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TMI Blog2019 (4) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, capacity and creditworthiness of the parties and genuineness of the transactions. - Decided against revenue - ITA No.3184/M/2017 - - - Dated:- 5-2-2019 - Shri Mahavir Singh, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Assessee : Shri Rashmikant C. Modi, A.R., Shri Ketki Rajeshirke, A.R. For the Revenue : Shri Chaudhary Arunkumar Singh, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The present appeal has been preferred by the Revenue against the order dated 27.02.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09. 2. The only issue raised by the Revenue is against the deletion of addition of ₹ 63,44,882/- by Ld. CIT(A) as made by the AO on account of unsecured loans and interest thereon when the assessee failed to prove the identity, creditworthiness and genuineness. 3. The facts in brief are that the assessee filed return of income on 26.09.2008 declaring an income of ₹ 1,77,39,303/-. Thereafter the case of the assessee was reopened under section 147 of the Act by issuing notice under section 148 on 31.03.2015 after receiving i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, creditworthiness and genuineness. However, the AO doubting all the facts on record treated the same as unexplained cash credit and added the same to the income of the assessee by framing assessment under section 143(3) read with section 148 of the Act. 4. In the appellate proceedings, the Ld. CIT(A) allowed the appeal of the assessee by holding and observing as under: 4.3 I have carefully gone through the assessment order as well as the written submission of the AR, I have also perused the details filed by the AR. The AO has made addition u/s 68 of the IT Act 1961. It is therefore important to understand the position of law which has evolved from a catena of judgments delivered by High Courts and Tribunals on this issue. The Hon'ble ITAT Mumbai in the case of ITO vs Anant Shelters Pvt. Ltd. (2012) 20 Taxmann.com 153 has enumerated certain principles which would be extremely useful in understanding the issue in hand. It has been stated in the said judgment that over the years, law regarding cash credits have evolved and has taken a definite shape. A few aspects of law u/s 68 can be enumerated 1. Sec. 68 can be invoked when there is a credit of amounts in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars that the lenders have filed confirmation as well as details asked by the AO. The AO has however chosen not to discuss the result of his enquiry conducted u/s 133(6). In order to make addition u/s 68 AO had to establish that either the transactions were not genuine or the lenders did not have credit worthiness or their identity was not established. As mentioned in para 4.5 above, the genuineness of transaction and the identity as well as the creditworthiness of the lenders have been established. It can be seen from the assessment order that the entire focus of the AO was on the modus operand! adopted by Bhanwarlal Jain Group of cases to provide bogus accommodation entry of loan. The main reason for making addition u/s 68 was on the basis of information provided by the Investigation Wing. While the information provided by the Investigation Wing can be the starting point of an enquiry it cannot be a conclusion reached by the AO. The moot point before the AO was to examine the application of section 68 in the case of the appellant. Instead of establishing that the explanation offered regarding the nature and source of credit in the books of the appellant is not satisfactory the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed during the course of statement of Bhanwarlal Jain recorded under section 132(4) of the Act. Under these circumstances, all these transactions are sham and AO has rightly made the addition under section 68 doubting the identities, capacity, creditworthiness of the parties and genuineness of these transactions and therefore the order of AO needs to be restored. In support of his argument the Ld. D.R. has relied upon the following cases. 1. Pr. CIT vs. Bikram Singh (2017) 85 taxmann.com 104 (Delhi) 2. Pavankumar M. Sanghvi vs. ITO (2018) 97 taxmann.com 398 (SC) 3. Ashwinbhai B Pokiya vs. ACIT (2014) 45 taxmann.com 62 (Gujarat) 6. The Ld. A.R. vehemently submitted before the Bench that the assessee has filed all the necessary evidences before the AO such as confirmations, affidavits of the lenders their balance sheets, copies of ITRs, bank statements etc. evidencing all the transactions of loans taken by the assessee. The Ld. A.R. also submitted that the said loans were repaid in the subsequent years along with interest due thereon. Even the notices issued under section 133(6) of the Act to all these five parties from whom the assessee has raised loans of ₹ 63,44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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