefore , the of source of such
genuineness of the cre dit is required
transaction as well on ly in the case of
as creditworthiness a company in wh ich
of the le nde r M/s the public is not
S idh art h. S could substan tially
not be established. interested.
However, the bank
statement of this
le nde r is being
attached her e w it h
for your kind
perusal and ready
reference.
9. Bhanu A. AFSPB9573 12,50,000/ The assessee The Ld. Assessing The
Shah Q - submitted a Officer has casted observations of
confir mat ion a doubt on the the AO and the
whereas no ITR, cre dit wor thiness of rejoinder of the
ban k statements h as the lender which is appellant along
been submitted. purely based on with ITR of A.Y.
ITR of AY 2018 -1 9 suspicion. Further, 2018-19 h ave
is not submitted, there is no been perused.
hence it appears requirement to The appellant
that assessee is a share the ITR for has su bmitted
non-filer for the the same PAN, ITR,
re le vant ye ar. assessment year confir mat ion for
Further, it is seen for which the the lender,
that a le dge r has assessment banks
been submitte d pert a in s. H owever, statements of
where it has been the appellant the lender to
shown that interest hereby resubmits explain the loan
has been received the ITR of said taken by it. On
22
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
but no supporting le nde r for the A.Y. perusal, I find
documents like bank 2018-19 as well that the
statement has been showing the appellant has
shown. And as no declared taxable satisfactorily
ITR submitted, income du r in g the explaine d the
hence such le dger s said a ssessmen t identity and
appear to h ave le ss year in the tune of cre ditwor thiness
re le vance as the Rs. 47.72 lacs of the lender.
interest income in which is much more There is no
such cases are than Rs. 12,50,000 material on
never taxed. taken as loan. record to doubt
The assessee did Therefore, credit the genuineness
not submit the ITR w ort h ine s s of the of the
and ban k statement said lender cannot transaction.
of the relevant be doubted. Therefore, the
year. Therefore, the It is hereby being ad d it io n made
genuineness of the submitted that , the u/s 68 is not
transaction as well cash cre dit in the sustainable .
as creditworthiness books of account
of the lender Bhan u can be termed as
A Shah could not be undisclosed cash
established. cre dit u/s 68 of the
Act only when the
identity credit
w ort h ine s s and
source of such
cre dit is not
explaine d by the
assessee. H owever,
to show the source
of source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
10. Kishore AAKPK6068 25,00,000/ The assessee The Ld. Assessing The
Kumar J - submitted a Officer has casted observations of
HUF confir mat ion a doubt on the the AO and the
whereas no ITR, cre ditwor thiness of rejoinder of the
ban k statement h as the lender which is appellant along
been submitted. purely based on with ITR of A.Y.
ITR of AY 2018 -1 9 suspicion. Further, 2018-19 h ave
is not submitted, there is no been perused.
hence it appears requirement to The appellant
that assessee is a share the ITR for has su bmitted
non-filer for the the same PAN, ITR,
re le vant ye ar. assessment year confir mat ion for
23
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
Further, it is seen for which the the lender,
that a le dge r has assessment banks
been submitte d pert a in s. H owever, statements of
where it has been the appellant the lender to
shown that: hereby resubmits explain the loan
interest has the ITR of said taken by it. On
been le nde r for the A.Y. perusal, I find
received but no 2018-19 as well that the
suppor ting showing the appellant has
documents like bank declared taxable satisfactorily
statement has been income in the tune explaine d the
shown. And as no of Rs. 25.48 lacs identity and
ITR submitted, during the said cre ditwor thiness
hence such le dger s assessment year. of the lender.
appear to h ave le ss Therefore, There is no
re le vance as the cre ditwor thiness of material on
interest income in said len der may n ot record to doubt
such cases are be questioned in the genuineness
never taxed. The this case . of the
assessee did not It is hereby being transaction.
submit the ITR an d submitted that , the Therefore, the
bank statement of cash cre dit in the ad d it io n made
the re le va nt year . books of account u/s 68 is not
Therefore, the can be termed as sustainable .
genuineness of the undisclosed cash
transaction as well cre dit u/s 68 of the
as creditworthiness Act only when the
of the le nde r identity
Kishore Kumar HUF cre ditwor thiness
could not be and source of such
established. cre dit is not
explaine d by the
assessee. H owever,
to show the source
of source of such
cre dit is required
on ly in the case of
a company in wh ich
the public is not
substan tially
interested.
However, the bank
statement of this
le nde r is being
attached her e w it h
for your kind
perusal and ready
reference.
24
ITA Nos. 2488 & 2739/Del/2023
CO No. 140/Del/2023
Subramaniam Ashok Kumar
12. Having heard the arguments of both the parties, examined the amounts o f the loan, remarks given by the AO in the original Assessment Order as well as in the Re mand Report, rebuttal of the assessee on the Remand Or der and the observations of the ld. CIT(A), we hold that no reason arises to interfere with the order of the ld. CIT(A). W ith regard to the loan of Rs.40,00,000/- received, we find that the said amount has bee n received from Mr. Duraisami and the ld. CIT(A) has accepted the loan of Rs.20 ,00,000/-. The ld. CIT(A), however, volte-faced on the issue of re maining Rs.20,00,000/- which we hereby reverse.
Interest Payment:
13. Interest payment being co nsequential to the loans re ceived, the same is liable to be deleted owing to the adjudication on the issue of the unsecured loans.
14. In the re sult, the appeal of the Revenue is dismissed and the appeal & the Cross o bjection of the assessee is dismissed as infructuous.
Order Pronounced in the Open Court on 15/03/202 4.
Sd/- Sd/-
(C. N. Prasad) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 15/03/2024
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Assessee
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR