Income Tax Appellate Tribunal - Agra
A.C.I.T.,Circle-2(1)(1), Agra vs M/S Akrati Promoters & Developers, Agra on 8 June, 2018
IN THE INCOME-TAX APPELLATE TRIBUNAL,
AGRA BENCH, AGRA
Before: Shri A.D. Jain, Judicial Member And
Dr.Mitha Lal Meena, Accountant Member
I.T.A No. 278 /Agra/2016
(A.Y.2012-13)
ACIT, Circle-2(1)(1), Vs M/s Akrati Promotors & Developers
Agra C/o Akrati Technimont Ltd.
CS/1-3, Rashmi Place, Sultanganj
Crossing, Kamla Nagar,
Agra
Appellant) PAN AACFA 3117 E
(Respondent)
Appellant by Shri Waseem Arshad, Sr. DR
Respondent by Shri R.C. Tomar, I.T.P.
Date of Hearing 10.04.2018
Date of Pronouncement 08/06/2018
ORDER
PER, DR. MITHA LAL MEENA, A.M.:
This appeal, by the revenue is directed against the order of the Ld. Commissioner of Income tax (Appeals)-II, Agra [hereinafter referred to as the 'CIT (A)] dated 31.03.2016 for the Assessment Year 2012-13, on the following grounds:ITA No.278/Ag/2016 2
1. That the ld CIT(A) has erred in law and on facts in deleting the addition of Rs.2,29,00,000/- made u/s 68 of the I.T Act without appreciation the facts that the assessee failed to substantiate the creditworthiness and genuineness of the unsecured loans during the course of assessment proceedings.
2. That the order of Ld. Commissioner of Income Tax (Appeals)-II, Agra being erroneous in law and on facts deserves to be quashed and that of the Assessing Officer deserves to be restored.
3. That the appellant craves leave to add or alter any or more ground or grounds of appeal as may be deemed fit at the time of hearing of the appeal.
2. Briefly stated, facts of the case are that assessee is a 'Firm' by status, engaged in Civil Construction business, filed its Return of Income showing Income of Rs.1,10,44,350/- which was selected for scrutiny. During assessment proceedings as noted in the assessment order Notice u/s 142(1) dated 13.01.2015 was issued in response thereto vide reply dated 06.02.2015 it was submitted by the assessee that it has furnished confirmation letters of all cash creditors, affidavits, addresses, PAN, and copies of Bank statements. Again, vide Notice dated 13.01.2015 assessee was required to give his explanation on genuineness of credits and creditworthiness of creditors in view of section 68 of the Income Tax Act, 1961 (In short, "the Act"). The AO after discussing facts of the credits concluded that the assessee failed to prove the genuineness and creditworthiness of creditors and accordingly the AO made addition of Rs. 2,29,00,000/-. ITA No.278/Ag/2016 3
3. Being aggrieved, assessee went in appeal before ld. CIT(A), before whom detailed submission was filed, Remand Report called upon from the AO and Rejoinder thereto was also filed, by the assessee. Proceedings before the ld. CIT(A) was personally attended by the AO whose presence is also found recorded in the appellate order. The ld. CIT(A) deleted the addition in view of the findings recorded vide para 5.7 to 9, after concluding as under:
9. Thus, in the view of the foregoing and while considering the facts of the case in entirety, and the judicial decisions motioned herein before it is thus found that the AO has not made out any case for the impugned addition of Rs. 2.29 Cr. On account of unexplained deposits under section 68 of the Act . The appellant while discharging its onus , has filed sufficiently overwhelming evidence for proving the identity, creditworthiness and genuineness of the loan transaction which the appellant had entered into with the loan depositors .As per the undisputed facts observed from the instant appeal ,it is observed that the depositor are existing assessee on the record of respective assessing officers, their identity is established .it is Also uncontroverted facts that these cash creditors have PANs and filing their Income Tax returns. Besides, the other evidences which includes the loan amount depositors' confirmation letter , copy of bank account through which the amount were received by the appellant, the depositors affidavit having confirmed the repayment of loan amount , interest and TDS and more importantly ,when no primary rebuttal on same has been offered by the AO , it is thus amply proved that the assessee appellant has duly discharged the onus that lay on it . As a result , from the details and evidences as that have been furnished by the appellant ,the identity , creditworthiness &genuineness of transaction had been duly established by the appellant .Even in the remand report the AO by not commenting on the evidence furnished by the appellant has accepted the contentions of the appellant .ITA No.278/Ag/2016 4
Thus keeping in view of facts and the legal position as discussed above , it is thus found that the AO's action in making the addition of Rs. 2,29,00,000/- as made u/s 68 is not justified and which cannot be sustained .Accordingly the addition of Rs. 2,29,00,000/- as made by the AO is hereby deleted .
4. The ld. Sr. D.R supported the assessment order contending that the addition was made by the AO after due discussion of facts of each creditor at the assessment stage, where the assessee failed to prove the creditworthiness of creditors. The shortcoming in the creditors' financial status is evidently based on their Returns of Income which were brought on records by the assessee where source of credits received in bank accounts of the creditors just before advancing of loan to the assessee remained unproved. Thus, according to the AO source of deposit prior to advancing loan to the assessee remained unproved by the assessee. The ld. DR. has referred to his synopsis which is extracted from some paras of the assessment order as follows:
3.3 of AO "In instant case most of the creditors who have given statement or submitted written explanation are completely failed to give evidence regarding source of money deposited in their bank account out of which they advanced loan."
Para 3.4of AO ITA No.278/Ag/2016 5 "It is further observed most of the creditors are not aware about the activities, where about and persons who are controlling the firm M/s Akriti Promoters & Developers whom they have advanced loan. Some of them admitted that they have advanced loan to the firm through a dalal, but they are completely failed to give address, phone no. of such person. One creditor Sri Tarun Agarwal who advanced Rs. 10,00,000/- admitted in his statement given u/s 131 of the Act on oath that he received only Rs. 4000/- for giving such accommodation entry of Rs. 10 lakh."
To buttress his submission reliance was placed on the following case laws:
(a) C.I.T. vs. Chetan Das Lachman Das dated 07.08.2012 Delhi High Court
(b) C.I.T. vs. Oasis Hospitalities (Pvt.) Ltd. Delhi High Court.
(c) ACIT vs. Shri Jatinder Manchanda - ITA No. 4060/Del./201.L - ITAT Delhi
(d) Rajmandir Estates Pvt. Ltd. vs. PCIT, Calcutta High Court
(e) M/s Pragati Financial Management Pvt. Ltd. vs. C.I.T. Calcutta High Court.
(f) C.I.T. vs. Gagandeep Infrastructure Pvt. Ltd. Bombay High Court
(g) C.I.T. vs. Navodaya Castles Pvt. Ltd. - ITA No. 320/2012Delhi High Court
(h) Deniel Merchants Pvt. Ltd. vs. ITO
(i) I.T.O vs Babulal Jain (2008) 116 TTJ Jab 741 - ITAT Jabalpur
(j) State of Gujarat vs. GordhandasKeshavji Gandhi - AIR 1962 Guj 128
(k) Smt. Suman Gupta Vs. ITA No. 680 of 2012 - Allahabad High Court
(l) M/s Malnad Finance Corp. vs. ACIT ITA Nos. 121-124/Bang./2016
(j) C.I.T. vs. Kamdhenu Steel & Alloys Ltd. -- Delhi High Court ITA No.278/Ag/2016 6
(k) Pankaj Hospital Ltd. vs. C.I.T Writ Tax No. 83 of 2014-- All. High Court
(l) Prem Casting Pvt. Ltd. vs C.I.T --ITA No. 34 of 2016 - All. High Court
(m) M/s Vimal Organics Ltd. vs CIT -- ITA No. 22 of 2015 - All. High Courtf
(n) CIT vs. Nav Bharat Duplex Ltd. -- ITA No. 279 of 2010 - All. High Court
5. Per contra, the ld. A.R placed reliance on the Paper Books, Synopsis filed before the Bench and findings of the ld CIT(A). He further submitted that assessee has duly discharged its burden as envisaged under section 68 of the Act and that neither the AO nor the ld. DR has brought any evidence on records to prove that the credits representing loans from parties have flown from the coffers of the Firm and represents undisclosed income of the assessee. It was also submitted by the ld. AR for the assessee that though the AO has treated the Loans to be unexplained, however interest paid on such loans were allowed as deduction, meaning thereby the AO has accepted the loan creditors as genuine loan in principle. He relied upon the following case laws to prove his point of argument:
a) CIT vs S. Kamaljeet Singh (2005)147 Taxman18(All)
b) Aravali Trading Co. vs. ITO (2010) 187 Taxman 338(Raj.)
c) Sugandhi Cold Storage Vs Department ITA No.368/Agra/2010 Agra Bench
d) Subhash Dal Mills Vs ACIT (2002) 124 Taxman 169 (Agra)(Mag)
e) CIT Vs. Metachem Industries (2000) 245 ITR 160 (All)
f) CIT Vs Avant Grade Carpet Ltd. (2015) 54 taxman.com 216 (All)
g) M/s Anil Rice Mills Vs CIT (2006) 282 ITR 236 (All) ITA No.278/Ag/2016 7
h) CIT Vs Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 SC
i) SreelekhaBenerjee Vs. CIT (1963) 49 ITR 112 SC
j) S. Hastimal Vs CIT (1963) 49 ITR 273 (Mad)
k) TolaramDaga Vs. CIT (1966) 59 ITR 632 (Assam)
l) CIT Vs. Daulat Ram Rawatmull (1973) 87 ITR 349 (S.C)
m) Sarogi Credit Corporation Vs. CIT (1976) 103 ITR 344 (Pat)
n) Jalan Timber Vs. CIT (1997) 223 ITR 11
o) Kalyan Memorial Charitable trust Vs. ACIT (2009)124 TTJ 883 (Agra)(TM)
p) Smt. Raj Bala Devi vs. CIT in ITA No. 75 of 2017
q) CIT vs. Daulat Ram Rawatmull (1973) 87 TTJ 349 (SC)
r) Rajendra Prasad Shukla vs. CIT, Allahabad
s) M/s Zafa Ahmed & Company vs. CIT
t) CIT Vs. Real Time Marketing (P) Ltd reported in (2008) 306 ITR 35 u) CIT Vs. Rahul Vineet Traders in (2014) 41 Taxman.com 86 (All)
v) CIT Vs. Shiv Dhooti Pearls & Inv. Ltd in (2015) 64 Taxmann 329 (Del) w) CIT Vs. M/s. Dataware (P) Ltd in ITA No. 263 of 11 GA No. 2856 of 2011
x) CIT Vs. RanchhodJivabhaiNakhava in (2012) 21 Taxmann 159 (Guj) y) Sona Electric Co. vs. CIT (1984) 152 ITR 507 (Del.) z) ParimisettiSeetharamamma vs CIT, (1965) 57 ITR 0532 (S.C) aa) Kishan Chand Chelaram vs. CIT (1980) 125 ITR 713 (S.C.). ab) CIT vs. DaulatramRawatmal (1973) 87 ITR 349 (SC) ac) CIT Vs Diamond Products Ltd in (2009) 177 Taxman 331 (Del) ad) Kanhaia Lal Jangid vs. ACIT reported in (2008) 217 CTR (Raj.) 354 ae) CIT v. Ram Narain Goel (1997) 224 ITR 180 (P&H) af) CIT v. Metachem Industries (2000)245 ITR 160(M.P) ag) Labhchand Vohra Vs ITO (2008) 219 CTR (Raj.) 571 ah) CIT v.Jauhari Mal Goel reported in(2006) 201 CTR (All.) 54 ITA No.278/Ag/2016 8
6. We have heard both the parties, perused the material on records to which our attention was drawn in the light of case laws relied upon and given careful thought to the issue under appeal.
6.1 It is seen that a fair and an adequate opportunity has been given to the AO, to controvert the submissions filed by the assessee at the appeal stage and ld. CIT(A) has discussed the case with the AO during the course of hearing on 15.02.2016. Simultaneously, a copy of the assessee's written submissions was also provided to the AO for her comments in terms of section 250(4) of the Act. In other words, the matter of addition made u/s 68 of the Act was remanded to the AO for examining the claim of assessee in the light of the detailed documentary evidences filed by assessee at the appellate stage. However, the AO instead of making further inquiries to substantiate her contention with regard to the additions, has submitted a remand report dated 21.03.2016 through her range head, the JCIT Range 2(1), Agra, in a summary manner, just repeating the discussion made in the assessment order, that the assessee having failed to discharge his onus in respect of proving the source of deposits by furnishing necessary evidence at the time of assessment proceedings or even in appeal proceedings, therefore, the additions made u/s 68 were justified. The remand report submitted by the AO reads as under: ITA No.278/Ag/2016 9
"The undersigned has received written submission made before your honour, which has gone through thoroughly. The assessee has filed the evidence in respect of justification of creditors, which were already considered and found insufficient as per discussion in the assessment order. Your honour may kindly appreciate that in few cases the creditors has accepted that the amount was merely and accommodation entry of which no credence can be given. Even at the stage of appeal the assessee has not brought on record any new evidence or justification in order to support his contentions that the disallowanceof(Rs.2500000+2700000+3200000+2100000+5000 00+500000+1500000+3400000+1900000+300000+800000+100 0000+2000000) made u/s 68 were not justified.
The assessee having failed to discharge his onus in respect of proving the source of deposit by furnishing necessary evidence at the time of assessment proceedings or even in appeal before your honour, the additions made u/s 68 of the I. T. Act are justified.
It is therefore humbly requested that the appeal filed by the assessee may kindly be dismissed & oblige."
6.2 The counsel for the assessee contended that despite the fact when a specific opportunity was granted to the AO to critically examine all such details file by the assessee and offer her comments after making any further inquiry as she may deem fit or cross examine the loan creditors; that the short and cryptic remand report of the AO per ITA No.278/Ag/2016 10 se makes it clear that the AO was in all agreement with the arguments of the appellant, otherwise she would have also brought out any adverse comment or findings to rebut the appellant's submissions, instead of just relying on the assessment order framed by her; that the AO instead of discharging the onus that lays on her, has brushed aside the details evidences just by submitting that the assessee having failed to discharge his onus in respect of proving the source of deposits by furnishing necessary evidence at the time of assessment proceedings or even at the appeal stage, therefore the additions made u/s 68 were justified. However, while adopting such a stance, the AO has not brought out any fact to the fore as to how the identity and creditworthiness of the loan creditors were not proved from the evidences submitted by the appellant in the assessment proceeding as well as appellate proceedings and how the genuineness of the loan transactions was at doubt particularly when even the proof of repayment of loans by cheques to the lendersalong with TDS on interest duly paid to income tax account were duly furnished by the assessee.
6.3. We find that the AO has framed the assessment in a one-sided manner neither making proper inquiries or nor culminating the enquiries made to logical conclusions by way of confronting the ITA No.278/Ag/2016 11 assessee with any adverse finding in respect of the loan creditors. We, therefore, appreciate that the ld. CIT(A) has brought the detailed evidences on record by way of submission of the appellant, Remand Report called upon from the AO there on and Rejoinder thereto was also filed, by the assessee. Further, the proceedings before the ld. CIT(A) were personally attended by the AO whose presence is also found recorded in the appellate order. Thus, ld. CIT(A) has adjudicated the matter in judicious manner while deleting the addition.
7. The sole controversy involved in the appeal is that whether in the facts and circumstances of the case and in the light of evidences assessee can be held to have discharged the burden which lays upon it in terms of deeming provisions of section 68 of the Act or not? For adjudication of this issue, which primarily pertains to the facts of the case, it is considered expedient to revisit the facts of each credit based on evidences on records brought by the parties to the dispute in the light of precedents referred on the issue. Therefore, we would now like to discuss the law relating to such cash credits in the light of the numerous judicial pronouncements rendered by various Courts including the Hon'ble Apex Court. To understand the requirements of the law to prove the genuineness of a cash credit, we would reproduce the Section 68 of the Act.
ITA No.278/Ag/2016 12"Where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year."
8. The subject of cash credit has assumed ominous overtures, over the years. This subject has been one of the major areas of litigation in taxation. To understand this subject one needs to know about the alpha and the omega of the law relating to cash credits, starting with its legislative history up to its development in this cyber era, step by step, in order to understand this subject threadbare. This section can be comprehended in a better way by dividing it into the following ingredients (parts):
(a) Where any sum is found credited in the books of the assessee;
(b) maintained for any previous year;
(c) and the assessee offers no explanation about its nature and source; or
(d) the explanation offered by the assessee is not, in the opinion of the AO, satisfactory; then ITA No.278/Ag/2016 13
(e) the sum so credited may be charged to income-tax, as the income of the assessee of that previous year, in relation to which it is so found to have been credited.
9. Thus, it is clear from the above that the initial catchwords of this section are:
(a) Where any sum is found credited;
(b) In the books of the account of the assessee.
Section 68 comes into play immediately when an entry relating to a sum is found to have been credited in the books kept by the assessee, meaning thereby, that the condition-precedent to apply this section is the existence of books and the recording of a sum, as cash credit therein. Thereafter, the satisfaction of the AO regarding genuineness of the cash credit in question arises. In case, he doubts the relevant entry, after making possible enquiry(ies), the AO is satisfied that the entries are not genuine, he is vested with the power to add the said sum in the total income of the assessee represented by such cash credit entries, as the income of the assessee from other sources. Thus, the satisfaction of the AO is the basis of invocation of his powers under Section 68. However, such satisfaction must not be irrational, perverse, illusory and imaginative but must be based on valid and legitimate reason(s) in the light of various precedents available on the issue. The AO is required to make a proper enquiry of all materials, ITA No.278/Ag/2016 14 which are placed before him or over which he has a command. Thus, the inquiry envisaged under Section. 68 is an enquiry, which is reasonable and just. This is a quasi-judicial enquiry and not an arbitrary one. This enquiry should not be based on terrorem but should be based on reasons. The enquiry must be based on logic and not on magic. In a nutshell, the enquiry should be objective and not a subjective one. The AO after receipt of evidences from the assessee should undertake enquiry and cannot remain passive.
10. It is a, well-settled principle of law that when a person (litigant) claims a fact to be true, this is he who must prove that fact. In other words, when a person wants the Court to believe that a fact is true, a preliminary onus is cast upon him to prima facie prove that fact. This onus is said to have been discharged in case he (the assessee) establishes his claim prima facie. Thereafter, the onus may or may not shift on the other party depending upon various factors, which will be discussed in later paras. It follows from the above, as a natural corollary, that even correct and authentic entry in the books of accounts cannot, without independent evidence of its trustworthiness can be, ipso facto, accepted as correct.
ITA No.278/Ag/2016 15
11. The Section. 68 is a charging section and is a deeming provision and it applies when the assessee's explanation regarding cash credit is rejected as being unsatisfactory and where the assessee does not tender any explanation in that respect. The AO must state elaborately as to how he has formed his opinion that the explanation is unsatisfactory, and the AO cannot merely rely upon failure of the assessee to bring evidence, more than, which are prima-facie required to prove the credit under consideration before him. The role of the AO is that of an investigator which implies that after receipt of primary evidences regarding the genuineness of credit the AO with vast powers available with him under his command provided by the Income Tax Act and Civil Procedure Code, which powers he assumes once Summons are issued under section 131 of the Act, should get the enquiry initiated/conducted. He cannot remain passive over the evidences (may be primary) brought on records by the assessee for want of few more evidences and therefore, cannot keep on asking evidence one after another without causing or conducting enquiry in the matter.
12. As it has been stated in the beginning that Section 68 has gained great importance over the years, the reason(s) for the same are that some unscrupulous assessee(s) use this method, i.e., of cash credit, as a device to channelize black money into white money. This ITA No.278/Ag/2016 16 provision was brought on the statute book in the form of Section 68 in 1961 Act. By this provision, a thin line has been drawn between the genuine and non-genuine transaction. Over the years various Courts have drawn their receptive 'lines' in the given facts of their respective cases. But, it would not be out of place to mention that there cannot be straight-jacket formula, which can fit into the facts of a given case and whereby it can be decided whether a credit is genuine or not. It depends on the facts and circumstances of a given case and the Court(s) dealing with the same must find out the true colour of the impugned transaction.
13. The various Courts have given their verdicts regarding the genuineness or non-genuineness of the cash credits involved in the cases they were dealing with in their own way in view of the peculiar facts of cases and the questions in these cases before them .The gist of most of such decisions is that the onus to establish the identity, the genuineness of the transactions and the creditworthiness of the creditors in question is cast upon the assessee.
14. The decisions as rendered by various courts, at times, are misread to mean that a very hard and never shifting and never dischargeable onus is cast upon the assessee to prove their cash ITA No.278/Ag/2016 17 credits. It has been pleaded by the Department, in cases where the deposit is through account payee cheque and even the particulars of the creditor are furnished, however, still then the impugned credit does not stand proved. It has been held that mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction as genuine. Many a times, limited ratios of the judicial decisionsare applied to rebut the argument of the assessee that the deposit has been received through account payee cheque. Unfortunately, the ratio of various decisions is usedto suit their requirements in a piecemeal manner. However, it is well settled law that to apply a decision on a given facts of a case, it must be applied in entirety and without reading it out of context.
15. The Hon'ble Supreme Court has not given a verdict that the burden which is initially cast on the assessee to prima facie establish the relevant cash credit by establishing the identity, the creditworthiness of the creditor and the genuineness of the transaction never shifts on the Department. The Hon'ble Apex Court in its decisions as referred to above, has held that in case the above three requirements are not established by the assessee, in that case no further burden lies on the Revenue to show that the income is from any ITA No.278/Ag/2016 18 particular source. Otherwise also, the facts of that case are very peculiar.
16. It can be safely stated that the decisions of the Courts rendered in the context of Section 68 are only guidelines, which can be properly applied to the given facts of a particular case and these do help to some extent to arrive at a just decision. But, none of the above decisions can completely help in deciding a transaction of deposit because the facts of two cases are never identical. It is only that Court who is dealing with the given facts of a case, who must winnow the chaff from the grain after taking guidance from the available precedents.
17. More often than not, the decisions are interpreted in the sense that the assessee is duty-bound to prove the source of the source of the deposit. When the source of the source is demanded by the Courts, invariably, the counsel appearing for the assessee exclaims that, can a beggar be a chooser and can an assessee who has to take loan from a creditor can ask for the source of his amount which is being given as a loan. This query of the counsel sounds sensible. No Court ever has given a decision that source of the source has to be proved by the assessee, in that way. But sometimes, to demand proof ITA No.278/Ag/2016 19 of creditworthiness of the creditor, the intensity of the required proof is stretched too far to mean that the creditworthiness of the creditor can be established only and only when the source of the source is also proved. With due respect, it is observed that this can never be the intention of any piece of legislation nor of any precedent for that matter. What is required is the proof of creditworthiness of the creditor which can be done by various other methods and not directly by demanding the proof of the source of the source directly. This is a reality of life that no loan recipient can ever ask the loan creditor to explain the source of his source before he gives a loan to him. It is also a reality of life that an assessee cannot be expected to either be aware about the financial affairs of his creditors from whom he has raised loan or can as a matter of right can ask for the sources of loan, which is raised always in times of need. Therefore, to demand the proof of the genuineness of the source of the source will be like demanding the proof of impossible.
18. For a cash credit, two parties are required. The one is the assessee and the other is the loan creditor. No one can deposit his own money with himself. To get benefit of Section 68 of the Act, another person should have deposited a sum of money with the assessee. This 'another person' cannot be a fictitious person but he should be a real person, who can be also a legal juristic person, which ITA No.278/Ag/2016 20 are permitted under the Act. The other person should have deposited his 'own money' and not the money of the assessee. Therefore, a maxim is created that if the real person deposits his own money with the assessee, the deposit is genuine and nothing else. In a sense, all the three ingredients which have been overall accepted generally, i.e., the identity, the creditworthiness and the genuineness are different parts of only one ingredient, i.e., the genuineness of a cash credit. If the money is deposited by the self in the name of others, it cannot be said to be a cash credit at all. If the money is stated to be deposited in the name of a person, who does not exist at all, it cannot be a cash credit. If no money is deposited but only entry is passed in the books of the account, it is not a cash credit at all. Therefore, what is necessary to establish to prove a cash credit under Section 68 of the Act is that any other person other than the assessee must have given or deposited money(s) worth with assessee out of his own money.
19. The Hon'ble Supreme Court in its Judgment in the case of 'Parashuram Pottery Works Co. Ltd. Vs. ITO', reported in (1997) 106 ITR 0001,has observed as follows:
"It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with ITA No.278/Ag/2016 21 the task of calculating and realizing that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remission on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue"
20. An unscrupulous or dishonest assessee who has no respect for law can play any tricks to evade payment of tax and can relate concocted stories which seem to be plausible and reasonable on the face of it. Therefore, it is for the AO to discern the truth in the given facts and the circumstances of that case. At the same time, the AO has to act as an ordinary prudent man instead of posing as a super human being. All the precedents simply guide the decision-maker in a given facts of a particular case and it is he who has to apply his judicial mind with all the prudence at his command to decide that case. Often the ratio of a decision is followed only by adopting its letters. The decision has to be followed both in its letter as well as the spirit. The spirit of a decision is its soul. Yes, to follow the letter only is not that harmful, but the unfortunate part of it is that the letters are torn out of context from a given judgment and the same are put where they do not fit. In this melee, the real meaning of a decision is lost. The most useful ITA No.278/Ag/2016 22 precedents are usually lost when only from an excerpt of a decision, entirely different meanings are drawn by different people.
21. It may be worthwhile to delve further on this issue by referring to the judgment rendered by Hon'ble Patna High Court in the case of 'Addl. CIT v. Hanuman Agarwal', (supra), wherein the Hon'ble High Court hasheld that it can never be within the exclusive knowledge of debtor to know the sources of income of the creditor, once he is supplied the credits that he wants, he is satisfied. Once, he has furnished the identity, the correct address and the correct GIR number of the creditor, he fulfills his obligations under the Act. The assessee is not supposed to know the capacity of the money-lender or the cash creditor. This fact is within the exclusive domain of the creditor. It is for that specific purpose that Section. 131 of the Act has been introduced so that in case of any suspicion, the ITO or the authorities concern may exercise the power of a civil Court under that provision and call upon the creditor concerned to prove his capacity to pay and the genuineness of the transaction. Once, the ITO is satisfied that the creditor is not telling the truth, it has been left open to the assessee to discharge his subsequent onus of proving the genuineness of the transaction and the capacity of the creditor to pay, by cross-examining him.
ITA No.278/Ag/2016 23
22. Hon'ble Judges of the Hon'ble Calcutta High Court in the case of 'C. Kant & Co. v. CIT', (Supra) have held that in the case of cash credit entry, it is necessary for the assessee to prove not only the identity of the creditors but also to prove the capacity of the creditors to advance the money and the genuineness of the transaction. If this case is read in its entirety it would be clearly revealed that the Judges did not want the assessee to do an impossible act. In the light of the given facts of that case it was held that it was a question of fact whether the onus to prove the capacity has been discharged in a particular case or not. In that case, the assessee was not able to discharge even the preliminary onus cast on him, in this regard. But, if one goes by the head note or a limited finding of the above Calcutta case, he would be misled. Therefore, both the decisions have almost the identical ratio but the misreading of the two creates confusion. Thus, it is always a factual matrix of a given case, which has to decide the fate of given cash credit. The onus to prove that the apparent is not the real is on the person who claims it to be so, it was mandated by the Hon'ble apex Court as back as in the year 1973 by deciding the case of 'CIT v. Daulatram Rawat mull', (supra). Any or every decision which ordains the proof of the capacity of the depositor, lender or the creditor, ITA No.278/Ag/2016 24 can never mean to ask for their direct capacity to advance, as has been sometime taken to mean.
23. In the light of all these observations, let it be stated that there may be cases where all the above stated ingredients of Section 68 as established by the plethora of judicial pronouncements, are proved by the assessee, nevertheless, the credit may not be genuine. For example, if the assessee has created a genuine firm with different identity with the help of certain strangers, but this fact was obscured from the Department or it remained overlooked anyhow, and the assessee has proved that he received deposit/cash credit through account payee cheque, that other firm or assessee is assessed to tax and had their paying capacity and transaction is also established to be genuine, can it be a valid cash credit. The answer is 'No'. What follows from the above is that it is the overall commonsense and average prudence of the AO, who is dealing with the facts of a particular case, which can decide the genuineness of a given transaction, of course, which includes all the above three ingredients. In the same manner, there may be cases, where the deposit was not through account payee cheque, no confirmation was even filed, but the entries are found recorded both in the books of the creditor and the assessee, and both of them are assessed with the same AO, who is having command over ITA No.278/Ag/2016 25 the records of both of them, he can immediately accept the cash credit, as genuine. There is no need to even ask for any evidence, in this regard, any further, for that matter. That is why unlimited powers have been given by the precincts of this section and other sections of this Act to ascertain the veracity of a fact.
24. In a nutshell, it can be stated that the AO has to find out as to whether the deposit/gift/cash credit is a result of any collusion, is a result of any dubious device employed by the assessee, is a result of any subterfuge, which is aimed at evasion of tax. Therefore, even the cash credits by near and dear relatives and the partners of the firm can be genuine. These are to be doubted to a certain limit and thereafter the doubts should not be perennial.
25. In this background of the history governing section 68 of the Act, we brought ourselves to the facts of the case on hands. During the year under consideration assessee had received credits from the following parties which have been added under section 68 of the Act by the AO and are subject matter of present appeal. Assessee, to prove the three ingredients of Section 68 of the Act had brought on records the following evidences and on the strength of which it claimed that it has discharged its 'primary' burden to prove its case. We have chosen ITA No.278/Ag/2016 26 to discuss facts of each credit in the light of available evidences as were brought on records before the authorities below and objections of the AO as found noted in the Assessment order and as portrayed before us through the Sr. D.R representing the revenue. The extracted details of all such documents and evidences filed by assessee in its paper book for giving explanation in respect of its each loan transactions are discussed below: -
26. In the case of Piyush Agarwal & Company, Prop. Shri Piyush Agarwal from whom assessee had received an aggregate sum of Rs.10,00,000/- by two cheques of equal amount Rs.5,00,000/- vide Cheque No. 413628 dated 28.04.2011 and another cheque bearing No. 413629 of Rs.5,00,000/-. Assessee had furnished Confirmation duly signed by the creditor, Bank Account of the Lender bearing Account Number 0322201061426 being maintained with Canara Bank Belanganj, Agra showing out flow of funds to the assessee(APB-104-
105), Acknowledgement of his Income Tax Returns for Assessment Year(s) 2010-11 & 2011-12 in evidence to the statement that the Lender is assessed to Income Tax(APB-106-107), Copy of his PAN card (APB-108), Copies of two cheques issued in favour of the assessee(APB-109), his duly sworn Affidavit by which the lender has confirmed on oath having advanced this loan to the assessee and ITA No.278/Ag/2016 27 receipt back of such loan(APB-110). The copy of Bank Statement showing that the Loan stood repaid, Copies of Cheque No. 914590 & 914589 drawn on Punjab National Bank dated 28.08.2012 (APB-111-
112) towards repayment of Loan &Interest.(APB-113-114)Loan is subjected to Interest and due deduction of Tax was made on such Interest (APB-115) for which copy of TDS Certificate for F.Y 2011-12 & 2012-13 was brought on records. (APB,116-117). 26.1 Assessee has also explained the sources of Loan received on 28.04.2011 through cheque No. 413628 to be out of available balance of Rs. 5,44,311/- in his bank account. The available balance had been explained at the end of lender in his bank account mobilized from the credit of Rs. 4,75,000/- received through cheque No. 431923 date 28.04.2011 from Tarun Agarwal & Co. 17-A Mani Enclave, Balkeswar, Agra. Further credit of Rs. 25,000/- was received through cheque No. 418560 dated 28.04.2011 from Suresh Chand Agarwal, Balkeswar, Agra. It was thus explained that before advancing the loan of Rs. 5,00,000/- on 28.04.2011 vide cheque No. 413628 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account No. 0322201061426 was of Rs. 5,44,311/- and stand duly explained. ITA No.278/Ag/2016 28 26.2 In respect of loan amount of Rs. 5,00,000/- received on 07.06.2011 through Cheque No. 413629, while explaining the sources of credit in the lender's Bank Account it was explained by the assessee that the credit of Rs.5,00,000/- got sourced out of available balance of Rs. 5,68,938/- in bank account of the creditor. The availability of balance in lenders bank account has been explained to be out of (a) opening balance Rs. 88,938/-, (b) credit received amounting to Rs. 20,000/- through Cheque No. 4319325 dated 07.06.2011 from M/s Tarun Agarwal & Co. 17-A Mani Enclave, Baleshwar, Agra. (c) Credit of Rs. 1,85,000/- received through Cheque No. 418565 dated 07.06.2011 from Suresh Chand Agarwal, Baleshwar, Agra. (d) Credit of Rs. 50,000/- received through Cheque No. 418565 dated 07.06.2011 from Om Prakash Suresh Chand, Agra (e) Credit of Rs. 2,25,000/-received through Cheque No. 842680 dated 07.06.2011 from Suresh Chand Agarwal, Baleshwar, Agra.
26.3 Thus before advancing the loan of Rs. 5,00,000/- on 07.06.2011 vide Cheque No. 413629 to assessee the available balance in lender Canara Bank, Belanganj, Agra. Account No. 0322201061426 was of Rs. 5,68,938/- and stand duly explained.
ITA No.278/Ag/2016 2926.3.1 It is further noted that the lender has appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid loan amount of Rs. 10,00,000/- to the assessee from his Bank account.
26.4 It is also noted that evidences were brought on records to show that the aforesaid loan amount has since been repaid to the lender namely Piyush Agarwal & Co. vide Cheque No. 914590 of Rs.10,00,000/- drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for A.Y 2013-14. The lender has been paid interest on the loan amount for the A.Y 2012- 13&2013-14 at Rs. 1,04,548/- & 49,315/- respectively on which TDS of Rs. 10,455/- & 4932/- was made. Copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB, 114-115).
26.5 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lenders for A.Y 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS details were too brought on records.
ITA No.278/Ag/2016 30
27. In the case of Murarilal Agarwal & Company Prop. MurariLal Agarwal assessee received Loan of Rs. 5,00,000/- and to prove the credit the assessee furnished Copy of bank account No. 0322201060823 Canara Bank, Belanganj, Agra. (APB-118),Copy of ITR of the creditor for A.Y 2011-12& 2012-13 (APB-119-120),Copy of PAN (APB-121), Copy of Cheque No. 047757dated 20.08.2011 drawn on Canara Bank, Belanganj, Agra (APB-122),Copy of affidavit by the depositor in which he has confirmed on oath having advanced the Loan and repayment of Loan (APB-123),Copy of ledger of Loan account for the FY 2011-12 & 2012-13 confirming of loan amount &repayment of loan amount.(APB-124-125), Copy of Bank statement showing that the loan had been repaid. (APB-126-127),Copy of Cheque No. 914584 &914585 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-128),Copy of TDS certificate for the FY 2011-12 & 2012-13,(APB-129-130). 27.1 Again from Murarilal Agarwal & Co. Prop. MurariLalAgarwal, assessee has received loan amount of Rs. 5,00,000/- on 20.08.2011 through cheque no. 047757 of bank account No. 0322201060823 from M \urari Lal Agarwal & Co. drawn on Canara Bank, Belanganj, Agra, out of available balance of Rs. 5,18,704/- in his bank account. ITA No.278/Ag/2016 31 27.2 The availability of balance had been explained at the end of lender in his bank account by submitting that credit of Rs. 5,00,000/- was received from Shristhi City Planner Pvt. Ltd., Agra through cheque No. 035458 date 16.08.2011.
27.3 It was thus submitted that before advancing the loan of Rs. 5,00,000/- on 28.04.2011 vide cheque No. 047757 to the assessee the available balance in lender's Canara Bank, Belanganj, Agra Account No. 0322201060823 was of Rs. 5,18,704.00 and stand duly explained. The aforesaid lender is assessed to Tax at PAN No. ABKPA0183B. The following documents in support of loan were filed.
(a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN (APB-121)
(c)Copy of Bank Account No. 03222010608236 Canara Bank Belanganj Agra (d) Copy of Cheque No. 047757 dated 20.08.2011 drawn on Canara Bank, Belanganj, Agra. It was also shown that the lender appeared before the AO as per the statement recorded on oath and confirmed the transaction of Loan amounting toRs.5,00,000/- to the assessee.
27.4 The Ld A.R with reference to the Paper Book on records had shown that the aforesaid loan amount had since been repaid to the ITA No.278/Ag/2016 32 Lender namely Murari Lal Agarwal& Company and drew out attention to the submission made before ld CIT(A) submitting that Rs. 5,00,000/- stood paid to the creditor vide cheque No. 914585 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14. The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 36,822/-&24,658/- respectively on which TDS of Rs. 3,682/-& 2,466/-was made. The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction has also been produced. The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 Since the date of raising loan to the date of return loan along with interest payment and TDS details were too brought on records.
28. In the case of Chandra Kumar & Co. Prop. Chandra Kumar Mittal from whom Loan of Rs. 5,00,000/- was received, it was submitted by the assessee that it has received loan amount of Rs. 5,00,000/- on 14.02.2012 through cheque No. 672578 drawn on Bank Account No. 0168201002558 from Chandra Kumar & Co. ITA No.278/Ag/2016 33 drawn on Canara Bank, Kacherighat, Agra . Out of available balance of Rs. 5,01,270/- in his bank account. The available balance had been explained at the end of lender in his bank account to have been sourced by (a) credit of Rs. 2,96,000/- received through RTGS dated 14.02.2011from Shree Mahalaxmi Enterprises., Agra. (b) credit of Rs. 45,000/- received through Cheque No. 047737 dated 14.02.2011 from Amit Agarwal, Agra. (c) Credit of Rs. 30,000/- through Cheque No. 948280 date 14.02.2011 from Anjali Agarwal, Agra. (d) credit of Rs. 25,000/- through Cheque No.946243 dated 14.02.2011from Pramod Kumar Agarwal. (e) Credit of Rs. 1,00,000/- through NEFT dated 14.02.2011 from Keshoram (HUF) (f) Credit of Rs. 4,000/- deposited through cash on dated 14.02.2011. 28.1 Thus before advancing the loan of Rs. 5,00,000/- on 14.02.2012 vide cheque No. 672578 to assessee the available balance in Lender's Bank Account being maintained with Canara Bank, Kacherighat, Agra Account No. 0168201002558 was of Rs. 5,01,270/- and it was therefore, even the source of source, was explained by the assessee.
ITA No.278/Ag/2016 3428.2 It was seen that the lender is assessed to Tax vide PAN No. ACKPM2303E and the following documents in support of loan were brought on records of the authorities below (a) Copy of confirmation of Loan account with copy of Ledger account duly supported by the Affidavit of Lender (b) Copy of PAN (APB-134)
(c) Copy of Bank Account No. 0168201002558 Canara Bank Kacherighat Agra (APB-118) (d) Copy of Cheque No. 672578 dated 14.02.2012 drawn on Canara Bank, Kacherighat, Agra. (APB-135) (e) Copy of ITR for AY 2011-12 & 2012-13 (APB-132-
133) 28.3 The Lender, during assessment proceedings hadappeared and, in his statement, recorded by the AO has confirmed the aforesaid Loan amount of Rs.5,00,000/-to the assessee from his bank account.
28.4 The Ld A.R submitted that the aforesaid loan amount had since been repaid to the lender namely Chandra Kumar &Covide cheque No. 914561 of Rs 5,00,000/- drawn on National Bank dated 28.08.2012 duly supported by the audited books of account for A.Y. 2013-14; the lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 7,562/-& 24,658/- respectively on ITA No.278/Ag/2016 35 which TDS of Rs.756/-& 2,466/- was made; Copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-142-143); Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was produced; In support the copy of ledger account duly confirmed by the lender was produced(APB-137-138). The copy of assessee bank account through which the loan amount has been repaid was produced(APB-139-140); Lender had confirmed having advanced the loan and repayment of loan amount through banking channel as per his Affidavit.
29. In the case of Kamla Trading Company Prop. Vijay Kumar Rohatagi from whom Loan of Rs.5,00,000/- was received, assessee in order to prove the credit furnished (a)Copy of Bank Account No.0322201060229 Canara Bank Belanganj, Agra.(APB-144) (b) Copy of ITR for AY 2010-11, 2011-12 & 2012-13. (APB-145-147) (c) Copy of PAN No. (APB-148) (d) Copy of Cheque No. 411139 dated 03.05.2011 drawn on Canara Bank, Belanganj, Agra. (APB-
149) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-150) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming ITA No.278/Ag/2016 36 of loan amount & repayment of loan amount. (APB-151-152) (g) Copy of Bank statement showing that the loan had been repaid. (APB-153-154) (h) Copy of Cheque No. 914619 & 914620 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-155) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-156 to 158) 29.1 The loan was sourced out of available balance of Rs. 5,05,532/- in his bank account. The available balance had been explained at the end of lender in his bank account to be represented by (a) Opening balance of Rs. 65,532/-(b) Credit of Rs. 2,15,000/- received through Cheque No. 442717 dated 03.05.2011from Vijay Kumar Rohatagi (HUF), Agra. (c) Credit of Rs. 55,000/-received through Cheque No. 133660 dated 03.05.2011 from BalkishanKhandelwal (HUF), Agra. (d) Credit of Rs. 1,70,000/- through Cheque No.412435 dated 03.05.2011from Jagdish Prasad Vijay Kumar (HUF).
29.2 Thus before advancing the loan of Rs. 5,00,000/- on 03.05.2011 vide Cheque No. 411139 to assessee the available balance in Lender Bank Account with Canara Bank, Belanganj, ITA No.278/Ag/2016 37 Agra Account no. 0322201060229 was of Rs. 5,05,532/- and stand duly explained.
29.3 The lender appeared before the AO and as per the statement recorded has confirmed the aforesaid to loan amount of Rs.5,00,000/- to the assessee from his bank account. 29.4 In respect of Repayment of Loan it was submitted by the assessee that as per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the assessee vide Cheque no. 914620 on 28.08.2012and Rs. 22,192/- vide Ch e qu e no. 9 1 46 19 dat e d 2 8. 08. 2 01 2. Thepayment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 54,740/- & Rs. 24,658/- as per Cheque no. 914033 dated 31.03.2012 respectively on which TDS of Rs.5,474/-& 2,466/- was made; Copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014. (APB-156-158); 29.5 These have been duly confirmed by the depositor as per copy of ledger account placed as per PB Page 45 and 46.Also the copy ITA No.278/Ag/2016 38 of bank account of the assessee where these amounts have been debited is submitted as per PB Page No.149.
30. In respect of credit against Loan received from M/s BalKishan Khandelwal (HUF) of Rs. 7,00,000/-assessee furnished (a) Copy of Bank Account No. 0322101031109 Canara Bank Belanganj, Agra. (APB-159-160) (b) Copy of ITR for AY 2010-11, 2011-12 & 2012-13. (APB-161-163) (c) Copy of PAN (APB-164) (d) Copy of Cheque No. 036891 dated 11.07.2011 drawn on Canara Bank, Belanganj, Agra. (APB-165) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-166) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-167-168) (g) Copy of Bank statement showing that the loan had been repaid. (APB-169-170) (h) Copy of Cheque No. 914558 & 914559 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest, (APB-171)
(i) Copy of TDS certificate for the FY 2011-12 & 2012-13, (APB- 172-174).
ITA No.278/Ag/2016 3930.1 It was submitted by the assessee that the Loan of Rs.7,00,000/- was sourced out of available balance of Rs. 7,02,132/- in his bank account. The available balance had been explained at the end of lender in his bank account to be as (a) Opening balance of Rs. 62,132/-(b) Credit of Rs. 90,000/- through Cheque No. 138620 dated 11.07.2011 from Vijay Kumar Rohatagi, Agra. (c) Credit of Rs. 5,50,000/-received through Cheque No. 837973 dated 11.07.2011 from Bal KishanKhandelwal (HUF), Agra. 30.2 Thus, before advancing the loan of Rs. 7,00,000/- on 11.07.2011 vide Cheque No. 036891 to assessee the available balance in lender's Canara Bank, Belanganj, Agra Account No. 0322101031109 was of Rs. 7,02,132/- and stand duly explained. 30.3 The Lender, during assessment proceedings had appeared before the AO and his statement was recorded on oath wherein he had confirmed the transaction of loan amounting to Rs.7,00,000/- to the assessee Firm.
30.4 The aforesaid loan amount has since been repaid to the lender namely BalKishanKhandelwal (HUF) by (a) drawing Cheque No. 914558 of Rs.7,00,000/- drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of ITA No.278/Ag/2016 40 account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 60,756/- & 34,521/- respectively on which TDS of Rs.6,076/-& 3,452/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction is produced.
30.5 The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit.
31. In the case of M/s MurarilalAgarwal (HUF) from whom loan of Rs. 10,00,000/- was received, assessee in order to prove the credit furnished following evidences (a) Copy of Bank Account No. 0322201060855 Canara Bank Belanganj, Agra. (APB-175) (b) Copy of ITR for AY 2011-12 & 2012-13. (APB-176-177) (c) Copy of PAN (APB-178) (d) Copy of Cheque No. 415195 dated 20.08.2011 drawn on Canara Bank, Belanganj, Agra. (APB-
179) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-180) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming ITA No.278/Ag/2016 41 of loan amount &repayment of loan amount. (APB-181-182) (g) Copy of Bank statement showing that the loan had been repaid. (APB-183-184) (h) Copy of Cheque No. 914588 & 914586 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-185) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-186).
31.1 It was also explained by the assessee that loan of Rs.10,00,000/- got sourced out of available balance of Rs. 10,23,738/- in the bank account of the Lender and the available balance had been explained at the end of lender in his bank account to be out of (a) Credit of Rs. 70,000/- through Cheque No. 942936 dated 20.08.2011 from Gyani Ram Sunil Kumar, Agra. (b) Credit of Rs. 9,35,000/ - through Cheque No. 417977 dated 20.08.2011 from Sunil Kumar Gopal Das, Agra. 31.2 Thus, before advancing the loan of Rs. 10,00,000/ - on 20.08.2011 vide cheque No.415195 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account No.0322201060855 was of Rs. 10,23,738/ - and stand duly explained.
ITA No.278/Ag/2016 4231.3 The lender appeared before the AO and as per the statement recorded on oath, has confirmed the aforesaid to loan amount of Rs.10,00,000/- to the assessee.
31.4 The aforesaid loan amount of Rs.10,00,000/- has since been repaid to the lender namely Murarilal Agarwal (HUF)(a) Vide cheque No. 914586 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14at Rs. 73,644/- & 49,315/- respectively on which TDS of Rs.7,364/-& 4,932/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction is produced. (e) In support the copy of ledger account duly confirmed by the lender is produced. The copy of assesee bank account through which the loan amount has been repaid is produced
(f) The l e n d e r has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledge r account duly confirmed by the lender for AY 2012-13 & 2013-14 Since the date of raising loan to ITA No.278/Ag/2016 43 the date of return loan along with interest payment and TDS details is also enclosed (g) As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 10,00,000/- has been returned by the assessee vide cheque no.914586 on 28.08.2012. (h) The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 66,280/- as per cheque No. 914042 dated 31.03.2012 and Rs. 44,383/ - vide cheque No. 914588 dated 28.08.2012. (i) These have been duly confirmed by the depositor as per copy of ledger account placed. (j) Also, the copy of bank account of th e assessee where these amounts have been debited is submitted.
32. In the case of Tarun Agarwal &Co. Prop Tarun Agarwal Loan Amount of Rs. 10,00,000/-was received and in support of Loan assessee furnished following evidences before the AO (a) Copy of Bank Account No. 0322201061297 with Canara Bank Belanganj, Agra. (APB-189) (b)Copy of ITR for AY 2010-11. (APB-190) (c) Copy of PAN (APB-191) (d) Copy of Cheque No. 431924 dated 14.05.2011 drawn on Canara Bank, Belanganj, Agra. (APB-192)(e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-193) (f) Copy of ledger of loan account for the FY 2011 -12 ITA No.278/Ag/2016 44 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-194-195) (g) Copy of Bank stat ement showing that the loan had been repaid. (APB -196-197) (h) Co p y o f Ch e qu e No. 9 14 6 14 & 91 4 61 6 d r a wn o n Pu nja b Nat io na l B a nk d at ed 28.08.2012 against repayment of loan &interest. (APB-198) (i) Copy of TDS certificate for the FY 2011 -12 &2012-13. (APB,199-200).
32.1 It was submitted by the assessee that loan amount of Rs. 10,00,000/- was sourced out of available balance of Rs. 10,10,006/- in his bank account. The available balance had been explained at the end of lender in his bank account
(a)Credit of Rs. 4,04,000/- through Cheque No. 904394 dated 02.05.2011 from Chedalal Agarwal, Agra. (b) Credit of Rs. 3,00,000/- through Cheque No. 838856 dated 04.05.2011 from Sunil Kumar Gopal Das, Agra. (c) Credit of Rs.3,00,000/- through Cheque No. 412717 dated 04.05.2011 from Om prakash Suresh Chand, Agra. 32.2 Thus before advancing the loan of Rs. 10,00,000/- on 04.05.2011 vide cheque No.431924 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061297 was of Rs. 10,10,006/- and stand duly explained.
ITA No.278/Ag/2016 4532.3 The aforesaid lender is assessed to Tax at PAN No.AGPPA7009J. The following documents in support of loan are filed.
(a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b)Copy of PAN (APB-191) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0322201061297 Canara Bank. Belanganj Agra (APB-189) (d) Copy of Cheque Nth 431924 dated 04.05.2011 drawn on Canara Bank, Belanganj, Agra (e) Copy of ITR for AY 2010 -11 (APB-
190) 32.4 The lender namely Sh. Tarun Agarwal has further appeared in compliance to summon issued and has deposed by way of Affidavit that the loan amount of Rs. 10,00,000/ - was given to the assessee vide cheque No. 431924 dated 04.05.2011 and in support he has further furnished the copy of bank account, followed by confirmation of loan, copy of assessee account as standing in his books. Revenue 's case while making the addition in this particular case has been that the lender in his statement recorded by the AO has admitted that he has received Rs.4,000/- against this transaction. ITA No.278/Ag/2016 46 32.5 The aforesaid loan amount has since been repaid to the lender namely Tarun Agarwal &Co. (a) Rs. 10,00,000/- vide cheque No. 914616 drawn on Punjab National Bank dated28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14at Rs. 1,09,151/- & 49,315/- respectively on which TDS of Rs.10,915/ -&4,932/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-199-
200) 32.6 The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012 -13 & 2013-14 stood brought on records of the AO.
32.7 It is seen that t he credit of Rs. 10,00,000/- received from Shri Tarun Agarwal who as mentioned in the assessment order has stated that during his deposition before the AO that he has received Rs.4,000/- against this transaction and thus the AO has concluded that it transpires that his account has been used ITA No.278/Ag/2016 47 for such accommodation entries. In its statement of fact filed before Ld CIT(A), it was stated by the assessee that subsequent, to such a statement Shri Tarun Agarwal appeared before the AO and filed Affidavit confirming the transaction with the assessee. This statement of fact has not been disputed before us by the Sr. D.R much less with any evidence or even in his pleadings. It is also not denied that the stat ement was recorded at the back of the assessee without providing opportunity of cross-examination and such statement was used against the assessee which in the light of Hon'ble Apex Court Judgment in the case of 'Union of India Vs T.R Verma', AIR 1957 (S.C) 882 was the bounden duty of the AO. Furthermore, statement was oral evidence which could not take preference over the documentary evidences filed by the assessee backed by duly sworn in Affidavit filed subsequent, to the date of giving above statement which has not been alleged to be fabricated and therefore, the statement cannot be read as evidence and has to be excluded for the purpose of consideration of assessee's case.
ITA No.278/Ag/2016 48
33. In the case of Anoop Goyal (HUF) the assessee has received Loan of Rs. 5,00,000/- and furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0984000100018457 PNB, Rambagh, Agra. (APB-201-202) (b)Copy of ITR for AY 2010-11 & 2012-13. (APB-203-204) (c)C o p y o f P A N ( A P B - 2 0 5 ) ( d ) Copy of Cheque No. 486118 dated 30.04.2011 drawn on Canara Bank, Belanganj, Agra. (APB-206) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-207) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-208-209)
(g) Copy of Bank statement showing that the loan had been repaid. (APB-210-211) (h) Copy of Cheque No. 914550 & 914551 drawn on Punjab National Bank dated28.08.2012 against repayment of loan & interest. (APB-212) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-213 to 215).
33.1 The assessee has received loan amount of Rs. 5,00,000/- on 30.04.2011 through Cheque no. 486118of bank account No. 0984000100018457 from Anoop Goyal (HUF) drawn on PNB, Rambagh, Agra out of available balance of Rs. 5,10,751/- in his bank account. The available balance had been explained at the end of lender in his bank account with ITA No.278/Ag/2016 49 reference to Credit of Rs. 5,04,603/- through Cheque No. 904392 dated 02.05.2011 from Cheda Lal Agarwal, Agra. 33.2 Thus before advancing the loan of Rs. 5,00,000/ - on 30.04.2011 vide Cheque No.486118 to assessee the a va i l a b l e b a l a n c e i n t h e l e n d e r ' s P NB , R a mb a g h , A g r a A c c o u n t n o . 0984000100018457 was of Rs. 5,04,603/- and stand duly explained.
33.3 The aforesaid lender is assessed to Tax at PAN No. AAFHA6471A. The following document in support of loan have been filed (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN(APB-205) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0984000100018457 PNB, Rambagh, Agra (APB-201-202) (d) Copy of Cheque No. 486118 dated 30.04.2011 drawn on Canara Bank, Belanganj, Agra. (APB-206). (e) Copy of ITR for AY 2010-11 & 2012- 13(APB-203-204) 33.4 The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid loan amount of Rs.5,00,000/- to the assessee from his bank account.
ITA No.278/Ag/2016 5033.5 The aforesaid loan amount Rs. 5,00,000/- has since been repaid to the lender namely Anoop Goyal (HUF). (a) vide Cheque No. 914550 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012 -13 &2013-14 at Rs. 55,233/-& 24,658/- respectively on which TDS ofRs.5,523/-& 2,466/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-213 to 215)(d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was brought on AO's record. (e) In support the copy of ledger account duly confirmed by the lender was brought on AO's record the copy of assessee bank account through which the loan amount has been repaid was brought on AO's record. (f) The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012- 13 & 2013-14 Since the date of raising loan to the date of return ITA No.278/Ag/2016 51 loan along with interest payment and TDS details was brought on records. (g) As per the copy of Bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/-has been returned by the assessee vide Cheque no. 914550 on 28.08.2012 (h) The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs 49710/- as per Cheque no. 914011 dated 31.03.2012 and Rs. 22192./-vide Cheque no. 914551 dated 28.08.2012. (i) These have been duly confirmed by the depositor as per copy of ledger account placed as per PB Page 98 and
99. (j) Also the copy of bank account of the assessee where these amounts have been debited was submitted as per PB Page No. 100 and 100A. .
34. In the case of Baboolal Agarwal & Sons (HUF) Loan Amount of Rs. 5,00,000/-and furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201060074 Canara Bank, Belanganj, Agra. (APB-216) (b) Copy of ITR for AY 2010-11 & 2012-13. (APB-217-218) (c) Copy of PAN (APB-219) (d) Copy of Cheque No. 394173 dated 03.05.2011 drawn on Canara Bank, Belanganj, Agra. (APB-220) (e) Copy of Death Certificate. (APB-221) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & ITA No.278/Ag/2016 52 repayment of loan amount. (APB-221(A)-221(B))(g)Copy of Bank statement showing that the loan had been repaid.(APB-221(C)- 221(D)) (h) Copy of Cheque No. 914556 &914557 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-221(E)) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (221(F)-221(H)).
34.1 The assessee has received loan amount of Rs. 5,00,000/- on 03.05.2011 through Cheque no. 394173 of bank account No. 0322201060074 from Baboolal Agarwal & Sons (HUF) drawn on Canara Bank, Belanganj, Agra out of available balance of Rs. 5,05,764/- in his bank account. The available balance had been explained at the end of lender in his bank. (a) Opening balance of Rs. 18,764.19 (b) Credit of Rs. 2,02,000/- received through Cheque No. 751322 dated 02.05.2011. (c) T h e a f f i d a vi t o f t h e c r e d i t o r ( d ) His full address with PAN No., existence of lender of credit amount is established (e) In a statement recorded on oath the loan is owned by the existing creditor thus the onus which lay the assessee has been discharged the presumption raised u/s 68 stands discharged. Repayment of Loan as per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the ITA No.278/Ag/2016 53 assessee vide Cheque no. 914557 on 28.08.2012and Rs. 22192/- vide Cheque no. 914556 dated 28.08.2012. 34.2 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 54740/-& 24,658/- as per Cheque no. 914020 dated 31.03.2012 respectively on which TDS of Rs. 5,474/-& 2,466/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014
35. In the case of Vijay Kumar Rohatagi (HUF) Loan Amount of Rs. 15,00,000/-and furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061078 Canara Bank, Belanganj, Agra. (APB-221(I)) (b) Copy of ITR for AY 2011-12 & 2012-13. (APB-221(J)- 221(K)) (c) Copy of PAN (APB-221(L)) (d) Copy of Cheque No. 044119 dated 14.02.2012 drawn on Canara Bank, Belanganj, Agra &Cheque No. 044120 dated 21.02.2012. (APB -222-223)
(e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-224) (f) Copy of ledger of loan account for the FY 2011 -12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB- ITA No.278/Ag/2016 54 225-226) (g) Copy of Bank statement showing that the loan had been repaid. (APB-227-228) (h) Copy of Cheque No. 914621 & 914622 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB -229) (h) Copy of TDS certificate for the FY 2011 -12 & 2012-13. (APB- 230-231) 35.1. It was submitted by the assessee that loan amount of Rs. 10,00,000/- was sourced out of available balance of Rs. 12,28,548/-in his bank account. The available balance had been explained at the end of lender in his bank. (a) Credit of Rs. 3,00,000/- through RTGS dated 09.02.2012 from Nisha Agarwal. (b) Credit of Rs. 36,000/-received through Cheque No. 205449 dated 10.02.2012 from Stella Bhudhiraja, Agra. (c) Credit of Rs. 1,10,000/- through NEFT dated 10.02.2012 from Nisha Agarwal, Agra.(d) Cr e dit of Rs. 2, 16, 3 00/ -th rou g h RTGS d at ed 13. 02. 201 2 fr o m Ra m K is ho re Agarwal, Agra. (e) Credit of Rs. 1,45,000/- through Cheque No.840023 dated 14.02.2012 from Vinay Kumar Rohatagi (HUF),Agra (f) Credit of Rs. 2,16,300/- through RTGS dated 14.02.2012 from Krishna Murari Agarwal, Agra.
ITA No.278/Ag/2016 5535.2 Thus before advancing the loan of Rs. 10,00,000/- on 14.02.2012 vide ChequeNo.044119 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061078 was of Rs. 12,28,548/ - and stand duly explained.
35.3 Again, Rs. 5,00,000/- was received by assessee from Vijay Kumar Rohatagi (HUF) on 21.02.2012 through Cheque no. 044120 dated 21.02.2012 drawn on Canara Bank, Belanganj, Agra out of available balance of Rs. 5,13,548/- in his bank account. The availability of balance in lenders bank account has been explained at the end of lender. (a) Credit of Rs. 5,65,000/-through RTGS 17.02.2012 from Mithlesh Agarwal, Agra.Thus, before advancing the loan of Rs. 5,00,000/- on 21.02.2011 vide Cheque No. 044120 to assessee the available balance in lender Canara Bank, Belanganj Agra Account no. 0322201061078 was of Rs. 5,13,548.50 and stand duly explained. 35.4 The aforesaid lender is assessed to Tax at PAN No. AACHV2530G. The following documents in support of loan are filed.
(a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN (APB- ITA No.278/Ag/2016 56 221(L)) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0322201061078 Canara Bank, Belanganj Agra (APB-221(I)) (d) Copy of Cheque No. 044119 dated 03.05.2011 &044120 dated 21.02.2012 drawn on Canara Bank, Belanganj, Agra. (e) Copy of ITR for AY 2010-11 & 2012-13 (APB-221(J)-221(K). (f) The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs.5,00,000/ - each to the assessee from his bank account. 35.5 The aforesaid loan amount has since been repaid to the lender namely Vijay Kumar Rahtogi& Sons as per detailed. (a) Rs. 15,00,000/- vide Cheque No. 914621 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 21,534/-& 73,973/- respectively on which TDS of Rs.2,153/-& 7,397/-was made. (c) The copy of TDS on interest duly paid to income tax account was filed with the reply given on 20.11.2014 (APB-230-231) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was brought on records. (e) The lender has further confirmed having advanced the loan and repayment of loan amount through banking ITA No.278/Ag/2016 57 channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 Since the date of raising loan to the date of return loan along with interest payment and TDS details was also brought on records. (f) As per the copy of Bank account No. 0983008700001389 standing with Punjab National Bank the amount of Ioan of Rs. 15,00,000/- has been returned by the assessee vide cheque No. 914621 on 28.08.2012. (g) The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs 19381/- as per cheque no. 914030 dated 31.03.2012 and Rs. 66576/- vide cheque no. 914622 dated 28.08.2012.
36. In the case of Ashoka Brothers Prop. Subhash Chand Agarwal from whom Loan of Rs. 7,00,000/- was raised assessee furnished following evidences to prove the loan. (a) Cop y of Bank Account No. 032220 1060061 Ca n ara Bank, Belanganj, Agr a. (APB-232) (b) Copy of ITR for AY 2010- 11,2011-12 & 2012-13. (APB-233 to 235) (c) Copy of Pan No (APB-236) (d) Copy of Cheque No. 412315 dated 16.07.2011 of Rs. 7,00,000/ - drawn on Canara Bank. (APB-
237) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-238) (f) Copy ITA No.278/Ag/2016 58 of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB- 239-240) (g) Copy of Bank statement showing that the loan had been repaid. (APB-241-242) (h) Copy of Cheque No.914606 &914607 drawn on Punjab National Bank dated28.08.2012against repayment of loan & interest. (APB-243) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-244 to
246).
36.1 It was submitted by the assessee that loan amount of Rs. 7,00,000/- was sourced out of available balance of Rs. 7,06,305/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 30,000/-through Cheque No. 411145 dated 15.07.2011 from KamlaTrading Co.(b) Credit of Rs. 6,70,000/- through Cheque No. 126629 dated 15.07.2011 from Vimal Rohtagi HUF. 36.2 Thus before advancing the loan of Rs. 7,00,000/ - on 16.07.2011 vide cheque No. 412315 to assessee the available balance in lender Canara Bank, Belanganj,Agra Accountno.0322201060061 was of Rs.7,06,305/ - and stand duly explained.
ITA No.278/Ag/2016 5936.3 The aforesaid l ender is assessed to Ta x at PAN No. AAMPA0687K. The follo wing documents in support of loan are filed.(a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN(APB-236) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0322201060061 Canara Bank, Belanganj Agra (APB-232) (d) Copy of Cheque No. 412315 dated 16.07.2011 drawn on Canara Bank, Belanganj, Agra. (APB-237). (e) Copy of ITR for AY 2010-11 (APB-233) 36.4 The lender appeared before the AO and as per the statement recorded on oath confirmed the aforesaid loan amount of Rs.7,00,000/-to the assessee from his bank account. 36.5 The aforesaid loan amount has since been repaid to the lender namely Ashoka Brothers as per detailed. (a) Rs. 7,00,000/- vide cheque No. 914607 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14at Rs. 59,605/- & 34,521/- respectively on which TDS of Rs. 5,961/-& 3,452/- was made (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB, 244 to 246) (d) ITA No.278/Ag/2016 60 Copy of ledger account duly confirmed by the lender - explaining the aforesaid transaction was also brought on records. 36.6 In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid was also submitted before the AO. 36.7 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 Since the date of raising loan to the date of return loan along with interest payment and TDS detail was brought on AO's record.
36.8 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 7,00,000/- has been returned by the assessee vide cheque no. 914607on 28.08.2012and Rs. 31,069/- vide cheque no. 914606 dated 28.08.2012.
37. In the case of Kesho Ram (HUF) from whom Loan of Rs. 10,00,000/- was received assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 12790100010304 Bank of Baroda, Belanganj, Agra. (APB-247 to 249) (b) Copy of ITR for AY 2010- ITA No.278/Ag/2016 61 11 & 2011-12. (APB-250-251) (c) Copy of Pan No. (APB-252) (d) Copy of Cheque No. 521781 dated 09.07.11 of Rs. 5,00,000/-& 521785dated 30.09.2011 of Rs. 5,00,000/- drawn on Bank of Baroda, Belanganj, Agra. (APB-253-254) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-255) (f) Copy of ledger of loan account for the FY 2011 -12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB - 256-257) (g) Copy of Bank statement showing that the loan had been repaid. (APB-258-259) (h) Copy of Cheque No. 914574 & 914575 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB -260) (i) Copy of TDS certificate for the FY 2011 -12 & 2012-13. (APB- 261-262) (j) AO has accepted part amount of loan taken & the other part of Loan consisting of Rs.5,00,000/ - of loan taken on 30.09.2011 has been added.
37.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,02,536/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 5,00,000/- through Cheque No. 130188 dated 07.07.2011 ITA No.278/Ag/2016 62 from Garg Medical Agency. Thus, before advancing the loan of Rs. 5,00,000.00 on 09.07.2011vide cheque No. 521781 to assessee the available balance in lender Bank of Baroda, Belanganj, Agra Account no. 12790100010304 was of Rs. 5,02,536/- and stand duly explained.
37.2 Again Loan of Rs. 5,00,000/- on 30.09.2011 was received through cheque no. 521785 dated 21.02.2012 drawn on Canara Bank, Belangani, Agra. It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,25,833/- in his bank account. The availability of balance in lenders bank account has been explained at the end of lender.(a) Credit of Rs. 5,00,000/- through transfer dated 29.09.2011 from Om PrakshKesho Ram (HUF).Thus, before advancing the loan of Rs. 5,00,000/ - on 29.09.2012 vide cheque No. 521785 to assessee the available balance in lender Bank of Baroda, Belanganj, Agra Account no. 12790100010304 was of Rs. 5,25,833/ - and stand duly explained.
37.3 The aforesaid lender is assessed to Tax at PAN No.AAIHK5830J. The following documents in support of loan are filed (a) Copy of confirmation of loan account with copy of ITA No.278/Ag/2016 63 ledger account duly supported by the affidavit of lender (b) Copy of PAN (APB-252) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 12790100010304 Bank of Baroda, Belanganj, Agra (APB-247 to 249) (d) Copy of Cheque No. 521781 dated 09.07.2011 of Rs. 5,00,000/- & Cheque No. 521785 dated 30.09.2011 drawn on Canara Bank, Belanganj, Agra. (e) Copy of ITR for AY 2010-11 & 2011-12 (APB-250-251) 37.4 The lender has further appeared before the AO and as per the statement recorded has confirmed the aforesaid loan amount of Rs. 10,00,000/- to the assessee from his bank account. 37.5 The aforesaid loan amount has since been repaid to the lender namely Kesho Ram (HUF) as per details. (a) Rs. 10,00,000/- vide cheque No. 914575 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the- loan amount for the AY 2012 - 13 & 2013-14 at Rs. 73,808/-&49,315/- respectively on which TDS of Rs. 7381/-&4932/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with thereply given on 20.11.2014 (APB-261 to 262) (d) Copy of ledger account duly confirmed by the lender explaining the ITA No.278/Ag/2016 64 aforesaid transaction is produced.(e) In support the copy of ledger account duly confirmed by the lender was brought on records . The copy of assessee bank account through which the loan amount has been repaid was also produced before the AO.
37.6 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012 -13 & 2013-14 Since the date of raising loan to the date of return loan along with interest payment and TDS details was filed. 37.7 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 10,00,000/- has been returned by the assessee vide cheque no. 914575 on 28.08.2012and Rs. 44383/- vide cheque no. 914574 dated 28.08.2012.
38. In the case of Kavita Agarwal from whom Loan of Rs. 5,00,000/- was received assessee furnished following evidences to prove the loan.
(a) Copy of Bank Account No. 0322101050202 Canara Bank Belanganj, Agra.(APB-263) (b) Copy of ITR for AY 2010-11 &2012-13. (APB- ITA No.278/Ag/2016 65 264 to 267) (c) Copy of PAN (APB-268) (d) Copy of Cheque No. 038795 dated 04.05.2011 of Rs. 5,00,000/-. (APB-269) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan, (APB-270) (f) Copy of ledger of loan account for the FY 2011 -12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-271 to 272) (g) Copy of Bank statement showing that the loan had been repaid. (APB-273-274) (h) Copy of Cheque No. 914572 & 914573 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan &interest. (APB-275) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-276 to 278). 38.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,08,109/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Opening balance of Rs. 88,109/- (b) Credit of Rs 1,20,000/-received through Cheque No. 430473 dated 03.05.2011 from Abhishek Enterprises,Agra. (c) Credit of Rs. 90,000/-received through Cheque No. 416938 dated 03.05.2011 from BaijnathAgarwal (d) Credit of Rs. 80,000/- through Cheque No. 418544 dated 03.05.2011 ITA No.278/Ag/2016 66 from Devi Sahay Baijnath, Agra. (e) Credit of Rs. 40,000/- through Cheque No. 415589 dated 03.05.2011 from Amit Agarwal & Co. (f) Credit of Rs. 90,000/- through Cheque No. 040291 dated 03.05.2011 from Amit Agarwal (HUF).
38.2 Thus before advancing the loan of Rs. 5,00,000/- on 04.05.2011 vide cheque No. 038795 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322101050202 was of Rs. 5,08,109/- and stand duly explained.
38.3 The aforesaid lender is assessed to Tax at PAN No. AOCPA0827M. The following document in support of loan were filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN(APB-268) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0322101050202 Canara Bank, Belanganj, Agra (APB-263) (d) Copy of Cheque No. 038795 dated 04.05.2011 of Rs. 5,00,000/- drawn on Canara Bank, Belanganj, Agra. (APB-
269). (e) Copy of ITR for AY 2010-11 &2011-12 (APB-264 to
267) ITA No.278/Ag/2016 67 38.4 The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 5,00,000/-each to the assessee from his bank account. 38.5 The aforesaid loan amount has since been repaid to the lender namely Kavita Agarwal as per details. (a) Rs. 5,00,000/- vide cheque No. 914572 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 54,575/-&24,658/- respectively on which TDS of Rs. 5,458/-& 2,466/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-276 to
278) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was brought on records . (e) In support the copy of ledger account duly confirmed by the lender was also filed. The copy of assessee bank account through which the loan amount has been repaid was also produced. 38.6 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012 -13 & 2013-14 Since the date of raising loan to the date of return ITA No.278/Ag/2016 68 loan along with interest payment and TDS were too brought on records.
38.7 As per the copy of bank Account No. 0983008700001389 standing with Punjab national Bank the mount of loan of Rs. 5,00,000/- has been returned by the assessee vide cheque No. 914572 on 28.08.2012. The payment of Interest on loan amount after deducting the TDS has been paid to the depositor rate Rs, 49,117/- as per cheque no, 914031 dated 31.03.2012 and Rs. 22192/- vide cheque no 914573 dated 28,08,2012.
39. In the case of Meera Devi Agarwal from whom Loan of Rs. 6,00,000/-was received assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322101029966 Canara Bank Belanganj Agra. (APB-279) (b) Copy of ITR for AY 2010-11. (APB-280-
281) (c) Copy of PAN (APB-282) (d) Copy of Cheque No. 040560 dated 15.07.2011 of Rs. 6,00,000/-. (APB-283) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-284)
(f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-285-286) (g) Copy of Bank statement showing that the loan had been repaid. (APB-287-
288) (h) Copy of Cheque No. 914633 & 914634 drawn on Punjab ITA No.278/Ag/2016 69 National Bank dated 28.08.2012 against repayment of loan & interest. (APB-289) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB- 290-291).
39.1 It was submitted by the assessee that loan amount of Rs. 6,00,000/- was sourced out of available balance of Rs. 6,07,766.42 in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Opening balance of Rs. 47,766.42 (b) Credit of Rs 45,000/- through transfer dated 15.07.2011 from Gaurav Agarwal (HUF),Agra. (c) Credit of Rs 45,000/- through transfer dated 15.07.2011 from Anoop Goyal (HUF),Agra. (d) Credit of Rs. 3,85,000/- through transfer Nom Amit Agarwal (HUF),Agra (e) Credit of Rs. 85,000/- through transfer from Kavita Aqarwal 39.2 Thus before advancing the loan of Rs. 6,00,000/- on 15.07 2011 vide cheque No. 040560 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322101029966 was of Rs. 6,07,766/- and stand duly explained. 39.3 The aforesaid lender is assessed to Tax at PAN No AFOPD9805P. The following documents in support of loan are filed.(a) Copy of confirmation of loan account with copy of ledger ITA No.278/Ag/2016 70 account duly supported by the affidavit of lender (b) Copy of Pan No. (APB-282) (Reply dated 20.11.2014) (c) Copy of Bank Account No. 0322101029966 Canara Bank, Belanganj, Agra (APB-279) (d) Copy of Cheque No. 040560 dated 15.07.2011 of Rs. 6,00,000/- drawn on Canara Bank, Belanganj, Agra. (APB-283).
(e)Copy of ITR for AY 2010-11 (APB-280) (f) The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 6,00,000/- to the assessee from his bank account. 39.4 The aforesaid loan amount has since been repaid to the lender namely Meera Devi Agarwal as per details: (a) Rs. 6,00,000/- vide cheque No. 914581 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of account for AY 2013-14 (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 at Rs. 51,288/-& 29,589/- respectively on which TDS of Rs. 5,129/-& 2,959/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-290-291) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was produced. (e) In support the copy of ledger account duly confirmed by the lender was filed. The copy of ITA No.278/Ag/2016 71 assesee bank account through which the loan amount has been repaid was brought on records. (f) The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 Since the date of raising loan to the date of return loan along with interest payment and TDS detail.
(g) As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 6,00,000/- has been returned by the assessee vide cheque no. 914633 on 28.08.2012.
39.5 The payment of interest on loan amount was after deducting the TDS and has been paid to the depositor at Rs. 46,159/- as per cheque No. 914035 dated 31.03.2012 and Rs. 26,630/- vide cheque No. 914634 dated 28.08.2012.
40. In the case of Praveen Bansal from whom Loan of Rs. 5,00,000/- was received assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 31047530761 State Bank of India, Loha Mandi, Agra (APB-292-293) (b) Copy of ITR for AY 2011-12 & 2012-13. (APB-294 to 295) (c) Copy of PAN ITA No.278/Ag/2016 72 (APB-296) (d) Copy of Cheque No. 325804 dated 30.09.2011 of Rs. 5,00,000/-. (APB-297) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-
298) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-299-300) (g) Copy of Bank statement showing that the loan had been repaid. (APB-301-302) (h) Copy of Cheque No. 914591 & 914592 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-303). (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-304-305). 40.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,08,289/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 5,24,020/- through Cheque No. 594266 dated 27.09.2011 from Deepak Shivhare, Agra. (b) Thus before advancing the loan of Rs. 5,00,000/- on 04.10.2011 vide cheque No. 325804 to assessee the available balance in lender State Bank of India, Loha Mandi, Agra Account no. 31047530761 was of Rs 5,08,289/- and stand duly explained.
ITA No.278/Ag/2016 7340.2 The aforesaid lender is assessed to Tax at PAN No AOYPB1971P.The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (APB-296) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2011-12 & 2012-13 (APB-294-295) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 31047530761 State Bank of India, Loha Mandi, Agra (APB-292-293) (e) Copy of Cheque No. 325804 dated 30 09.2011 drawn on State Bank of India, Loha Mandi, Agra (APB-297).
40.3 The lender appeared before the AO and as per statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 5,00,000/- to the assessee from his bank account. 40.4 The aforesaid loan amount has since been repaid to the lender namely Praveen Agarwal as per following detail. (a) Rs. 5,00,000/- vide cheque No. 914591 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 &2013-14 of 30,082/-& 24,658/- respectively on which TDS of Rs. 3,008/-& 2,466/- was made. (c) The ITA No.278/Ag/2016 74 copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-304-305) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was filed. (e) In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid is produced. (f) The lender has further confirmed having advanced the loan and repayment of loan amount, through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records. 40.5 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the assessee vide cheque no. 914591 on 28.08.2012.
40.6 The payment of interest on loan amount after deducting the TDShas been paid to the depositor at Rs. 27074/- as per cheque no. 914039 dated 31.03.2012 and Rs. 22192/- vide cheque no. 914592 dated 28.08.2012.
ITA No.278/Ag/2016 75
41. In the case of Anoop Goyal from whom Loan of Rs. 5,00,000/- was received assessee furnished following evidences to prove the loan.
(a) Copy of Bank Account No. 0984000100012238 PNB Ram Bagh, Agra. (APB-306-307) (b) Copy of ITR for AY 2010-11& 2012-13 (APB-308 to 309) (c) Copy of PAN (APB-310) (d) Copy of Cheque No. 369210 dated 23.08.2011 of Rs. 5,00,000/-. (APB-
311) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-312) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-313-314) (g) Copy of Bank statement showing that the loan had been repaid. (APB - 315-316) (h) Copy of Cheque No. 914548 & 914549 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-317) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-318-319).
41.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,22,463.73 in lender's bank account. The available balance had been explained at the end of lender in his bank account with reference to the Credit of Rs. 5,21,452/- through RTGS dated 23.08.2011 from Weaved India, Agra.
ITA No.278/Ag/2016 7641.2 Thus before advancing the loan of Rs. 5,00,000/- on 23.08.2011 vide cheque No. 369210 to assessee the available balance in lender Punjab National bank, Rambagh, Agra Accountno. 0984000100012238 was of Rs 5,22,463.73 and stand duly explained.
41.3 The aforesaid lender is assessed to Tax at PAN No. ACBPG4957D. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (APB-310) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 (APB-308-309) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0984000100012238 Punjab National Bank, Rambagh, Agra (APB-306-307) (e) Copy of Cheque No. 369210 dated 23.08.2011 drawn on Punjab National bank, Rambagh, Agra (APB-311).
41.4 The lender has further appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 5,00,000/- to the assessee from his bank account. 41.5 The aforesaid loan amount has since been repaid to the ITA No.278/Ag/2016 77 lender namely Anoop Goyal as per detailed. (a) Rs. 5,00,000/- vide cheque No. 914548 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 36,329/-& 24,658/- respectively on which TDS of Rs. 3,633/-& 2,466/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (Page No. 18-19) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was filed. (e) In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid was filed. (f) The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012- 13 & 2013-14 since the date of raising loan to the date of return of loan along with interest payment was also filed. (g) As per he copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the assessee vide cheque no. 914548 on 28.08.2012. ITA No.278/Ag/2016 78 41.6 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 32696/- as per cheque no. 914015 dated 31.03.2012 and Rs. 22192/- vide cheque no. 914549 dated 28.08.2012.
42. In the case of Gainda Lal Mithan Lal & Sons from whom Loan of Rs. 5,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0168201001767 Canara Bank, Kacherighat, Agra. (APB-320) (b) Copy of ITR for AY 2011-12(APB-321-322) (c) Copy of PAN (APB-
323) (d) Copy of Cheque No. 668244 dated 30.09.2011 of Rs. 5,00,000/-. (APB-324) (e) Copy of affidavit confirming that the depositor had advanced the loan andrepayment of loan. (APB-325)
(f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB- 326-327) (f) Copy of Bank statement showing that the loan had been repaid. (APB-328-329) (g) Copy of Cheque No. 914562 & 914563 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-330) (h) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-331 to 333) ITA No.278/Ag/2016 79 42.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 6,04,504.50 in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 5,24,000/- through RTGS from Deepak Shivhare,Agra 42.2 Thus before advancing the loan of Rs. 5,00,000/- on 30.09.2011 vide cheque No. 668244 to assessee the available balance in lender Canara Bank, Kacherighat, Agra Account no. 0168201001767 was of Rs 6,04,504.50 and stand duly explained. 42.3 The aforesaid lender is assessed to Tax at PAN No. AABFG1439Q. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (APB-323) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2011-12 (APB-321-322) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0168201001767 Canara Bank, Kacherighat, Agra (APB-320) (e) Copy of Cheque No. 668244 dated 30.09.2011 drawn on Canara Bank, Kacherighat, Agra (APB-324). 42.4 The lender has further appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to ITA No.278/Ag/2016 80 loan amount of Rs. 5,00,000/- to the assessee from his bank account.
42.5 The aforesaid loan amount has since been repaid to the lender namely Gainda Lal Mithan Lal & Sons as per detailed (a) Rs. 5,00,000/- vide cheque No. 914563 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 30,082 no Rs. 24,658/- respectively on which TDS of Rs 3,006/-& 2,466/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-331 to 333) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was filed.(e) In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid was also filed.
42.6 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising ITA No.278/Ag/2016 81 loan to the date of return loan along with interest payment and TDS were too brought on records.
42.7 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the assessee vide cheque no. 914563 on 28.08.2012.
42.8 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 27074/- as per cheque no. 914028 dated 31.03.2012 and Rs. 22192/- vide cheque no. 914562 dated 28.08.2012.
43. In the case of Meenu Bansal from whom Loan of Rs. 5,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 31047531787 State Bank of India, LohaMandi,Agra. (APB-334-335) (b) Copy of ITR for AY 2011-12. (APB-336 to 338) (c) Copy of PAN (ABP-339) (d) Copy of Cheque No. 325787 dated 30.09.2011 of Rs. 5,00,000/ - (APB-340) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-341) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-342-343) (g) Copy ITA No.278/Ag/2016 82 of Bank statement showing that the loan had been repaid. (APB-344-345) (h) Copy of Cheque No. 914578 & 914579 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-346) (i) Copy of TDS certificate for the FY 2011-12 &2012-13. (APB-347-348) 43.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 5,07,848/- in the lender's bank account. The available balance had been explained at the end of lender in her bank account with reference to the Credit of Rs. 5,24,020/- through Cheque No. 594265 dated 27.09.2011 from Deepak Shivhare, Agra.
43.2 Thus before advancing the loan of Rs. 5,00,000/- on 30.09.2011 vide cheque No. 325787 to assessee the available balance in lender State Bank of India, Loha Mandi, Agra Account no. 31047531787 was of Rs. 5,07,848.00 and stand duly explained. 43.3 The aforesaid lender is assessed to Tax at PAN No AOYPB1816R. The following documents in support of loan are filed (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of Pan No. (APB-339) (Reply dated 20.11.2014) (c) Copy of ITR for AY ITA No.278/Ag/2016 83 2011-12 (APB-336 to 338) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 31047531787 State Bank of India, Loha Mandi, Agra (APB-334-335) (e) Copy of Cheque No. 325787 dated 30.09.2011 drawn on State Bank of India, Loha Mandi, Agra (APB-
340). (f) The lender has further appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 5,00,000/- to the assessee from his bank account.
43.4 The aforesaid loan amount has since been repaid to the lender namely Meenu Agarwal as per detailed. (a) Rs. 5,00,000/- vide cheque No. 914578 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 30,082/-& 24,658/- respectively on which TDS of Rs. 3,008/-& 2,466/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-347-348) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was brought on records (e) In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid is ITA No.278/Ag/2016 84 produced. (f) The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records.
43.5 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 5,00,000/- has been returned by the assessee vide cheque no. 914578 on 28.08.2012.
43.6 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 27074.00 as per cheque no. 914037 dated 31.03.2012 and Rs. 22192.00 vide cheque no. 914579 dated 28.08.2012.
44. In the case of Moti Ram Agarwal (HUF) from whom Loan of Rs. 15,00,000/- was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061519 Canara Bank, Belanganj, Agra. (APB-349 to 351) (b) Copy of ITR for AY 2010-11, 2011-12 & 2012-13. (APB-352-354) (c) Copy of PAN (APB-355) (d) Copy of Cheque No. 414820 dated ITA No.278/Ag/2016 85 04.05.2011 of Rs. 10,00,000/- & 414825 dated 11.07.2011 of Rs. 5,00,000/-. (APB-356) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-357)
(f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-358-
359) (g) Copy of Bank statement showing that the loan had been repaid. (APB-360-361) (h) Copy of Cheque No. 914582 & 914583 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-362) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-363-365) 44.1 It was submitted by the assessee that loan amount of Rs. 10,00,000/- was sourced out of available balance of Rs. 10,15,975/- in his bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs 60,000/- through Cheque No. 104704 dated 04.04.2011 from Sanjeev Goyal, Agra. (b) Credit of Rs. 32,400/- through Cheque No. 760892 dated 19.04.2011 from ChedalalAgarwal, Agra. (c) Credit of Rs. 24,000/- through Cheque No. 009259 dated 26.04.2011 from Usha Garg, Agra. (d) Credit of Rs. 3,03,000/- through Cheque No. 904393 dated 19.04.2011 from Chedalal Agarwal, Agra.(e) Credit of Rs. 3,00,000/- through Cheque No. 414700 dated ITA No.278/Ag/2016 86 03.05.2011 from Suman Agarwal & Co., Agra. (f) Credit of Rs 3,00,000/- through Cheque No. 414769 dated 03.05.2011 from Raj Kumar Sunil Kumar, Agra.
44.2 Thus before advancing the loan of Rs. 10,00,000/- on 04.05.2011 vide cheque No. 414820 to assessee the available balance in lender Canara Bank, Belanganj, AgraAccountno.0322201061519 was of Rs 10,15,975/- and stand duly explained.
44.3 Again Loan of Rs. 5,00,000/- was received from said lender through cheque no. 414825 on 11.07.2011 drawn on bank account No. 0322201061519 Canara Bank, Belanganj, Agra. 44.4 The assessee has received loan amount of Rs. 5,00,000/ - on 11.07.2011 through cheque no. 414825 of bank account No. 0322201061519 from Moti Ram Agarwal (HUF) drawn on Canara Bank, Belanganj, Agra. Out of available balance of Rs. 5,23,867.00 in his bank account. The available balance had been explained at the end of lender in his bank account with reference to the Credit of Rs. 5,16,500/- through Cheque No. 104708 dated 08.07.2011 from Sanjeev Goyal, Agra.
ITA No.278/Ag/2016 8744.5 Thus before advancing the loan of Rs. 5,00,000/- on 11.07.2011 vide cheque No. 414825 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061519 was of Rs 5,23,867/- and stand duly explained. 44.6 The aforesaid lender is assessed to Tax at PAN No. AADHM9244D. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of Pan No. (APB-355) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 & 2012-13 (APB-352 to 354) (Reply dated 20.11.2014)
(d) Copy of Bank Account No. 0322201061519 Canara Bank, Belanganj, Agra (APB-349 to 351) (e) Copy of Cheque No. 414820 dated 04.05.2011 drawn on Canara Bank, Belanganj, Agra (APB-
356). (f) Copy of Cheque No. 414825 dated 11.07.2011 drawn on Canara Bank, Belanganj, Agra 44.7 The lender appeared before the AO and as per the statement recorded on oath, has confirmed the aforesaid to loan amount of Rs. 15,00,000/- to the assessee from his bank account. 44.8 The aforesaid loan amount has since been repaid to the lender namely Anoop Goyal as per detailed. (a) Rs. 15,00,000/- vide ITA No.278/Ag/2016 88 cheque No. 914582 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 1,52,548/-& 86,301/- respectively on which TDS of Rs. 15,255/-& 8,630/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (ABP-363 to 365) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction. (e) In support the copy of ledger account duly confirmed by the lender. The copy of assessee bank account through which the loan amount has been repaid .
44.9 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records.
45. In the case of Raj Kumar Sunil Kumar from whomLoan of Rs. 16,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061183 ITA No.278/Ag/2016 89 Canara Bank, Belanganj, Agra. (APB-366-367) (b) Copy of ITR for AY 2010-11,2011-12 & 2012-13. (APB-368 to 370) (c) Copy of PAN (APB-371) (d) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-
372) (e) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-373-374) (f) Copy of Bank statement showing that the loan had been repaid (APB-375-376) (g) Copy of Cheque No. 914594 & 914595 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest (ABP-377) (h) Copy of TDS certificate for the FY 2011-12 & 2012-13. (ABP-378-379) 45.1 It was submitted by the assessee that loan amount of Rs. 10,00,000/- was sourced out of available balance of Rs. 10,09,509/- in his bank account The available balance had been explained at the end of lender in his bank account (a) Opening balance of Rs. 49509/- (b) Credit of Rs. 1,00,000/- through Cheque No. 277111 dated 06.06.2011 from Raj Kumar Agarwal, Agra. (c) Credit of Rs. 2,00,000/-received through Cheque No. 415100 dated 07.06.2011 from MurariLal Agarwal, Agra. (d) Credit of Rs. 1,90,000/- through Cheque No. 417971 dated 07.06.2011 from Sunil Kumar Gopal Das, Agra. (e) Credit of Rs. 70,000/- ITA No.278/Ag/2016 90 through Cheque No. 415188 dated 07.06.2011 from Rameshwar Das Murari Lai, Agra.(f) Credit of Rs. 1,00,000/- through Cheque No. 415131 dated 07.06.2011 from GyaniRam Raj Kumar (HUF), Agra. (g) Credit of Rs. 3,00,000/- through Cheque No. 414822 dated 09.06.2011 from Gulab Agarwal & Sons, Agra. (i) Thus before advancing the loan of Rs. 10,00,000/- on 10.05.2011 vide cheque No. 038176 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061183 was of Rs 10,09,509/- and stand duly explained. 45.2 Again Loan of Rs. 6,00,000/- was received from said lender through cheque no. 038182 on 23.08.2011 drawn on bank account No. 0322201061183 Canara Bank, Belanganj, Agra. 45.3 The assessee has received loan amount of Rs. 6,00,000/ - on 23.08.2011 through cheque no. 038182 of bank account No. 0322201061183 from Raj Kumar Sunil Kumar drawn on Canara Bank, Belanganj, Agra. Out of available balance of Rs. 6,47,260/- in his bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 6,25,743/- through RTGS dated 23.08.2011 from Weaved India, Agra. ITA No.278/Ag/2016 91 45.4 Thus before advancing the loan of Rs. 6,00,000/- on 23.08.2011 vide cheque No. 038182 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061183 was of Rs 6,47,260/- and stand duly explained. 45.5 The aforesaid lender is assessed to Tax at PAN No. AEEPA7395C. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender.(b) Copy of Pan No. (APB-371) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 (APB-368 to 370) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322201061183 Canara Bank, Belanganj, Agra (APB-366-367) 45.6 The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 16,00,000/- to the assessee from his bank account. 45.7 The aforesaid loan amount has since been repaid to the lender namely Raj Kumar Sunil Kumar as per details (a) Rs. 16,00,000/- vide cheque No. 914595 drawn on PNB, dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount ITA No.278/Ag/2016 92 for the AY 2012-13 & 2013-14 of 1,41,567/- & 78,094/- respectively on which TDS of Rs. 14,157/-& 7,890/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-378-379) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction.(e) In support the copy of ledger account duly confirmed by the lender, copy of assessee bank account through which the loan amount has been repaid was also brought on records.
45.8 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records. 45.9 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 16,00,000/- has been returned by the assessee vide cheque no. 914595 on 28.08.2012.
ITA No.278/Ag/2016 9345.10 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 127410/- as per cheque no. 914041 dated 31.03.2012 and Rs. 71014/-vide cheque no. 914594 dated 28.08.2012.
46. In the case of Raj Kumar Agarwal HUF from whom Loan of Rs. 18,00,000/- was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061184 Canara Bank, Belanganj, Agra. (APB-380-381) (b) Copy of ITR for AY 2011-12 & 2012-13. (APB-382-383) (c) Copy of PAN (APB-384) (d) Copy of Cheque No. 415138 dated 20.08.2011 of Rs. 12,00,000/- & 415145 dated 04.10.2011 of Rs. 6,00,000/-. (ABP-385-386) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-387) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-388-389) (g) Copy of Bank statement showing that the loan had been repaid. (ABP-390-391) (h) Copy of Cheque No. 914596 & 914597 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-392) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13 (APB-393 to 395) ITA No.278/Ag/2016 94 46.1 It was submitted by the assessee that loan amount of Rs. 12,00,000/- was sourced out of available balance of Rs. 12,83,669/- in the lender's bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 7,50,064/- through RTGS dated 20.08.2011 from Weaved India, Agra. (b) Credit of Rs. 5,00,000/- through RTGS dated 20.08.2011 from Weaved India, Agra 46.2 Thus before advancing the loan of Rs. 12,00,000/- on 10.05.2011 vide cheque No. 415138 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061184 was of Rs. 12,83,669/- and stand duly explained. 46.3 Again Loan of Rs. 6,00,000/- was received by assessee through cheque no. 415145 on 04.10.2011 drawn on bank account No. 0322201061184 Canara Bank, Belanganj, Agra. 46.4 The assessee has received loan amount of Rs. 6,00,000/ - on 04.10.2011 through cheque no 415145 of bank account No. 0322201061184 from Raj Kumar Agarwal (HUF) drawn on Canara Bank, Belanganj, Agra. Out of available balance of Rs. 14,50,813/ - in his bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 6,00,000/- ITA No.278/Ag/2016 95 through cheque no. 417982 dated 04.10.2011 from Sunil Kumar Gopal Das, Agra.
46.5 Thus, before advancing the loan of Rs. 6,00,000/- on 04.10.2011 vide cheque No. 415145 to assessee the - available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061184 was of Rs. 14,50,813/- and stand duly explained. 46.6 The aforesaid lender is assessed to Tax at PAN No. AAFHR2186B. The following documents in support of loan are filed.(a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (ABP-384) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2012- 13 (APB-382-383) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322201061184 Canara Bank, Belanganj, Agra (APB- 380-381) (e) Copy of Cheque No. 415138 dated 20.08.2011 drawn on Canara Bank, Belanganj, Agra (APB-385).(f) Copy of Cheque No. 415145 dated 04.10.2011 drawn on Canara Bank, Belanganj, Agra (APB-386).
46.7 The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 18,00,000/- to the assessee from his bank account. ITA No.278/Ag/2016 96 46.8 The aforesaid loan amount has since been repaid to the lender namely Anoop Goyal as per detailed (a) Rs. 18,00,000/- vide cheque No. 914596 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 1,23,682/- &88,767/- respectively on which TDS of Rs. 12,368/-& 8,877/-was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 ( Page No. 128-129) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction. (e) In support the copy of ledger account duly confirmed by the lender, copy of assessee bank account through which the loan amount has been repaid was also brought on records.
46.9 The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records.
ITA No.278/Ag/2016 9746.10 As per the copy of hank account No 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 18,00,000/- has been returned by the assessee vide cheque no. 914582 on 28.08.2012.
46.11 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 111314/- as per cheque no. 914025 dated 31.03.2012 and Rs. 77671/-vide cheque no. 914583 dated 28.08.2012.
46.12 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 18,00,000/- has been returned by the assessee vide cheque no. 914596 on 28.08.2012.
46.13The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 111314/- as per cheque no. 914026 dated 31.03.2012 and Rs. 79890/-vi d e cheque no. 914597 dated 28.08.2012.
47. In the case of Sunil Kumar Agarwal HUFfrom whom Loan of Rs. 9,00,000/- was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061431 ITA No.278/Ag/2016 98 Canara Bank, Belanganj, Agra. (APB-396) (b) Copy of ITR for AY 2011-12 & 2012-13. (APB-397-398) (c) Copy of PAN (APB-399)
(d) Copy of Cheque No. 942938 dated 04.10.2011 of Rs. 9,00,000/-. (APB-400) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-401)
(f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-402-
403) (g) Copy of Bank statement showing that the loan had been repaid. (APB-404-405) (h) Copy of Cheque No. 914608 &914609 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-406) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-407 to 409) 47.1 It was submitted by the assessee that loan amount of Rs. 9,00,000/- was sourced out of available balance of Rs. 9,08,737/- in his bankaccount. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 35,000/- through Cheque No. 417983 dated 04.10.2011 from Sunil Kumar Gopal Das, Agra. (b) Credit of Rs. 25,000/- through Cheque No. 038186 dated 04.10.2011 from Raj Kumar Sunil Kumar, Agra.(c) Credit of Rs. 8,43,200/- through Cheque No. 415146 dated 04.10.2011 from Gyani Ram Raj Kumar (HUF), Agra ITA No.278/Ag/2016 99
(d) Thus before advancing the loan of Rs. 9,00,000/- on 04.10.2011 vide cheque No. 942938 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061431 was of Rs. 9,08,737/- and stand duly explained. 47.2 The aforesaid lender is assessed to Tax at PAN No. AAPHS9292B. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender (b) Copy of PAN (APB-399) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2012-13 (APB-397 to 398) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322201061431 Canara Bank, Belanganj, Agra (APB-396) (e) Copy of Cheque No. 942938 dated 04.10.2011 drawn on Canara Bank, Belanganj, Agra (Page no. 352). 47.3 The lender has further appeared before the AO and as per his statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 9,00,000/- to the assessee from his bank account. 47.4 The aforesaid loan amount has since been repaid to the lender namely Sunil Kumar Agarwal HUF as per details. (a) Rs. 9,00,000/- vide cheque No. 914608 drawn on Punjab National Bank dated 28.08,2012 duly supported by the audited books of accounts for AY ITA No.278/Ag/2016 100 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 52,964/-&44,384/- respectively on which TDS of Rs. 5,296/-& 4,438/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-407 to 409) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was produced. In support the copy of ledger account duly confirmed by the lender was filed. The copy of assessee bank account through which the loan amount has been repaid was also brought on records. The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012- 13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS details is also enclosed. 47.5 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 9,00,000/- has been returned by the assessee vide cheque no. 914608 on 28.08.2012.
47.6 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 47688/- as per ITA No.278/Ag/2016 101 cheque no. 914027 dated 31.03.2012 and Rs. 39946/- vide cheque no. 914609 dated 28.08.2012.
48. In the case of Sunil Kumar Gopal Das from whom Loan of Rs. 10,00,000/- was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201061374 Canara Bank, Belanganj, Agra. (APB-410-411)
(b) Copy of ITR for AY 2010-11,2011-12 & 2012-13. (APB-412 to
414) (c) Copy of PAN (APB-415) (d) Copy of Cheque No. 417968 dated 26.04.2011 of Rs. 5,00,000/- & 417973 dated 13.07.2011 of Rs. 5,00.000/-. (APB-416) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-417) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-418 to 419) (g) Copy of Bank statement showing that the loan had been repaid. (APB -420-421)
(h) Copy of Cheque No. 914610 & 914611 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-422) (i) Copy of TDS certificate for the FY 2011-12 & 2012-13.(APB-423-424).
ITA No.278/Ag/2016 10248.1 It was submitted by the assessee that loan amount of Rs. 5,00,000/- was sourced out of available balance of Rs. 6,81,706,50 in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 5,00,000/- through Cheque No. 548459 dated 26.04.2011 from Pawan Kumar Garg, Agra. (b) Thus, before advancing the loan of Rs. 5,00,000/- on 26.04.2011 vide cheque No. 417968 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061374 was of Rs. 6,81,706.50 and stand duly explained.
48.2 Again Loan of Rs. 5,00,000/- through cheque no. 417973 on 13.07.2011 drawn on bank account No. 0322201061374 Canara Bank, Belanganj, Agra.
The assessee has received loan amount of Rs. 5,00,000/- on 13.07.2011 through cheque no. 417973 of bank account No. 0322201061374 from Sunil Kumar Gopal Das drawn on Canara Bank, Belanganj, Agra. Out of available balance of Rs. 5,30,970.50 in his bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 54,000/- through Cheque No. 071953 dated 07.07.2011 from ITA No.278/Ag/2016 103 SanmatiPetro Carrier, Agra. (b) Credit of Rs. 54,000/- through Cheque No. 043067 dated 08.07.2011 from JainsonIndia, Agra. (c) Credit of Rs. 1,09,000/- through Cheque No. 415133 dated 09.07.2011 from Gyani Ram Raj Kumar, Agra. (d) Credit of Rs. 2,20,000/- through Cheque No. 942933 dated 09.07.2011 from Gyani Ram Sunil Kumar (HUF), Agra. (e) Credit of Rs. 65,000/- through Cheque No. 047754 dated 13.07.2011 from Murai Lai Agarwal, Agra.
48.3 Thus before advancing the loan of Rs. 5,00,000/- on 13.07.2011 vide cheque No. 417973 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201061374 was of Rs. 5,30,970.50 and stand duly explained. 48.4 The aforesaid lender is assessed to Tax at PAN No. AIOPK8318F. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of Pan No. (APB-415) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 (APB-412 to 414) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322201061374 Canara Bank, Belanganj, Agra (APB-410-411)(e) Copy of Cheque No. 417968 dated 26.04.2011 ITA No.278/Ag/2016 104 drawn on Canara Bank, Belanganj, Agra (f) Copy of Cheque No. 417973 dated 13.07.2011 drawn on Canara Bank, Belanganj, Agra 48.5 The lender appeared before the AO and as per the statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 10,00,000/- to the assessee from his bank account. 48.6 The aforesaid loan amount has since been repaid to the lender namely Sunil Kumar Gopal Das as per detailed (a) Rs. 10,00,000/- vide cheque No. 914611 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14.(b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 99,123/-& 49,135/- respectively on which TDS of Rs. 9,912/-& 4,932/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB- 423-424) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction.The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the ITA No.278/Ag/2016 105 date of return loan along with interest payment and TDS were too brought on records.
48.7 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 10,00,000/- has been returned by the assessee vide cheque no. 914611 on 28.08.2012.
The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 89211/- as per cheque no. 914046 dated 31.03.2012 and Rs. 44383/- vide cheque no. 914610 dated 28.08.2012
49. In the case of Suresh Chand Agarwal & Co. Prop. Suresh Chand Agarwal from whom Loan of Rs.3,00,000/- was received , assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322201060585 Canara Bank, Belanganj, Agra. (APB-425) (b) Copy of ITR for AY 2011-12. (APB-426) (c) Copy of PAN (APB-427) (d) Copy of Cheque No. 418581 dated 14.02.2012 of Rs. 3,00,000/-. (APB-428) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-429) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & ITA No.278/Ag/2016 106 repayment of loan amount. (APB-430-431) (g) Copy of Bank statement showing that the loan had been repaid. (APB-432-433)
(h) Copy of Cheque No. 914612 & 914613 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-434) (i) Copy of TDS certificate for the FY 11-12 &2012-13. (APB-435-436) 49.1 It was submitted by the assessee that loan amount of Rs. 3,00,000/- was sourced out of available balance of Rs. 3,15,404.80 in his bank account. The available balance had been explained at the end of lender in his bank account (a) Credit of Rs. 30,000/- through Cheque No. 089955 dated 13.02.2012 from Piyush Agarwal, Agra. (b) Credit of Rs. 2,70,000/- through Cheque No. 412728 dated 14.02.2012 from Om Prakash Suresh Chand Agarwal, Agra.
49.2 Thus before advancing the loan of Rs. 3,00,000/- on 14.02.2012 vide cheque No. 418581 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322201060585 was of Rs. 3,15,404.80 and stand duly explained.
49.3 The aforesaid lender is assessed to Tax at PAN No. ADJPA6119J. The following documents in support of loan are filed. (a) ITA No.278/Ag/2016 107 Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of Pan No. (APB-427) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2011-12 (APB-426) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322201060585 Canara Bank, Belanganj, Agra (APB-425) (e) Copy of Cheque No. 418581 dated 14.02.2012 drawn on Canara Bank, Belanganj, Agra (Page no. 362). (f) The lender has further appeared before the AO and as per his statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 3,00,000/- to the assessee from his bank account.
49.4 The aforesaid loan amount has since been repaid to the lender namely Suresh Chand Agarwal as per details. (a) Rs. 3,00,000/- vide cheque No. 914612 drawn on Punjab National Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012- 13 & 2013-14 of 4,537/-& 24,461/- respectively on which TDS of Rs. 454/-& 2,446/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB-435-436) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction is produced. (e) In support the copy of ledger account duly confirmed by the lender is produced. ITA No.278/Ag/2016 108 The copy of assessee bank account through which the loan amount has been repaid is produced.
49.5 The lender has further confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS details is also enclosed.
49.6 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 6,00,000/- has been returned by the assessee vide cheque no. 914612 on 28.08.2012.
49.7 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 4083/- as per cheque no. 914048 dated 31.03.2012 and Rs. 22015/-vide cheque no. 914613 dated 28.08.2012.
50. In the case of VinaiRohatgi (HUF) from whom Loan of Rs. 8,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 0322101031116 ITA No.278/Ag/2016 109 Canara Bank, Belanganj, Agra (APB-437-438) (b) Copy of ITR for AY 2010-11,2011-12 & 2012-13. (APB-439 to 441) (c) Copy of PAN (APB-442) (d) Copy of Cheque No. 126628 dated 11.07.2011 of Rs. 8,00,000/-. (APB-443) (e) Copy of affidavit confirming that the depositor had advanced the loan and repayment of loan. (APB-444) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13 confirming of loan amount & repayment of loan amount. (APB-445-446) (g) Copy of Bank statement showing that the loan had been repaid. (APB-447-448) (h) Copy of Cheque No. 914623 & 914624 drawn on Punjab National Bank dated 28.08.2012 against repayment of loan & interest. (APB-449) (i) Copy of TDS certificate for the FY 2011-12 & 2012-
13. (APB-450-452) 50.1 It was submitted by the assessee that loan amount of Rs. 8,00,000/- was sourced out of available balance of Rs. 8,04,394/- in bank account. The available balance had been explained at the end of lender in his bank account (a) Opening balance of Rs. 5,498/- (b) Credit of Rs. 1,13,096/- through Cheque No. 928872 dated 29.04.2011 from Nitin Sachdeva, Agra. (c) Credit of Rs. 15,800/- through Cheque No. 240996 dated 22.06.2011 from Dr. SnehSaini, Agra. (d) Credit of Rs. 6,70,000/- through Cheque No. ITA No.278/Ag/2016 110 412308 dated 11.07.2011 from Dr. Sneh Saini, Agra. (e) Thus before advancing the loan of Rs. 8,00,000/- on 11.07.2011 vide cheque No 176628 to assessee the available balance in lender Canara Bank, Belanganj, Agra Account no. 0322101031116 was of Rs. 8,04,394.00 and stand duly explained.
50.2 The aforesaid lender is assessed to Tax at PAN No. AAFHV4692E. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (APB-442) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 (APB-439 to 441) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 0322101031116 Canara Bank, Belanganj, Agra (APB-437-438) (e) Copy of Cheque No. 126628 dated 11.07.2011 drawn on Canara Bank, Belanganj, Agra (APB-443). (f) The lender has further appeared before the AO and as per his statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 8,00,000/- to the assessee from his bank account. 50.3 The aforesaid loan amount has since been repaid to the lender namely VinaiRahatgi (HUF) as per detailed. (a) Rs. 8,00,000/- vide cheque No. 914624 drawn on Punjab National ITA No.278/Ag/2016 111 Bank dated 28.08.2012 duly supported by the audited books of accounts for AY 2013-14. (b) The lender has been paid interest on the loan amount for the AY 2012-13 & 2013-14 of 69,436/-& 39,452/- respectively on which TDS of Rs. 6,944/- & 3,945/- was made. (c) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (APB- 450-452) (d) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was filed. .The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 &2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS details was brought on records.
50.4 As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 8,00,000/- has been returned by the assessee vide cheque no. 914624 on 28.08.2012.
50.5 The payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 62492/- as per cheque no. ITA No.278/Ag/2016 112 914052 dated 31.03.2012 and Rs 35507/- vide cheque no. 914623 dated 28.08.2012.
51. In the case of Alankrit Holding &Finlease Pvt. Ltd. from whom Loan of Rs. 10,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 1842002100045320 PNB, Kamla Nagar, Agra. (APB-453) (b)Copy of ITR for AY 2010-11 & 2012-13. (APB-454-455) (c) Copy of PAN (APB-456) (d) Copy of Cheque No. 572950 dated 02.05.2011 of Rs. 10,00,000/-. (APB-457) (e) Copy of affidavit confirming that the depositor had advanced the loan. (APB-458)(f) Confirmation of Loan (ABP-459 to 462) (g) Copy of ledger of loan account for the FY 2011-12 & 2012-13. (PBP-464 to 466) (h) Copy of Cheque No. 914631 drawn on Punjab National Bank dated 28 08 2012 against repayment of loan and repayment of interest. (ABP-463) (i) Copy of TDS certificate for the FY 2011-12 & 2012-
13.(APB-467 to 469).
51.1 It was submitted by the assessee that loan amount of Rs. 8,00,000/- was sourced out of available balance of Rs. 11,41,604/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 10,09,000/- ITA No.278/Ag/2016 113 through Cheque No. 904388 dated 02.05.2011 from Cheda Lal Agarwal, Agra.Thus before advancing the loan of Rs. 10,00,000/- on 02.05.2011 vide cheque No. 572950 to assessee the available balance in lender Punjab National Bank, KamlaNagar,AgraAccount no. 1842002100045320 was of Rs. 11,41,604.75 and stand duly explained.
51.2 The aforesaid lender is assessed to Tax at PAN No. AABCA3716F. The following documents in support of loan are filed. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of Pan No. (APB-456) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11 & 2012-13 (APB-454 to 455) (Reply dated 20.11.2014) (d) Copy of Bank Account No. 1842002100045320 Punjab National Bank, Kamla. Nagar, Agra (APB-453) (e) Copy of Cheque No. 572950 dated 02.05.2011 drawn on Punjab National Bank, Kamla Nagar, Agra (APB-457).
51.3 The lender has further appeared before the AO and as per his statement recorded on oath has confirmed the aforesaid to loan amount of Rs. 10,00,000/- to the assessee from his bank account. ITA No.278/Ag/2016 114 51.4 The aforesaid loan amount has since been repaid to the lender namely Alankrit Holding &Finlease Pvt. Ltd. as per detailed. (a) The lender has been paid interest on the loan amount for the AY 2012- 13 & 2013-14 of 1,09,808/- & 1,26,736/- respectively on which TDS of Rs. 10,981/-&12,674/- was made. (b) The copy of TDS on interest duly paid to income tax account has been filed with the reply given on 20.11.2014 (Page No. 13-14) (c) Copy of ledger account duly confirmed by the lender explaining the aforesaid transaction was filed alongwithcopy of assessee bank account through which the loan amount has been repaid.
51.5 The lender confirmed having advanced the loan and repayment of loan amount through banking channel as detailed above supported by the affidavit. The copy of ledger account duly confirmed by the lender for AY 2012-13 & 2013-14 since the date of raising loan to the date of return loan along with interest payment and TDS were too brought on records.
52. In the case of Shiva Handicrafts (P) Ltd.from whom Loan of Rs. 20,00,000/-was received, assessee furnished following evidences to prove the loan. (a) Copy of Bank Account No. 1842002100040006 PNB, KamlaNagar,Agra.(APB-470) (b) Copy of ITR for AY 2010- ITA No.278/Ag/2016 115 11,2011-12 & 2012-13. (APB-471 to 473) (c) Copy of PAN (APB-
474) (d) Copy of Cheque No. 575858 dated 20.02.2012 of Rs. 10,00,000/- & cheque No. 575859 dated 21.02.2012 of Rs. 10,00,000/-. (APB-475) (e) Copy of affidavit confirming that the depositor had advance the loan. (APB-476) (f) Copy of ledger of loan account for the FY 2011-12 & 2012-13. (APB-477 to 480, 482 to 483) (g) Copy of Cheque No. 914632 drawn on Punjab National Bank dated 28.08.2012 against repayment of interest. (APB-481)
(h) Copy of TDS certificate for the FY 2011-12 & 2012-13. (APB-484 to 486) (i) Copy of ITAT's order accepting the identity capacity & genuineness of loan accepted.
52.1 The assessee has received loan amount of Rs. 10,00,000/- through cheque no. 575858 on 20.02.2012 & Rs. 10,00,000/- through cheque no. 575859 on 21.02.2012 of bank account No. 1842002100040006 from Shiva Handicrafts Pvt. Ltd. drawn on Punjab National Bank, Kamla Nagar, Agra. Out of available balance of Rs. 20,06,386/- in his bank account. The available balance had been explained at the end of lender in his bank account. (a) Credit of Rs. 6,00,000/- through Cheque No. 240127 dated 25.02.2012 from Arrow Engineering Co., Agra. (b) Credit of Rs. 7,00,000/- through Cheque No. 580187 dated 25.02.2012 from Anil Associates, Agra. (c) ITA No.278/Ag/2016 116 Credit of Rs. 7,00,000/- through Cheque No. 958485 dated 25.02.2012 from Mittal &Co., Agra.
52.2 Thus before advancing the loan of Rs. 10,00,000/- vide cheque no. 575858 on 20.02.2012 & Rs. 10,00,000/- vide cheque no. 575859 to assessee the available balance in lender Punjab National Bank, Kamla Nagar, Agra Account no.
1842002100040006 was of Rs. 20,06,386.50 and stand duly explained.
52.3 The aforesaid lender is assessed to Tax at PAN No. AAFCS3643H. The following documents in support of loan were filed before the AO. (a) Copy of confirmation of loan account with copy of ledger account duly supported by the affidavit of lender. (b) Copy of PAN (APB-474) (Reply dated 20.11.2014) (c) Copy of ITR for AY 2010-11, 2011-12 & 2012-13 (APB-471 to 473) (Reply dated 20.11.2014) (d) Copy of Bank Account No 1842002100040006 Punjab National Bank, Kamla Nagar, Agra (APB-470) (e) Copy of Cheque No. 575858 dated 20.02.2012 drawn on Punjab National Bank, Kamla Nagar, Agra (APB-475). (f) Copy of Cheque No. 575859 dated 21.02.2012 drawn on Punjab National Bank, Kamla Nagar, Agra (g) The lender has further appeared before the AO &as ITA No.278/Ag/2016 117 per the statement recorded on oath at the back assessee, has confirmed the aforesaid to loan amount of Rs. 20,00,000/- to the assessee from his bank account.
52.4 The aforesaid loan amount has since been returned to the lender namely Shiva Handicrafts Pvt. Ltd. as per detailed. (a) As per the copy of bank account No. 0983008700001389 standing with Punjab National Bank the amount of Loan of Rs. 20,00,000/- has been returned by the assessee vide cheque no. 914585 on 28.08.2012. (b) the payment of interest on loan amount after deducting the TDS has been paid to the depositor at Rs. 23,376/- as per cheque no. 914049 dated 31.03.2012 and Rs. 88,767/- vide cheque no. 914632 dated 28.08.2012.
53. From the consideration of the above evidences and submission advanced before us by the parties and the findings recorded by the authorities below, we have no hesitation to hold that assessee had successfully discharged its burden which lay upon it in terms of deeming provisions of section 68 of the Act.
54. The appellant had brought on records overwhelming and sufficient evidences to meet the test of law as laid down u/s 68 of the Act, their assessment, copies of acknowledgment for filing ITA No.278/Ag/2016 118 income tax return of each of them for several years in the past had been laid on record. Copies of bank account of creditors from where the money had come to the bank account of the appellant as loan had been furnished to the Assessing Officer. The appellant thus, had established that the unsecured loans from the aforesaid three creditors are real and genuine receipt as loan from each of them through account payee cheques coming from their respective bank accounts having no nexus with any income or own money of the appellant before it reached his bank account as loan to him. Merely because these loan creditors, according to the objection raised by revenue have disclosed low income to the income tax department amount deposited in their respective accounts, which have been duly explained to be out of repayment of advances given earlier, could not be treated afacade or tailor-made statement to accommodate the appellant. The facts reveal that the cash deposits in their bank account before giving loan to the appellant is out of the known and identified source of each of t hem and the money so appearing in their account genuinely owned and belonged to them and not to the appellant.
ITA No.278/Ag/2016 119
55. The assessee was under no obligation to prove source of source nor the origin of origin after the appellant established the real source of such receipts as loans. It is an admitted position of law that once the assessee explains the credit entry and brings evidence to show that the entry is related to a third party and that third party also owes the credit, the burden would shift to the AO to prove that it is not true. The AO thus,hasto establish that the entry was not real but was pseudonymous. This burden in the present case in appeal, however, has not been discharged by the AO before making addition u/s 68 of the Act nor has established that the entry was not real but was pseudonymous. This finds support from the judgment by Hon'ble Assam High Court in the case of 'Nabadwip Chandra Roy v. CIT', (1962) 44 ITR 591 and which has also been followed in the case of 'TolaramDaga' (supra) at page 638 as under:
"All that could be said to follow from this decision is that once the assessee explains the credit entry and brings in evidence to show that the entry related to a third party and that credit was that of that third party, the burden would shift to the Income-tax Officer to prove that this is not true. For instance, it would be open to the Income-tax Officer in ITA No.278/Ag/2016 120 such a case to establish that the entry was not real but was pseudonymous."
55.1 The appellant as pointed out earlier has explained the immediate source of loan received by it, yet the revenue's case is not that the appellant had knowledge of the source from which the deposit was made by the said creditors in their respective bank accounts. Under the law, in the absence of specific proof of that knowledge, it cannot be assumed that the assessee has the knowledge in question within the meaning of section 106 of the Indian Evidence Act. To require the appellant, therefore, to adduce proof of the source from which the deposit was made by these creditors in their bank accounts, cannot be placed on him which is neither required nor justified by law. This view finds support from the judgment rendered by Hon'ble Assam High Court in the case of TolaramDaga (supra) and relevant passage at page 635 as under clarifies this position:
"At the outset, we have to point out that there is no substance in the contention that the sources from which the money was realised by the third party are within the special knowledge of the petitioner as the depositor happens to be his wife. Whether he has knowledge at all of the source of the money deposited by the third-party is a matter which ITA No.278/Ag/2016 121 has to be decided on evidence. The mere fact that the third party making the deposit happens to be the wife of the assessee does not ipso facto make the assessee come into the knowledge of the sources from which the money was realised. Under law, in the absence of specific proof of that knowledge, it cannot be assumed that the assessee has the knowledge in question within the meaning of section 106 of the Evidence Act. In order to rely on this section, which lays down that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him, it must be established first that the person has special knowledge of that fact, having regard to the circumstances of the case. As illustration (b) to the section shows, when A is charged with travelling on a railway without a ticket, the burden of proving that he had a ticket is on him, obviously, because it is he alone that would have special knowledge regarding the possession of the ticket. The instant case is by no means a parallel and, in our opinion, section 106 of the Evidence Act cannot, therefore, be invoked in aid."
55.2 Proceeding further and admittedly also the principle embodied u/s 68 of the Act is only a statutory recognition of what was always considered to be the law based on Rule of Evidence that it is for the tax payer to prove the genuineness of the borrowings or other credits in his books, since the relevant facts are exclusively in his knowledge. Section 68 of the Act, ITA No.278/Ag/2016 122 1961 incorporates only a Rule of Evidence placing the onus to prove on the assessee. The Expression "nature & source" has to be understood together as a requirement of identification of source and the nature of the source so that the genuineness or otherwise can be inferred. In 'Kale Khan Mohammad Hanif v. CIT', (1963) 50 ITR 1 (SC), it was pointed out that the onus on the assessee has to be understood with reference to the facts of each case and proper inference drawn from the facts. The law after 68 is not different. If the prima facie inference on the fact is that assessee's explanation is probable, as we also find in the present case, that the amount of borrowings in real terms had come from the aforesaid loan creditors and are genuine receipts as loans, the onus can be said to have shifted on Revenue. 55.3 Undisputedly, the loan creditors in this case are the bank account holder in their respective banks in their own name and are sole owner of the credits appearing in their bank account from where they issued cheques to the appellant. For the proposition that a Bank Account holder himself is the 'owner' of 'credits' appearing in his account (with the result that he himself is accountable to explain the source of such credits in whatever way and form, the same have emerged) support can be derived ITA No.278/Ag/2016 123 from section 4 of Bankers Book Evidence Act 1891which reads as under: -
"4. Mode of proof of entries in bankers' books Subject to the provisions of this Act, a certified copy of any entry in a bankers' book shall in all legal proceedings he received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every cases where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise."
56. Keeping with the principle referred to above and by specifically relying on the decision of Hon'ble Apex Court in the case of Orissa Corpn. (P) Ltd. (supra) the Hon'ble Gujarat High Court, in the case of Dy. CIT v. Rohini Builders [2002] 256 ITR 360 (Guj), has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of deposit in the bank accounts of the creditors', the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor). In arriving at this conclusion, the Hon'ble Court ITA No.278/Ag/2016 124 has further stressed the presence of word "may" in section 68. Relevant observations at pages 369 and370 of this report are reproduced hereunder: -
"before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation [1986] 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw and adverse inference against the assessee. in the case of six creditors who appeared before the Assessing Officer and whose statements were recorded by the Assessing Officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the Assessing Officer was not satisfied with the cash amount deposited by those creditors in their bank accounts, the proper course would have been to make assessments in the cases of those creditors by treating the cash deposits ITA No.278/Ag/2016 125 in their bank accounts as unexplained investments of those creditors under section 69.
Further, we may point out that section 68 under which the addition has been made by the Assessing Officer reads as under:
"68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year."
The phraseology of section 68 is clear. The Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income -tax as the income of the assessee of that previous year. In this case the legislative mandate is not in terms of the words "shall be charged to income-tax as the income of the assessee of that previous year". The Supreme Court while interpreting similar phraseology used in section 69 has held that in creating the legal fiction the phraseology employs the word "may" and not "shall". Thus the un - satisfactoriness of the explanation does not and n eed not automatically result in deeming the amount credited in the books as the income of the assessee as held by the Supreme Court in the case of CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570."
ITA No.278/Ag/2016 126
57. Against the said decision of Hon'ble Gujarat High Court the special leave petition filed by the revenue has also been dismissed by the Hon'ble Apex Court.
58. In the case of Nemi Chand Kothari (supra), the Hon'ble Gauhati High Court on the issue of onus on assessee under section 68, held that the same should be decided by taking into consideration the provision of section 106 of the Evidence Act which says that a person can be required to prove only such facts which are in his knowledge. The Hon'ble Court in the said case held that, once it is found that an assessee has actually taken money from depositor/lender who has been fully identified, the assessee/borrower cannot be called upon to explain, much less prove the affairs of such third party, which he is not even supposed to know or about which he cannot be he ld to be accredited with any knowledge. In this view, the Hon'ble Court has laid down that section 68 of Income-tax Act, should be read along with section 106 of Evidence Act. The relevant observations at page 260 to 262, 264 and 265 of the report are reproduced here in below: -
ITA No.278/Ag/2016 127
"While interpreting the meaning and scope of section 68, one has to bear in mind that normally, interpretation of a statute shall be general, in nature, subject only to such exceptions as may be logically permitted by the statute itself or by some other law connected therewith or relevant thereto. Keeping in view these fundamentals of interpretation of statutes, when we read carefully the provisions of section 68,we notice nothing in section 68 to show that the scope of the inquiry under section 68 by the Revenue Department shall remain confined to the transactions, which have taken place between the assessee and the creditor nor does the wording of section 68 indicate that section 68 does not authorize the Revenue Department to make inquiry into the source(s) of the credit and/or sub-creditor. The language employed by section 68 cannot be read to impose such limitations on the powers of the Assessing Officer. The logical conclusion, therefore, has to be, and we hold that an inquiry under section 68 need not necessarily be kept confined by the Assessing Officer within the transactions, which took place between the assessee and his creditor, but that the same may be extended to the transactions, which have taken place between the creditor and his sub-creditor. Thus, while the Assessing Officer is under section 68, free to look into the source(s) of the creditor and/or of the sub-creditor, the burden on the assessee under section 68 is definitely limited. This limit has been imposed by section 106 of the Evidence Act which reads as follows:ITA No.278/Ag/2016 128
"Burden of proving fact especially within knowledge : -- when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him."
** ** ** "What, thus, transpires from the above discussion is that white section 106 of the Evidence Act limits the onus of the assessee to the extent of his proving the source from which he has received the cash credit, section 68 gives ample freedom to the Assessing Officer to make inquiry not only into the source(s) of the creditor but also of his (creditor's) sub-creditors and prove, as a result, of such inquiry, that the money received by the assessee, in the form of loan from the creditor, though routed through the sub-creditors, actually belongs to, or was of, the assessee himself. In other words, while section 68 gives the liberty to the Assessing Officer to enquire into the source/source from where the creditor has received the money, section 106 makes the assessee liable to disclose only the source(s) from where he has himself received the credit and IT is not the burden of the assessee to prove the creditworthines s of the source(s) of the sub creditors.
If section 106 and section 68 are to stand together, which they must, then, the interpretation of section 68 are to stand together, which they must, then the interpretation of section 68 has to be in such a way that it does not make section 106 redundant. Hence, the harmonious construction of section 106 of the Evidence Act and section ITA No.278/Ag/2016 129 68 of the Income-tax Act will be that though apart from establishing the identity of the creditor, the assessee must establish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. What follows, as a corollary, is that it is not the burden of the assessee to prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been eventually, received by the assessee. It, therefore, further logically follows that the creditor's creditworthiness has to be Judged vis-a-vis the transactions, which have taken place between the assessee and the creditor, and it is not the business of the assessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and sub-creditor and/or creditworthiness of the sub-creditors, for, these aspects may not be within the special knowledge of the assessee."
** ** ** "...If a creditor has, by any undisclosed source, a particular amount of money in the bank, there is no limitation under the law on the part of the assessee to obtain such amount ITA No.278/Ag/2016 130 of money or part thereof from the creditor, by way of cheque in the form of loan and in such a case, if the creditor fails to satisfy as to how he had actually received the said amount and happened to keep the same in the bank, the said amount cannot be treated as income of the assessee from undisclosed source. In other words, the genuineness as well as the creditworthiness of a creditor have to be adjudged vis-a-vis the transactions, which he has with the assessee. The reason why we have formed the opinion that it is not the business of the assessee to find out the actual source or sources from where the creditor has accumulated the amount, which he advances, as loan, to the assessee is that so far as an assessee is concerned, he has to prove the genuineness of the transaction and the creditworthiness of the creditor vis -a- vis the transactions which had taken place between the assessee and the creditor and not between the creditor and the sub-creditors, for, it is not even required under the law for the assessee to try to find out as to what sources from where the creditor had received the amount, his special knowledge under section 106 of the Evidence Act may very well remain confined only to the transactions, which he had with the creditor and he may not know what transaction(s)had taken place between his creditor and the sub-creditor. ....."
** ** ** ITA No.278/Ag/2016 131 "In other words, though under section 68.an Assessing Officer is free to show, with the help of the inquiry conducted by him into the transactions, which have taken place between the creditor and the sub-creditor, that the transaction between the two were not genuine and that the sub-creditor had no creditworthiness, it will not necessarily mean that the loan advanced by the sub-creditor to the creditor was income of the assessee from undisclosed source unless there is evidence, direct or circumstantial, to show that the amount which has been advanced by the sub-creditor to the creditor, had actually been received by the sub-creditor from the assessee. ....."
** ** ** "Keeping in view the above position of law, when we turn to the factual matrix of the present case, we find that so far as the appellant is concerned,(it)has established the identity of the creditors, namely,NemichandNahata and Sons (HUF) and Pawan Kumar Agarwal. The appellant had also shown, in accordance with the burden, which rested on (it) under section 106 of the Evidence Act, that the said amounts had been received by him by way of cheques from the creditors. In fact, the assessee had received the said amounts by way of cheques was not in dispute. Once the assessee had established that ( it ) had received the said amounts from the creditors by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Thereafter ITA No.278/Ag/2016 132 the burden had shifted to the Assessing Officer to prove the contrary. On mere failure on the part of the creditors to show that their sub-creditors had creditworthiness to advance the said loan amounts to the assessee, such failure, as a corollary, could not have been and ought not to have been, under the law, treated as the income from the undisclosed sources of the assessee himself, when there was neither direct nor circumstantial evidence on record that the said loan amounts belonged to, or were owned by, the assessee. Viewed from this angle, we have no hesitation in holding that in the case at hand, the Assessing Officer had failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub-creditors, had been received by the sub- creditors from the assessee. In the absence of any such evidence on record, the Assessing Officer could not have treated the said amounts as income derived by the appellant from undisclosed sources. The learned Tribunal seriously fell into error in treating the said amounts as income derived by the appellant from undisclosed sources merely on the failure of the sub-creditors to prove their creditworthiness."
59. Further, the Hon'ble Jurisdictional High Court in the case of 'CIT v. S. Kamaljeet Singh', (2005) 147 Taxman 18 (All.), on the issue of discharge of assessee's onus in relation to a cash credit ITA No.278/Ag/2016 133 appearing in his books of account, their lordships have observed and held as under:-
"4. The Tribunal has recorded a finding that the assessee has discharged the onus which was on him to explain the nature and source of cash credit in question. The assessee discharged the onus by placing (i)confirmation letters of the cash creditors; (ii) their affidavits; (iii) their full addresses and GIR numbers and permanent account numbers. It has found that the assessee's burden stood discharged and so, no addition to his total income on account of cash credit was called for. In view of this finding, we find that the Tribunal was right in reversing the order of the AAC, setting aside the assessment order."
60. Furthermore, in the matter of discharge of 'onus', an assessee (in whose books of account credit appears) is not required to prove source of the 'source'. Reference can usefully be made to the following case laws: -
(i) The Hon'ble Allahabad High Court vide its judgment and order dated 15.4.2005 in the case of CIT v. Jauhari Mal Goel reported in 2006) 201 CTR (All.) has observed as follows:
"11. It has been held by the various High Courts that the assessee cannot be asked to prove source of source or th e origin of origin vide S. Hastimal v. CIT (1963) 49 ITR 273 (Mad.), TolaramDaga v. ITA No.278/Ag/2016 134 CIT [1966] 59 ITR 632 (Assam), CIT v. Daulat Ram Rawatmull (1973) 87 ITR 349 (SC),
17. We also do not find any error in the order of the Tribunal where the Tribunal held that in case the amount deposited in the bank account of Smt. Vimlesh Aggarwal and Smt. Shashi Aggarwal are to be treated as the amount belonging to the assessee and the deposits made by the assessee, then it would be a case of investment made by the assessee in the name of Smt. Vimlesh Aggarwal and Suit. Shashi Aggarwal and the provision of Section 69 of the Act would apply and not Section 68 of the Act and for that purpose the financial year would be relevant and then such investment may be deemed to be the income of the assessee of such financial years which falls to the asst. yr. 1986 -87 and not 1987-88. Section 68 applies when the amount is found deposited in the books of account of the assessee and not in third party, Deposit in the account of bank would amount to investment and Section 69 would apply and not Section 68. Reliance is placed on the decision of Gauhati High Court in the case of Anand Ram Raitani v.
CIT ."
(ii) In the case of 'Zafa Ahmed & Co. Vs CIT', (2013) 30 taxmann.com 267 where addition was confirmed by the ITAT in the case of firm which has explained that partners were in receipt of gifts. However, the ITAT confirmed the addition on the ITA No.278/Ag/2016 135 ground of lack of creditworthiness of the donors who had given gift to the partners of assessee firm, claiming the donors are weavers and they own only one loom. They have filed their Income Tax Returns on one single day for 1988-89 to 91-92. The Hon'ble jurisdiction High Court reversed the order passed by the ITAT following itsJudgment in the case of 'Anil Rice Mills vs CIT', (2006) 282 ITR 236, observing that this Court has held that the assessee cannot be asked to prove the source of source or the origin of origin and held that the Firm has explained the nature and source of the deposit and has discharged its burden.
(iii) In a later decision, the Hon'ble Rajasthan High Court vide its judgment in the case of Labhchand Vohra Vs ITO (2008) 219 CTR (Raj.) 571 has taken the following view in this respect: -
"Examining the present case even on these parameters, first requirement is not relevant. So far as second requirement is concerned, there is no doubt about initial burden being on the assessee. So far as third requirem ent is concerned, obviously if the explanation is not satisfactory, then it is added. Then fourth requirement is, that the firm has to establish that the amount was actually given by the lender Fifth requirement is about genuineness and regularity in maintenance of the accounts, obviously of ITA No.278/Ag/2016 136 the assessee, and it is not the finding, that the accounts were not regularly maintained. Then sixth requirement is that if the explanation is not supported by any documentary or other evidence, then the deeming fiction created by s.68 can be invoked, in the present case, so far as 6th requirement is concerned, it is very much there in existence, inasmuch as the amount has been advanced by account payee cheques, through bank, and is duly supported by documentary evidence, as well as the evidence of the two lenders, and that satisfies the 2nd requirement also, about the discharge of burden on the part of the assessee to prove id entity and genuineness of the transaction. So far as capacity of the lender is concerned, in our view, on the face of the judgment of Hon'ble Supreme Court, in Daulat Ram's case (supra), and other judgments, capacity of the lender to advance money to the assessee was not a matter which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. In that view of the matter, since this part of the judgement runs contrary to the judgment of the Hon'ble Supreme Court, in Daulat Ram's case (supra), while this Court in a subsequent judgment in Mangilal's case (supra) relying upon Daulat Ram's case (supra), has taken a contrary view, we stand better advised to follow the view, which has been taken in Mangilal's case (supra)'"ITA No.278/Ag/2016 137
(iv) The Hon'ble jurisdictional Allahabad High Court in the case of Banarsi Prasad Vs. CIT reported as 304 ITR 239 (All.), has held that u/s 68, the assessee has to prove three conditions i.e. the identity of creditor, the capacity of the creditors and genuineness of the transactions. It was also held that the assessee is required to explain the sum found credited in its books of account and also further requires the assessee to disclose the source from which the money has been received by the assessee and it does not require the assessee to disclose the source of the source. There are number of other decisions of Hon'ble Courts wherein it has been held that where source of the loan is proved, no adverse inference can be drawn and to find out the source of source, the action can be taken in the hands of loan creditor and not in the case of loan recipient.
(v) The Hon'ble Allahabad High court in the case of "Smt. Raj Bala Devi vs. CIT" (Income Tax Appeal No. 75 of 2017; Date of Order:
22.05.2017), has observed that:
" it has been held by a series of decision including that of the supreme Court in CIT vs, Daulat Ram Rawatmull reported in (1973) 87 TTJ 349(SC) that the source of the source need not be proved, and the authorities are not legally justified in drawing the ITA No.278/Ag/2016 138 adverse inference against the assessee for not disclosing the source of the source of the investment in his hands. A division Bench of Allahabad High Court has followed above principle vide its decision dated 05.09.2017 rendered in IT Appeal No. 68 of 2005 (Rajendra Prasad Shukla Propreitor M/s Shukla Aapurti Kendra vs. Commissioner of Income Tax, Allahabad)."
(vi) The Hon'ble Apex court has repeatedly held that suspicion has no role to play in the matters of assessment. Suspicion, howsoever, strong cannot take place of legal proof and the finding arrived on basis of irrelevant material and evidence is wrong. The following decisions of Hon'ble Apex Court could be referred to in this regard Dhakeshwari Cotton Mills Ltd. vs. CIT 26 ITR 776 (SC); DhirajLalGirdhariLal vs. CIT 26 ITR 736 (SC); Lal Chand BhagatAmbica Ram vs. CIT 37 ITR 288 (SC); Omar Solay Mohammad Sait vs. CIT 37 ITR 151 (SC); and Uma Charan Shaw & Brothers vs. CIT37 ITR 271 (SC).
61. It also needs emphasis that the difficulty in proving an explanation is a fact which cannot be ignored. It however, now is an admitted position that where a credit or borrowi ng is shown to have come from a person other than the assessee, like in the present case before me, there is no further responsibility on the ITA No.278/Ag/2016 139 assessee to show that it has come from the accounted sources of the lender. Reference may also be had to the judgm ent by Hon'ble M.P. High Court in the case of CIT v. Metachem Industries (2000)245 ITR 160(M.P). Furthermore, the Hon'ble Punjab & Haryana High Court also in CIT v. Ram Narain Goel (1997) 224 ITR 180 (P&H) has entertained the view that the assessee was not supposed to prove the source of the loans. This is so apparent from the following passage:
"..........The Tribunal correctly took the view that the assessee was not supposed to prove the source of the loans. Suspicion, howsoever strong, cannot take the pl ace of evidence or proof. On these facts, the question, as sought to be referred, is declined."
62. Again, the Hon'ble Rajasthan High Court in the case of 'Kanhaia Lal Jangid vs. ACIT', reported in (2008) 217 CTR (Raj.) 354 while interpreting section 68, more specifically the issue of burden of proof has held as under:
"While it was the assessee's burden to furnish explanation relating to such cash credits, the assessee's burden does not extend beyond proving the existence of the creditor and further proving that such creditor owns to have advanced the amount credited in the account of assessee to him. However, the burden does not go beyond to put the ITA No.278/Ag/2016 140 assessee under an obligation to further prove that wherefrom the creditor has got or procured the money to be deposited or advanced to the assessee The fact that the explanation furnished by the creditor about the source from where he procured the money to be deposited or advanced to the assessee, is not relevant for the purposes of rejecting the explanation furnished by the assessee, and make additions of such deposits as income of the assessee from undisclosed sources by invoking s. 68. Unless it can be shown by the Department that the source of such money comes from the assessee himself or such source could be traced to the assessee itself".
63. Hon'ble Delhi High Court in the case of 'CIT Vs Diamond Products Limited reported', in (2009) 177 Taxman 331 (Del) had the occasion to deal with a case wherein the issue involved was in relation to creditworthiness of the sub-creditor(creditor's creditor). The Hon'ble High Court held as under:
"The 'AO' is not permitted to examine the source of the source once the assessee has been able to establish that the transaction with his creditors' identities and creditworthiness has been established. In the instant case, it had been done. Therefore, it was not open to the 'AO' to make the addition of the amount in question after the examination of the source of the source. The Tribunal had correctly applied the law on the facts deter mined by it.ITA No.278/Ag/2016 141
Consequently, no substantial question of law arose and the appeal was to be dismissed."
64. In the case of 'Sargoi Credit Corporation vs. CIT', reported in (1976) 103 ITR 344 (Pat.) has held as under:
"The 'AO' rejection not of the explanation of the assessee, but of the explanation regarding the source of income of depositor cannot by itself lead to any inference regarding the non-genuine or fictitious character of entries in the assessee's books of account".
65. The cardinal principal of law is settled by the decision of Hon'ble Supreme Court decision in 'CIT vs. DaulatramRawatmal', (1973) 87 ITR 349 (SC) where it has been held that it is the onus of the person making allegation that apparent is not real and there is nothing on record to show that transaction of the assessee was sham, unreal, non-genuine or bogus.
66. Similar observation has been made by the Hon'ble Supreme Court in the case of Kishan Chand Chelaram vs. CIT (1980) 125 ITR 713 (S.C.). Wherein the Hon'ble Supreme Court has held that the burden is on the department to show that the money belonged to the assessee by bringing proper evidence on ITA No.278/Ag/2016 142 records and the assessee could not be expected to put in the evidence to help the department to discharge the burden that lay upon it. Therefore, in absence of any contrary evidence on record the credits deserve to be accepted.
67. It would be apt to refer here the Judgment of Hon'ble Apex Court in the case of ParimisettiSeetharamamma Vs. CIT, (1965) 57 ITR 0532 (S.C) wherein it was held by the Hon 'ble Apex Court that "By ss. 3 and 4 the Act imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the Department to prove that it is within the taxing provision."
68. Hon'ble Delhi High Court in the case of 'Sona Electric Co. vs. CIT', (1984) 152 ITR 507 (Del.) has held:
"that section 68 makes it clear that the entry can be rejected, and the explanation offered by the assessee can be rejected by the ITO on cogent grounds. When such grounds are themselves based on no evidence the question of presumption does not arise. Seen in this legal/factual perspective the 'AO's remarks can best be termed as pure presumptions and surmises"ITA No.278/Ag/2016 143
69. Hon'ble Gujarat High Court in the case of CIT Vs. RanchhodJivabhaiNakhava in Appeal No. 50 of 2011 vide Judgment dated 20.03.2012 held as under: -
" After hearing Mrs. Bhatt, the learned advocate appearing on behalf of the appellant and after going through the materials on record, we are unable to accept her contention that in this case the Revenue has discharged its onus and it was for the assessee to further prove the genuineness and creditworthiness of the creditors.
In our view, once the assessee has established that he has taken money by way of accounts payee cheques from the lenders who are all income tax assessees whose PAN have been disclosed, the initial burden under Section 68 of the Act was discharged. It further appears that the assessee had also produced confirmation letters given by those lenders.
Once the Assessing Officer gets hold of the PAN of the lenders, it was his duty to ascertain from the Assessing Officer of those lenders, whether in their respective return they had shown existence of such amount of money and had further shown that those amounst of money had been lent to the assessee. If before verifying of such fact from the Assessing Officer of the lenders of the assessee, the Assessing Officer decides to examine the lenders and asks the assessee to further prove the genuineness and creditworthiness of the transaction, in our opinion, the ITA No.278/Ag/2016 144 Assessing Officer did not follow the principle laid down under Section 68 of the Income Tax Act.
If on verification, it was found that those lenders did not disclose in their income tax return the transaction or that they had not disclosed the aforesaid amount, the Assessing Officer could call for further explanation from the assessee to prove the genuineness of the transaction or creditworthiness of the same. However, without verifying such fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by the Commissioner of Income Tax (Appeals) and in such circumstances, we find that both the Commissioner of Income Tax (Appeals) and the Tribunal were justified in setting aside the deletion as the Assessing Officer, without taking step for verification of the Income Tax Return of the creditors, took unnecessary step of further examining those creditors. If the Assessing Officers of those creditors are satisfied with the explanation given by the creditors as regards those transactions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessments of the creditors of the assessee when a co- ordinate Assessing Officer is satisfied with the transaction. "ITA No.278/Ag/2016 145
70. Hon'ble Calcutta High Court in the case of 'CIT, Kolkatta-III Vs. M/s. Dataware (P) Limited', in ITAT No. 263 of 2011 GA No. 2856 of 2011 wherein vide Judgment dated 21st September 2011 the Hon'ble Court held as under:
"In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence.
So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established.
We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the well -accepted ITA No.278/Ag/2016 146 principles which are required to be followed in considering the effect of Section 68 of the Act and we thus find no reason to interfere with the concurrent findings of fact recorded by both the authorities. The appeal is thus devoid of any substance and is summarily dismissed"
71. Hon'ble Delhi High Court in the case of 'CIT Vs. Shiv Dhooti Pearls & Investment Ltd', in (2015) 64 Taxmann.com 329 (Delhi) had the occasion to deal with section 68 of the Act wherein the objection of the AO was that the credit was received from a Company whose Return was filed showing Income of Rs. 2,904/- and in preceding year the creditor company filed Return showing Loss. The creditor Company informed that it has received loan from another Company, upon enquiry made by the AO on the address furnished by the assessee t he Notice got returned un-served with the remark 'Not Available', on these facts addition was made by the Assessing Officer, which action did not find approval by the appellate authorities including the High Court. The Hon'ble Delhi High Court after due consideration of decision of the Gauhati High Court in Nemi Chand Kothari (supra), Mod Creations (P) Ltd. v. ITO (2013) 354 ITR 282 (Delhi) wherein it was held that initial burden, which is placed on the Assessee, shifts as soon as the Assessee ITA No.278/Ag/2016 147 establishes the authenticity of transactions as executed between the Assessee and its creditors. It is no part of the Assessee's burden to prove either the genuineness of the transactions executed between the creditors and the sub-creditors nor is it the burden of the Assessee to prove the creditworthiness of the sub-creditors, Judgment in the case of Mod. Creations (P) Ltd. wherein the Hon'ble Delhi High Court negatived the case of the Revenue that the onus was on the Assessee to prove the source of the sub-creditor and dismissed the argument of the revenue that a bald assertion by the A.O. that the credits were a circular route adopted by the Assessee to plough back its own undisclosed income into its accounts, can be of no avail. The revenue was required to prove this allegation. An allegation by itself which is based on assumption will not pass muster in law. The revenue would be required to bridge the gap between the suspicions and proof in order to bring home this allegation held that the assessee has indeed discharged its onus of proving the creditworthiness and genuineness of the lender (TIL). There was no requirement in law for the Assessee to prove the genuineness and creditworthiness of the sub-creditor, which is in this case was TCL.
ITA No.278/Ag/2016 148
72. Hon'ble Allahabad High Court in the case of 'CIT Vs. Rahul Vineet Traders', in Appeal No. 490 of 2009 vide Judgement dated 19.11.2012 reported in (2014) 41 taxman. Com 86 approving the decision of ITAT, Agra Bench, Agra held in favour of the assessee as under: -
"Section 68 of the Income-tax Act, 1961 - Cash credits [Loan]- Assessment year 2000-2001- Assessee-firm had taken loan from 14 firms out of which loan from four firms were not found by Assessing Officer as genuine because those firms were, allegedly, related to one 'G' involved in providing accommodation entries-Assessing Officer thus invoked section 68 and made addition to assessee's income on account of unexplained cash credits- Commissioner noticed that lenders were regular income - tax assessee and their PANs were on record - It was also undisputed that amount had been advanced through account payee cheques and further before issuing cheques lenders had got sufficient balance in their account - Moreover, amount had also been repaid through account payee cheques-In view of above, Commissioner (Appeals), taking a view that loan transactions were genuine, deleted addition made by Assessing Officer-Tribunal upheld order of Commissioner (Appeals) - Whether on facts, impugned addition made in hands of assessee was rightly delet ed - Held, yes [Para 5]".ITA No.278/Ag/2016 149
73. Hon'ble Delhi High Court in the case of 'CIT Vs. Real Time Marketing (P) Ltd', reported in (2008) 306 ITR 35 had the occasion to deal with a case where assessee had taken an unsecured loan of Rs. 25 lakhs from M/s. Aishwaray Capital Lease Finance Pvt. Ltd. (hereinafter referred to as 'ACL'). The Assessing Officer asked the assessee to file a copy of income - tax return along with the audited profit and loss account and the balance sheet with annexures and copy of bank statement f or the period ending 31-3-2001 of M/s. ACL. The assessee furnished the same accordingly. On perusal of the bank statement of M/s. ACL, the Assessing Officer noticed that the funds were transferred through internal transfer on 28 -3-2001 to M/s. ACL and then in the same manner in the bank account of the assessee-company. The Assessing Officer called for information from the bank under section 133(6) of the Act to locate the true nature of these internal transfer transactions and the exact source of funds. It was revealed on the information furnished by the bank (a) that on 28-3-2001 cash of Rs. 22,97,000 was deposited in account No. 4142 pertaining to M/s. Fair Business Security and Leasing Pvt. Ltd. (hereinafter referred to as 'FBSL') (b) from this account No. 4142 a sum of ITA No.278/Ag/2016 150 Rs. 25 lakhs were transferred to account No. 4016, which stood in the name of M/s. Breeze Trade Links (P.) Ltd. (hereinafter referred to as 'BTL') on the same day (c)on the same day, Rs. 25 lakhs were transferred from account No. 4016 to M/ s. ACL, having account No. 4144 and (d) on same day, i.e., 28-3- 2001, Rs. 25 lakhs were transferred from account No. 4144 from M/s. ACL to the assessee. The Assessing Officer also noticed that all the three companies referred to above had the same address, i.e. B-258, Naraina Industrial Area, Phase-I, New Delhi. Further, no interest was charged by any of these transferees. The Assessing Officer was thus of the view that the entire transaction was a sham transaction and asked the assessee to show cause as to why cash deposit of Rs. 22,97,000 made into the account of M/s. FBSL be not added as the taxable income of the assessee for the year under consideration. The assessee submitted his reply and filed confirmation from M/s. ACL. The assessee also submitted that the cash deposited by M/s. FBSL was not its money and that it was from the books of the said company.
73.1. The Assessing Officer however, held that it was the assessee's money of Rs. 22,97,000 which was deposited in cash ITA No.278/Ag/2016 151 into the account of M/s. FBSL and the same was routed through different accounts and received as unsecured loan by the assessee-company and thus made an addition of Rs. 25 lakhs as unexplained cash credit under section 68 of the Act. 73.2. On appeal filed by the assessee, the Commissioner of Income-tax (Appeals) held that the assessee had discharged its burden of proving the identity, capacity and genuineness of the transaction and in the circumstances the addition made by the Assessing Officer was not justified. It was also observed by the CIT(A) that the Assessing Officer had not chosen to issue summons to M/s. FBSL, M/s. ACL or M/s. BTL before concluding that all the transactions were from and out of the money provided by the assessee.
73.4. Before the Tribunal it was contended by the revenue that the assessee has used circular route to receive the loan in its account and the same is merely a device being used to evade tax and as such, loan is taxable under section 68 of the Act. The Hon'ble High Court rejecting the appeal of the revenue held that assessee had filed confirmation of M/s. ACL, the said company was assessed to tax, the source of ACL had been explained as ITA No.278/Ag/2016 152 out of transfer of funds from the accounts of M/s. BTL; that thus, the assessee discharged its burden of proving identit y, capacity and genuineness of the transaction; that the Assessing Officer has not brought any material to show that the funds to ACL were provided by the assessee; that under the circumstances, it could not be said that the cash credit in question had remained unexplained and that there was absolutely no material to link the assessee with the sum of Rs. 22,97,000 deposited in cash in the bank account of M/s. FBSL' and no case could be made out for making addition under section 68 of the Act.
74. Considering the overall conspectus of the case in the light of legal position as discussed as above, we find that the assessee has proved the identity and creditworthiness of all the credits which effected the genuineness of the transaction and had come as loans genuinely advanced by these creditors and has thus proved the genuineness of the transaction as well. The assessee was under no obligation to prove further the source of availability of cash with such creditors. Thus, assessee has fully discharged the onus that lay upon it u/s 68 of the Act by proving nature and source of these cash credits appearing in its books of account. In the absence of any contrary material having been ITA No.278/Ag/2016 153 brought on record by the Revenue and the Assessing Authority having failed to discharge the onus that had shifted to her, we find no justification in grievance raised by the revenue by way of present appeal.
75. In the above view and considering the consistent view taken by various High Courts and this Tribunal on this matter, we, confirm the well reasoned order of the Ld. CIT(A) in deleting the addition aggregating to Rs. 2,29,00,000/-. Accordingly, the grounds raised in appeal by the revenue are dismissed.
76. In the result, the appeal of the revenue stands dismissed. (Order pronounced in the open court on 08/06/2018) Sd/- Sd/-
(A.D. JAIN) (Dr.Mitha Lal Meena)
Judicial Member Accountant Member
Dated 08/06/2018
Aks/-DOC
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITA No.278/Ag/2016 154
Date
1. Draft dictated (DNS) 28.05.2018 PS
2. Draft placed before author PS
3. Draft proposed & placed before the second member JM/AM
4. Draft discussed/approved by Second Member. JM/AM
5. Approved Draft comes to the Sr.PS/PS PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk PS
8. Date on which file goes to the AR
9. Date on which file goes to the Head Clerk.
10. Date of dispatch of Order.