Mahipal Ishwarlal Sottany Vs ITO (ITAT Ahmedabad)
The assessee in the present case has duly explained the source of money received in their hands. The assessee is not answerable to justify the source of the source of the money received by him. In this connection, we place our reliance on the judgment of Hon’ble Gujarat High Court in the case of DCIT Vs. Rohini builders reported in 256 ITR 360 wherein it was held as under:
“It has also proved the capacity of the creditors by showing that the amounts were received by the assessee by account payee cheques drawn from bank accounts of the creditors and the assessee is not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source as held by the Bombay High Court in the case of Orient Trading Co. Ltd. v. CIT [1963] 49 ITR 723. The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques.”
In view of the above and after considering the peculiar facts and circumstances as discussed above, we reverse the order of the authorities below. Thus we direct the AO to delete the addition made by him.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-7, Ahmedabad dated 10/01/2017 (in short “Ld. CIT(A)”) arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (herein-after referred to as “the Act”) dt.17/02/2015 relevant to the Assessment Year 2012-2013.
The assessee has raised the following grounds of appeal.
The Authorities below have erred in law and facts by Disallowing sum of Rs.6,50,000/-on account of unexplained cash credit, even though the assessee has submitted all necessary details called for by the Id.Authorities, moreover in some cases the statements of the creditors were also recorded, assessee has fulfilled all the criteria mentioned under section 68 of the Income Tax act.
The Ld.Authorites below have erred in km and facts by adding sum of Rs.50.716/- on account of interest paid to unsecured loans. The assessee had submitted the return copies and bank statement of the concerned parties for the verification which clearly highlights the transaction.
The authorities below have erred in law by not following the judicial judgment on this subject.
Any other ground which may meet the end of justice shall be submitted at the time of hearing.
2. The solitary issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for Rs. 6.50 lakhs on account of unexplained cash credit under section 68 of the Act along with the amount of interest paid on such loan.
3. Briefly stated facts are that the assessee in the present case is an individual and engaged in the business of trading and processing of grey and fabrics cloth under the name and style of M/s Shree Mahavir Fabrics. The assessee in the year under consideration has taken loan from certain parties as detailed under:
