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TMI Blog2018 (7) TMI 1995X X X X Extracts X X X X X X X X Extracts X X X X ..... by both the creditors would show that the loans given to the assessee have been duly disclosed and further these creditors were having sources by way of loans taken by them from others. Further both the concerns were carrying of business having huge turnover. Hence the movement of funds in their accounts and also the availability of funds with them cannot be doubted. Hence, we are of the view that the CIT(A) was justified in holding that the creditworthiness of these two creditors also stand proved. AO has also made independent enquiry with these two creditors by issuing notices u/s 133(6) and in response to the same, both these creditors have confirmed the loan transactions. AO did not find fault with the financial statements of these two creditors. AO has proceeded to make the addition u/s 68 only for the reason that Shri Ritesh Siroya has admitted that his group has provided bogus sales bills. As observed by CIT(A), Shri Ritesh Siroya has not implicated the assessee nor did not he mention that the loans given to the assessee were bogus. On the contrary, the very same Shri Ritesh Siroya has furnished affidavits, during the course of assessment proceedings, confirming the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying activities of providing accommodation entries in the form of bogus loans and advances and it was noticed that the assessee has also taken loans from the above said group. Hence the AO reopened the assessment of the year under consideration by issuing notice u/s 148 of the Act. It was noticed that the assessee has received loan of ₹ 100.00 lakhs and ₹ 150.00 lakhs respectively from M/s A2 Jewels and M/s Daksh Diamonds aggregating to ₹ 250.00 lakhs respectively. 3. The AO, in order to verify the genuineness of loans, issued notice u/s 133(6) of the Act to the above said two parties. Both the parties responded to the notice, apparently, confirming the transactions. The assessee also contended that it has not taken any loan directly from M/s Bhanvarlal Jain. However, the AO did not accept the contentions of the assessee, since he noticed that a person named Shri Ritesh Siroya, who was a common partner in the above said two concerns, had admitted in the statement during the course of search that his group is providing accommodation sales bills in diamonds. Accordingly the AO took the view that the loan of ₹ 250 lakhs obtained from the above said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. Accordingly the Ld CIT(A) expressed the view that merely based on statement of a third person and without any corroborative evidence, the transaction cannot be treated as accommodation entries. 7. The Ld CIT(A) also observed that only certain transactions carried out by M/s A2 Jewels and M/s Daksh Diamonds were found to be bogus and not all other transactions. He observed that the AO did not bring any material to support his conclusions except relying on the report and statement. 8. The Ld CIT(A) observed that the case of the assessee is covered by the decisions rendered by Mumbai bench of ITAT in the case of Satish N Doshi HUF vs. ITO in ITA No.2329/Mum/2009 and in the case of Shaf Broadcast P Ltd vs. ACIT (ITA No.1819/Mum/2012), wherein the Tribunal has quashed the reopening of assessment, since the reopening was based on statements of Mr. Mukesh Choksi and Mr. I C Choksi. He observed that identical view has been taken by Delhi bench of Tribunal in the case of DCIT vs. Nipun Builders Developers P Ltd (ITA No.557/Del/2010). The Ld CIT(A) also relied upon decision rendered by the Mumbai bench of Tribunal in the case of Shri Jafferali K Rattonsey vs. DCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey have duly responded to the notices and have confirmed the loan transactions entered with the assessee. The Ld A.R further submitted that the AO has not found fault with any of the documents furnished by the assessee. He submitted that Shri Ritesh Siroya has also furnished affidavits confirming the loan transactions. Accordingly he submitted that the Ld CIT(A) was justified in holding that the AO has made the impugned addition on surmises and conjectures. 12. We have heard rival contentions and perused the record. We notice that the AO has made the impugned addition u/s 68 of the Act. It is a well settled principle of law that the initial onus to prove the genuineness of the cash credit is placed upon the assessee and in order to discharge the initial onus, the assessee is required to prove three main ingredients, viz., the identity of the creditor, the creditworthiness of the creditor and the genuineness of transactions. Once the assessee discharges the initial onus, then the onus to disprove the same is shifted upon the shoulders of the assessing officer. 13. In the instant case, the assessee has taken loans from M/s A2 Jewels and M/s Daksh Diamonds. All the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong. Thus the Ld CIT(A) has rightly pointed out that the AO has ignored the documentary evidences furnished by the assessee. Thus the assessee has discharged the initial onus placed upon it u/s 68 of the Act. On the contrary, it is seen that the AO has failed to discharge the onus shifted upon its shoulders. 15. We notice that the Ld CIT(A) has followed the principles laid down in various case laws extracted above. Before us, none of the case laws was controverted. The foregoing discussions also show that the AO has brushed aside various documents furnished by the assessee and proceeded to make the addition only on the basis of information received from the investigation wing and the statement given by Shri Ritesh Siroya. The Ld CIT(A) has rightly pointed out these facts and accordingly concluded that the addition made by the AO was not justified. In view of the foregoing discussions, we are of the view that the decision rendered by Ld CIT(A) does not call for any interference, since the first appellate authority has rendered his decision by considering the legal principles enunciated in various case laws relied upon by him and further applying the same to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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