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TMI Blog2019 (2) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... R and balance sheet and copy of his bank statement. The case of the assessee was examined on the basis of genuineness of the claim, identity and creditworthiness of the lender. AO raised the addition only on the basis of the information given by the Investigation Wing. AO nowhere conducted the inquiry on the basis of the information given by the Investigation Wing. Moreover, we noticed that the loan was repaid to M/s. Falak Trading Co. Pvt. Ltd. and in this regard the evidence lies at page 18 and 19 of the paper book. - Decided in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case the finding of Ld. CIT(A) that the assessee has proved identity, creditworthiness and genuineness of loan is perverse on facts as the assessee has not furnished any evidence to justify the creditworthiness and genuineness of the loan." 3. The brief facts of the case are that the assessee filed its return of income on 30.11.2013 declaring total income of ₹ 33,12,560/-. The assessee is a firm engaged in the business of construction. The search and seizure action was conducted in the Praveen Kumar Jain group cases by Investigation Wing, Mumbai. It was found that this group was a leading entry provider of Mumbai. There are many concerns floated by the group who provide accommodation entries of bogus loan. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Act. 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 Shelter 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 maintaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een established as they are having PAN and they are filling return of income. The genuineness of the transaction is established from the fact that both the acceptance and repayment of loan has been through banking channels. Further the interest paid against such loan has been subject to TDS. The creditworthiness of the lender can be established from bank statements and balance sheet of the lender which were filed before the AO. 3.6 From the assessment order, it is seen that the AO had issued notice u/s 133(6) to the lender to verify the genuineness of the loans. From a perusal of assessment order, it is seen that the lender filed its submission in response to notice u/s.133(6) vide its letter dated 03.12.2015. The AO did not make any ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the creditworthiness of the creditor as well as the genuineness of transaction. 3.7 Recently, the Hon'ble Bombay High Court has passed an order on similar issue in WP No.167 of 2015 dated 15.04.2015 in the case of M/s. Rushabh Enterprises Vs. ACIT 24(3) and Ors. In this case, the assessee had taken loan from concerns related with Bhanwarlal Jain group of cases. In its order the Hon'ble Bombay High Court in addition to deciding the legal validity of reopening of assessment also discussed the facts of the case. The Hon'ble Bombay High court in para 8 of its order stated "………according to her (AO) the revenue has received information from the DGIT (Inv) that the assessee has taken unsecured loans from the above part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as the lender's confirmation, copy of ITR and balance sheet and copy of his bank statement. The case of the assessee was examined on the basis of genuineness of the claim, identity and creditworthiness of the lender. The Assessing Officer raised the addition only on the basis of the information given by the Investigation Wing. The Assessing Officer nowhere conducted the inquiry on the basis of the information given by the Investigation Wing. Moreover, we noticed that the loan was repaid to M/s. Falak Trading Co. Pvt. Ltd. and in this regard the evidence lies at page 18 and 19 of the paper book. At the time of argument the learned representative of the department has placed reliance on the law settled by Hon'ble Bombay High Court in case t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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