Hon'ble Judges/Coram:
V. Durga Rao, Member (J) and G. Manjunatha

ORDER

G. Manjunatha, Member (A)

1. This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai, dated 23.08.2019, and pertains to assessment year 2013-14.

2. The brief facts of the case are that the assessee is an individual and filed his return of income for the AY 2013-14 on 27.07.2013 declaring total income of Rs. 17,83,470/-. During the course of assessment proceedings, the AO noticed that the assessee has received unsecured loans from '8' persons as stated by the AO in Para No. 4.5 of his assessment order amounting to Rs. 1,17,90,000/-. The assessee was called upon to file necessary evidences including confirmations from loan creditors. In response, the assessee has filed details of loans taken from various parties and also furnished their name and address. The AO issued summons u/s. 131 of the Act, to all persons and in response, they appeared with necessary evidences and statements were recorded u/s. 131 of the Act. The AO after considering relevant submissions of the assessee and also taken note of statements recorded from various loan creditors observed that the assessee is not able to prove loans taken from certain persons and thus, out of unsecured loans amounting to Rs. 1,17,90,000/-, he has made additions of Rs. 79,90,000/-. The relevant findings of the AO are as under:

In view of the above facts and circumstance of the case, it is proved that the assessee has not been able establish fully the creditworthiness and genuineness of the transactions. The following facts have been established:

(a) As regards loan obtained by the Shri M Selvam and Mrs. T Nadhiya, it is seen that they have obtained gold loan and details of jewellery pledged has found to be not matching with the details given by the bank. It has also been found that at the same the assessee has also obtained gold loan from the bank of Rs. 490000 each along with these two persons. Hence, this transaction is nothing but an arranged one so as to facilitate the assessee to get the funds to invest in his company in which he is director. Further as already mentioned, obtaining of loan by a person who is also an employer from employee with meager source of income question marks genuineness of transaction.

(b) As regards funds obtained from the family members of Late N Subramanian, the assessee has also admitted that he has not been able to furnish any evidences related to late Shri N Subramanian. The family members could have helped the assessee in giving this information as they had done by providing loan to him. This is not acceptable. Even if Shri N Subramanian died in 2012, the retirement benefit papers etc are always with the family members and if not they could have easily got it from the bank from where he voluntarily retired in 2006. Moreover, claim that he got 55,00,000 lac in 2006 also do not commensurate with the post held at the time of retirement. However, it cannot be held that the family members did not get anything from Late Subramanian and out of their own savings and hence reasonable amount in respect of each member considering the facts of the each person has been taken into account while holding the amount of loan as explained and balance as unexplained as mentioned above.

4.5. From the above facts and circumstances of the case and information gathered during the course of assessment proceedings, statements of above persons recorded, it is clear that the assessee has not been able to fully establish creditworthiness and genuineness of the loan creditors fully. Hence loan amounts obtained from the following persons is treated as unexplained and added back to total income the assessee under the head Income from other sources.

Since the assessee has concealed his particulars of income, penalty proceedings u/s. 271(1)(c) is initiated.

3. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld. ........