Case Law Details
Balaji Janakiraman Vs ACIT (OSD) (ITAT Chennai)
In the case of Smt. NS. Lakshmi, the assessee had taken a sum of Rs.20 lakhs through bank, and out of Rs.20 lakhs, the AO has accepted a sum of Rs.6 lakhs as genuine, and the remaining amount of Rs.14 lakhs has been added as unexplained credit. The assessee filed bank pass book of Smt. NS. Lakshmi. From the above, it is noticed that the creditor has availed FDR loan of Rs.14,38,000/- and the same has been credited to her bank account on 28.02.2013 and on 02.03.2013, she had transferred a sum of Rs.20 lakhs to the assessee’s bank account. From the above, it is very clear that the creditor have sufficient source of income to explain loans. As regards loan from Mr. NS. Poongodi, the assessee had taken a sum of Rs.25 lakhs through cheque. The AO has accepted a sum of Rs.7 lakhs and balance amount of Rs.18 lakhs has been treated as unexplained credit. The assessee has furnished bank statement of Mr. NS. Poongodi, and from the above, we find that the creditor has availed FDR loan from Bank of Baroda, amounting to Rs.23,72,000/- on 28.02.2013 and the same has been credited to his bank account on 02.03.2013. He had transferred a sum of Rs.25 lakhs to assessee’s account. From the above, it is very clear that the creditor has sufficient source of income to give loan to the assessee. Similarly, the assessee has taken a sum of Rs.25 lakhs loan from Mr. NS. Rajasekaran out of FDR loan availed from Karur Vysya Bank, amounting to Rs.24 lakhs. The loan proceeds credited to his bank account on 27.07.2013 and on 01.03.2013, he had transferred a sum of Rs.25 lakhs to the assessee’s bank account.
From the above, there is no dispute about source of credit and genuineness of transaction. The assessee has taken a sum of Rs.20 lakhs loan from Mr. NS. Thenmozhi. Mr. NS. Thenmozhi availed FDR loan of Rs.15,46,000/- on 28.02.2013 and out of loan proceeds, he has transferred a sum of Rs.20 lakhs on 02.03.2013 through cheque. All evidences are placed on paper book. Similarly, the assessee had taken a sum of Rs.20 lakhs from Mrs. NS. Hamsa. The AO has accepted a sum of Rs.6 lakhs, but made addition for balance amount of Rs.14 lakhs. The assessee explained that Mrs. NS. Hamsa availed FDR from Bank of Baroda amounting to Rs.18,70,000/-, and out of said amount, she had transferred a sum of Rs.20 lakhs on 02.03.2013 to the assessee’s account. All these evidences are part of paper book. In so far as loan taken from Mr. M. Selvam amounting to Rs.2,95,000/- the assessee claimed that the creditor has availed jewel loan from Indian Overseas Bank amounting to Rs.2,96,000/- and the same has been credited to his bank account. The assessee had also taken a sum of Rs.4,95,000/- from Mrs. T. Nadhiya and Mrs. T. Nadhiya has explained source for loan out of jewel loan from Indian Overseas Bank. The assessee has furnished evidences of loan creditors, including their bank statements and explained source for loans given to the assessee. From the above, it is very clear that the assessee has satisfactorily explained the identity, genuineness of transaction and creditworthiness of loan creditors. The AO without appreciating the fact simply made additions to part of loan taken from creditors, even though, he has accepted the fact that the assessee has filed all evidences to prove identity of the creditors. It is a well settled principle of law by the decision of various courts, including the decision of the Hon’ble Supreme Court in the case of CIT v. Lovely Exports Pvt. Ltd., reported in [2008] 216 CTR 195 (SC) that once name and address of creditors are furnished to the AO, then, it for the AO to proceed in accordance with law to re-open the assessment of creditors, but sum received from creditors cannot be regarded as unexplained credit/ income of the assessee. In this case, the assessee has furnished all evidences to prove the identity of creditors and also satisfactorily explained the genuineness of transactions and creditworthiness of creditors. Therefore, we are of the considered view that the AO is erred in making additions towards unsecured loans from ‘7’ parties amounting to Rs.79,90,000/- and thus, we direct the AO to delete the additions made towards loans.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai, dated 23.08.20 19, and pertains to assessment year 20 13-14.
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