SHRI MUJAFFAR HUSSEN,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

PER BHAGCHAND, AM

The appeal filed by the assessee emanates from the order of the ld.

CIT(A)-3, Jaipur dated 30-11-2017 for the Assessment Year 2012-13

raising therein solitary ground of appeal as under.

‘‘The ld. CIT(A) has erred in confirming the addition of Rs. 8,11,600/- u/s 68 of the Act.’’

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur 2.1 At the outset of the hearing, the Bench observed that the appeal

filed by the assessee is late by 19 days for which the ld. AR of the

assessee filed the application for condonation of delay with following

prayers.

‘’I received the order of the ld. CIT(A)-3, Jaipur in my case for Assessment Year 2012-13. Being aggrieved by the said order, I requested to my consultants Mr.Yogesh Kumar Sharma,FCS to prefer an appeal to the Hon'ble ITAT. This appeal was delay due to my illness (admission and discharge certificate of hospital is attached herewith). Hence my affidavit detailing the aforesaid facts and these may kindly be placed before the Hon'ble Tribunal for condonation of the short delay in submission of the appeal.’’

To this effect, the ld. AR of the assessee filed the Medical Certificate

issued by DR Amit Agarwal, M.S. (Ortho), Monilek Hospital, Jaipur

who certified that the assessee was suffering from back pain problem

since 5-02-2018 to 28-02-2018 besides the assessee has also filed the

affidavit giving the reason for such delay in late filing the appeal before

ITAT.

2.2 On the other hand, the ld. DR opposed the condonation application

of the assessee for late filing of the appeal.

2.3 We have heard the rival contentions and perused the materials

available on record. Taking into consideration the facts and circumstances

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur of the case and also the Medical Certificates issued by the doctor in

respect of the assessee, it is observed that there is sufficient cause in

preventing the assessee to file the appeal in time. In this view of the

matter, the delay in filing the appeal by the assessee is condoned.

3.1 Apropos solitary ground of the assessee, the facts as emerges from

the order of the ld. CIT(A) are as under:-

‘’4.3 I have carefully considered the material before me. I find that appellant failed to establish the creditworthiness of the so called creditor of Riyazuddin Quresh and Asmuddind Qureshi because the Riyazuddin Qureshi filed his return u/s 44AD of the I.T. Act which indicate that the appellant is not having the books of accounts and his total income is only Rs. 2,65,117/-. He paid Life Insurance Premium of Rs. 48,096/-and balance amount comes of Rs. 2,17,021/-. This amount is used for house hold expenses. He further made the argument that he had taken loan from other person is also not believable. The above facts prove that these persons are not having sufficient fund to lend the money. The so called cash creditor deposit the same in their bank account and issued same amount cheques on the same day or one and two days later. Therefore, the cited case laws of the A/R appellant is not applicable in ths case.

Considering the above observation, I am of the view that creditworthiness is not proved of the so called cash creditor of Shri Asmuddin Qureshi and Shri Riyazuddin Qureshi. Therefore, I treat that the appellant used his undisclosed money to deposit in their account ad made the entries in the books of accounts. Hence, I confirm the addition made by the assessing officer of Rs. 8,11,600/- u/s 68 of the I.T. Act, 1961. This ground is not allowed.’’

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur 3.2 During the course of hearing, the ld.AR of the assessee prayed that

the ld. CIT(A) has erred in confirming the addition of Rs. 8,11,600/- u/s

68 of the Act for which the ld.AR of the assessee filed the following

written submission and the same has been taken into consideration.

‘’1. That the Ld. Assessing Officer has erred on facts and in law in making the addition of two unsecured loans of Rs. 8,11,600 ( from Asmuddin kureshi of Rs. 5,36,000 and from Riyazuddin kureshi of Rs. 248000/- ) on account of income from undisclosed source under section 68 of Income Tax Act, 1961 without appreciating the submitted papers of confirmation of such loans. In this relation we submit that-

a. The Appellant was running the business of trading of iron scrap at chaksu. The Appellant have total income Rs. 5,51,150/- during the assessment year 2012-13. As per nature of the business appellant purchases scrap from the retailers and through general customers. Finance is the blood of the Business hence to a boost and growth of the business, the appellant has taken loan from Asmuddin kureshi of Rs. 5,36,000 and from Riyazuddin kureshi of Rs. 248000/- through bank. The appellant filed following documents to the assessing officer while the assessment –

Copy of Pan card of the Creditors

Copy of Bank statement of Creditors Copy of the confirmation cum explanation letter submitted by Creditors Copy of acknowledgement of return with computation of the Creditors which support the identity, Genuineness of transaction and Creditworthiness of loner Copy of the accounts of the creditors in the books of the appellant

b. On the other hand , the Ld. AO has also called information from loner directly and they have submitted their reply mentioning source of loan given to appellant but Ld. AO has not considered the reply of loner and reply of loner and reply of show cause issued to appellant and added the aforesaid amount of loan taken and Same was confirmed by the Honorable Commissioner of Income tax (Appeal-3), Jaipur.

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur

Once appellant has proved Identity of loner, genuineness of transaction, and Creditworthiness of loner then loan taken by appellant could not be treated as unexplained/undisclosed and not liable to addition u/s 68. In the case of Sumati Dayal v. CIT 214 ITR 801 (SC) Hon’ble Supreme court held that while considering the explanation of the appellant, the revenue or Department cannot act unreasonably.

Where the appellant has shown all the evidence to substantiate the case, the same cannot be ingnored by the department and claim unsatisfactory In the case of CIT vs. Uttamchand Jain (2010) 320 itr 554, wherein the appellant showed all the proof 18available with him to prove the genuine sale of jewellery but the Assessing Officer disallowed the same on extraneous grounds. The Hon’ble Delhi High Court observed as under: “…………………………………………………….The fact that the jewellery claimed to have been sold by the appellant was not found with the purchaser or his associates cannot be held against the appellant, because, admittedly, the said jewellery declared under VDIS, 1997 is also not found with the appellant after the sale is effected. If existence of the jewellery with the appellant prior to the sale is evidenced by the VDIS, 1997 certificate and on sale of the said jewellery the appellant has received the consideration which is duly accounted for, then the mere fact that the jewellery sold by the appellant is not found with the purchaser cannot be a ground to hold that the transaction was bogus and the consideration received by the appellant was the undisclosed income of the appellant ………….. ……... The fact that the cash credits are introduced in the accounts of Mr. Trivedi, it cannot be inferred that the said cash belonged to the appellant. The appellant was not under any obligation to prove the cash credits in the accounts of Mr. Trivedi. In the present case, the appellant has proved that he was in possession of the diamond jewellery which was duly declared and certified under VDIS, 1997. The appellant has proved the identity of the person to whom the said diamond jewe11ery was sold, his credit worthiness and has accounted for the sale proceeds received from the sale of the diamond jewellery.” 1. That on the facts and in the circumstances of the case and in law the Ld. Assessing Officer has erred in finalization of credit worthiness of the creditors ignoring the verified transaction appearing in bank account of lender, issued notice to loner and received the proper reply. Addition u/s 68 made by Ld. ITO and Ld. Commissioner of Income tax (Appeals-3) is totally illegal and arbitrary In this realtion we submit that- a. The Ld. AO and Ld. Commissioner of Income tax (Appeals-3) has not pointed out any defect in the reply of loner regarding source and he did not

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur mention any reason in his order which support his view that reply of loner and appellant is not found satisfactory for source of loan taken. b. As the appellant submitted all evidence, in support of identity, creditworthiness and genuineness of the lender and the onus of appellant stands discharged by providing all possible evidences, further is held at various decisions of apex court that appellant is not bound to provide source of source. c. The loan amount of the appellant fully verifiable. There are no undisclosed source of income or unexplained loan made during the above said assessment year. The appellant submitted profit and loss account , Balance sheet for the above said assessment year and provided proper clarification with the evidence and proof regarding the receiving of loan from creditors. d. That appellant had taken loan from Asmuddin qureshi of Rs 563600/- and Rs. 248000/- from Riyazuddin Qureshi on various dates through bank cheque sir appellant had furnished and submitted all the possible evidences and documents including confirmation, bank account, Declaration and reply from lender about source of amount given ITR genuineness of transaction and creditworthiness of lender. But the Ld. AO has not accepted the reply of appellant by saying just that reply is not satisfactory and could not reply the source of deposits in bank of lender. The id AO failed to point out the reply the defect in reply of appellant when appellant proved the genuiness of transaction identity of lender and creditworthiness of lender and id AO arbitrary decide and added the loan amount u/s 68. e. That sir, many honorable apex authorities and courts held in various cases that once appellant has proved identity of loner genuineness of transaction and creditworthiness of loner than loan taken by appellant could not be treated us unexplained and not liable to addition u/s 68.in this connection we submit these things as follows- (i) Identity of Loner 0. Sir appellant has filled the confirmation of loan taken by providing name, address,PAN, signed confirmation and bank account with cross check with the record of appellant hence appellant has proved the identity of loner and Ld AO had not objected the same. we are once again re-furnishing the whereabouts of loner. • Asmuddin Quershi Loan taken of Rs. 563600.00 s/o kamruddin Quershi Ward no. 04 kureshiyon ka mohalla VPO- chaksu Distt.- Jaipur. PAN- BGRPK6405P • Riyazuddin Quershi Loan taken of Rs. 248000.00 s/o kamruddin Quershi

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur Ward no. 04 kureshiyon ka mohalla VPO- chaksu Distt.- Jaipur. PAN-AAGPQ6840C The identity of cash creditor stood proved in as much as copy of PAN card and copy of Income Tax return were filed.

Hon'ble Rajasthan High Court in the case of Aravali Trading Co Vs Income Tax Officer (2008) 8 DTR (Raj) 199 has held that once the existence of the creditors is proved and such persons own the credits, the appellant's onus stands discharged and the appellant is not required to prove the source from which the creditors could have acquired the money deposited with him. Hon'ble jurisdictional High Court has held that merely because the depositors' explanation about the sources of money was not acceptable to the AO, it cannot be presumed that the deposit made by the creditors is money belonging to the appellant itself. (ii) Genuineness of Transaction 0. The appellant provide the correctness and Genuineness of Transaction i.e loan taken by the appellant. The appellant has taken loan through bank cheque only and appellant provided bank statement of loner and bank statement of himself and Ld AO got verified the both the entries and found with no difference in transaction. The Id AO has not doubted about the Genuineness of aforesaid Transaction . 1. The filed confirmation letter, admit the giving of loan. The appellant filed copy of bank statement of cash creditors where the amount of payment is reflected in bank statement.it is the clear evidence of the correctness and Genuineness of Transaction. 2. (iii) creditworthiness of loner or lender The appellant furnished the copy of return of appellant, PAN no, a declaration from lender of source of fund given, copy of bank statement. It was also stated and furnished that lenders are regular appellant and assessed to income tax regularly and looking to the return of lender and their regularly filling status they are capable for lending they aforesaid the amount the appellant and further it was stated that both the lender has shown the loan given their return of income hence there is no question about the creditworthiness of lender. The Id AO questioned the cash deposit in bank account by lender and during the course of assessments , appellant required to issue the notice to the lender for furnishing the source of case deposit by lender and in response to AO letter lender has furnished the reply by elaborating the source of cash deposit in the bank . (A) Riyazuddin Quershi Loan taken of Rs. 248000.00 PAN-AAGPQ6840C

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur • That Riyazuddin Quershi is proprietor of M/S R.K. Traders a registered firm under VAT. • That during the year 2011-12 A.Y. 2012-13 he filled the return of income by declaring a total turnover of Rs. 3188963.00 and filled the return of income u/s 44 AD and declared his income from business of Rs.255117.00 • That Riyazuddin Quershi is a regular appellant and filling his return of income since many years • That Riyazuddin Quershi has replied to Ld AO vide his declaration submitted on 13.03.2015 that cash deposit in bank out of income earned during the year, cash withdrwal from bank, out of accumulated saving and petty loan from two person .(copy enclosed)

(B) Asmuddin Quershi Loan taken of Rs. 563600.00 PAN- BGRPK6405P • That Asmuddin Quershi was previously running a small firm but during the year 2011-12 he was doing service • That during the year 2011-12 A.Y. 2012-13 he filled the return of income by declared a income of Rs. 195917.00 • That Asmuddin Quershi is a regular appellant and filling his return of income since many years. • That Asmuddin Quershi had replied to Ld AO vide his declaration submitted on 13.03.2015 that cash deposit in bank out of income earned during the year , cash withdrwal from bank out of accumulated saving and petty loan from two person .(copy enclosed.)

The appellant has also filed copy of bank statement of the company which shows regular number of transactions which shows business bonding between the a appellant and loner . There is no onus of the appellant to prove source of source. Once the appellant able to establish that he has in fact received money from third party, it can't be burdened with a further onus of establishing the source from which such third party had been able to obtain the money.

As per above situation and facts, appellant furnished about identity creditworthiness and genuineness of transaction hence discharged his liability as per various courts decision and principal.

As per the decision of honable supreme court in matter of Lovely Exports 216 ITR 195 that it was submitted that he identity and genuineness of the transaction and the creditworthiness of the concerned parties has been established and that in these circumstances, the AO could not have included these amount under section 68

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur

All the relevant materials in the from of confirmation with respect to each transaction pertaining to the appellant’s business activities as well as the sale/purchase deeds was disclosed and given tha fact that the amount were reflect in the bank account there was no question of dubious credit entries the verdict of the Hon’ble Supreme Court in the case of CIT Vs Lovely Exports (P) Ltd. 216 CTR 195 which held as under: - “Can the amount of share money be regarded as undisclosed income under section 68 of the Income Tax Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the appellant company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgement.”

As per such decision of lovely Export 216 CTR 195 Guides the authorities for the proper conduct of proceeding of adding amounts under section 68. The initial onus to show the genuineness and identity of transaction and the credit worthiness of the party is no doubt upon the appellant. Once that is done in the form of prima facie credible material, the AO has to then exert himself /her self to quote relevant material to disprove that onus and discharge the burden placed upon the Revenue. The above held proposition of the Hon’ble Supreme Court was followed various High Courts and the matter was mostly decided in favor of appellant. Those include: a) CIT Vs K.C.Fibres (2010) 187 TAXMAN 53 (Del) b) CIT Vs Kamdhenu Alloys and Steel Ltd. & Ors (2012) 248 CTR (Del) 33 c) CIT Vs Mishra Preservers (P) Ltd. (2013) 350 ITR 222 (All) d) CIT Vs People General Hospital Ltd. (2013) 356 ITR 65 (MP) e) DCIT Vs Rana Girders Ltd. (2013) 84 CCH 128 All HC f) Sources of source can not be asked That many apex authority held that source of source cannot be asked. I. in the recent judgment held by ITAT No. 1542/2012 date of order 15.01.2016 that appellant not obliged to prove source of source of the unsecured loan creditor. The burden is to prove source of the credit only- ITIAT. II. The Hon’ble Supreme Court in the case of CIT Vs Orissa Corporation (P) Ltd. 159 ITR 78 (SC) held as follows:-

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur

“13. In this case, the appellant had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax appellants. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the appellant, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the appellant could not do anything further.” Also, it is presumed subject to rebuttal that transaction cannot be considered as bogus when the funds are routed through bank accounts as they cannot be considered as unaccounted monies being the purpose for which the provision was introduced and also the bank statements are very much subject to scrutiny of the department. I The Hon’ble Agra Tribunal in the case of S.K.Jain Vs ITO (2004) 2 SOT 579 (Agra) observed as under: - “The creditors have confirmed that they have advanced loan to the appellant. In most of the cases, transactions have been routed through bank account. Therefore, asking source of such deposits will amount to asking source of the source which is not permitted under the law as held by the Hon’ble High Court of Patna in the case of Sarogi Credit Corpn. vs. CIT 1975 CTR (Pat) 1 : (1976) 103 ITR 344 (Pat) and the decision of the Ahmedabad Bench of the Tribunal in the case of Rohini Builders vs. Dy. CIT (2002) 76 TTJ (Ahd) 521 : (2001) 117 Taxman 25 (Ahd)(Mag). Once it is established that the amount has been invested by a particular person, be he is a family member or close relative then the responsibility of the appellant is over. The appellant cannot ask that person, who advanced the loan, whether money advanced is properly taxed or not.” Thus, it had become fairly settled law that appellant is not required to satisfy the Assessing Authority of the source of source. Thus the addition u/s 68 made by Ld. ITO and Ld. Commissioner of Income tax (Appeals-3) is totally illegal and arbitrary and liable to be deleted.

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur g) That in the context of the section 68, we submit that the intention of the law maker is to expose undisclosed investment or credit or identify the investor/creditors. It is also general economic principle that the Investments made to a country promote the Growth in the country. However, when the investments are not genuine in nature, it will have a counter-effect on the economy of the country. Hence, it is very essential to have stringent provisions in order to protect the economy of the country. Section 68 of the Income Tax Act, 1961 does well in this regard. With the consideration of the above facts, ground and submitted documents & proof, it is clearly identifiable person as creditors, clear payment via transfer from banking channel hence the applicability of section 68 should be dropped. 2. That on the facts and in the circumstances of the case and in law the Honorable Commissioner of Income–tax (Appeals) where an appeal is filed before the Tribunal against the order of Commissioner (Appeals)) erred in finalization of credit worthiness of the creditors only on behalf of the paying of life insurance household expenses without considering this facts that both these persons are brother and they are living with him parents and no burden of household expenses comes on these brothers. In this connection, we submit that- a. Asmuddin kureshi and Riyazuddin kureshi are bothers and they are living with his father in joint family, all the expenses of household are borne by his father and mother. The father and mother are in the Business and they are filling regular returns. Whereas Mr. Asmuddin kureshi and Riyazuddin kureshi are in working as small Businessman of trading. The net income after paying the Insurance receipts goes into own fund/corpus to further promote the business. The nature of Business of Mr. Asmuddin kureshi and Riyazuddin kureshi is mostly in cash as small trading or small payment/receipts. Hence they keep and use the cash for Business trading. If the additional fund create, they pay this amount as loan to appellant who is the brother of Asmuddin kureshi and Riyazuddin kureshi without interest to a boost the business of brother. With the consideration of the above facts, the amount was given by Asmuddin kureshi and Riyazuddin kureshi as loan in parts with small ticket size loan as follows on different dates as per the requirements of the business of appellant as follows –

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur Paid by Asmuddin kureshi to appellant S.NO. Particulars Date of Payment Amount Through Bank/Cash 1. Loan 05/05/2011 49,000 Through Bank of Baroda 2. Loan 11/05/2011 49,000 Through Bank of Baroda 3. Loan 18/05/2011 49,000 Through Bank of Baroda 4. Loan 13/06/2011 1,00,000 Through Bank of Baroda 5. Loan 06/09/2011 2,18,500 Through Bank of Baroda 6. Loan 12/10/2011 50,0000 Through Bank of Baroda 7. 28/01/2012 49,000 Through Bank of Baroda

Paid by Mr. Riyazuddin kureshi to appellant S.NO. Particualrs Date of Amount Through Payment Bank/Cash 1. Loan 19/05/2011 49,000 Through Bank of Baroda 2. Loan 13/06/2011 1,00,000 Through Bank of Baroda 3. Loan 12/10/2011 50,000 Through Bank of Baroda 4. Loan 28/01/2012 49,000 Through Bank of Baroda 3. That on the facts and in the circumstances of the case and in law the Honorable Commissioner of Income–tax (Appeals) where an appeal is filed before the Tribunal against the order of Commissioner (Appeals)) erred in finalization of credit worthiness of the creditors only on behalf of the paying of life insurance household expenses without considering the papers submitted by the creditors of sources of loans. 4. That the Appellant prays that the addition/ disallowance of Rs. 8,11,600 made in respect of unsecured loan be deleted. In this relation we submit that - a. The view of the above fact the amount Rs. 8,11,600/- received as loan is easily verifiable, genuineness creditworthy transactions. The Appellant did not make any concealment and does not have any unexplained income or undisclosed source under section 68 of Income Tax Act, 1961. The

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur Appellant doses not violate the provisions of the Income Tax Act, 1961. Therefore Rs. 8,11,600/- is not covered under section 68 of Income Tax Act, 1961. Therefore the addition of Rs. 8,11,600 made the Ld. Assessing officer as unsecured loan is wrong and should be deleted.

3.3 On the other hand, the ld. DR supported the order of the ld. CIT(A)

and relied on the decision of Hon'ble Gujarat High Court in the case of

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur Blessing Construction vs ITO (2013), 32 Taxmann.com 366 (Guj) and

Umesh Krishnani vs ITO (2013) 35 Taxmann. Com 598 (Guj).

3.4 We have heard the rival contentions and perused the materials

available on record. Brief facts of the case are that the AO made the

addition of Rs. 8,11,600/- holding that the assessee routed his income

through the bank account of the unsecured loaners because neither the

unsecured loaners nor the assessee could explain the source of the cash

deposited in the bank accounts of the concerned unsecured loaners during

the year under consideration. The AO during the assessment proceeding

did not find the reply of the assessee as well as unsecured loaners

acceptable. Therefore, the AO added the amount of Rs. 8,11,600/- to the

income of the assessee and thus made the addition. In first appeal, the ld.

CIT(A) has confirmed the action of the AO by holding as under:-

‘’…I am of the view that creditworthiness is not proved of the so called cash creditor of Shri Asmuddin Qureshi and Shri Riyazuddin Qureshi. Therefore, I treat that the appellant used his undisclosed money to deposit in their account ad made the entries in the books of accounts. Hence, I confirm the addition made by the assessing officer of Rs. 8,11,600/- u/s 68 of the I.T. Act, 1961. This ground is not allowed.’’

During the course of hearing, the ld.AR of the assessee filed the detailed

written submission mentioning that the assessee has filed the complete

papers concerning the loan amount of Rs. 8,11,600/- taken from Shri

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur Ashmuddin Qurshi amounting to Rs. 5,63,600/- and from Shri

Riyazuddin Qureshi amounting to Rs. 2,48,600/-. The ld.AR of the

assessee further submitted that assessee has filed confirmation, bank

account, declaration and reply letter about source of amount given, ITR

Copies of loaners and identity of loaners. The assessee had taken the loan

through bank cheque only and assessee provided bank statement of

loaners. The ld.AR further submitted that the assessee submitted profit

and loss account, balance sheet for the above Assessment Year and

provided proper clarification with evidence and proof of regarding

receiving the loan taken from creditors. The ld.AR of the assessee

submitted that the lenders had furnished the reply by elaborating the

source of cash deposit in the bank which are mentioned in the written

submission of the assessee. The assessee has filed the chart whereby

details of the loans are mentioned therein. It is noted Shri Asmuddin

Kureshi and Riyajuddin are brother of the assessee. Shri Asmuddin

Kurshi S/o Shri Kamruddin Kureshi bearing PAN BGRPK 6450P is

assessed to income tax and return of income has been filed in the office

of ITO, Ward 1(3), Jaipur on 19-03-2013. He has declared the income

from salary from M/s. M.S. Steels and income from other sources.

Further Shri Riyajuddin Qureshi S/o Shri Kamruddin Qureshi bearing

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur PAN AAGPQ 6840 C is assessed to income and return of income for the

year under consideration i.e. 2012-13 has been filed in the office of Ward

7(3), Jaipur on 01-02-2013. While assessee was assessed to tax with ITO,

Ward 7(2), thus Shri Riyajuddin Kureshi was filing the returned income

in the same range. He has shown income from business and profession

u/s 44AD of the I.T. Act, 1961 at Rs. 2,55,117/-. From the available

records, it is noted that confirmations have been filed by these two

creditors placed at PBP 16 and 28. Shri Asmuddin Kureshi has confirmed

regarding give loan / advance of Rs. 5,64,500/- during the Financial Year

2011-12. The loan was through bank cheques. Sources of the advance

has also been enumerated therein. Similarly Shri Riyazuddin Kureshi has

also submitted the confirmations alongwith details of source of the loan

given to the assessee through cheque (PBP Page 28). These facts establish

that these two persons had advanced loans to the assessee who are also

close relative (i.e. brother). It is also noted that they were assessed to tax

and they were having taxable income. If any doubt is raised regarding the

source of credit in their account to doubt the creditworthiness of these

two persons (supra) then the necessary action needs to be taken in their

hands. The assessee should not have been asked to explain source of

ITA No.290/JP/2018 Shri Mujaffar Hussen vs ITO, Ward- 7(2) Jaipur source. In view of all the above facts and circumstances of the case, the appeal of the assessee is allowed. 4.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 05 -07-2018.

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