Case Law Details
Case Name : Shri Ashutosh Garg Vs ACIT (ITAT Delhi)
Appeal Number : IT Appeal No.-5642/2012
Date of Judgement/Order : 30/10/2015
Related Assessment Year : 2003-04
Brief of the case:
- The ITAT Delhi in the case of Shri Ashutosh Garg vs. ACIT held that when the assessee had produced his copy of bank accounts showing the advancing of loan to non-resident and its repayment collection along with affidavit filed both by non-resident and assessee , the creditworthiness and genuineness of transaction gets proved and merely because assessee failed to produce the bank account copies of payer does not make the transaction unexplained Within the meaning of Section 68.
Facts of the case:
- During the course of assessment proceedings AO observed that an amount of 26,31,25/- credited in the capital account of the assessee as receipts of remittances from overseas. Assessee was asked to furnish the details with regard to the nature of receipt of remittances from overseas.
- In response to assessee’s response that the receipt was infact repayment of loan advanced to Mr. Giang Tran (Singapore resident) ,the assessee was specifically asked to file the copy of bank account of the payer from where the money was sent along with his IT return to prove his credit worthiness.
- The copy of Bank account in which money has been received is filed however the genuineness of the transaction is not complete unless the copy of account of the payer is produced.
- AO concluded that in the absence of the said account from where the money travelled the sources & genuineness of the claim of the assessee remains unverifiable and made an addition of Rs. 26,31,257 is made to assessed income under section 68 of IT Act.
Contention of the Assessee:
- The learned counsel for the assessee contended the assessee submitted copy of his bank statement indicating the advance of Rs. To Mr. Giang Tran 5000USD and also receiving bank the same in eight instalments and also submitted affidavit of assessee and affidavit of Shri Giang Tran.
- All documents clearly show that not only identity of the payer is proved but the genuineness of the transaction and creditworthiness of the payer is also fully established beyond doubt and addition u/s 68 of the Act could not be made as per provisions of the Act.
Held by ITAT Delhi:
- The Assessing Officer has observed that the assessee has not been able to file any evidence or cogent reason to prove the genuineness of the transaction and creditworthiness of the creditor.
- But assessee has produced documentary evidences showing that the amount was actually not a loan or advance to the assessee but the same was refund or return of advance/loan of USD 50000 given by the assessee to Mr. Giang Tran in the year 2000 on 14.2.2000 which was credited to the bank account of Mr. Tran on 16.2.2000 and assessee received back amount of USD 46000 equivalent to INR 26,31,257/- from Mr. Tran in eight instalments from 20.7.2002 to 2.1.2003 pertaining to FY 2002-03 relevant to assessment year 2003-04.
- As such the assessee discharged its onus to prove identity and creditworthiness of the payer and the genuineness of the transaction as required u/s 68 of the Act. Therefore, the addition cannot be made u/s 68 of the Act where the assessee has established this fact that he made advance/loan to payer on 14.2.2000 which was returned during previous year under consideration and thus amount cannot be held as deemed income of the assessee u/s 68 of the Act.