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TMI Blog2017 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... er For The Assessee : Shri Shashank Dundu For The Revenue : Shri Purushottam Kumar-DR ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 10/03/2015 of the Ld. First Appellate Authority, Mumbai, deleting the addition of ₹ 55,50,000/- made on account of unsecured loans taken by the assessee during the year added as unexplained credit u/s 68 of the Income Tax Act, 1961 (hereinafter the Act). 2. During hearing, Shri Purushottam Kumar, ld. DR, defended the addition made by the Assessing Officer by contending that the First Appellate Authority deleted the addition without appreciating the fact that onus was upon the assessee to prove the genuineness of transaction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee, a partnership firm, was engaged in the business of manufacturing and dealing in textiles and other merchandises, consisting of two partners. During the relevant period, the assessee borrowed loans for its business activities. The Assessing Officer issued summons u/s 133(6) of the Act to four parties. Out of these parties, two parties i.e. Alka Jain and Ms. Lalita Jain responded to the notices and in one case, the husband of the party personally appeared before the Assessing Officer and the last one was represented by his authorized representative to explain the source of the loans. Miss. Priyanka Deora and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year : Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assesseecompany shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar source. Where the assessee failed to prove satisfactorily the source and nature of such credit, the Revenue is free to make the addition. The principle laid down in Ganpati Mudaliar (1964) 53 ITR 623/A. Govinda Rajulu Mudaliar (34 ITR 807)(SC) and also CIT vs Durga Prasad More (72 ITR 807)(SC) are the landmark decisions. The ratio laid down therein are that if the explanation of the assessee is unsatisfactory, the amount can be treated as income of the assessee. The ratio laid down in Daulat Ram Rawatmal 87 ITR 349 (SC) further supports the case of the assessee. In the case of a cash entry, it is necessary for the assessee to prove not only the identity of the creditor but also the capacity of the creditor and genuineness of the transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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