Arun Khodpia ORDER
1. This is an appeal filed by the assessee against the order dated of the ld. CIT(A)-2, Bhubaneswar in Appeal No. Sambalpur/1020/2014-15 for the assessment year 2011-12.
2. S/Shri Somanath Sahoo/S.N. Sahoo, ARs appeared for the assessee and Shri Kishore Chandra Mohanty ld. Sr. DR appeared for the revenue.
3. It was submitted by ld. AR that the assessee is an individual, who is deriving salary income and interest in firm M/s. Biraja Construction. It was the submission that the assessee had acquired certain immovable property during the relevant assessment year for a consideration of Rs. 30,40,677/-. The assessee was called upon to prove the source of the said investment. The assessee had submitted that he has taken loan of Rs. 14 lakhs from seven persons as mentioned in para 4 of the assessment order. It was the submission that seven persons were called for examination and the assessee produced 5 persons namely; Shri Ratikanta Mohanty, Shri Narayan Chandra Samal, Shri Udakar Bhanja, Shri Narendra Kumar Das, who have confirmed having given the loan to the assessee. They had also mentioned that they are agriculturist and their main source of income is from agriculture. In respect of Shri Jajati Keshari Mohanty and Shri Sashikanta Mohanty, the assessee had produced the confirmations in the form of affidavits. It was the submission that all the seven persons have confirmed having given loans to the assessee. Five persons had appeared in person and two persons through sworn affidavits. It was the submission that the Assessing Officer took the stand that the all the seven persons did not have the capacity to give loan and also questioned the creditworthiness of the creditors. The Assessing officer had treated the genuineness of the transaction as bogus. It was the submission that as the five persons appeared before the AO and confirmed the loan given to the assessee and two persons through sworn the affidavits having given the loan to the assessee, no disallowance was called for. It was the submission that the ld. CIT(A) without appreciating the contention of the assessee had rejected the appeal of the assessee.
4. In reply, ld. Sr DR submitted that the Co-ordinate Bench of this Tribunal ITAT Delhi Benches in the case of Surender Kumar (Individual) vs ITO (2010) 36 SOT 464 (Del) has categorically held that mere filing of affidavits could not prove that the loans were genuine. It was the further submission that in the said decision, it has also been categorically held that just because the persons who have given the loan held land did not mean that the credits were genuine. It was the submission that the said loans were book entry and the amount of Rs. 14 lakhs shown as loan is nothing but assessee's own funds routed through the name of seven persons. He submitted that the order of the ld. CIT(A) is liable to be upheld.
5. We have considered the rival submissions. A perusal of the present case clearly shows that the Assessing Officer has called for the creditors and five of the creditors have appeared in persons and have confirmed the transaction before the AO. Two persons were unable to appear as they were out of station but filed affidavits sworn by them. Thus, we are now faced with a situation whether the creditors have personally appeared and confirmed the transaction. The decision relied upon by ld. Sr DR was a case where the affidavits were filed but persons were never produced. When the creditors have appeared personally and confirmed the transaction, then unless there is substantial proof to show that what has been mentioned by the creditors is false, they cannot be disbelieved. It is also to be understood that giving false affidavit is also punishable. Such action has not also been initiated by the Assessing Officer. In these circumstances, as the creditors have appeared and have also confirmed the transaction and in respect of two creditors, the affidavits filed, we are of the view that the credits as claimed by the assessee is substantiated and the addition as made by the AO and confirmed by the ld. CIT(A) stands deleted.
6. In the result, appeal of the assessee is allowed.
Order dictated and pronounced in the open court on 14/12/2022.
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