Case Law Details

Case Name : Nived Anoopkumar Dhandhania, Kolkata Vs I.T.O. (ITAT Kolkata)
Appeal Number : ITA No.1064/Kol/2011
Date of Judgement/Order : 04/09/2012
Related Assessment Year : 2007-08
Courts : All ITAT (4773) ITAT Kolkata (345)

At the time of hearing the ld. Counsel appearing on behalf of assessee by referring to the paper book at page nos.9 to 31 which contain copies of Kishanlal M.Dayama’s I.T.Return Ack., P&L A/c Capital A/c, Balance Sheet and Banker’s Certificate, Copies of Rajesh Kaishchand Vyasa’s I.T.Return Ack; Brokerage A/c, Interest A/c., Capital A/c, Balance Sheet and PAN Card, Banker’s Certificate and Bank statement, Jagdishprasad M.Devmurari’s I.T.Return Ack., Income & Expenditure A/c. Bank Statement and Banker’s Certificate, Ghisaram M.Nirban’s I.T.Return Ack., Capital A/c, Balance Sheet, PAN card, Banker’s Certificate, Bank statement and Cash A/c. and Sushilkumar Hanumandas Sarda’s Loan confirmations and Bank statement, submitted that the revenue is not justified in ignoring these documents and made the additions though the transactions are entered through banking channels and the assessee has discharged his onus of identification of the  creditors with PAN Nos., copies of balance sheet and bank statements. He further filed affidavits of Kishanlal M.Dayama and Rajesh Kailashchand Vyas which are placed at pages 4&5 and 6&8 dated 12th December, 2011 and 7th December, 2011 respectively as additional documents. When the Bench proposed to set aside the issue to the file of AO since both AO as well as ld. CIT(A) has contended that the assessee has not filed any confirmations and not discussed regarding the bank statements and other documents which are filed before them. Both the parties have fairly conceded that the matter may be set aside to the file of AO for further verification. Therefore, in the interest of justice, we consider it fit to set aside the issue to the file of AO to give one more opportunity of being heard to the assessee to substantiate its claim.

INCOME TAX APPELLATE TRIBUNAL,, KOLKATA

ITA No.1064/Kol/2011

Assessment Year : 2007-08

Nived Anoopkumar Dhandhania, Kolkata

Vs

I.T.O.

Date of Pronouncement: 04.09.2012.

ORDER

Per Shri C.D.Rao, AM

The above appeal is filed by assessee against order dated 31.05.2011 of the ld. CIT-(A)-XXX, Kolkata pertaining to A.Yr. 2007-08.

2. The grounds raised by assessee in this appeal are as under:-

“1) For that under the facts and circumstances of the case the learned C.I.T.(Appeals) erred and acted un judiciously in doubting the genuineness of and confirming the addition of unsecured loans from five parties totaling Rs.6,02,714/- to the appellant’s total income.

2) For that under the facts and circumstances of the case the learned CIT(Appeals) erred and acted un judiciously in also confirming addition of Rs.2,714/- paid as interest to the said five parties.”

3. The brief facts of the above case are that while doing the scrutiny assessment the AO has added an amount of Rs.65,96,859/- under the head ‘unexplained loan creditors’ and Rs.2,44,256/- under the head interest paid on the above loan creditors by observing as under :-

“It is seen from the records that the assessee showed Rs. 65,96,859/- as unsecured loans Rs. 65,96,859/- and Interest paid thereon of Rs.244256 out of which the assessee debited Rs.180483/- in the P & L A/C. after adjusting the interest from debtors. During the course of hearing, while the A/R of the assessee was asked to produce the loan confirmation and present address of the loan creditors. He failed to file the details of the loan creditors merely a statement of names of some persons/concern, to whom the assesses paid interest. Therefore, in absence of loan confirmation it is established that the assessee showed bogus outstanding liabilities in the balance sheet as on 31.03.09 and debited interest Rs.244256 as interest paid to the loan creditors to reduce the tax liability. Hence, I add back the bogus unsecured loan of Rs. 65,96,859/- U/s.68 as the unexplain cash credit and as the existence of the loan creditors not established and the interest of Rs.244256/- as the interest not paid but only debited in the P&L A/C to reduce the profit.”

3.1. On appeal after taking into consideration of the written submissions and other documents filed before ld. CIT(A) the ld. CIT(A) called for the remand report from the AO. Based on the two remand reports he deleted the addition of Rs.59,94,145/- on account of loan creditors and the corresponding interest accrued on the above. However, he confirmed the loan creditors to the extent of Rs.6,02,714/- and interest on the above amounting to Rs.2,714/- by observing as under:-

“Creditors have not independently confirmed their loan transaction to the A.O despite the issue of notice u/s. 133(6) by him and despite efforts by the appellant these creditors have not sent their confirmations independently to the A.O for his verification. Considering all these facts the genuineness of the loan from these five parties is not stablished. The appellant has been unable to discharge the onus of establishing the genuineness of these unsecured loans, The details of these unsecured loans are as under

1. Jagadish Prasad M. Devmura 1,00,699/-

2. Ghisaram M. Nirban 1,00,699/-

3. Rajesh Kailashchand Vyas 1,00,411/-

4.Sushilkumar Hanumandas Sarda 2,00,740/-

5.Krishanlal M Dawyama 1,00,165/-

6,02,714/ –

Accordingly the addition on account of unsecured loan from these parties (Rs. 1,00,699+1,00,699+1,00,411+2,00,740+1,00,615) i.e. Rs. 6,02,714/- is confirmed.”

3.2. Aggrieved by this the assessee is in further appeal before us.

4. At the time of hearing the ld. Counsel appearing on behalf of assessee by referring to the paper book at page nos.9 to 31 which contain copies of Kishanlal M.Dayama’s I.T.Return Ack., P&L A/c Capital A/c, Balance Sheet and Banker’s Certificate, Copies of Rajesh Kaishchand Vyasa’s I.T.Return Ack; Brokerage A/c, Interest A/c., Capital A/c, Balance Sheet and PAN Card, Banker’s Certificate and Bank statement, Jagdishprasad M.Devmurari’s I.T.Return Ack., Income & Expenditure A/c. Bank Statement and Banker’s Certificate, Ghisaram M.Nirban’s I.T.Return Ack., Capital A/c, Balance Sheet, PAN card, Banker’s Certificate, Bank statement and Cash A/c. and Sushilkumar Hanumandas Sarda’s Loan confirmations and Bank statement, submitted that the revenue is not justified in ignoring these documents and made the additions though the transactions are entered through banking channels and the assessee has discharged his onus of identification of the  creditors with PAN Nos., copies of balance sheet and bank statements. He further filed affidavits of Kishanlal M.Dayama and Rajesh Kailashchand Vyas which are placed at pages 4&5 and 6&8 dated 12th December, 2011 and 7th December, 2011 respectively as additional documents. When the Bench proposed to set aside the issue to the file of AO since both AO as well as ld. CIT(A) has contended that the assessee has not filed any confirmations and not discussed regarding the bank statements and other documents which are filed before them. Both the parties have fairly conceded that the matter may be set aside to the file of AO for further verification. Therefore, in the interest of justice, we consider it fit to set aside the issue to the file of AO to give one more opportunity of being heard to the assessee to substantiate its claim.

5. In the result the appeal of assessee is allowed for statistical purposes.

Order pronounced in the open court on 04.09.2012

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0 responses to “Addition can’t be made Merely Because Transaction not made through banking Channel”

  1. Sudarshan says:

    Yes, it will be held valid. However, the amount will have to be less than Rs. 20000/- otherwise there will be contravention of section 269SS.

  2. Mihir Naik says:

    Suppose, I have given loan to somebody and the same is not through banking channel but I give confirmation for the same then the same can be help valid?

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