Madhumita Roy DECISION
Waseem Ahmed, Member (A)
1. The appeal has been preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Rajkot-2, (in short 'CIT(A)') dated 21.01.2020 arising in the assessment order dated 11.03.2016 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2013-14.
2. The only issue raised by the assessee is that the learned CIT(A) erred in confirming the addition made by the AO by treating the receipt of unsecured loan as unexplained cash credit under section 68 of the Act.
3. The facts in brief are that the assessee, a private limited company, is engaged in the business of manufacturing HDPE Pipes and Sprinkler & Drip items. The assessee during the year under consideration received an unsecured loan for Rs. 17,45,000.00, among other parties, from the persons detailed as under:
4. However, the AO found that all the loan parties were agriculturists and there was cash deposit before issuing the demand draft to the assessee. Furthermore, there were not furnished sufficient details justifying the quantum of agricultural income. Likewise, the amount of cash deposit in some of the cases was below Rs. 50,000/- against which demand draft was issued by the parties. Thus, the AO in the absence of sufficient creditworthiness of the loan parties treated the amount of loan as unexplained cash credited and added to the total income of the assessee.
5. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A).
6. The assessee before the Ld. CIT(A) submitted that the confirmation of all the loan parties were filed along with the bank passbook and revenue records in Form 7/12 and 8A. He also submitted that the statement under section 131 of the Act was also obtained by the AO from all the loan parties. Thus, the assessee claimed that it has discharged onus cast under Section 68 of the Act. However, the Ld. CIT(A) disagreed with the contention of the assessee and confirmed the order of the AO by observing as under:
"I have carefully considered the appellant's above written submission the appellant has relied upon the decision of various courts mention supra and careful consider of the same is found squarely distinguishable on fact of the assessee's case and appellant therefore of the opinion that he has made available documents like confirmations, revenue record in the form of 7/12, 8A, bank passbook and even the statements recorded u/s 131 in each case has accordingly met the basic criteria of identity of the depositors, genuineness of the transaction, creditworthiness of the depositors has been satisfied and accordingly appellant has discharged his primary onus hence pleaded that addition made u/s 68 be therefore deleted.
I have carefully considered the appellant's written submission, argument made during the appellant proceedings, and gone through various records produced during the appeal proceedings. In the appellant case glaring finding of the AO's are that in the case of Ashokbhal Bhutani and Bhavnaben Savaliya the sign as per the contra confirmation differs and even in the written submission it has been categorically mentioned that confirmations were signed by the heirs. Moreover Panchabhai Savaliya who cannot sign has produced the confirmation which is the signed one so it clearly establishes that the aspect of non genuineness. As regard the credit worthiness the depositors have claimed that they are the farmers who has agriculture land, at the same time all of them are maintaining a bank account but such bank account do n........