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2024 (8) TMI 875 - AT - Income TaxUnexplained cash credit u/s 68 - prove of source of the source - HELD THAT - We find that the assessment year, involved in the assessee s case under consideration, is the assessment year 2009-10, where the assessee need not to prove source of the source , however, we note that the assessee has proved the source in a satisfactory manner, as noted by us above. Therefore, we note that assessee has discharged his initial onus, and once that onus is discharged, it is for the Revenue to prove that the credit found in the books of accounts of the assessee is the undisclosed income of the assessee. Our view is fortified by the judgement of Nemi Chand Kothari 2003 (9) TMI 62 - GAUHATI HIGH COURT wherein it was held that the burden of the assessee to prove the genuineness of the transactions as well as creditworthiness of the creditor is confined to the transactions which have taken place between the assessee and the creditors, and it is not the burden of the assessee to show the source of his creditor or to prove the creditworthiness of the source of the sub-creditors. Unexplained cash credit for the loan taken from M/s. Deepika Roadlines - We find that such loan was taken by the assessee, by an account payee cheque, through proper banking channel, and necessary interest have been accrued. Name and address and PAN number of the party from whom the loan was taken, have been submitted by the assessee, before the assessing officer, during the assessment proceedings. We note that in the case of CIT V/s. Ranchod JivabhaiNakhava 2012 (5) TMI 186 - GUJARAT HIGH COURT held that once the assessee has established that he has taken money by the way of accounts payee cheques from the lenders who all are Income Tax assessee, whose PAN have been disclosed, the initial burden u/s 68 of the Act was discharged. Addition on account of difference in the accounts with M/s Star Shine Pvt. Ltd. - HELD THAT - The assessee has not recorded any transactions in its books of account, as the assessee has not purchased such goods from M/s Vision Impex, the said good was transferred to M/s Star Shine on high sea sale and therefore the said party has credited such transactions in the name of assessee, however, the said party was required to credit the said purchases from M/s Vision Impex. The details of the bills which are issued on high sea sales by M/s Vision Impex to M/s Star Shine Clothing Pvt. Ltd,were submitted by the assessee, before the lower authorities.The copy of confirmation of the accounts obtained from M/s Star Shine Pvt Ltd was also submitted by the assessee. Based on the factual position, narrated above, we are of the view that no addition should be made in the hands of the assessee, as the assessee has explained the transaction with document evidences, as noted by us above, hence, we are not inclined to accept the contention of the AO in any manner and hence the addition so made is deleted. Hence this ground of the assessee is allowed.
Issues Involved:
1. Addition of Rs. 1,13,00,000/- on account of unexplained cash credit under Section 68 of the Income-tax Act, 1961. 2. Addition of Rs. 73,54,821/- on account of difference in the accounts with M/s Star Shine Pvt. Ltd. 3. Charging of interest under Sections 234A, 234B, 234C, and 234D of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Addition of Rs. 1,13,00,000/- on account of unexplained cash credit under Section 68 of the Income-tax Act, 1961: The assessee filed a revised return declaring a total loss of Rs. 2,02,54,264/-. The case was selected for scrutiny, and the Assessing Officer (AO) noticed unsecured loans of Rs. 2,11,81,000/- from Mr. Kuldeep Singh Grewal, a director and Canadian resident. The AO required the assessee to prove the identity, creditworthiness, and genuineness of the Indian depositors who were claimed to be relatives of the director. Despite submitting various documents, the AO made an addition of Rs. 1,08,00,000/- and Rs. 5,00,000/- totaling Rs. 1,13,00,000/- due to insufficient evidence. The CIT(A) confirmed the addition, noting the assessee's failure to discharge the onus of proving the identity, creditworthiness, and genuineness of the depositors. The assessee argued that it had provided sufficient evidence, including affidavits, bank statements, and confirmations from the depositors. The Tribunal found that the assessee had discharged the initial burden of proof and cited the Supreme Court's ruling in Orissa Corpn. (P) Ltd. and the Gujarat High Court's ruling in Rohini Builders, which state that once the initial burden is discharged, the onus shifts to the Revenue. The Tribunal deleted the addition of Rs. 1,13,00,000/-. 2. Addition of Rs. 73,54,821/- on account of difference in the accounts with M/s Star Shine Pvt. Ltd.: During the assessment, the AO noted a discrepancy between the credit balance shown by the assessee and the debit balance shown by M/s Star Shine Pvt. Ltd. The assessee explained that the discrepancy arose due to a high seas sale transaction involving M/s Vision Impex, where goods were redirected to M/s Star Shine Pvt. Ltd. due to quality issues. The AO rejected the explanation and made an addition of Rs. 73,54,821/-. The CIT(A) confirmed the addition. The assessee provided documentary evidence, including high seas sale agreements and sample vouchers, to support its explanation. The Tribunal found the explanation satisfactory and deleted the addition, noting that the assessee had maintained regular books of accounts and provided sufficient evidence to explain the discrepancy. 3. Charging of interest under Sections 234A, 234B, 234C, and 234D of the Income-tax Act, 1961: The assessee contested the charging of interest under Sections 234A, 234B, 234C, and 234D. The Tribunal found the issue premature and did not require adjudication. Conclusion: The appeal of the assessee was allowed, with the Tribunal deleting the additions of Rs. 1,13,00,000/- and Rs. 73,54,821/-. The issue of interest under Sections 234A, 234B, 234C, and 234D was found to be premature and not adjudicated. The order was pronounced in the open court on 12/08/2024.
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