STAVAN SHAILESHKUMAR RAO,AHMEDABAD V. THE ITO, WARD-4(2)(3), AHMEDABAD

ITA 358/AHD/2025

AI Insights

The case revolves around an appeal by Stavan Shaileshkumar Rao against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of Rs.9,62,000 to his income as unexplained cash credit under section 68 of the Income Tax Act for the Assessment Year 2015-16. The amount represented unsecured loans received from eight relatives, all agriculturists. The Assessing Officer had initially treated these loans as bogus due to insufficient documentary evidence proving the creditworthiness and genuineness of the transactions. However, the Tribunal noted that the Revenue authorities failed to conduct a thorough inquiry into the detailed evidence provided by the assessee, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312506 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH BEFORE: DR. BRR KUMAR, VICE PRESIDENT And SHRI T. R SENTHIL KUMAR, JUDICIAL MEMBER Stavan Shaileshkumar Rao, 337 KK Nagar Sector 4, Rannapark, Ghatlodiya-380061. Ahmedabad. PAN: BUPPR6469G (Appellant) Vs The Income Tax Officer, Ward-4(2)(3), Ahmedabad. (Respondent) Assessee Represented: None Revenue Represented: Shri S K Agal, Sr.D.R. Date of hearing : 23.04.2025 Date of pronouncement : 01.05.2025 आदेश/ORDER PER : DR. BRR KUMAR, VICE PRESIDENT: This appeal is filed by the Assessee as against the appellate order dated 27.01.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2015-16. ITA No.358/Ahd/2025 Assessment Year 2015-16 I.T.A No. 358/Ahd/2025 A.Y. 2015-16 Page No 2 2. The assessee has raised the following grounds of appeal: 1. The Learned CIT(A) erred in law and facts in upholding the addition of Rs.9,62,000/- u/s.68 despite Appellant provided sufficient evidence in form of PAN cards, Aadhar cards, ledger account confirmations, affidavits, 7/12 statements and counter party’s confirmation through video conferring to establish identity, creditworthiness and genuineness of the parties from whom the unsecured loans of Rs,9.62,000 were received. 2. The appellant craves leave to add, modify or later any ground of appeal if necessary. 3. The facts of the case are that that Assessee is an agriculturist and engaged in the Agricultural activities since generations. During the year under consideration, the assessee has received unsecured loans of Rs.9,62,000/- from total 8 parties all being Agriculturist and relative of the assessee which are as follows: Sr.No. Party Name Amount Nature of Relation 1. Balumatiben kantibhai Barot 1,20,000 All are maternal side relative of the Assessee and Agriculturist. 2. Jigar Kantibhai Barot 1,22,000 3. Kantilal Manilal Barot (Died on 25.08.2020) 1,24,000 4. Prakshchandra Kantibhai Barot 1,73,000 5. Bharatbhai Harvovandas Barot 87,000 All are Maternal side relative of father 6. Jayantibhai Harvovandas Barot 81,000 7. Nareshbhai Harvovandas Barot 1,30,000 8 Sureshbhai Harvovandas Barot 1,25,000 Assessee and Agriculturist. Total Unsecured Loan received 9,62,000 I.T.A No. 358/Ahd/2025 A.Y. 2015-16 Page No 3 4. A show-cause notice dated 03.03.2023 was issued to the assessee to explain the genuineness and creditworthiness of the creditor. In reply the assessee submitted that all 8 parties were involved in agriculture business since many years and have savings out of agriculture income duly earned by them. The Assessing Officer find that assessee could not justify this loan with any documentary evidence about how could these people gather these amount and gave loan of Rs.9,62,000/- to the assessee, hence the genuineness and creditworthiness of the transaction were remained unverified. So the Assessing Officer assumed that this amount claimed as loan received is assessee own money received from undisclosed sources and as such this loan of Rs.9,62,000/- is treated as bogus and added back to the total income of the assessee u/s.68 of the Act as unexplained cash credit. 5. Aggrieved assessee filed an appeal before the Ld. CIT(A), who dismissed the ground of appeal of the assessee by observing as follows: “…7.6 In the appellate proceedings, the appellant submitted that 1. The appellant had received unsecured loans from 8 (eight) relatives amounting to Rs.9,62,000/- during the year. ii. The creditors are agriculturists and the sources of loans advanced to the appellant are past savings and agricultural Income earned by them. 7.7 The appellant furnished copies of identity documents, ledger accounts, affidavits and land holding documents of each purported creditor. 7.8 It is a settled position of law that with regard to loans, the tests of identity, genuineness of transactions and creditworthiness of the creditors have to be applied. 7.9 With regard to creditworthiness of each purported creditor, the appellant has furnished copies of land records. No other supporting document has been furnished such as details of sale of agricultural I.T.A No. 358/Ahd/2025 A.Y. 2015-16 Page No 4 produce, expenses incurred, crops cultivated, application of income, income-expenditure accounts, balance sheets, bank statements, cash book etc. The evidence brought on record cannot be said to constitute sufficient proof of agricultural activity and generation of income there from which can justify advancing of cash loans amounting in aggregate to Rs.9,62,000/- to the appellant. In the result, this claim of the appellant, being insufficiently substantiated, is not acceptable. 7.10 The onus is on the appellant to establish the creditworthiness of the respective creditors. As discussed above, the appellant has not furnished any documentary evidence to establish the same. Accordingly, it is held that the sources of cash loans amounting to Rs.9,62,000/- received by the appellant remain unexplained. 7.11 In view of the facts and circumstances of the case as elucidated above, the impugned addition of Rs.9,62,000/- is hereby confirmed.…” 6. At the outset we noticed that the alleged unsecured loan amount varies from Rs.81,000/- to 1,20,000/- and Rs.1,73,000/-. The lenders are all relatives and due details have been given before the authorities but no inquiry was conducted by Revenue authorities. Hence, keeping in view the facts and circumstances peculiar to this instant case, the appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 01.05.2025 Sd/- Sd/- (T.R SENTHIL KUMAR) (DR.BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT (True Copy) Ahmedabad : Dated 01.05.2025 I.T.A No. 358/Ahd/2025 A.Y. 2015-16 Page No 5 आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद "