SRI. L. HANUMANTHAIAH,BANGALORE vs. ITO, BANGALORE

This is an assessee’s appeal directed against the order of learned CIT (Appeals), Bengaluru-6, Bengaluru dated 20.01.2016, for the assessment year 2008-09.

The grounds raised by the assessee are as under:-

It was submitted by learned AR of the assessee that this is the second round of appeal. It was submitted that the Tribunal order in first round of appeal is available at page 82-84 of the paper book in dated 19.06.2013. Thereafter, he pointed that in para No. 5 of this Tribunal order, the matter was restored back to the file of AO with the direction to reconsider the relevant evidence filed by the assessee and complete the assessment as per law. He submitted that in the second round, proper enquiry was not made by the AO. He also submitted that on page 81 is the confirmation letter received from the creditor in respect of loan of Rs.7,99,500/- received from him. At this juncture, a query was raised by the bench as to whether there is any PAN details of the loan creditor and the details of his credit worthiness are available in the paper book and in reply, it was submitted by learned AR of the assessee that the same are not readily available in the paper book, but the same was not required by the authority below and therefore the matter may be restored back to the file of the AO for a fresh decision. In this round, the assessee will furnish the PAN details of the loan creditor along with the evidence of his credit worthiness. The learned DR supported the orders of the authorities below.

I have considered the rival submissions. I find that although confirmation has been filed by the assessee to the authorities below and the same is available before me also at page 81 of paper book, but the assessee has not submitted PAN details of the loan creditor and no evidence about his credit worthiness. This is now a settled position of law that in support of any cash credit, the assessee has to establish three ingredients i.e., identity of the loan creditor, his credit worthiness and genuineness of the transactions. The assessee in the present case has not submitted the PAN details of the loan creditor and nothing has been furnished in support of the credit worthiness of the loan creditor. It is also true that these details were not specifically asked for by the authorities below from the assessee. Under these facts, I set aside the order of the CIT(A) and restore the matter back to the file of the AO for a fresh decision after providing adequate opportunity of being heard to the assessee. The assessee is also directed to bring all evidences before the AO regarding these three ingredients i.e., identity of the loan creditor, his credit worthiness and genuineness of the transactions, without waiting for any specific query by the AO. The AO should pass necessary orders as per law after providing adequate opportunity to the assessee.

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