SHRI DHARMENDRASINH R.VAGHELA,BARODA vs. THE INCOME TAX OFFICER, WARD-2(1), BARODA

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ITA 2443/AHD/2014Status: DisposedITAT Ahmedabad31 May 2018AY 2008-094 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition of Rs. 1,00,000 as unexplained loan. The assessee failed to discharge the initial onus of proving the bonafides and creditworthiness of the lender before the AO and CIT(A), and no such evidence was presented before the Tribunal either.

What were the facts?

The assessee claimed to have received a loan of Rs. 1,00,000 from Shri Bharatsinh Jadeja. The Assessing Officer added this amount as unexplained income as the assessee failed to provide evidence of the lender's identity, genuineness, and creditworthiness.

What were the issues?

Whether the loan received by the assessee is unexplained income under Section 68 of the Income Tax Act, 1961, due to failure to establish the identity, genuineness, and creditworthiness of the lender.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI RAJPAL YADAV & PRADIP KUMAR KEDIA

For Appellant: Shri Mukund Bakshi, A.R, Shri Saurabh Singh, Sr. D.R

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the assessee against the order of the CIT(A)-II, Baroda (‘CIT(A)’ in short), dated 24.04.2014 arising in the assessment order dated 28.12.2010 passed by the Assessing Officer (AO) u/s.143(3) of the

ITA No. 2443/Ahd/14 [Dharmendrasinh R. Vaghela vs. ITO] A.Y. 2008-09 - 2 -

Income Tax Act, 1961; (the Act) concerning assessment year 2008- 09.

2.

The grounds of appeal raised by the assessee reads as under:

“1. The Ld. CIT(A)-II, Baroda has erred in law and in facts in confirming an addition of Rs.1,00,000/- received as loan from Shri Bharatsinh Jadeja, as unexplained.

2.

(a) The Ld. CIT(A)-II, Baroda ought to have accepted the contention of the appellant that the provisions of sec.40(a)(ia) could be invoked only in a case where the payment liable to deduction of tax at source remained payable and not in respect of the payments where the amount has already paid.

(b) The CIT(A)-II, Baroda has erred in law and in facts in not accepting the above contention in respect of the disallowance of expenditure of Rs.5,96,899/- incurred and paid to NBFC as interest.”

3.

The ground no.2 raised by the assessee is not pressed in the course of hearing and therefore dismissed.

4.

We shall now advert to ground no.1 of the assessee’s appeal concerning addition of Rs.1Lakh received as loan from Shri Bharatsinh Jadeja.

5.

In the course of the scrutiny assessment, the AO inter alia noted that the assessee is claimed to have received Rs.1Lakh from one Bharatsing Lalubha Jadeja. The AO observed that the assessee has not furnished any evidence towards identity, genuineness and

ITA No. 2443/Ahd/14 [Dharmendrasinh R. Vaghela vs. ITO] A.Y. 2008-09 - 3 -

creditworthiness of the alleged lender despite several opportunities. It was noticed that the assessee did not have the PAN number at the time of the money lent. The return pertaining to assessment year 2008-09 was also not filed. The AO accordingly resorted to Section 68 of the Act and added the aforesaid credit appearing in the books as unaccounted income of the assessee introduced as unsecured loan.

6.

Aggrieved, the assessee preferred the appeal before the CIT(A).

7.

The CIT(A) also was not persuaded to accept the loan as bonafide. It was found by the CIT(A) that the assessee has failed to discharge its initial onus on the bonafides of the loan and creditworthiness of the lender. The CIT(A) therefore refused to grant any relief to the assessee.

8.

Further aggrieved, the assessee preferred appeal before the Tribunal.

9.

We have carefully considered the rival submissions on the issue and perused the material available on record. The maintainability of addition of Rs.1Lakh under s.68 purportedly received as loan is in controversy. A perusal of the assessment order shows that the assessee has totally failed to support the bonafides of the loans received from one Shri Bharatsinh L. Jadeja. The assessee has neither submitted the return of income nor has provided the bank statement of lender to discharge the initial onus. As narrated in appellate order, the assessee has failed to support the

ITA No. 2443/Ahd/14 [Dharmendrasinh R. Vaghela vs. ITO] A.Y. 2008-09 - 4 -

genuineness and creditworthiness of the lender before CIT(A) also. Therefore, we do not see any reason to interfere with the findings of the CIT(A). Before us also, the assessee has failed to establish, at least prima facie, as to how the loan so obtained is bonafide. There are no particulars towards repayment of loan on record either. In the circumstances, we decline to interfere.

10.

In the result, the appeal of the assessee is dismissed.

This Order pronounced in Open Court on 31/05/2018

Sd/- Sd/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 31/05/2018 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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