INCOME TAX OFFICER, MUMBAI vs. AMI SANDEEP SANGHAVI, MUMBAI

Accordingly, the Ld.CIT(A) proceeded to admit the additional evidences. Upon the examination of those evidences, the Ld CIT(A) found that the assessee‟s husband had enough sources to give the impugned loans of the assessee. He also noticed that the assessee has proved the identity, credit worthiness and genuineness of loans received from her husband. Accordingly, he deleted the addition made by the AO u/s.69A of the Act. The revenue is aggrieved.

5. Hence, the Ld.CIT(A) examined as to whether the husband of the assessee, Shri Sundeep Sanghavi was having enough funds for giving loans to the assessee. As rightly observed by the Ld.CIT(A), the total income declared by the assessee is not relevant to determine the credit worthiness or availability of funds. It is required to be seen as to whether the lender has got sufficient funds on the date of giving loans to the assessee. Hence, the Ld.CIT(A) has proceeded to examine the loans received from husband of the assessee in terms of sec.68 of the Act.

1. 1. Copy of Ledger A/c of the Appellant in the Books of Mr.Sundeep M Sanghavi Loan Creditor.

2. Photocopy of Bank Passbook of Mr.SundeepM.Sanghavi.

4. Copy of Ledger A/c of Mr.Sundeep M Sanghavi in the Books of Mahavir Polyfilms Private Limited.

“4.3.4. The finding of the AO appears only as a general comment without any enquiry/investigation. The income shown by a particular person for taxation in a single year does not throw full light on the net worth of the individual and his credit worthiness. The AO should have called for further details with regard to the sources of the loan lender, if he wished so or should have made independent enquiry before proceeding with the addition. In any case, the Appellant during the appeal proceedings has submitted the additional evidence in the form of bank accounts of the lendor, his balance sheet and copy of his ledger Account in the books of Mahavir polyfilms limited etc. The evidences although sent to the AO, he has only summarily submitted the Remand Report with remarks that no additional documents are submitted in the appeal proceedings, which is factually incorrect. 4.3.5. The additional documents submitted by the appellant have been examined. It is seen that the Sri Sundeep Sanghavi was having sufficient funds at the time/on the dates of lending loans to the appellant in his bank account. One of the sources as explained by Mr. Sundeep Sanghavi is the amount of Rs. 4,56,80,000/- received by him from the loan given earlier to M/s Mahavir Polyfilms. Sri Sundeep Sanghavi is also a full time director in M/s Mahavir Polyfilms Pvt. Ltd, which has substantial turnover during the year under consideration. Another source is the loan availed of Rs.1,96,00,000/- from his father Sri Mahendra Sanghavi. All the transactions are through banking channels. The receipts from the respective firms/persons are reflected in the Bank accounts of Mr Sundeep Sanghavi. The AO has neither made any effort either during the assessment proceedings or during the submission of Remand Report to make any enquiry /investigation to counter the above submissions which are substantiated by the transactions made through banking channels. In view of the above discussion, there is no reason to disbelieve the submissions / sources explained by the appellant with regard to loan from her husband Sri Sundeep Sanghavi. In any case, the appellant need not go to explain the source of source to prove the credit worthiness of the loan lendor. No money trail has also been established by the AO to prove that it is in fact appellant’s money and was routed through the above transactions for the said investments. Hence, the appellant has discharged her onus with regard to the sources of the payment made towards investment in foreign/ Indian properties. In the above background of the facts, the addition made by the AO cannot be sustained. The AO is hence, directed to delete the addition”