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TMI Blog2019 (7) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Ld. CIT(A) and restore the matter to the file of the AO to make an order afresh, after allowing the assessee to cross-examine the aforesaid parties. We direct the assessee to file the relevant documents/evidence before the AO. Needless to say, the AO would give reasonable opportunity of being heard to the assessee before finalizing the order. - Revenue appeal is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... not be traced at the giving address and the assessee failed prove the primary onus i.e. is the existence of the parties. Further observing that 2 companies out of the said list of 11 companies had not received any interest on the loan given to the assessee, the AO held that the said companies were just entry providers. Further, the AO verified and found that the loan parties have high reserve and surplus in their balance sheet but it was only because of share premium amount and not due to profit and loss during the year. In fact the said companies, whose financials had been submitted, had very low income in their P&L account. Thus the AO observed that it is beyond comprehension how such companies, with meagre income had given such huge loans to the assessee. The AO tabulated the financials of the said loan parties, which is as under: Sr. No. Name of the companies Reserves and Surplus (In Rs.) Share Premium (In Rs.) Surplus (P/L statement) & Income for AY 2014-15. (In Rs.) 1. Aachman Marketing Pvt. Ltd. 5,51,88,108/- 5,51,39,600/- 48,508/- &9,370/- 2. Cyndrella Tie-Up Pvt. Ltd. 3,47,76,426/- 3,97,17,500/- (-) 49,41,074/- & 0/- 3. Jagannath Banwarilal Textiles Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements as referred above, the impugned additions, made in the assessment order, has to fail on several counts such as reliance on evidence that is totally inadequate; failure to make available any incriminating material (reports, statements etc.) forming basis for action by the AO; failure to give due opportunity to the appellant to cross examine witnesses, whose statement might have been relied upon and failure to recognize the satisfactory nature of the explanation /evidence tendered by the appellant to explain identity of creditors, creditworthiness of the creditors and the genuineness of the loan transactions. It has rebutted the observations of AO by point to point. Accordingly, in view of the above facts of analysis of the facts and documents on record, as well as judicial pronouncements including the judgments of jurisdictional High Court of Bombay as well as ITAT, Mumbai, it will be difficult to sustain the additions/disallowances made by the AO since 3 conditions prescribed for proving the cash credit were satisfied by the Appellant in the present case." Thus observing, the Ld. CIT(A) held that the assessee, during the course of assessment proceedings has proved identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct addresses which were earlier submitted by the assessee to the AO. It is further argued that (i) the AO never considered issuing of notice u/s 133(6) and summons u/s 131 at the new address as submitted by the assessee and therefore, the primary onus was discharged by the assessee, (ii) the Inspector of Income Tax did not make the necessary efforts to trace present address from the department records, website of NBFC and/or Google Maps and/or other means and therefore, the Inspector report is prepared mechanically and without due diligence. Regarding observation of the AO that filing of ITR does not prove genuineness, the Ld. counsel submits that the CIT(A) has examined not only ITR but also other evidences like net worth etc. It is further submitted that apart from this, the assessee had also filed balance sheet, bank statement etc. and the combined effect of evidence produced by the assessee established identity, genuineness and creditworthiness. Regarding the observations of the AO in respect of Onkarmal Consultancy Pvt. Ltd. and Cyndrella that they are merely companies providing entries and no interest is paid to them, the Ld. counsel submits that (i) the CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated by him that (i) confirmations and bank statements are the primary evidence establishing availability of funds with the assessee and (ii) combined effect of confirmations, bank statements and financials of the loan creditors clearly establishes the identity, genuineness and creditworthiness of the loan creditors. Finally, it is submitted by him that the CIT(A) has stated that the assessee has demonstrated that it has satisfied all the ingredients required to prove satisfactorily and the AO was not justified in having disregarded overwhelmingly supportive evidence. Thus it is stated that (i) the AO has picked up only isolated aspect of the evidence and avoided total picture of the loan creditors, (ii) reply dated 26.12.2018 and 28.12.2018 contained exhaustive details of loan creditors like letter of loan creditor, proof of filing IT return by loan creditor, audited accounts, bank statements of loan creditor, sign board displayed at premises of loan creditors, (iii) the overall evidences in the P/B clearly prove the identity, genuineness and creditworthiness of the loan creditors, (iv) therefore, the conclusion of the AO was based on wrong interpretation of the replies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above is evident from page 279 of the P/B, which the Ld. counsel has also referred to. The above submission dated 26.12.2016 was received by the AO on 27.12.2016. The AO completed the assessment on 30.12.2016. There is no dispute on the above facts. 7.1 As mentioned earlier in the case of NRA Iron & Steel (P.) Ltd. (supra), the Hon'ble Supreme Court has held at para 13 that : "13. The lower appellate authorities appear to have ignored the detailed findings of the AO from the field enquiry and investigations carried out by his office. The authorities below have erroneously held that merely because the respondent company - assessee had filed all the primary evidence, the onus on the assessee stood discharged. The lower appellate authorities failed to appreciate that the investor companies which had filed income tax returns with a meagre or nil income had to explain how they had invested such huge sums of money in the assessee company-respondent. Clearly the onus to establish the credit worthiness of the investor companies was not discharged. The entire transaction seemed bogus, and lacked credibility. The Court/Authorities below did not even advert to the field enquiry co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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