Income Tax Appellate Tribunal - Ahmedabad
Aanya Developers, Ahmedabad vs The Dcit, Central Circle-2(2), ... on 26 June, 2019
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'D'
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.2069/Ahd/2018
नधा रण वष /Asstt. Year: 2013-14
Aanya Developers Vs. DCIT, Cent.Cir.2(2)
Survey No.326/1, Block Ahmedabad.
No.450
Opp: Aarohi Homes, Bopal
Ahmedabad 380 015.
PAN : AAOFA 8827 H.
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : Shri G.C. Pipara, AR
Revenue by : Shri Vinod Tanwani, Sr.DR
सन
ु वाई क तार ख/Date of Hearing : 18/06/2019
घोषणा क तार ख /Date of Pronouncement: 26/06/2019
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-12, Ahmedabad dated 10.7.2018 passed for the Asstt.Year 2013-14.
2. Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming addition of Rs.1,79,29,883/- under section 68 of the Income Tax Act, 1961 and interest of Rs.3,01,277/- alleged to have been paid on such non-genuine unsecured loans.
ITA No.2069/Ahd/2018 23. Brief facts of the case are that the assessee is engaged in the business of property development and civil contractor. It has filed its return of income on 20.9.2013 declaring loss of Rs.6,61,964/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued on 8.9.2014 which was duly served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee had received unsecured loan of Rs.2,24,89,445/-. In order to verify the genuineness of the above loans, he raised a query bearing no.5 in the notice under section 142(1) issued on 11.6.2015. The AO has directed the assessee to furnish names and addresses of the persons from whom fresh unsecured loans/deposits were received by the assessee during the accounting year relevant to this assessment. The ld.AO has also directed to submit copies PANs, photo-copy of acknowledgement of ITRs, confirmation, balance sheets and evidence supporting credit-worthiness of deposits/lenders in respect of unsecured loans. According to the AO, the assessee has submitted partial details and sought adjournment. He further observed that 50 creditors had filed their return within the range of Rs.1,90,000/- to Rs.2,25,000/-; whereas all of them given loans to the assessee in the range of Rs.2,00,000/- to Rs.5,00,000/-. The assessee thereafter submitted further details and ultimately, the ld.AO issued notice under section 133(6) of the Act to 57 depositors requesting them to submit details of business they are carrying on; copy of returns; specimen copy of such queries has been reproduced by the AO. The ld.AO thereafter made an analysis of evidence submitted by the assessee as well as his observation. He compiled such details in tabular form and annexed those finding ITA No.2069/Ahd/2018 3 with the assessment order as annexure-A. We take note of this annexure A-1, which reads as under:
Annexure: A S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 1 Amrit Bhai Patel 195600 300000 3773 I am doing trading in The depositor had not given any surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act Muljibhai V Chaudhari without specifying the name and earlier which was nature of the business. Further, received back on no PAN, copy of ITR and bank 12/06/2012. The statement of Muljibhai V same was given by Chuadhary was given which me to the assessee as could justify that Muljibhai V loan. Chaudhari had taken loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
2 Arihant Exports 309000 550000 6818 In this case, notice issued u/s 133(6) of the Act returned unserved. The AR of the assessee vide order sheet entry dated 04-01-2016, was requested to provide the evidence sought for vide notice u/s. 133(6) of the Act but nothing was given in respect of loan transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
3 Ashaben 196440 250000 3144 I am doing trading of The depositor had not given any Praveen Bhai goods and have no evidence in support of nature of Kubadiya proofs for same. I business carried on by her. In the had given loan to computation of income, the Hiteshbhai H Shah depositor had simply disclosed earlier which was income u/s 44AD of the Act received back and the without specifying the name and same was given by nature of the business. Further, me to the assessee as no PAN, copy of ITR and bank loan. statement of Hiteshbhai H Shah was given which could justify that Hiteshbhai H Shah had taken loan from the depositor and ITA No.2069/Ahd/2018 4 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor repaid the same to her during the year which was further advanced by her to the assessee.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
4 Ashwinbhai 193750 500000 8137 I am doing general The depositor had not given any Nagjibhai trading in Surat which evidence in support of nature of Vekariya is done from business carried on by him. In Residence, Hence I the computation of income, the don't possess any depositor had simply disclosed evidence to submit. income u/s 44AD of the Act Amount in received without specifying the name and by me in pursuance nature of the business. Further, of sale done by me to no evidence was furnished with Dipak Gems. regard to purchase or stock of Diamond with the depositor which was stated to be sold to Dipak Gems. Mere stating that sale was done to Dipak Gems and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
5 Bharatbhai 196290 300000 2219 I am under business The depositor had not given any Shantilal Doshi of trading of evidence in support of nature of Diamonds and as this business carried on by him. In business is carried the computation of income, the from my residence. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act Mansukhbhai K. Patel without specifying the name and earlier which was nature of the business. Further, received back and the no PAN, copy of ITR and bank same was given by statement of Mansukhbhai K. me to the assessee as Patel was given which could loan. justify that Mansukhbhai K. Patel had taken loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting ITA No.2069/Ahd/2018 5 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor above mentioned transaction.
6 Birenbhai A 189970 600000 9173 I am doing business The depositor had not given any Sanghvi of retailer of Diamond evidence in support of nature of operating from my business carried on by him. In house, there is no the computation of income, the specific business depositor had simply disclosed address in support of income u/s 44 AD of the Act business carried. I without specifying the name and had given loan to nature of the business. Further, Chetan B. Shah no PAN, copy of ITR and bank earlier which was statement of Chetan Bhratbhai received back and the Shah was given which could same was given by justify that Chetan Bhratbhai me to the assessee as Shah had taken loan from the loan. depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
7 Chandrikaben K 193520 250000 7027 The depositor had not given any Doshi evidence in support of nature of business carried on by her. In the computation of income, the depositor had simply disclosed income u/s 44AD of the Act without specifying the name and nature of the business. Further, no PAN, copy of ITR and bank statement of Nileshbhai N. Patel was given which could justify that Nileshbhai N. Patel had taken loan from the depositor and repaid the same to her during the year which was further advance to the assessee.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
8 Chetanbhai J 191590 400000 5030 In this case, notice issued u/s Shah 133(6) of the Act returned unserved. The AR of the assessee vide order sheet entry dated 04-01-2016, was requested to provide the evidence sought for vide notice u/s. 133(6) of the Act but nothing was given in respect of loan transactions.
Therefore, creditworthiness of the depositor is treated as ITA No.2069/Ahd/2018 6 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor unexplained in absence of evidence supporting above mentioned transaction.
9 Chintan P Doshi 196910 200000 5671 I am doing trading in The depositor had not given any surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act Prakash A. Doshi without specifying the name and earlier which was nature of the business. Further, received back and the no PAN, copy of ITR and bank same was given by statement of Prakash A. Doshi me to the assessee as was given which could justify loan that Prakash A. Doshi had taken loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
10 Darshnaben P 196790 250000 3576 I am doing retail The depositor had not given any Shah trading from my evidence in support of nature of house, I have no any business carried on by her. In the evidence in support of computation of income, the business carried. I depositor had simply disclosed have given loan to income u/s 44AD of the Act the assessee from without specifying the name and sale proceeds from nature of the business. Further, M/s. Raj & Sons and no evidence was furnished with Sejal R. Mehta regard to purchase or stock with the depositor which was stated to be sold to M/s. Raj & Sons and Sejal R Mehta. It is very surprising that what was sold is not at all mentioned by the depositor. Mere stating that sale was done to M/s. Raj & Sons and Sejal R Mehta and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
11 Deveshbhai M 195840 500000 7151 I am doing general The depositor had not given any ITA No.2069/Ahd/2018 7 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor Shah trading in surat which evidence in support of nature of is done from business carried on by him. In residence, hence I the computation of income, the don't possess any depositor had simply disclosed evidence to submit. income u/s 44AD of the Act Amount in received without specifying the name and by me in pursuance nature of the business. Further, of sale done by me to no evidence was furnished with M/s. Raj & Sons regard to purchase or stock of diamond with the depositor which was stated to be sold to M/s. Raj & Sons. Mere stating that sale was done to M/s. Raj & Sons and sale proceed was given to the assessee as unsecured
loan is a self-serving statement.
It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
12 Gautam Jems 197950 250000 3699 I have done business The depositor had not given any of retailer of Diamond evidence in support of nature of operating at my business carried on by her. In the house, there is no computation of income, the specific business depositor had simply disclosed address in support of income u/s 44 AD of the Act business carried. I without specifying the name and had given loan to nature of the business. Further, M/s. Radhe no PAN, copy of ITR and bank Corporation earlier statement of M/s. Radhe which was received Corporation was given which back and the same could justify that M/s. Radhe was given by me to Corporation had taken loan from the assessee as loan. the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
13 Ghanshyambhai 211550 250000 3144 No reply as required vide notice G Rokhaliya u/s 133(6) was given. The earlier submission filed was again sent.
Since, no evidence in respect of source of deposit of Rs.250000/-
in the bank account was given by the depositor which was later on given by the depositor to the ITA No.2069/Ahd/2018 8 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor assessee, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
14 Ghanshyambhai 215000 500000 14178 We have received The depositor had not given any V Kabariya payment of evidence in support of nature of Rs.5,00,000/- on 06- business carried on by him. In 12-2012 of Polished the computation of income, the Diamond Sales from depositor had simply disclosed M/s. Mahashakti income u/s 44AD of the Act Gems without specifying the name and nature of the business. Further, no evidence was furnished with regard to purchase or stock of polished Diamond with the depositor which was stated to be sold to M/s. Mahashakti Gems.
Mere stating that sale was done to M/s. Mahashakti Gems and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
15 Girishbhai L 191880 200000 2712 I am doing trading in The depositor had not given any Vora Surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of income u/s 44AD of the Act Rs.200000 received without specifying the name and by me is in purchase nature of the business. Further, of loan taken by me no PAN, copy of ITR and bank from Mittal V. Vora statement of Mittal V. Vora was given which could justify the genuineness of the loan taken by the depositor from Mittal V. Vora and creditworthiness of Mittal V. Vora who had given to the depositor. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
16 Gitaben 196980 250000 1849 I am doing trading in The depositor had not given any
Jagabhai Patel Surat which is done evidence in support of nature of
ITA No.2069/Ahd/2018
9
S. Name of Party ITR Loan Interest Submission of the Findings
No given Depositor
from residence, hence business carried on by her. In the
I don't possess any computation of income, the
evidence to submit. I depositor had simply disclosed
am saying that the income u/s 44AD of the Act
amount received by without specifying the name and
me is in pursuance of nature of the business. Further,
sale done by me to no evidence was furnished with
Mansukhbhai K regard to purchase or stock with
Bhalala. the depositor which was stated
to be sold Mansukhbhai K
Bhalala. It is very surprising that what was sold is not at all mentioned by the depositor.
Mere stating that sale was done to Mansukhbhai K Bhalala and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
17 Gomtiben 196810 250000 7027 I am doing trading in The depositor had not given any Jivrajbhai Surat which is done evidence in support of nature of Chaudhary from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act Jivrajbhai S. without specifying the name and Chaudhary earlier nature of the business. Further, which was received no PAN, copy of ITR and bank back on 06-12-2012 statement of Jivrajbhai S. and the same was Chaudhary was given which given by me to the could justify that Jivrajbhai S. assessee as loan Chaudhary had taken loan from the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
18 Gomtiben 197170 150000 999 In this case, notice issued u/s Bhurabhai Patel 133(6) of the Act returned unserved. The AR of the assessee vide order sheet entry dated 04-01-2016, was requested to provide the evidence sought ITA No.2069/Ahd/2018 10 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor for vide notice u/s. 133(6) of the Act but nothing was given in respect of load transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
19 Harjibhai 195700 200000 2712 I am doing trading in The depositor had not given any Devarambhai Surat which is done evidence in support of nature of Patel from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act Pritiben J. Shah without specifying the name and earlier which was nature of the business. Further, received back on 02- no PAN, copy of ITR and bank 02-2013 and the statement of Pritiben J. Shah was same was given by given which could justify that me to the assessee as Pritiben J. Shah had taken loan loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
20 Hetalben 195600 525000 7767 I am doing trading in The depositor had not given any Mehulbhai Surat which is done evidence in support of nature of Dharu from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed have given loan to income u/s 44AD of the Act the assessee out of without specifying the name and sale proceeds from nature of the business. Further, Vitragbhai Dhirajlal no evidence was furnished with Dharu regard to purchase or stock with the depositor which was stated to be sold Viragbhai D Dharu. It is very surprising that what was sold is not at all mentioned by the depositor. Mere stating that sale was done to Vitragbhai D Dharuand sale proceed was given to the assessee as unsecured loan is a self-serving statement.
It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. It is very relevant to mention here that Hetalben Dharu deposited cash of Rs.
ITA No.2069/Ahd/2018 11S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 3,00,000/- each on 11-12-2012 & 07-01-2013and then, cheque was issued to Vitragbhai D. Dharu.
Thereafter, Vitragbhai D. Dharu issued cheque of Rs.5,25,000/- to Hetalben Dharu. This clearly proves that there was no sale transaction and cash was deposited and rotated to the books of the assessee. It is also relevant to mention that Hetalben Dharu stated that she had received sale proceeds from Vitragbhai Dharu, whereas Vitragbhai Dharu stated that he had received loan from her and given to the assessee. Therefore, there is a clear contradiction in the statement of both the depositor who had given loan to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
21 Jagdishbhai D 199220 250000 3575 I have done business The depositor had not given any Padhiyar of Diamond Retail evidence in support of nature of Trading. I have no business carried on by him. In any evidence in the computation of income, the support of business depositor had simply disclosed carried as it is not income u/s 44AD of the Act fixed. I Have given without specifying the name and loan to the assessee nature of the business. Further, out of sale proceeds no evidence was furnished with from M/s. Sundha regard to purchase or stock with Gems. the depositor which was stated to be sold to M/s. Sundha Gems.
It is very surprising that what was sold is not at all mentioned by the depositor. Mere stating that sale was done to M/s.
Sundha Gems and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
ITA No.2069/Ahd/2018 12 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 22 Jayshreeben K 206240 550000 8137 I am doing business The depositor had not given any Sanghvi of Retailer and evidence in support of nature of Operating at my business carried on by her. In house. There is no the computation of income, the specific business depositor had simply disclosed address in support of income u/s 44AD of the Act business carried. I without specifying the name and had given loan to nature of the business. Further, M/s. Radhe no PAN, copy of ITR and bank Corporation earlier statement of M/s Radhe which was received Corporation was given which back and the same could justify that M/s Radhe was given by me to Corporation had taken loan from the assessee as loan. the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore,
creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
23 Jitendrabhai 193450 300000 8507 I am doing trading in The depositor had not given any Himatlal Shah surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44AD of the Act Rutikaben A. Shah without specifying the name and earlier which was nature of the business. Further, received back on no PAN, copy of ITR and bank 06.12.2012 and the statement of Rutikaben A. Shah same was given by was given which would could me to the assessee as justify that Rutikaben A. Shah loan. had taken loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
24 Kiranben 195880 300000 8359 I am doing trading in The depositor had not given any Dilipbhai Shah surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44AD of the Act Ashokbhai B. Doshi without specifying the name and HUF earlier which was nature of the business. Further, received back on no PAN, copy of ITR and bank 08.12.2012 and the statement of Ashokbhai B. Doshi same was given by HUF was given which could me to the assesseee justify that Ashokbhai B. Doshi ITA No.2069/Ahd/2018 13 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor as loan. HUF had taken loan from the depositor and repaid the same to him during the year which was further advanced by her to the assesseee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
25 Laljibhai 193160 350000 9407 I am doing trading in The depositor had not given any Devrambhai surat which done evidence in support of nature of Patel from residence, hence business carried on by him. In don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of Rs. income u/s 44AD of the Act 350000 received by without specifying the name and me is in pursuance of nature of the business. Further, loan taken by me no PAN, copy of ITR and bank from Ritesh R. Saliya statement Ritesh R. Saliya & & Ramjibhai G. Patel. Ramjibhai G. Patel was given which could justify the genuineness of the loan taken by the depositor from Ritesh R. Saliya & Ramjibhai G. Patel and creditworthiness of Ritesh R. Saliya & Ramjibhai G. Patel who had given loan to the depositor.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
26 Mahendra 197410 300000 8063 I am doing trading in The depositor had not given any Dhirubhai surat which is done evidence in support of nature of Pipalya from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of Rs income u/s 44 AD of the Act 300000 received by without specifying the name and me on 12.12.2012 is nature of the business. Further, in pursuance of loan no PAN, copy of ITR and bank taken by me from statement of Nitaben K. Pipaliya Nitaben K. Pipaliya. was given which could justify the genuineness of the loan taken by the depositor from Nitaben K. Pipaliya and creditworthiness of Nitaben K. Pipaliya who had givan loan to the depositor.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
ITA No.2069/Ahd/2018 14 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 27 Mahendrabhai 196330 250000 6596 I am doing trading in The depositor had not given any Shantilal Doshi Surat which is done evidence in support of nature of HUF from residence, hence business carried on by him. In I don't possess any the computation of income, the
evidence to submit. I depositor had simply disclosed am saying that of Rs. income u/s 44AD of the Act 250000 received by without specifying the name and me on 14.12.2012 is nature of the business. Further, in pursuance of loan no PAN, copy of ITR and bank taken by me from statement of Mitul M Shah was Mitul M Shah. given which could justify the genuineness of the loan taken by the depositor from Mitul M shah and creditworthiness of Mitul M shah who had given loan to the depositor. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
28 Maheshbhai 195450 600000 17014 We Have received The depositor had not given any Devshibhai payment of Rs. evidence in support of nature of Koladiya 6,00,000/- on business carried on by him. In 06.12.2012 of the computation of income, the Polished Diamond depositor had simply disclosed Sales from M/s. income u/s 44AD of the Act Bhuvneshvari without specifying the name and Diamond. nature of the business. Further, no evidence was furnished with regard to purchase or stock of Polished Diamond with the depositor which was stated to be sold to M/s Bhuvneshvari Diamond. Mere stating that sale was done to M/s Bhuvneshvari Diamond and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
29 Maheshbhai 208550 700000 8803 In this case, notice issued u/s
Nanjibhai 133(6) of the Act returned
Savliya unserved. The AR of the
assessee vide order sheet entry
dated 04.01.2016, was requested to provide the evidence sought for vide notice u/s .133(6) of the ITA No.2069/Ahd/2018 15 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor Act but nothing was given in respect of loan transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
30 Mehulbhai 185540 525000 8544 I am doing purchase The depositor had not given any Sumatilal Shah and sale along with evidence in support of nature of LIC commission business carried on by him. In income in surat which the computation of income, the is done from depositor had simply disclosed residence, hence I income u/s 44 AD of the Act don't possess any without specifying the name and evidence to submit. I nature of the business. Further, am saying that I had no PAN, copy of ITR and bank given loan to Chetan statement of Chetan Bharatbhai B. Shah earlier which Shah was given which could was received back on justify that Chetan Bharatbhai 05.02.2013 and the Shah had taken loan from the same was given by depositor and repaid the same to me to the assessee as him during the year which was loan. further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
32 Mukeshbhai B 195740 500000 8137 I am doing trading in The depositor had not given any Malaviya HUF Surat, which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to the income u/s 44 AD of the Act Assesseee out of sale without specifying the name and proceeds from Vijay nature of the business. Further, K. Talaviya no evidence was furnished with regard to purchase or stock with the depositor which stated to be sold to Vijay K. Talaviya. It is very surprising that what was sold is not at all mentioned by the depositor. Mere stating that sale was done to Vijay K. Talaviya and sale process was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given. Therefore, creditworthiness of the depositor is treated as unexplained in ITA No.2069/Ahd/2018 16 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor absence of evidence supporting above mentioned transaction 33 Nayanaben 197930 225000 6103 I am under business The depositor had not given any Jagdishbhai of trading of Diamond evidence in support of nature of Bhansali as this business is business carried on by him. In carried from my the computation of income, the residence no evidence depositor had simply disclosed is submitted. I had income u/s 44AD of the Act given loan to without specifying the name and Vardhman Developers nature of the business. Further, earlier which was no PAN, copy of ITR and bank received back on statement of Vardhman 08.12.2012 and the Developers was given which same was given by could justify that Vardhman me to assesseee as Developers had taken loan from loan. Further, I had the depositor and repaid the taken loan from same to him during the year Bhavnaben J. Doshi which was further advanced by on 11.12.2012 which her to the assessee.
was also given by me Furthermore, no PAN, copy of
to assessee as a loan. ITP and bank statement of
Bhavnaben J. Doshi was given
which could justify the
genuineness of the loan taken by
the depositors from Bhavnaben J.
Doshi and creditworthiness of the Bhavnaben J. Doshi who had given loan to the depositors.
Therefore, Creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
34 Niteshbhai No ITR 300000 3773 In this case, notice issued u/s
Dineshchandra 133(6) of the Act returned
Shah unserved. The AR of the
assessee vide order sheet entry
dated 04.01.2016, was requested to provide the evidence sought for vide notice u/s. 133(6) of the Act but nothing was given in respect of loan transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
35 Pari Jems 196030 250000 3699 I have done business The depositor had not given any of Retail Diamond evidence in support of nature of Trading and I have business carried on by her. In the no any evidence of computation of income, the business carried. I depositor had simply disclosed had given loan to income u/s 44AD of the Act M/s. Radhe without specifying the name and ITA No.2069/Ahd/2018 17 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor Corporation earlier nature of the business. Further, which was received no PAN, copy of ITP and bank back and the same statement of M/s Radhe was given by me to Corporation was given which the assessee as loan. could justify that M/s Radhe Corporation had taken loan to the assessee. Therefore, creditworthiness of the depositors is treated as unexplained in absence evidence supporting above mentioned transaction.
38 Poojaben 173980 200000 1825 I am into business of The depositor had not given any Hasmukhlal Purchase / Sale of evidence in support of nature of Mehta Diamonds and it is business carried on by her. In the done in market no computation of income, the proofs is there. I had depositor had simply disclosed given loan to income u/s 44 AD of the Act Hasmukhbhai Mehta without specifying the name and earlier which was nature of the business. Further, received back and the no PAN, copy of ITR and bank same was given by statement of Hasmukhbhai Mehta me to the assesseee was given which could justify as loan. that Hasmukhbhai Mehta had taken loan from the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
39 Pravinchandra K 193350 525000 7638 I am doing business The depositor had not given any Shah of Retailer of evidence in support of nature of Diamond, operating business carried on by her. In the at my house there is computation of income, the no specific business depositor had simply disclosed address however in income u/s 44 AD of the Act support of business without specifying the name and carried. I had given nature of the business. Further, loan to M/s. Radhe no PAN, copy of ITR and bank Corporation earlier statement of M/s Radhe which was received Corporation was given which back and the same could justify that M/s Radhe was given by me to Corporation had taken loan from the assessee as loan. the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
ITA No.2069/Ahd/2018 18 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 40 Pravinbhai G 195740 375000 5733 I am doing trading in The depositor had not given any Shah HUF surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of income u/s 44 AD of the Act Rs.375000 received without specifying the name and on 28.01.2013 by me nature of the business. Further, is pursuance of loan no PAN, copy of ITR and bank taken by me from statement of Pravinbhai G. Shah Pravinbhai G. Shah. was given which could justify the genuineness of the loan taken by the depositor from Pravinbhai G.Shah who had given loan to the depositor. Therefore,
creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
43 Rameshbhai 195660 400000 5425 In this case, notice issued u/s
Mohanlal Shah 133(6) of the Act returned
HUF unserved. The AR of the
assessee vide order sheet entry
dated 04.01.2016, was requested to provide the evidence sought for vide notice u/s.133(6) of the Act but nothing was given in respect of loan transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
45 Ranjitbhai V 193700 400000 5918 I have done business The depositor had not given any Padhiyar of Retail of Diamond evidence in support of nature of Trading and I have business carried on by her. In the no any evidence of computation of income, the business carried. I depositor had simply disclosed had given loan to income u/s 44 AD of the Act M/s. Radhe without specifying the name and Corporation earlier nature of the business. Further, which was received no PAN, copy of ITR and bank back and the same statement of M/s Radhe was given by me to Corporation was given which the assessee as loan. could justify that M/s Radhe Corporation had taken loan from the depositor and repaid the same to him during the year which was further advanced by her to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
ITA No.2069/Ahd/2018 19 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 46 Sahilbhai 198520 250000 3144 I am doing trading in The depositor had not given any Hasmukhlal surat which is done evidence in support of nature of Mehta from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of income u/s 44 AD of the Act Rs.250000 received without specifying the name and on 08.02.2013 by me nature of the business. Further, is pursuance of loan no PAN, copy of ITR and bank taken by me from statement of Poojaben H. Mehta Poojaben H. Mehta was given which could justify the Genuineness of the loan taken by the depositor from Poojaben H. Mehta and creditworthiness of Poojaben H. Mehta who had given loan to the depositor.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
47 Sangitaben 197570 300000 2219 I am doing trading in The depositor had not given any Kalpeshbhai surat which is done evidence in support of nature of Doshi from Residence, business carried on by him. In hence I don't possess the computation of income, the any evidence to depositor had simply disclosed submit. I have given income u/s 44 AD of the Act loan to the assessee without specifying the name and out of sale proceeds nature of the business. Further, from Mansukhbhai K. no evidence was furnished with Bhalia. regard to purchase or stock with the depositor which was stated to be sold to Manuskhbhai K. Bhalala. It is very surprising that what was sold is not at all mentioned by the depositor.
Mere stating that sale was done to Mansukhbhai K. Bhalala and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
49 Sanjaybhai 1936000 350000 9752 I am doing trading in The depositor had not given any Nanalal Shah surat which is done evidence in support of nature of HUF from residence, hence business carried on by him. In I don't possess any the computation of income, the ITA No.2069/Ahd/2018 20 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor evidence to submit. I depositor had simply disclosed am saying that of Rs. income u/s 44AD of the Act 375000 received on without specifying the name and 28.01.2013 by me is nature of the business. Further, in pursuance of loan no PAN, copy of ITR and bank taken by me from statement of Ajay R Salvi & Ajay R Salvi & Hitesh Hitesh R. Shah was given which R. Shah could justify the genuineness of the loan taken by the depositor from Ajay R Salvi & Hitesh R. Shah and creditworthiness of Ajay R Salvi & Hitesh R. Shah who had given loan to the depositor. Therefore, creditworthiness of the depositor is treated as unexplained in absence supporting above mentioned transaction.
50 Sanjaybhai 195550 325000 8575 In this case, notice issued u/s
Vardhilal 133(6) of the Act returned
Sanghvi unserved. The AR of the
assessee vide order sheet entry
dated 04.01.2016, was requested to provide the evidence sought for vide notice u/s. 133(6) of the Act but nothing was given in respect of load transactions.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
51 Shaileshgiri 198370 250000 6658 I am doing general The depositor had not given any Gulabgiri trading in Surat which evidence in support of nature of Goswami is done from business carried on by him. In residence, Hence I the computation of income, the don't possess any depositor had simply disclosed evidence to submit. I income u/s 44AD of the Act had given loan to without specifying the name and Rameshbhai L Diyora nature of the business. Further, earlier which was no PAN, copy of ITR and bank received back on statement of Rameshbhai L 12.12.2012. The Diyora was given which could same was given by justify that Rameshbhai L Diyora me to the assesseee had taken loan from the as loan. depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
ITA No.2069/Ahd/2018 21 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 52 Shantilal Manilal 198080 675000 6158 I am doing trading in The depositor had not given any Mehta surat which is done evidence in support of nature of from Residence, business carried on by him. In
hence I don't possess the computation of income, the any evidence to depositor had simply disclosed submit. I have given income u/s 44 AD of the Act loan to the assesseee without specifying the name and out of sale proceeds nature of the business. Further, from Bharatbhai B. no evidence was furnished with Ghelani. regard to purchase or stock with the depositor which was stated to be sold to Bharatbhai B. Ghelani. It is very surprising that what was sold is not at all mentioned by the depositor.
Mere stating that sale was done to Bharatbhai B. Ghelani and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stack was given.
Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mention transaction.
53 Shilpaben 194630 500000 4562 I am doing trading in The depositor had not given any Champaklal surat which is done evidence in support of nature of Shah from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed have given loan to income u/s 44AD of the Act the assessee out of without specifying the name and sale proceeds from nature of the business. Further, Mansukhbhai K. no evidence was furnished with Bhalala regard to purchase or stock with the depositor which was stated to be sold to Mansukhbhai K. Bhalala. It is very surprising that what was sold is not at all mentioned by the depositor.
Mere stating that sale was done to Mansukhbhai K. Bhalala and sale proceed was given to the assessee as unsecured loan is a self-serving statement. It is not supported by any evidence, when the business is carried on from residence and no evidence of purchase or stock was given.
Therefore, creditworthiness of ITA No.2069/Ahd/2018 22 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
54 Sushilaben 194550 300000 3995 I am doing trading in The depositor had not given any Rameshbhai surat which is done evidence in support of nature of Shah from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed had given loan to income u/s 44AD of the Act Rameshbhai M Shah without specifying the name and HUF earlier which was nature of the business. Further, received back on no PAN, copy of ITR and bank 05.02.2013. The statement of Rameshbhai M Shah same was given by HUF was given which could me to the assessee as justify that Rameshbhai M Shah loan. HUF had taken loan from the depositor and repaid the same to him during the year which was further advanced by him to the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
57 Vitragbhai 197690 300000 8063 I am doing trading in The depositor had not given any Dhirajlal Dharu surat which is done evidence in support of nature of from residence, hence business carried on by him. In I don't possess any the computation of income, the evidence to submit. I depositor had simply disclosed am saying that of income u/s 44AD of the Act Rs.300000 received without specifying the name and by me is in pursuance nature of the business. Further, it of loan taken by me is very surprising that Hetalben from Hetalben Dharu Dharu Stated that she had on 12.12.2012. received sale proceeds from Vitragbhai Dharu,whereas Vitrangbhai Dharu stated that he had received loan from her and given to the assessee. Therefore, there is clear contradiction in the statement of both the depositor who had given loan to the assessee. It is a willfull attempt both by Hetalben Dharu and Viragbhai D.Dharu to route unexplained money to the books of accounts of the assessee. No evidence of sale of item was given by Hetalben Dharu and no explanation was given by Hetalben Dharu with regard to cash deposits of RS.3,00,000/-
each on 11.12.2012 & ITA No.2069/Ahd/2018 23 S. Name of Party ITR Loan Interest Submission of the Findings No given Depositor 07.01.2013 in her bank account
and thereafter issuing cheque to Vitragbhai D. Dharu. Similarly, Vitragbhai D. Dharu issued cheque of RS.5,25,000/- to Hetalben Dharu for the purchase of items but what was done with the item purchased and where such items were accounted for in books had not been explained by Vitragbhai D. Dharu. This clearly proves that there was no sale/purchase transaction between them and cash was deposited and rotated to the books of the assessee. Therefore, creditworthiness of the depositor is treated as unexplained in absence of evidence supporting above mentioned transaction.
4. The ld.AO on the above analysis, made addition of Rs.1,79,29,883/- under section 68 of the Act. He further observed that the assessee has alleged payment of interest on these loans which were termed as bogus, therefore, the expenses claimed in the shape of interest deserves to be disallowed. He disallowed such interest expenditure and made addition of Rs.3,01,277/-.
5. Dissatisfied with the additions, the assessee carried the matter in appeal before the ld.CIT(A). Assessee has compiled details in tabular form exhibiting the names of lenders/depositors; the amount received, evidence submitted by it and observation of the AO. It has also filed its explanation qua such observation of the AO. These details are available on page no.1 to 9 of the paper book. These details are also been compiled in tabular form and submitted before us which read as under:
Sr. Evidences submitted
Interest
No. as Loan
Credited
per Name of Received Observation of the Assessing
during Explanation of the appellant firm
Chart depositor during the Officer
the year Page No. of
of the year (Rs.)
(Rs.) Details the
Order Paperbook
(a) Confirmation of Account 26 In the passbook of the depositor at page
There is no evidence that amount
(b) ITR of AY 2013-14 27 no. 29 of paperbook, it is reflected that
1 Amratbhai Patel 300000 3773 was received from Muljibhai V.
(c) Passbook of Bank of India 28-29 amount was received from Muljibhai
Chaudhari.
(d) Repayment of Loan A/c. 30 V. Chaudhari.
(a) Confirmation of Account 232 Notice u/s 133(6) was unserved
Requisite details are submitted at page 2 Arihant Exports 550000 6818 (b) ITR of AY 2013-14 233 and no response is received from no. 232 to 234 of paperbook.
(c) Repayment of Loan A/c. 234 depositor
(a) Confirmation of Account 31 In the passbook of the depositor at page Ashaben There is no evidence that amount
(b) ITR of AY 2013-14 32 no. 34 of paperbook, it is reflected that 3 Pravinbhai 250000 3144 was received from Hiteshbhai H.
(c) Passbook of Bank of India 33-34 amount was received from Hiteshbhai Kubadiya Shah.
(d) Repayment of Loan A/c. 35 H. Shah.
(a) Confirmation of Account 173 In the bank passbook of the depositor Ashvinbhai (b) ITR of AY 2013-14 174 Creditworthiness of the depositor submitted at page no. 176 of 4 Nagjibhai 500000 8137 (c) Passbook of Akhand Anand Co- 175-176 is treated as unexplained in paperbook, it is reflected amount of Vekariya op Bank absence of evidence loan is earlier received in bank account.
(d) Repayment of Loan A/c. 177 ITA No.2069/Ahd/2018 25 (a) Confirmation of Account 36 In the bank passbook of the depositor
Creditworthiness of the depositor Bharatbhai (b) ITR of AY 2013-14 37 submitted at page no. 39 of paperbook, 5 300000 2219 is treated as unexplained in Shantilal Doshi (c) Passbook of Bank of India 38-39 it is reflected amount of loan is earlier absence of evidence.
(d) Repayment of Loan A/c. 40 received in bank account.
(a) Confirmation of Account 41 In the passbook of the depositor at page There is no evidence that amount Birenbhai A (b) ITR of AY 2013-14 42 no. 44 of paperbook, it is reflected that 6 600000 9173 was received from Chetanbhai Sanghavi (c) Passbook of UBI 43-44 amount was received from Chetanbhai Bharatbhai Shah.
(d) Repayment of Loan A/c. 45 Bharatbhai Shah.
The ledger account of depositor in the
(a) Confirmation of Account(b) books of accounts of Nileshbhai ITR of AY 2013-14(c) Passbook of There is no evidence that amount Chandrikaben 464748- Narsangbhai Patel is placed at page no. 7 250000 7027 Bank of India(d) Ledger Account in was received from Nileshbhai K Doshi 495051 50 of paperbook, where it is reflected books of Nileshbhai Patel(e) Narsangbhai Patel.
that amount has been paid to Repayment of Loan A/c.
Chandrikaben Doshi.
(a) Confirmation of Account 235Notice u/s 133(6) was unserved Chetanbhai J (b) ITR & COI of AY 2013-14 236-238 Requisite details are submitted at page 8 400000 5030 and no response is received from Shah (c) Bank Passbook 239 no. 235 to 240 of paperbook.
depositor (d) Repayment of Loan A/c. 240
(a) Confirmation of Account 52 The passbook and ledger account of the
(b) ITR of AY 2013-14 53 depositor in the books of accounts of There is no evidence that amount
(c) Passbook of Dena Bank 54-55 Prakashbhai Doshi is placed at page no. 9 Chintan Doshi 200000 5671 was received from Prakashbhai
(d) Ledger Account in books of 56 54 to 56 of paperbook, where it is Doshi.
Prakashbhai Doshi reflected that amount has been paid to
(e) Repayment of Loan A/c. 57 Chintan Doshi.
ITA No.2069/Ahd/2018 26(a) Confirmation of Account 178 In the bank passbook of the depositor Creditworthiness of the depositor Darshanaben P (b) ITR of AY 2013-14 179 submitted at page no. 181 of 10 250000 3575 is treated as unexplained in Shah (c) Passbook of UBI 180-181 paperbook, it is reflected amount of absence of evidence
(e) Repayment of Loan A/c. 182 loan is earlier received in bank account.
(a) Confirmation of Account 183 In the bank statement of the depositor Creditworthiness of the depositor Deveshbhai M (b) ITR of AY 2013-14 184 submitted at page no. 185 of 11 500000 7151 is treated as unexplained in Shah (c) Bank Statement of UBI 185 paperbook, it is reflected amount of absence of evidence
(e) Repayment of Loan A/c. 186 loan is earlier received in bank account.
(a) Confirmation of Account 58 In the bank statement of the depositor There is no evidence that amount
(b) ITR of AY 2013-14 59 at page no. 60 of paperbook, it is 12 Gautam Gems 250000 3699 was received from M/s. Radhe
(c) Bank Statement of UBI 60 reflected that amount was received Corporation.
(d) Repayment of Loan A/c. 61 from M/s. Radhe Corporation.
(a) Confirmation of Account(b) Notice u/s 133(6) was unserved Ghanshyambhai Requisite details are submitted at page 13 G Rakholiya 250000 3144 ITR of AY 2013-14(c) Repayment 241242243 and no response is received from no. 241 to 243 of paperbook.
of Loan A/c. depositor
(a) Confirmation of Account 187 In the bank passbook of the depositor at
There is no evidence that amount
Ghanshyambhai (b) ITR of AY 2013-14 188 page no. 190 of paperbook, it is
14 500000 14178 was received from M/s.
V Kabariya (c) Passbook of Vijaya Bank 189-190 reflected that amount was received
Mahashakti Gems.
(e) Repayment of Loan A/c. 191 from M/s. Mahashakti Gems.
(a) Confirmation of Account 62 In the bank passbook of the depositor
Creditworthiness of the depositor Girishbhai L. (b) ITR of AY 2013-14 63 submitted at page no. 65 of paperbook, 15 200000 2712 is treated as unexplained in Vora (c) Passbook of Bank of India 64-65 it is reflected amount of loan is earlier absence of evidence.
(d) Repayment of Loan A/c. 66 received in bank account.
(a) Confirmation of Account 192 In the bank passbook of the depositor Creditworthiness of the depositor Gitaben (b) ITR of AY 2013-14 193 submitted at page no. 195 of 16 250000 1849 is treated as unexplained in Jagabhai Patel (c) Passbook of Bank of India 194-195 paperbook, it is reflected amount of absence of evidence.
(d) Repayment of Loan A/c. 196 loan is earlier received in bank account.
ITA No.2069/Ahd/2018 27(a) Confirmation of Account 67 The ledger account of the depositor in
(b) ITR of AY 2013-14 68 the books of accounts of Jivrajbhai There is no evidence that amount Gomtiben (c) Passbook of Bank of India 69-70 Chaudhary is placed at page no. 71 of 17 250000 7027 was received from Jivrajbhai S. Chaudhary (d) Ledger Account in books of 71 paperbook, where it is reflected that Chaudhary.
Jivrajibhai Chaudhary amount has been paid to Gomtiben
(e) Repayment of Loan A/c. 72 Chaudhary.
(a) Confirmation of Account 244
Notice u/s 133(6) was unserved
Gomtiben (b) ITR of AY 2013-14 245 Requisite details are submitted at page
18 150000 999 and no response is received from
Bhurabhai Patel (c) Passbook of Bank of India 246-247 no. 244 to 248 of paperbook.
depositor
(d) Repayment of Loan A/c. 248
(a) Confirmation of Account(b) In the bank passbook of the depositor
Harjibhai Creditworthiness of the depositor
ITR of AY 2013-14(c) Passbook of 737475- submitted at page no. 76 of paperbook,
19 Devrambhai 200000 2712 is treated as unexplained in
Bank of India(d) Repayment of 7778 it is reflected amount of loan is earlier
Patel absence of evidence.
Loan A/c. received in bank account.
(a) Confirmation of Account 197 The ledger account of the depositor in
(b) ITR of AY 2013-14 198 the books of accounts of Vitragbhai D.
Hetalben There is no evidence that amount
(c) Passbook of Bank of India 199-200 Dharu is placed at page no. 50 of
20 Mehulbhai 525000 7767 was received from Vitragbhai D.
(d) Ledger Account in books of 201 paperbook, where it is reflected that
Dharu Dharu.
Vitragbhai D. Dharu amount has been paid to Hetalben M.
(e) Repayment of Loan A/c. 202 Dharu.
(a) Confirmation of Account 203 In the bank statement of the depositor
Creditworthiness of the depositor Jagdishbhai D (b) ITR of AY 2013-14 204 submitted at page no. 285 of 21 250000 3575 is treated as unexplained in Padhiyar (c) Bank Statement of UBI 205 paperbook, it is reflected amount of absence of evidence.
(d) Repayment of Loan A/c. 206 loan is earlier received in bank account.
ITA No.2069/Ahd/2018 28(a) Confirmation of Account 79 In the bank passbook of the depositor at There is no evidence that amount Jayshreeben K (b) ITR of AY 2013-14 80 page no. 82 of paperbook, it is reflected 22 550000 8137 was received from M/s. Radhe Sanghavi (c) Passbook of UBI 81-82 that amount was received from M/s.
Corporation.
(d) Repayment of Loan A/c. 83 Radhe Corporation.
(a) Confirmation of Account 84 In the bank passbook of the depositor at There is no evidence that amount Jitendrabhai (b) ITR of AY 2013-14 85 page no. 87 of paperbook, it is reflected 23 300000 8507 was received from Rutikaben A. Himatlal Shah (c) Passbook of Dena Bank 86-87 that amount was received from Shah.
(d) Repayment of Loan A/c. 88 Rutikaben A. Shah.
(a) Confirmation of Account 89 In the bank passbook of the depositor Creditworthiness of the depositor Kiranbhai (b) ITR of AY 2013-14 90 submitted at page no. 92 of paperbook, 24 300000 8359 is treated as unexplained in Dilipbhai Shah (c) Passbook of Dena Bank 91-92 it is reflected amount of loan is earlier absence of evidence.
(d) Repayment of Loan A/c. 93 received in bank account.
(a) Confirmation of Account(b) In the bank passbook of the depositor Laljibhai Creditworthiness of the depositor ITR of AY 2013-14(c) Passbook of 949596- submitted at page no. 97 of paperbook, 25 Devrambhai 350000 9407 is treated as unexplained in Bank of India(d) Repayment of 9798 it is reflected amount of loan is earlier Patel absence of evidence.
Loan A/c. received in bank account.
(a) Confirmation of Account 99 In the bank passbook of the depositor Mahendra Creditworthiness of the depositor
(b) ITR of AY 2013-14 100 submitted at page no. 100 of 26 Dhirubhai 300000 8063 is treated as unexplained in
(c) Passbook of Bank of India 101-102 paperbook, it is reflected amount of Pipaliya absence of evidence.
(d) Repayment of Loan A/c. 103 loan is earlier received in bank account.
(a) Confirmation of Account 104 The ledger account of the depositor in
(b) ITR of AY 2013-14 105 Mahendra There is no evidence that amount the books of accounts of Mitul M. Shah
(c) Passbook of Bank of India 106-107 27 Shantilal Doshi 250000 6596 was received from Mitul M. is placed at page no. 108 of paperbook,
(d) Ledger Account in books of 108 HUF Shah. where it is reflected that amount has Mitul M. Shah been paid to Mahendra S. Doshi HUF.
(e) Repayment of Loan A/c. 109 ITA No.2069/Ahd/2018 29 (a) Confirmation of Account 207 In the bank passbook of the depositor Maheshbhai Creditworthiness of the depositor (b) ITR of AY 2013-14 208 submitted at page no. 210 of 28 Devshibhai 600000 17014 is treated as unexplained in (c) Passbook of BOB 209-210 paperbook, it is reflected amount of Koladiya absence of evidence. (d) Repayment of Loan A/c. 211 loan is earlier received in bank account. (a) Confirmation of Account 249 Maheshbhai (b) ITR of AY 2013-14 250-253 Notice u/s 133(6) was unserved
Requisite details are submitted at page 29 Nanjibhai 700000 8803 (c) Bank Statement of Akhand 254 and no response is received from no. 249 to 255 of paperbook.
Savaliya Anand Co-op. Bank depositor
(d) Repayment of Loan A/c. 255
(a) Confirmation of Account 110 In the passbook of the depositor at page
There is no evidence that amount
Mehulbhai (b) ITR of AY 2013-14 111 no. 113 of paperbook, it is reflected
30 525000 8544 was received from Chetanbhai B.
Sumatilal Shah (c) Passbook of Syndicate Bank 112-113 that amount was received from
Shah.
(d) Repayment of Loan A/c. 114 Chetanbhai B. Shah.
(a) Confirmation of Account(b) In the bank passbook of the depositor
Creditworthiness of the depositor Mukeshbhai B ITR of AY 2013-14(c) Passbook of 212213214- submitted at page no. 215 of 32 500000 8137 is treated as unexplained in Malaviya HUF Akhand Anand Co-op. Bank(d) 215216 paperbook, it is reflected amount of absence of evidence.
Repayment of Loan A/c. loan is earlier received in bank account.
In the passbook of the depositor at page
(a) Confirmation of Account 115 no. 118 of paperbook and the ledger
(b) ITR of AY 2013-14 116 accounts of the depositor in the books Nayanaben (c) Passbook of Bank of India There is no evidence that amount 117-118 of accounts of Vardhman Developers 33 Jahdishbhai 225000 6103 (d) Ledger Account in books of was received from Bhavnaben J.
119-120 and Bhavnaben Doshi placed at page Bhansali Vardhman Developers and Doshi & Vardhman Developers.
no. 119 and 120 of paperbook Bhavnaben J. Doshi 121 respectively, it is reflected that amount
(e) Repayment of Loan A/c.
has been paid to Nayanaben Bhansali.
Niteshbhai Notice u/s 133(6) was unserved
(a) Confirmation of Account 256 Requisite details are submitted at page 34 Dineshchandra 300000 3773 and no response is received from
(b) Repayment of Loan A/c. 257 no. 256 to 257 of paperbook.
Shah depositor ITA No.2069/Ahd/2018 30 (a) Confirmation of Account 122 In the bank statement of the depositor There is no evidence that amount (b) ITR of AY 2013-14 123 at page no. 124 of paperbook, it is 35 Pari Gems 250000 3699 was received from M/s. Radhe (c) Bank Statement of UBI 124 reflected that amount was received Corporation. (d) Repayment of Loan A/c. 125 from M/s. Radhe Corporation. (a) Confirmation of Account 126 In the bank passbook of the depositor at Poojaben There is no evidence that amount (b) ITR of AY 2013-14 127 page no. 129 of paperbook, it is 38 Hasmukhlal 200000 1825 was received from Hasmukhbhai (c) Passbook of Bank of India 128-129 reflected that amount was received Mehta Mehta. (d) Repayment of Loan A/c. 130 from Hasmukhbhai Mehta. (a) Confirmation of Account 136 In the bank statement of the depositor There is no evidence that amount Pravinchandra (b) ITR of AY 2013-14 137 at page no. 139 of paperbook, it is 39 525000 7638 was received from M/s. Radhe K Shah (c) Passbook of Bank of India 138-139 reflected that amount was received Corporation. (d) Repayment of Loan A/c. 140 from M/s. Radhe Corporation. (a) Confirmation of Account(b) In the bank passbook of the depositor
Creditworthiness of the depositor Pravinbhai G ITR of AY 2013-14(c) Passbook of 131132133- submitted at page no. 134 of 40 375000 5733 is treated as unexplained in Shah HUF Bank of India(d) Repayment of 134135 paperbook, it is reflected amount of absence of evidence.
Loan A/c. loan is earlier received in bank account.
(a) Confirmation of Account
258
(b) ITR of AY 2013-14
Rameshbhai 259 Notice u/s 133(6) was unserved
(c) Passbook of Bank of India Requisite details are submitted at page
43 Mohanlal Shah 400000 5425 260-261 and no response is received from
(d) Ledger Account in books of no. 258 to 263 of paperbook.
HUF 262 depositor
Sushilaben Shah
263
(e) Repayment of Loan A/c.
(a) Confirmation of Account 141 In the bank statement of the depositor
There is no evidence that amount
Ranjitbhai V (b) ITR of AY 2013-14 142 at page no. 139 of paperbook, it is
45 400000 5918 was received from M/s. Radhe
Padhiyar (c) Bank Statement of UBI 143 reflected that amount was received
Corporation.
(d) Repayment of Loan A/c. 144 from M/s. Radhe Corporation.
ITA No.2069/Ahd/2018
31
(a) Confirmation of Account 145 In the bank passbook of the depositor at
Sahilbhai There is no evidence that amount
(b) ITR of AY 2013-14 146 page no. 148 of paperbook, it is
46 Hasmukhlal 250000 3144 was received from Poojaben H.
(c) Passbook of Bank of India 147-148 reflected that amount was received
Mehta Mehta.
(d) Repayment of Loan A/c. 149 from Poojaben H. Mehta.
(a) Confirmation of Account 217 In the bank passbook of the depositor
Sangitaben Creditworthiness of the depositor
(b) ITR of AY 2013-14 218 submitted at page no. 220 of
47 Kalpeshbhai 300000 2219 is treated as unexplained in
(c) Passbook of Bank of India 219-220 paperbook, it is reflected amount of
Doshi absence of evidence.
(d) Repayment of Loan A/c. 221 loan is earlier received in bank account.
No such amount is received from Ajay R. Salvi or Hitesh R. Shah.This amount
(a) Confirmation of Account(b) is received from Vitragbhai Dharu, Sanjaybhai ITR of AY 2013-14(c) Passbook of There is no evidence that amount 150151152- which is refleceted in the bank 49 Nanalal Shah 350000 9752 Bank of India(d) Ledger Account in was received from Ajay R. Salvi 153154155 passbook of the depositor at page no. HUF books of Vitragbhai D. Dharu(e) & Hitesh R. Shah.
153 of paperbook and ledger account of Repayment of Loan A/c.
the depositor in the books of accounts of Vitragbhai D. Dharu.
(a) Confirmation of Account 264Notice u/s 133(6) was unserved Sanjaybhai V. (b) ITR of AY 2013-14 265 Requisite details are submitted at page 50 325000 8575 and no response is received from Sanghavi (c) Passbook of Bank of India 266-267 no. 264 to 268 of paperbook.
depositor (d) Repayment of Loan A/c. 268
(a) Confirmation of Account 156 The ledger account of Shaileshbhai G.
(b) ITR of AY 2013-14 157 Goswami in the books of accounts of Shaileshgiri There is no evidence that amount
(c) Passbook of BOB 158-159 Rameshbhai L. Diyora is submitted at 51 Gulabgiri 250000 6658 was received from Rameshbhai
(d) Ledger Account in books of 160 page no. 160 of paperbook, where it is Goswami L. Diyora.
Rameshbhai L. Diyora reflected that amount has been paid to
(e) Repayment of Loan A/c. 161 Shaileshbhai G. Goswami.
ITA No.2069/Ahd/2018 32(a) Confirmation of Account 222 In the bank passbook of the depositor Creditworthiness of the depositor Shantilal (b) ITR of AY 2013-14 223 submitted at page no. 225 of 52 675000 6158 is treated as unexplained in Manilal Mehta (c) Passbook of BOB 224-225 paperbook, it is reflected amount of absence of evidence.
(d) Repayment of Loan A/c. 226 loan is earlier received in bank account.
(a) Confirmation of Account 227 In the bank passbook of the depositor Shilpaben Creditworthiness of the depositor
(b) ITR of AY 2013-14 228 submitted at page no. 230 of 53 Champaklal 500000 4562 is treated as unexplained in
(c) Passbook of BOB 229-230 paperbook, it is reflected amount of Shah absence of evidence.
(d) Repayment of Loan A/c. 231 loan is earlier received in bank account.
(a) Confirmation of Account(b) In the bank passbook of the depositor at Sushilaben There is no evidence that amount ITR of AY 2013-14(c) Passbook of 162163164- page no. 148 of paperbook, it is 54 Rameshbhai 300000 3995 was received from Rameshbhai Bank of India(d) Repayment of 165166 reflected that amount was received Shah M. Shah HUF.
Loan A/c. from Rameshbhai M. Shah HUF.
(a) Confirmation of Account 167 In the bank passbook of the depositor Creditworthiness of the depositor Vitragbhai (b) ITR of AY 2013-14 168 submitted at page no. 170 of 57 300000 8063 is treated as unexplained in Dhirajlal Dharu (c) Passbook of Bank of India 169-170 paperbook, it is reflected amount of absence of evidence
(d) Repayment of Loan A/c. 171 loan is earlier received in bank account.
Grand Total 1,72,25,000 2,94,187 Pushpaben 58 Ashokkumar 250000 7089 (a) Confirmation of Account 172 No observation of the AO -
Shah
(a) Confirmation of Account 10
59 Alpesh Gami 15000 0 No observation of the AO -
(b) Repayment of Loan A/c. 11
(a) Confirmation of Account 12
60 Anita 10000 0 No observation of the AO -
(b) Repayment of Loan A/c. 13
(a) Confirmation of Account 14
61 Naman 15000 0 No observation of the AO -
(b) Repayment of Loan A/c. 15
ITA No.2069/Ahd/2018
33
(a) Confirmation of Account
16
Pankajbhai R. (b) ITR of AY 2013-14
62 404883 5425 17 No observation of the AO -
Shah (c) Bank Passbook and Ledger
18-23
Accounts
(a) Confirmation of Account 24
63 Viral N. Patel 10000 0 No observation of the AO -
(b) Repayment of Loan A/c. 25
Grand Total 1,79,29,883 3,06,701
6. The ld.CIT(A) has gone through the submissions of the assessee, but did not find any merit and confirmed the addition by recording the following finding:
"5.6 There should not be any dispute that u/s 68 the opinion of the AO for not accepting the explanation offered by the assessee being not satisfactory is required to be based objectively on proper appreciation of materials and other attending circumstances. I find that the AO based on the very small incomes of the lenders and doubtful sources of fund in the bank statements of the lenders came to form the opinion of his being not satisfied as to genuineness of the transactions of loans given and creditworthiness of the lenders to advance loans of respective amounts. It is well settled in law that the onus of providing the source of fund received by the assessee is on the assessee. In this regard this also is an established law that mere transactions through bank accounts banking channels are not enough to explain money and that creditworthiness of creditors and genuineness of transaction have to be examined by the AO and that the transactions made by cheques may not necessarily be sacrosanct and enough to discharge the burden of the assessee. In Kamal Motors Vs CIT 131 Taxman 155 it has been held that the onus is on the assessee to prove that creditors are persons of means. In this case it was also held that when the cash creditors are income tax assessees it cannot be said that they are not the persons of means. But this by itself cannot be sufficient and end in itself. To me mere filing of income tax returns does not prove the worthiness of the persons rather the worthiness of the creditors have to be determine based on their capacity to give such loans which is combination of the income, the capital and turnover i.e. volume of receipts of that person. The income tax returns of the creditors should not be returns of marginal income paying little tax and only for the purpose of building up capital and creating records of loans transactions. The returns of the creditors which have not been found worthy of giving loans to the appellant are short on these aspects and the AO is justified in his not being satisfied and in having adverse inference on creditworthiness of lenders and thus the genuineness of loans taken by the appellant. The inference of the AO in the present case is not matter of conjecture and surmises.ITA No.2069/Ahd/2018 35
5.7 It is also a settled law that unless the assessee has discharged the burden u/s 68, the onus of proving that the lenders had no creditworthiness will not shift on the AO. However in the case of appellant it is seen that though the appellant had nol discharged its onus completely the AO had issued notices u/s 133(6) to 57 creditors and has analysed the details submitted by them and the details provided by the appellant in case of the creditors to whom the notices u/s 133(6) was returned unserved. The Ld. ARs are not justified in asserting that the appellant had discharged its onus and was not required to establish the source of fund in the hand of the lenders to advance loans to the appellant. No doubt the case laws relied by the appellant lay down the principles as to various components required for satisfaction of section 68 but with due respect to those case laws and the Ld. ARs, in my considered opinion, the appellant has failed to establish that the facts of those case laws are similar to the facts of the appellant as marshalled by the AO after analyzing the details received on enquiry u/s 133(6). I am of the considered view that having establish the identity, the appellant had to establish the creditworthiness of the creditors and if the same is not proved the loan transactions cannot be held genuine. Mere ratios of these cases cannot rescue the appellant unless the appellant proves that the AO is not objective in his non satisfaction and that the creditors had the capacity to give the alleged loans. In fact the appellant has not even contended that the lenders are persons of means and have capacity to given loans.
5.8 During the appeal proceedings vide letter dated 27/12/2017 to the appellant it was required that either the appellant produces the lenders before me for examination or I may refer the case to the AO before whom those lenders can be produced by the appellant because without establishing the creditworthiness of the lenders no relief to the appellant can be granted.
5.9 In response to the letter dated 27/12/2017 the Ld. ARs appeared on 15/01/2018 and again pointed out to various case laws wherein in essence it has been held that capacity of the creditor is proved when the amounts are received by the assessee by account payee cheques drawn from bank accounts of the creditors. But again with due respect to ITA No.2069/Ahd/2018 36 those case laws the ratios do not protect the appellant as the creditors have neither enough incomes and capitals nor enough balances in their bank accounts on regular basis. The Ld. ARs have not mentioned based in the capita/income/balance in bank account, the lenders had financial capacity to give loans. It will not be wrong to say that the Ld. AR's submission is long in law and short on facts."
7. Before us, the ld.counsel for the assessee contended that the assessee has fulfilled all requirements of the section 68 in order to explain the genuineness of the loans taken by it. It has submitted confirmation of amounts, copy of income-tax returns, PAN data, bank statements along with copy of pass-book, repayment of loan amounts. It was also contended before us that on the last occasion, Bench has directed to submit copies of bank statement indicating that the amounts returned by the assessee have been credited in their accounts. The assessee has prepared the details of such repayment in tabular form and also annexed copies of bank statement, wherein the amounts repaid by the assessee have been credit in the accounts of the depositors. He specifically took us through the details which contained in page no.1 of the paper book showing how the creditors have recognized their receipt of money from the assessee. We deem it appropriate to take note of these details also which reds as under:
Interest Repayment of Loan
Amount of Credited Utilization of
Name of Page
No. loan added during Amount funds received
depositor the year Date Nos.
(Rs.) (Rs.) by depositors
(Rs.)
Copy of bank
statement is
1 Amratbhai Patel 3,00,000 3,773 08-12-2014 3,08,987 -
not received
from depositor
ITA No.2069/Ahd/2018
37
Copy of bank
statement is
2 Arihant Exports 5,50,000 6,818 18/04/2014 5,50,000 -
not received
from depositor
Loan of Rs.
2,50,000 given
to Nileshkumar
Ashaben P.
3 2,50,000 3,144 05-01-2014 2,50,000 D Viradi on 310
Kubadiya
12-05-2014 by
cheque no.
246709
Balance
Ashvinbhai carried
4 Nagjibhai 5,00,000 8,137 23/06/2015 5,49,710 forward in 311-312
Vekariya savings bank
account
Copy of bank
Bharatbhai statement is
5 3,00,000 2,219 08-12-2014 3,08,987 -
Shantilal Doshi not received
from depositor
Loan of Rs.
7,00,000 given
to Shantinath
Birenbhai A
6 6,00,000 9,173 08-12-2014 6,17,976 Associates on 313
Sanghavi
13-08-2014 by
cheque no.
030195
Copy of bank
Chandrikaben K statement is
7 2,50,000 7,027 05-01-2014 2,50,000 -
Doshi not received
from depositor
Copy of bank
Chetanbhai J statement is
8 4,00,000 5,030 23/06/2015 4,39,767 -
Shah not received
from depositor
Loan of Rs.
2,20,000 given
Chintan to Rupalben on
9 Prakashbhai Doshi
2,00,000 5,671 23/06/2015 2,19,884 314-315
24-06-2015 by
cheque no.
108888
Transferred
Rs. 2,55,000 as
Darshanaben loan on 10-07-
10 2,50,000 3,575 07-08-2014 2,55,215 316-317
Shah 2014 by
cheque no.
007500
Copy of bank
Deveshbhai M statement is
11 5,00,000 7,151 28/07/2014 5,13,204 -
Shah not received
from depositor
ITA No.2069/Ahd/2018
38
Loan of Rs.
3,00,000 given
to Mukeshbhai
12 Gautam Gems 2,50,000 3,699 07-04-2014 2,55,215 B. Patel on 10- 318
07-2014 by
cheque no.
029740
Copy of bank
Ghanshyambhai statement is
13 2,50,000 3,144 09-02-2014 2,58,544 -
G Rakholiya not received
from depositor
Copy of bank
Ghanshyambhai statement is
14 5,00,000 14,178 09-02-2014 5,17,087 -
V Kabariya not received
from depositor
Loan of Rs.
2,00,000 given
to Upendra C
Girishbhai L
15 2,00,000 2,712 08-12-2014 2,05,992 Shah on 16- 319
Vora
08-2014 by
cheque no.
477031
Loan of Rs.
2,55,000 given
to Upendra C
Gitaben
16 2,50,000 1,849 08-12-2014 2,57,490 Shah on 16- 320-321
Jagabhai Patel
08-2014 by
cheque no.
884776
Loan of Rs.
2,50,000 given
Gomtiben to Riteshbhai
17 Jivrajbhai 2,50,000 7,027 28/07/2014 2,56,602 K Shah HUF 322-323
Chaudhary on 30-07-2014
by cheque no.
000027
Loan of Rs.
1,60,000 given
to Upendra C
Gomtiben
18 1,50,000 999 08-12-2014 1,54,494 Shah on 16- 324-325
Bhurabhai Patel
08-2014 by
cheque no.
043738
Loan of Rs.
2,00,000 given
Harjibhai
to Pritiben on
19 Devrambhai 2,00,000 2,712 18/04/2014 2,00,000 326-327
22-04-2014 by
Patel
cheque no.
000023
Balance
Hetalben
carried
20 Mehulbhai 5,25,000 7,767 28/07/2014 5,38,864 328-329
forward in
Dharu
savings bank
ITA No.2069/Ahd/2018
39
account
Copy of bank
Jagdishbhai D statement is
21 2,50,000 3,575 07-04-2014 2,55,215 -
Padhiyar not received
from depositor
Copy of bank
Jayshreeben K statement is
22 5,50,000 8,137 28/07/2014 5,64,525 -
Sanghavi not received
from depositor
Copy of bank
Jitendrabhai statement is
23 3,00,000 8,507 08-12-2014 3,08,987 -
Himatlal Shah not received
from depositor
Loan of Rs.
3,00,000 given
to Ashok B
Kiranbhai
24 3,00,000 8,359 28/07/2014 3,07,922 Doshi on 30- 330-331
Dilipbhai Shah
07-2014 by
cheque no.
000017
Loan of Rs.
3,75,000 given
Laljibhai to NCPL
25 Devrambhai 3,50,000 9,407 18/04/2014 3,50,000 Developers on 332-333
Patel 23-04-2014 by
cheque no.
000026
Loan of Rs.
3,25,000 given
Mahendra to NCPL
26 Dhirubhai 3,00,000 8,063 18/04/2014 3,00,000 Developers on 334-335
Pipaliya 23-04-2014 by
cheque no.
025427
Loan of Rs.
2,50,000 given
Mahendra to Bhadresh
27 Shantilal Doshi 2,50,000 6,596 28/07/2014 2,56,602 Traders on 31- 336
HUF 07-2014 by
cheque no.
015419
Withdrawal of
Rs. 1,20,500
Maheshbhai
on 03-09-2014
28 Devshibhai 6,00,000 17,014 09-02-2014 6,20,506 337-338
Koladiya and balance
carried
forward
ITA No.2069/Ahd/2018
40
Transferred
Rs. 7,00,100 as
Maheshbhai N. loan on 05-09-
29 Savaliya
7,00,000 8,803 09-02-2014 7,23,923 339
2014 by
cheque no.
001230
Copy of bank
Mehulbhai statement is
30 5,25,000 8,544 08-12-2014 5,40,728 -
Sumatilal Shah not received
from depositor
Transferred
Rs. 9,50,025 as
Mukeshbhai B loan on 24-06-
32 5,00,000 8,137 23/06/2015 5,49,710 340-341
Malaviya HUF 2015 by
cheque no.
511691
Copy of bank
Nayanaben
statement is
33 Jahdishbhai 2,25,000 6,103 23/06/2015 2,47,370 -
not received
Bhansali
from depositor
Copy of bank
Niteshbhai D. statement is
34 3,00,000 3,773 23/06/2015 3,29,826 -
Shah not received
from depositor
Copy of bank
statement is
35 Pari Gems 2,50,000 3,699 07-04-2014 2,55,215 -
not received
from depositor
Copy of bank
Poojaben
statement is
38 Hasmukhlal 2,00,000 1,825 05-01-2014 2,00,000 -
not received
Mehta
from depositor
Loan of Rs.
5,36,840 given
Pravinchandra K to Mittal Gems
39 5,25,000 7,638 07-04-2014 5,35,952 342-343
Shah on 10-07-2014
by cheque no.
317976
Loan of Rs.
3,75,000 given
to Nileshkumar
Pravinbhai G
40 3,75,000 5,733 05-01-2014 3,75,000 D Viradi on 344-345
Shah HUF
12-05-2014 by
cheque no.
0149434
Transferred
Rs. 1,00,000 as
loan on 25-02-
Rameshbhai
2013 by
43 Mohanlal Shah 4,00,000 5,425 05-01-2014 4,00,000 346-347
cheque no.
HUF
228011 and
Rs. 5,00,000 as
loan on 25-02-
ITA No.2069/Ahd/2018
41
2013 by
cheque no.
228013
Loan of Rs.
6,00,000 given
Ranjitbhai V to Star Galaxy
45 4,00,000 5,918 07-04-2014 4,08,344 348
Padhiyar on 08-07-2014
by cheque no.
049465
Balance
Sahilbhai carried
46 Hasmukhlal 2,50,000 3,144 05-01-2014 2,50,000 forward in 349
Mehta savings bank
account
Loan of Rs.
3,15,000 given
Sangitaben to Upendra C
47 Kalpeshbhai 3,00,000 2,219 08-12-2014 3,08,987 Shah on 16- 350-351
Doshi 08-2014 by
cheque no.
043032
Loan of Rs.
3,50,000 given
Sanjaybhai to Bhadresh
49 Nanalal Shah 3,50,000 9,752 28/07/2014 3,59,243 Traders on 30- 352
HUF 07-2014 by
cheque no.
000027
Loan of Rs.
3,50,000 given
to Pinkiben S
Sanjaybhai V.
50 3,25,000 8,575 28/07/2014 3,33,583 Mehta on 30- 353-354
Sanghavi
07-2014 by
cheque no.
880304
Transferred
Rs. 2,70,000 as
Shaileshgiri
loan as 23-04-
51 Gulabgiri 2,50,000 6,658 18/04/2014 2,50,000 355-356
2014 by
Goswami
cheque no.
000016
Copy of bank
Shantilal Manilal statement is
52 6,75,000 6,158 23/06/2015 7,42,108 -
Mehta not received
from depositor
Copy of bank
Shilpaben
statement is
53 Champaklal 5,00,000 4,562 23/06/2015 5,49,710 -
not received
Shah
from depositor
Copy of bank
Sushilaben
statement is
54 Rameshbhai 3,00,000 3,995 05-01-2014 3,00,000 -
not received
Shah
from depositor
ITA No.2069/Ahd/2018
42
Loan of Rs.
3,30,000 given
to NCPL
Vitragbhai
57 3,00,000 8,063 18/04/2014 3,00,000 Developers on 357
Dhirajlal Dharu
23-04-2014 by
cheque no.
000014
Loan of Rs.
2,50,000 given
to Riteshbhai
Pushpaben
58 2,50,000 7,089 28/07/2014 2,56,602 K. Shah HUF 358-359
Ashokkumar Shah
on 28-07-2014
by cheque no.
000012
59 Anita Tatosaniya 10,000 0 18/06/2013 10,000 Repaid in cash -
60 Naman 15,000 0 30/09/2013 15,000 Repaid in cash -
Cash
Withdrawal of
Pankajbhai R. Rs. 4,00,000
61 4,00,000 5,425 27/06/2014 4,00,000 360
Shah on 28-06-2014
by cheque no.
096397
52 Viral N Patel 10,000 0 31/08/2013 10,000 Repaid in cash -
1,79,10,000 3,06,701
8. In support of his contentions, he relied upon large number of decisions, which have been noticed by the ld.CIT(A) viz. DCIT Vs. Rohini Builders, 256 ITR 360, CIT Vs. Orissa Corporation P.Ltd., 159 ITR 78 (SC), CIT Vs. Shri Mahavir Crimpers, Tax Appeal No.547 of 208, CIT Vs. Chanakya Developers, 3 taxmann.com 91 (Guj), CIT Vs. Ranchhod Jivabhai Nakhava, 21 taxmann.com 159 (Guj) etc. On the strength of these details and decisions, he submitted that the assessee has discharged the onus put upon it by virtue of section 68 and no addition deserves to be made in his hand.
9. On the other hand, the ld.DR relied upon the orders of the Revenue authorities. He specifically took us through paragraph 5.7 of the ld.CIT(A)'s order and submitted that an holistic view is ITA No.2069/Ahd/2018 43 required to be taken by the adjudicating authority which gives a sense of satisfaction that loans/deposits taken by the assessee were genuine. A cumulative analysis of all the evidences did not infuse confidence in the AO as well as in the CIT(A) to form an opinion that these loans are genuine-one; rather it suggests that once a person advances loans ranging between Rs.2,00,000/- to Rs.3,00,000/- to such developer at a meager rate of interest is an effort of manipulation at the end of the assessee, and the explanation given on papers deserves to be rejected. In support of his contentions, he relied upon the latest decision of Hon'ble Supreme Court in the case of Pr.CIT Vs. NRA Iron & steel P.Ltd., 103 taxmann.com 48 (SC). He placed on record copy of this decision. He also filed copy of the Hon'ble Delhi High Court decision in this very case which has been reversed by the Hon'ble Supreme Court. His emphasis that the Hon'ble Supreme Court has observed that lower appellate authorities failed to appreciate that investor companies which had filed income-tax returns with meager or NIL income have failed to explain how they had invested such huge sum of money in the assessee-company.
10. We have duly considered rival contentions and gone through the record carefully. Section 68 of the Income Tax Act has a direct bearing on the controversy. Therefore, it is pertinent to take note of the relevant part of this section, which reads as under:
"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 officer, satisfactory the sum so credited may be charged to ITA No.2069/Ahd/2018 44 income tax as the income of the assessee of that previous year."
11. A perusal of this section would indicate that basically this section contemplates three conditions required to be fulfilled by an assessee. In other words, the assessee is required to give explanation which will exhibit nature of transaction, and also explain the source of such credit. The explanation should be to the satisfaction of the AO. In order to give such type of explanation, which could satisfy the AO, the assessee should fulfill three conditions viz. (a) identity of the creditors, (b) genuineness of the transaction, and (c) credit worthiness of the creditors/depositors. As far as construction of section 68 and to understand its meaning is concerned, there is no much difficulty. The difficulty arises when we apply the conditions formulated in section in the given facts and circumstances. In other words, it has been propounded in various decisions that section 68 contemplates that there should be a credit of amount in the books of assessee, (b) such amount has to be sum received during the previous year, (c) the assessee offers no explanation about the nature and source of such credit found in the books, or (d) explanation offered by the assessee is not in the opinion of the AO satisfactory. The above three requirements have to be tested not superficially but in-depth, having regard to the human probabilities and normal course of human conducts. The adjudicating authority should find out the reality of transaction. In other words, if the AO is able to demonstrate that apparent transaction projected by the assessee was not real, then claim of the assessee should not be accepted. This can be tested on the surrounding circumstances, making reference to substantial ITA No.2069/Ahd/2018 45 evidences produced by the assessee as well as collected by the AO. It is also pertinent to observe that certificate of incorporation or PAN number being referred by the assessee to demonstrate identity of the creditor may not be sufficient documents, because these documents have their own limitation, and PAN is being allotted on an application made by an assessee. It is also pertinent to observe that in these days, such account is being allotted through on-line application. There is no investigation about the identity of the assessee who obtained PAN. Thus, these documents have their own limitation. Similarly, cash credit received from banking channel has a corroborative factor, which does not construe as genuine always.
12. In the light of the above, let us examine facts of the present case. The decision relied upon by the ld.DR in the case of NRA Iron & Steel P.Ltd.(supra) is concerned, the facts are totally different. That was the case where money was received as share application plus premium on purchase of such shares. It is an irreversible nature. The assessee-company who received such money would not refund the money, because, it was cost of purchase of shares. The share applicants in that case have purchased the shares on premium and invested money more than Rs.90 lakhs each. There were roughly 19 applicants who have made investment in the range of Rs.90 lakhs to Rs.95 lakhs. They have shown income of Rs.10,000/-, Rs.14,000/- and Rs.5,000/-. In that context, Hon'ble Supreme Court has recorded a finding that when share applicants were having meager income or NIL income how they can make an arrangement of Rs.90 lakhs and Rs.95 lakhs in investment in the assessee-company. In the ITA No.2069/Ahd/2018 46 case of the assessee, it has received loans which are to be repaid. If it failed to repay and liability is ceased, then it will be recognized as income in the year, when liability to pay is ceased. The second factor that it has received loans in the range of Rs.2,00,000/- to Rs.5,00,000/- and lenders/depositors have returned income in the range of Rs.1,90,000/- to Rs.2,20,000/-. This income is in consonance with the amount of loans they have advanced. Therefore, no benefit can be drawn from the decision of Hon'ble supreme Court in the case of NRA Iron & Steel P.Ltd. (supra). The facts are totally different.
13. The second important fact in the case of the present assessee is that it has not only filed conformations, copies of income-tax returns, bank statements, all the creditors have responded to the notice of the AO issued under section 133(6) except at serial no.2, 8, 13, 18, 29, 34 and 43. They have confirmed the advancement of loans. The assessee has repaid these loans through account payee cheques, and these entries have been credited in the accounts of the creditors. For buttressing this, the assessee has filed copies of the pass-books. Now, the AO is doubting these evidences on the ground that after receipt of repayment, these creditors have further advanced the loans. They have not kept the money with them. To our mind, this is not a sufficient reason for doubting the explanation of the assessee. It is for the creditors to decide how to treat that amount. We can appreciate the cases of the AO if he was able to lay his hand on any of the evidence that after receipt of repayment of loans, money travelled back to the assessee. Similarly, if the AO is able to demonstrate that the assessee has ITA No.2069/Ahd/2018 47 given cash which was deposited by the creditors in their account; they have given loans to the assessee and on receipt repayment; they have again withdrawn the amount and repaid to the assessee in cash. There is no such exercise or mechanism discernible from the record. We have analysised all the material produced before us in the light of various authoritative pronouncements, and we are satisfied that the assessee has fulfilled the ingredients of section 68. It has proved identity of the creditors, genuineness of the transactions. The doubt raised by the AO qua their credit- worthiness, but to our mind, that has also been proved by the assessee by producing copies of income-tax returns, copies of the bank pass book, and more so, evidences demonstrating repayment of loans to all the creditors. After making a detailed analysis of all the materials, we are the view that no addition is sustainable in the hands of the assessee. We allow the appeal of the assessee, and delete the addition of Rs.1,79,29,883/-. Since loans received by the assessee have been treated as genuine, therefore, interest expenditure recognized on such loans deserves to be allowed to the assessee. Accordingly, addition of Rs,3,01,277/- is also deleted.
14. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 26th June, 2019.
Sd/- Sd/- (RIFAUR RAHMAN) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 26/06/2019