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TMI Blog2012 (7) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... it by such acceptable evidence as to the correctness of those entries - As no explanation is forthcoming for not examining those creditors who in the normal course would have come forward and conformed those entries the Tribunal was justified in excluding those credit entries which are confirmed by the creditors and those entries which are not supported by creditors directing the AO to accept the cash credits wherever the lenders have confirmed for having lent the monies to the assessee and not in other cases - against assessee. Treatment of the unsecured loans - Tribunal considered it as genuine and bona fide - Held that:- Merely because the transactions are through bank channels, the assessee would not be entitled to the benefit - without conducting an enquiry with regard to the identify of the payer i.e. creditors, creditworthiness of the said payer and the genuineness of the transaction it cannot be considered bonafide - in favour of the revenue - IT Appeal Nos. 421-422 of 2011 & others - - - Dated:- 14-3-2012 - N. KUMAR AND RAVI MALIMATH, JJ. E.R. Indrakumar and E. Sanmathi Indirakumar for the Appellant. Ashok Kulkarini for the Respondent. JUDGMENT N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieved by the said order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The Appellate Authority deleted the additions made in terms of Section 68 of the Act holding that onus was on the Assessing Authority to substantiate that the credits entered in the kuchha cash book were not the loans from others but the assessee's own money reflected in the shape of credits in the seized books. The Assessing Authority did not discharge the primary onus cast on it and it was wrong on the part of the assessing authority to throw the burden on the assessee to prove the genuineness of the credits. Regarding the additions made on account of increase in expenses, the Appellate Authority confirmed the additions made by the Assessing Authority. Two sets of books were found i.e. audited books and kuchha cash books, it was noticed by the Assessing Authority that in the returns of income filed by the assessee, the expenses claimed on the basis of audited books were more than what was recorded in the kuchha cash books. The difference was treated as inflation of expenses and confirmed the order of the Assessing Authority, The assessee preferred further appeal before the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The learned counsel for the revenue further pointed out in respect of their appeals that the Tribunal remanded the matter back to the assessing authority with a direction to the assessing authority to allow the transactions, which are claimed to be genuine, after confirming that the transactions are through the banking channels. He pointed out that the assessing authority before disallowing, not only has to verify whether those transactions are through banking channels but also should verify that the said transactions are genuine. 6. Per contra , the learned counsel for the assessee submitted that the transactions which are claimed by cheques are all genuine transactions and therefore, the assessee is entitled to the benefit of disallowance once it is found to be through the banking channels and the authority is satisfied about the nature of transactions. 7. Though several questions have been raised by both the parties, the parties agree that the substantial questions of law that arise for consideration in these appeals are as follows:- "(1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding the inclusion of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not safe for the authorities to act on such entries. If the assessee wants to have the benefit of the entries in the said books, as he did not produce voluntarily before the authorities and those entries are not reflected in the regular accounts, it is for him to substantiate it by such acceptable evidence as to the correctness of those entries. In fact, he has taken the trouble to examine those creditors who have confirmed those entries. If he had not examined those creditors, in whose name the entries are made, only inference that could be drawn is that they are not real entries. No explanation is forthcoming for not examining those creditors who in the normal course would have come forward and conformed those entries. In those circumstances, the Tribunal was justified in excluding those credit entries which are confirmed by the creditors and those entries which are not supported by creditors and was justified in issuing directions to the assessing authority to accept the cash credits wherever the lenders have confirmed for having lent the monies to the assessee and not in other cases. Therefore, we do not see any error committed by the Tribunal in passing the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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