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03-07-2019, Giriraj Prasad, Section 68, 131, 44AB, Tribunal Jaipur

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6 days 14 hours ago #9999 by amit
Section - 68, 131, 44AB
Order Date - 03-07-2019
Favouring - Assessee Partly
Court - Tribunal Jaipur
Appellant - Giriraj Prasad
Respondent - ACIT
Justice - RAMESH C. SHARMA, AM & VIJAY PAL RAO, JM
Citation - 719Taxpundit92
Appeal No. - ITA No. 781 & 782/JP/2018
Asstt. Year - 2011-12 & 14-15

Order

PER : VIJAY PAL RAO, JM

These two appeals by the assessee are directed against two separate orders of ld. CIT (A)-2, Jaipur dated 12.03.2018 and 15.03.2018 for the assessment years 2011-12 and 2014 15 respectively. For the assessment year 2011-12, the assessee has raised the following grounds :-

“ 1. On the facts and in the circumstances of the case and in law, the ld. CIT (A) has grossly erred in confirming the addition of Rs. 5,50,000/- u/s 68 of the Income Tax Act, 1961, made by ld. A.O. on account of bona fide unsecured loans accepted by the assessee.

2. On the facts and in the circumstances of the case and in law, the ld. CIT (A) has grossly erred in confirming the part of addition made by the ld. A.O. on account of disallowance of genuine business expenses of Rs. 72,852/-. The disallowance has been made of depreciation, vehicle running & maintenance expenses and telephone expenses.

3) That the appellant craves the leave to amend/alter any or all of the grounds of this appeal on or before the hearing of the matter.

Ground No. 1 is regarding addition made under section 68 of the I.T. Act.

2. The assessee has received loan of Rs. 26,00,000/- from Smt. Nidhi Goyal which was also repaid during the year under consideration. The AO verified and examined the relevant record including the bank statement of the loan creditor and noted that there was a cash deposit of Rs. 5,50,000/- in the bank account of the loan creditor on 09.12.2010 just before the cheque given to the assessee of Rs. 6,00,000/- on 10.12.2010. The AO also recorded the statement of the loan creditor under section 131 of the IT Act and finally made the addition of the said amount of Rs. 5,50,000/- under section 68 of the IT Act. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed.

3. Before us, the ld A/R of the assessee has submitted that the AO has accepted the loan to the extent of Rs. 20,50,000/- out of the total loan of Rs. 26,00,000/- taken from Smt. Nidhi Goyal. The entire loan was repaid by the assessee during the year under consideration and, therefore, there was no outstanding of loan as on 31st March, 2011. He has further submitted that the AO has examined the loan creditor who has admitted the transaction of loan to the assessee and also explained the source of the cash of Rs. 5,50,000/- being his withdrawal from the bank of Rs. 4,50,000/- as well as tuition fee income of loan creditor. The assessee has also produced the books of account and balance sheet of the loan creditor to show the creditworthiness of the loan creditor. Thus the ld. A/R has submitted that once the loan creditor herself in her statement recorded under section 131 has explained the source of the said cash deposit in the bank and also accepted the transaction of loan, then in the absence of any contrary record, the said addition made by the AO is not justified. He has relied upon the following decisions of Hon’ble Jurisdictional High Court :-

Aravali Trading Co. vs. ITO 187 Taxman 338 (Raj.).

CIT vs. Bhawani Oil Mills (P) Ltd. 20 Taxman.com 441 (Raj.)

CIT vs. Heeralal Chaganlal 257 ITR 281 (Raj.)

4. On the other hand, the ld. D/R has submitted that the loan creditor has explained the source of cash deposit as withdrawal from the bank on some earlier occasion. However, the nexus of said withdrawal and re-depositing in the bank account was not proved. Therefore, the assessee has failed to explain the source of the loan transaction when there is a cash of Rs. 5,50,000/- deposited just prior to the loan given to the assessee. He has relied upon the orders of the authorities below.

5. We have considered the rival submissions as well as the relevant material on record. The AO has noted that the assessee has received Rs. 26,00,000/- as loan from one Smt. Nidhi Goyal. The details of the said loan as reproduced by the AO at page 3 of his order are as under :-

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