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TMI Blog2020 (2) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... collected all the materials which proved source of the source. In a thorough consideration of the matter, we are of the view that the first appellate authority had returned a clear finding of fact that assessee had discharged its onus of proving identity of the creditors, genuineness of the transactions and credit-worthiness of the creditors which finding of fact stood affirmed by the Tribunal. There is, thus, concurrent findings of fact by the two lower appellate authorities. Appellant has not been able to show any perversity in the aforesaid findings of fact by the authorities below. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the assessee, Assessing Officer vide the assessment order dated 28.3.2013 passed under Section 143(3) of the Act treated the aforesaid amount of ₹ 34 crores as money from unexplained sources and added the same to the income of the assessee as unexplained cash credit under Section 68 of the Act. 7. Aggrieved by the aforesaid order, assessee preferred appeal before the Commissioner of Income Tax (Appeals)-1, Mumbai i.e the first appellate authority. In the appeal proceedings, the assessee sought leave of the first appellate authority to produce additional evidence which was granted by the first appellate authority. After hearing the matter, the first appellate authority vide the order dated 18.6.2014 held that assessee had discharged its burden under Section 68 of the Act by proving the identity of the creditors; genuineness of the transactions; and credit worthiness of the creditors. Consequently, the first appellate authority set aside the addition made by the Assessing Officer. 8. In appeal before the Tribunal by the revenue, Tribunal vide the order dated 26.8.2016 confirmed the order passed by the first appellate authority by holding that no addition could be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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. Simply put, the section provides that if there is any cash credit disclosed by the assessee in his return of income for the previous year under consideration and the assessee offers no explanation for the same or if the assessee offers explanation which the Assessing Officer finds to be not satisfactory, then the said amount is to be added to the income of the assessee to be charged to income tax for the corresponding assessment year. 14. Section 68 of the Act has received considerable judicial attention through various pronouncements of the Courts. It is now well settled that under Section 68 of the Act, the assessee is required to prove identity of the creditor; genuineness of the transaction; and credit worthiness of the creditor. In fact, in NRA Iron & Steel (P) Ltd (supra), Supreme Court surveyed the relevant judgments and culled out the following principles:- "11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice would not ipso facto mean that the creditors had no credit worthiness. In such circumstances, the first appellate authority held that where all material evidence in support of explanation of credits in terms of identity, genuineness of the transaction and creditworthiness of the creditors were available, without any infirmity in such evidence and the explanation required under Section 68 of the Act having been discharged, Assessing Officer was not justified in making the additions. Therefore, the additions were deleted. 19. In appeal, Tribunal noted that before the Assessing Officer, assessee had submitted the following documents of the three creditors:- a) PAN number of the companies; b) Copies of Income Tax return filed by these three companies for assessment year 2010-11; c) Confirmation Letter in respect of share application money paid by them; and d) Copy of Bank Statement through which cheques were issued. 20. Tribunal noted that Assessing Officer had referred the matter to the investigation wing of the department at Kolkata for making inquiries into the three creditors from whom share application money was received. Though report from the investigation wing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PAN, copies of the income tax returns of the creditors as well as copy of bank accounts of the three creditors in which the share application money was deposited in order to prove genuineness of the transactions. In so far credit worthiness of the creditors were concerned, Tribunal recorded that bank accounts of the creditors showed that the creditors had funds to make payments for share application money and in this regard, resolutions were also passed by the Board of Directors of the three creditors. Though, assessee was not required to prove source of the source, nonetheless, Tribunal took the view that Assessing Officer had made inquiries through the investigation wing of the department at Kolkata and collected all the materials which proved source of the source. 22. In NRA Iron & Steel (P) Ltd (supra), the Assessing Officer had made independent and detailed inquiry including survey of the investor companies. The field report revealed that the shareholders were either non-existent or lacked credit-worthiness. It is in these circumstances, Supreme Court held that the onus to establish identity of the investor companies was not discharged by the assessee. The aforesaid decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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