RAJENDRA KHIVRAJ MUTHA,PUNE vs. DCIT CIRCLE 9, PUNE

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ITA 42/PUN/2020Status: DisposedITAT Pune18 October 2022AY 2011-124 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to discharge the onus of proving the genuineness of the loan transaction. The authorities below were justified in making and sustaining the addition.

What were the facts?

The assessee, running medical stores, declared a loan of Rs. 10.00 lakh from an employee, Sh. Sanjay Pandhare, to whom the assessee had paid Rs. 11.03 lakh as commission. The Assessing Officer doubted the genuineness of this loan.

What were the issues?

Whether the loan received from an employee, to whom substantial commission was paid, was genuine and properly substantiated.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Mahavir Jain
For Respondent: Shri M.G. Jasnani

आदेश / ORDER

PER R.S. SYAL, VP :

1.

This appeal by the assessee is directed against the order dated 26-06-2019 passed by the CIT(A)-9, Pune in relation to the assessment year 2011-12.

2.

The only issue raised in this appeal is against the confirmation of addition of Rs.10.00 lakh made by the Assessing Officer (AO) u/s.68 of the Act.

3.

Briefly stated, the facts of the case are that the assessee has been running Medical stores. During the course of assessment proceedings, the AO observed that the assessee declared to have received loan from certain parties, including, Rs.10.00 lakh from Sh. Sanjay Pandhare. He observed that the assessee paid commission of Rs.11.03 lakh to this person who was working on commission basis. As per the statement, gross receipts of Sh Sanjay Pandhare were Rs.14.92 lakh. After making investment and expenditure at Rs.6.06 lakh, he was left with net income of Rs.8.86 lakh. The AO refused to accept the genuineness of the loan of Rs.10.00 lakh. The ld. CIT(A) upheld the assessment order on this point, against which the assessee has approached the Tribunal.

4.

After considering the rival submissions and gone through the relevant material on record, it is seen that Sh Sanjay Pandhare was working with the assessee on regular basis. Commission amounting to Rs.11.03 lakh was paid by the assessee to this person for the year under consideration. Sh Sanjay Pandhare had total income of Rs.14.94 lakh. The assessee is claiming to have received a loan of Rs.10.00 from his own employee to whom annual income of Rs.11.03 lakh was given. We are completely at a loss to appreciate the view point of the assessee in recording loan from his own employee and that too which covers about 90% of his annual salary paid by him. Not only the capacity of the creditor but the genuineness of the transaction is also clouded.

Under these circumstances, we hold that the assessee failed to discharge the onus cast upon him to prove the genuineness of the transaction. The authorities below were justified in making and sustaining the addition.

5.

In the result, the appeal is dismissed. Order pronounced in the Open Court on 18th day of October, 2022.

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