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ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee under section 253 of the Act is directed against the order of ld. Commissioner of Income-tax (Appeals)-2, Pune [ld. CIT(A)] dated 24.10.2017 for Assessment Year 2012-13 which in turn arises from the assessment order passed under section 143(3) dated 12.03.2015 by Assessing Officer/ITO-Ward 1(4), Kalyan. The assessee has raised the following grounds of appeal:
On the facts and in the circumstances of the case and in law learned Commissioner of Income Tax (Appeals)-2, Pune was not justified both in facts and in law while confirming following addition:- (a) by treating the loan obtained from appellant’s father of Rs. 7,17,000/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961. (b) the appellant craves leave to add, alter, modify and delete all or any of the above grounds of appeal on or before the final hearing.
2. Brief facts of the case are that the assessee is engaged in the business of retail trading of tyres of M/s J.K. Tyres & Industries in the name and style of M/s Gajanan Tyre Service. The assessee filed its return of income for Assessment Mum 17-Shri Swapnil Murlidhar Pichad Year 2012-13 on 30.09.2012 declaring total income at Rs. 8,02,810/-. The return of income was selected for scrutiny and the assessment order was passed under section 143(3) on 22.03.2015. The Assessing Officer while passing the assessment order made the addition under section 68 of Rs. 7,17,000/- on account of unexplained cash loan. On appeal before the ld. CIT(A), the action of Assessing Officer was confirmed. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us.
3. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and gone through the orders of authorities below. The ld. AR of the assessee submits that the Assessing Officer while passing the assessment order made the addition under section 68 of Rs. 7,17,000/- on account of unexplained cash. The Assessing Officer simultaneously initiated the penalty under section 271D of the Act.
The ld. AR of the assessee further submits that the father of assessee advanced temporary cash loan to assessee and the same was deposited in bank account of assessee. The details of cash was explained before the Assessing Officer as well as before the ld. CIT(A). The loan was taken from father of assessee; therefore, there was no dispute on identity. The assessee furnished the copy of affidavit of father of assessee and the return of income filed by his father. The assessee also shown/furnished copy of Audited accounts about the business activity of the father of the assessee. The assessee availed loan for the purpose Mum 17-Shri Swapnil Murlidhar Pichad of his business. Hence, the assessee has proved the creditworthiness of his father. The assessee availed loan for running his business; therefore, genuineness of the transaction cannot be doubted.
On the other hand, the ld. DR for the Revenue submits that during the assessment proceeding, the assessee agreed for addition at the time of assessment on 12.03.2015. Hence, the ground of appeal
raised by assessee has no force under the eyes of law. In rejoinder submission, the ld. AR of the assessee filed copy of order-sheet noting of Assessing Officer and invited our attention to the order-sheet dated 12.03.2015, wherein it is noted that assessee has explained that assessee accepted cash loan of Rs. 7,17,000/- from Murlidhar M. Pichad (father of assessee).
5. We have considered the rival submission of the parties and have gone through the orders of authorities below and the material placed before us in the form of Paper Book. During the assessment proceeding, the Assessing Officer made the addition on his observation that in ledger account of M/s. Gajanan Tyre Services, proprietor concerned of the assessee, it is seen that assessee has accepted the cash loan of Rs. 7,17,000/-. In the assessment order the Assessing Officer further noted that assessee agreed for addition on account of unexplained sources. The ld. CIT(A) confirmed the addition observing that assessee’s father is running a Petrol Pump, however, the assessee is dealer in Tyres and that it is not understandable to accept the cash deposit in the bank ITA No. 7315 Mum 17-Shri Swapnil Murlidhar Pichad account of assessee when both are having easy access to the banking facility.
The ld. CIT(A) doubted the genuineness of the transaction.
We have noted that the Assessing Officer made the addition on the basis of alleged admission of the assessee, reordered during the assessment proceedings. However, no such recording of the admission of assessee for admission is available in the order sheet noting dated 12.03.2015. There is no dispute about the identity of creditor, who is father of assessee. Further, there is no dispute about the creditworthiness of creditor. The Assessing Officer has disputed only the genuineness of transaction. We have noted that in the statement of fact filed before the ld. CIT(A), the assessee has categorically contended that the assessee has availed loan of Rs. 7,17,000/- on four occasions i.e. on 5th August, 30th August, 3rd October and on 8th November 2011. The assessee also explained that loan was taken due to paucity of working capital and the amount was received due to emergency of cheque clearing presented by M/s J.K. Tyre & Industries, to whom the assessee has given post dated cheuqe to ensure timely payment. From the facts narrated by assessee, the assessee has explained the genuineness of transaction. In view of the above factual discussion, we direct the AO to delete the addition of Rs. 7,17,000/-. The AO is directed accordingly.
In the result, appeal of the assessee is allowed.