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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI A.MOHAN ALANKAMONY & SHRI S.S.GODARA
This assessee appeal for AY.2010-11 arises from the CIT(A)-2, Hyderabad’s order dated 01-12-2017 passed in case No. 0082 / CIT(A)-2 / Hyd / 2016-17, involving proceedings u/s.143(3) r.w.s.254 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused. 2. The assessee raises the following substantive grounds in the instant appeal:
“1. The order of the learned Commissioner (Appeals) in dated 1st December, 2017 is contrary to law and facts and learned Commissioner (Appeals) erred in dismissing the said appeal.
That the learned Commissioner (Appeals) erred in upholding the addition of Rs.17,61,86,737 u/s. 68 of the Act. He has not appreciated the submissions of the appellant and the relevant documentary evidence produced before him that the loans received during the year from different persons are genuine. The appellant has fully discharged the onus cast upon him in explaining the loan amounts received by him and has adequately proved the identity of loan creditors, genuineness of transactions and the credit worthiness of the creditors.
The findings / observations of the learned Commissioner (Appeals) with regard to the addition of Rs.17,61,86,737 under section 68 of the Act are against the facts and evidence on record.
For these and other grounds that will be submitted at the time of hearing of the appeal, the appellant prays that the addition of Rs. 17,61,86,737 be deleted.
The Appellant craves leave to add to, alter or amend all or any of the above grounds of appeal at or before the hearing”.
3. We next note that the Ld.CIT(A) has affirmed the Assessing Officer’s action adding Section 68 un-explained cash credits vide following detailed discussion:
4. Learned counsel vehemently contended during the course of hearing that both the lower authorities have erred in law and on facts in making the impugned un-explained cash credits addition involving various un-secured loans. He invited our attention to the assessee’s detailed paper book running into 216 pages comprising of summarized list of loan sums borrowed followed by repayments, loan creditors’ balance sheets explaining source of funds with copies thereof, bank certificate and confirmation letter(s) involving Smt.V.Vasanthalakshmi and M/s.Kalawati Builders Pvt. Ltd., address proof and confirmation, Assessing Officer’s letter dt.15-02-2016 as replied on 26-02-2016 and 19-03-2016, tribunal’s remand order dt.06-02-2015 in first round, written submissions in respect of 53 creditors as well as various judicial precedents. Learned counsel sought to buttress the point that the assessee’s creditor parties have filed their income tax return acknowledgements, copies of bank statements reflecting loan transactions, their explanation regarding source of funds as well as confirmations before the lower authorities thereby discharging the three-folded onus of identity, genuineness and creditworthiness u/s.68 of the Act.
5. The Revenue strongly supported the impugned addition made in both the lower proceedings in light of the CIT(A)’s detailed discussion.
We have given our thoughtful consideration to the foregoing rival pleadings and find no merit in the assessee’s stand. There would be hardly any dispute about the settled proposition of law i.e., Sumati Dayal Vs. CIT (1995) [214 ITR 801] (SC) and CIT Vs. Durga Prasad More (1972) [82 ITR 540] (SC) that any explanation or evidence filed during the course of income tax proceedings ought to be examined in the light of human probabilities by removing all blinkers. Their lordships recent decision in PCIT Vs. NRA Iron and Steel Pvt. Ltd. (2019) 412 ITR 161 (SC) also holds that mere filing of documentary evidence does not itself prove genuineness or creditworthiness in an issue pertaining to un-explained cash credits. We keep in mind the foregoing legal parameters and deal with the clinching facts in the instant case. It is an admitted factual position that this assessee is assessed and lives in Hyderabad whereas all the corresponding loan creditors parties are from Kolkata only. And that too, there is not even a single loan agreement between the assessee and the said parties, reflecting the terms of repayment or interest, except the former self-styled repayment instances along with interest component at varying rates.
Mr.Ratnakar replied in response to our query that the assessee is the promoter/Managing Director of a very reputed entity and his staff members in Kolkata only had arranged for the impugned un-secured loans. This clinching explanation hardly comes to the assessee’s rescue since going against all human probabilities that a person, un-known in Kolkata would be able to receive such huge sums of unsecured loans without any surety. This is in addition to the fact that he has not produced a single employee having arranged all these loans. We therefore conclude in light of the foregoing settle law as well as the relevant facts and circumstances herein that the assessee has failed to prove genuineness and creditworthiness of the impugned un-secured loan sums. We thus find no reason to interfere with the learned lower authorities’ action making the impugned addition. The same stands confirmed.
This assessee’s appeal is dismissed in above terms.
Order pronounced in the open court on 23rd March, 2022