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TMI Blog2017 (10) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the Revenue is directed against the order dated 29.9.2016 passed by the learned CIT(A)-8, Mumbai and it relates to A.Y. 2008- 09. 2. None appeared on behalf of the assessee even though adjournment was granted on earlier occasion at the specific request of the assessee. Hence, I proceed to dispose of the appeal ex-parte, without presence of the assessee. 3. I heard learned Departmental Representative and perused the record. The Revenue is aggrieved by the decision of the learned CIT(A) in deleting the addition of ₹ 41 lakhs relating to unexplained cash credit. 4. The Assessing Officer received information that the assessee-herein was a beneficiary of accommodation loan entries provided by M/s. Basant Marketing Pvt. Limited (BMPL). Accordingly he reopened the impugned assessment and added a sum of ₹ 41 lakhs, being loan taken from BMPL, as unexplained cash credit. The learned CIT(A) noticed that the assessee has discharged the initial burden placed upon him by producing all the materials. Further, transaction carried out by BMPL is not found to be fake or bogus by the learned CIT(A) in the order passed by him in A.Y. 2011-12 in the hands of BMPL. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for assessment year 2010-11, it is also relevant for the instant appeal. Nowhere in his order has the assessing officer brought any finding of fact to establish that the impugned amounts were unexplained. There is no dispute as to the identity of BMPL, the amounts have been transferred and recorded in audited books of account, BMPL is assessed to Income Tax and it is acceptable business practice for promoters of companies to give to or take loans from group companies. The assessing officer has not brought anything on record to challenge the genuineness of the transactions. 5.2.4 In Appeal No.CIT(A)-8/1T-407/14-15, filed by M/s Watermarks Systems (India) Pvt Ltd for AY 2008-09, another group concern that had taken loans from BMPL. I had made the following observations:- "7.3.4 A bare reading of section 68 suggests that if any sum is found credited in the books of account of the assessee maintained for any previous year, and the assessee offers no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory, it is only then the sum so credited may be charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hawani Oil Mills (P.) Ltd. 49 DTR 212: Where it is found that the investors are genuinely existing persons, they have filed confirmations in respect of investments made by them and their statements are also recorded, amount of share application money cannot be treated as unexplained cash credit and no addition can be made under section 68. vi. Shree Barkha Synthetics Ltd. v. Asstt. CIT [2006] 283 1TR 377/155 Taxman 289 (Raj.), Uma Polymers (P.) Ltd. v. Dy. CIT [2006] 101 TTJ 124 (Jodh.)(TM): Where the share application money is received by the assessee company through banking channel, the assessee has only to prove the existence of person in whose name share application money is received. Once the existence of investor is proved, it is no further burden of assessee to prove whether the person itself has invested the said money or some other person has made investment in name of that person. The burden then shifts on the Revenue to establish that such an investment has come from assessee-company itself. vii. C1T v. Gangour Investment Ltd. [2009] 179 Taxman 1 (Delhi), C/T v. Victor Electrodes Ltd. [2010] 329 1TR 271 (Delhi), Dy. C/T v. Dolphine Marbles (P.) Ltd. [2011] 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the creditors were income-tax assessees. The revenue apart from issuing notices under section 131 did not pursue the matter further. It did not examine the source of income of the alleged creditors to find out whether they were creditworthy. Therefore, it was held that in these circumstances, assessee could not do any further and it had discharged the burden laid on it. xi. In Orient Trading Co. Ltd. v. Commissioner of Income-tax (1963) 49 ITR 723 (Born.), one of the questions referred to the Bombay High Court was whether there was any material before the Tribunal to hold that a sum standing in the books of the assessee to the credit of a third party belonged to the assessee. The Bombay High Court discussed the nature and significance of cash credits in such cases and observed as follows: "When cash credits appear in the accounts of an assessee, whether in his own name or in the name of third parties, the Income-tax Officer is entitled to satisfy himself as to the true nature and source of the amounts entered therein, and if after investigation or inquiry he is satisfied that there is no satisfactory explanation as to the said entries, he would be entitled to regard th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed explanation to the Assessing Officer but had not been able to submit all documentary evidences because the same were in custody of CBI. As already quoted above, in the appeal in the case of BMPL for AY 2010-11, the Id. CIT(A) 20, Kolkata had categorically observed that there is no material on record to back the finding that BMPL was involved in providing accommodation entry. The finding of fact of CIT(A) in that case has been accepted by the Department by not going in appeal against it. Thus, the genuineness of the transaction itself has been accepted by the Department. 7.3.9 In view of the ratio of decisions cited above, facts and circumstances of the case as discussed and after giving due consideration to the observations of the Assessing Officer in his remand report, I do not find merit in the action of the Assessing Officer in making addition of ₹ 4,35,69,6001- u/s. 68 of the Act and the same is, therefore, deleted. These grounds of appeal are allowed." 5.2.5 In the instant case, loan from the same group company BMPL is under question, therefore, my decision in respect of BMPL cited above is also valid in the instant appeal. The appellant had discharged onus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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