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TMI Blog2020 (12) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... interfere with - Decided against revenue. - ITA No. 6267/MUM/2017 - - - Dated:- 6-11-2020 - Shri Rajesh Kumar (AM) And Shri Ram Lal Negi (JM) For the Assessee : Shri Satish Mody (AR) For the Revenue : Shri Michael Jerald (DR) ORDER PER RAM LAL NEGI, JM This appeal has been filed by the revenue against the order dated 27.07.2017 passed by the Commissioner of Income Tax (Appeals)-24 (for short the CIT(A), Mumbai, for the assessment year 2013-14, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed u/s 143 (3) of the Income Tax Act, 1961 (for short the Act ). 2. Brief facts of the case are that the assessee a private limited company engaged in the business of processing paints and raw materials, filed its return of income for the assessment year under consideration declaring loss at ₹ 1,77,98,996/-. Since the case was selected for scrutiny, AO passed assessment order u/s 143 (3) and determined the total income of the assessee at ₹ 2,47,69,345/- after making various additions including the addition of ₹ 2,20,00,000/- as unexplained cash credit u/s 68 of the Act. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Calcutta High Court in the case of precision Finance Pvt. Ltd. 208 ITR 465, where in it is held that mere payment by account payee cheque is not sacrosanct not can it make a nongenuine transaction genuine. 4. The only ground raised by the revenue is that the Ld. CIT (A) erred in deleting the addition of unsecured loans from individuals, HUF and companies amounting to ₹ 2,20,00,000/- holding that the assessee has proved the genuineness of transaction by filing confirmation, PAN, return of income, bank statements etc. The Ld. Departmental Representative submitted before us that the Ld. CIT (A) has decided the issue in question in favour of the assessee without taking into consideration, the judgment of the Hon ble Supreme Court in the case of Navodaya Castle (P) Ltd. (2015) 56 taxman.com 18 (SC). The Ld. DR pointed out that in the said case the Hon ble Court has upheld the decision of the Hon ble High Court, holding that the certificate of incorporation PAN etc. are not sufficient for proving the identity of subscriber company. The Ld. DR further pointed out that the findings of the Ld. CIT (A) are not in accordance with the judgment of the Hon ble Bombay High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) Vinod Kumar Bhandari v. Asstt. CIT [2003] 174 Taxation 49 (Trib.) (xi) Orissa Corpn. (P) Ltd. s case (supra) (xii) Nemi Chand Kothari vs. CIT [2004] 136 Taxman 213 (Gaul) (xiii) Addl. CIT v. Bahri Bros. (P) Ltd. [ 1985] 154 ITR 244/22 Taxman 3 (Pat.) 6. In the light of the aforesaid cases, the Ld. counsel submitted that since the assessee has discharged the initial onus of establishing identity, creditworthiness of the parties and genuineness of the transaction, the Ld. CIT(A) has rightly deleted the addition made by the AO on account of unexplained cash credit. 7. We have heard the rival submissions of the parties and perused the material on record including the cases relied upon by the parties. The Ld. CIT(A) has deleted the addition made by the AO on the ground that the assessee has discharged the primary onus of furnishing complete details of the lenders to establish identity and creditworthiness of the lenders and the genuineness of transactions. The Ld. CIT (A) has relied on the decisions of the Hon ble Supreme Court and the various High Courts. The findings of the Ld. CIT (A) are as under:- 3.1.3I have carefully examined the facts in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of assessment proceedings. In the present case before me, as seen from the details filed before the AO, as evident from the paper book, I do not find any inconsistency or incoherence in respect of the receipt of the unsecured loans from the said concerns. Primarily, as regards the transaction, the same has routed through the banking channels and the source cannot be doubted. It was held in several cases that whatever may be the strength of presumption it cannot substitute the evidence. Even though the transaction is from a circuitous group concerns, the AO has not made any efforts to show that the transaction with the appellant company was sham, fictitious or artificial except believing the statements given by the accommodation entry providers. He has failed to gather any evidence to show that the unaccounted cash of the appellant has changed hands consequently replacing the cheque payments. The AO has also failed to prove how the details like PAN, IT returns, audited financials, incorporation certificates, bank statements etc. cannot be taken note of in this regard. The Hon ble Mumbai ITAT in the case of Anant shelters P ltd 20 Taxmann.com 153(2012) has laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ateriality of evidences, is the basis for deciding the cases falling under section 68. (v) Though confirmatory letters or account payee cheques do not prove that the amount in question is properly explained for the purpose of section 68 and assessee has to establish identity and creditworthiness of the creditor as well as the genuineness of the transaction, it is also true that money received through foreign remittance with RBI approval is a strong indicator of bona fide of the cash credit that has to be disapproved only with positive evidence. (vi) In matters regarding cash credits, the onus of proof is not a static one. As per the provisions of the section the initial burden of proof lies on the assessee. Amount appearing in the books of account of the assessee is considered a proof against him. He can prove the identity of the creditors by either furnishing their PANs or assessment orders. Similarly, genuineness of the transaction can be proved by showing that the money was received by an account payee cheque or by draft. Creditworthiness of the lender can be established by attending circumstances. Once the assessee produces evidences about identity, genuineness a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Durga Pravin Rathod, (v) Praful A Mota (vi) A.R. Vehicle Services Pvt. Ltd. (vii)Fried Water Foods and Beverages P. Ltd. and (vi) Quest Data India P Ltd. 9. These documents are available in the paper book submitted by the assessee. We further notice that the transactions have taken place through banking channels. Apart from these documents the assessee has furnished the addresses and PAN No. of the companies/entities from whom, the assessee had taken loans in question. As pointed out by the Ld. counsel, the Hon ble Supreme Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. (1986) 159 1TR 78 (SC) has held that if the assessee has given names and address of the creditors and it is in the knowledge of the revenue that the creditors were being assessed to tax, the onus is on the revenue to pursue the matters with the creditors. Similarly, in the case of CIT vs. Jauharimal Goel 147 Taxman 448 (All), it has been held that assessee cannot be asked to prove source of source or the origin of money. Further, as pointed out by the Ld. CIT (A), the Hon ble Supreme Court in the case of Lovely Exports Pvt. Ltd. 216 CTR 195 (SC) has held that the AO is at liberty to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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