K RAVI SHANKAR,HYDERABAD vs. INCOME TAX OFFICER, WARD-12(4), HYDERABAD

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ITA 1460/HYD/2017Status: DisposedITAT Hyderabad06 June 2018AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Assessing Officer did not properly verify the genuineness of the loans as the promissory notes alone were not sufficient proof. The assessee was given one more opportunity to furnish confirmations from the lenders.

What were the facts?

The Assessing Officer added Rs. 19,92,250/- to the assessee's income, treating bank deposits as unexplained. The assessee claimed these were loans from eight individuals, supported only by promissory notes signed by him.

What were the issues?

Whether the promissory notes signed by the assessee are sufficient evidence to prove the genuineness of loans received, and if further verification by the AO is required.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” (SMC

Before: SHRI B. RAMAKOTAIAH

This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-4, Hyderabad, dated 09-03-2017.

2.

Briefly stated, Assessing Officer (AO) made an addition of Rs. 19,92,250/- being the deposits in bank account maintained with ICICI Bank, Hyderabad for which assessee has stated that he has borrowed from eight persons totaling to Rs. 19.50 Lakhs. AO did not accept the stereo-typed promissory note copies with assessee’s signature only. He treated the amount as ‘unexplained’ and brought to tax.

:- 2 -: I.T.A. No. 1460/Hyd/2017

3.

Before the Ld.CIT(A), it was contended that the amounts were borrowed but as no other evidence was furnished, Ld.CIT(A) dismissed the appeal.

4.

It was the prayer that one more opportunity can be given to assessee to furnish necessary confirmations before the AO and pleaded for restoration of the issue to the file of AO. It was submitted that assessee could not get confirmations from other parties and now in a position to prove the genuineness of the borrowers.

5.

After considering the rival contentions, I am of the opinion that assessee can be given one more opportunity to prove the genuineness. As seen from the Paper Book filed, assessee has only produced copies of the promissory notes signed by him without any confirmation from the other party. AO also has not enquired from them whether they have advanced funds to assessee or not. Since there is no proper enquiry on the promissory notes furnished by assessee, I am of the view that AO can make enquiry and verify whether assessee has genuinely borrowed or not before rejecting the contentions. However, it is for the assessee to furnish necessary confirmations as the copies of the promissory notes does not prove that the other person has lent the money unless other person also confirms that he has advanced the money. The veracity of the promissory notes require examination. Therefore, in the interest of justice, the issue is restored to the file of AO for proper verification and to decide

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as per the facts and law. Assessee should be given due opportunity to substantiate the claims.

6.

In the result, appeal of assessee is considered allowed for statistical purposes.

Order pronounced in the open court on 6th June, 2018

Sd/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER

Hyderabad, Dated 6th June, 2018 TNMM

:- 4 -: I.T.A. No. 1460/Hyd/2017

Copy to : 1. Sri Kothakonda Ravi Shankar, C/o. Shri T. Chaitanya Kumar, Advocate, Flat No. 102, Gouri Apartment, Urdulane, Himayatnagar, Hyderabad. 2. The Income Tax Officer, Ward-12(4), Hyderabad.

3.

CIT (Appeals)-4, Hyderabad. 4. Pr.CIT-4, Hyderabad.

5.

D.R. ITAT, Hyderabad.

6.

Guard File.

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