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TMI Blog2020 (12) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the transactions was duly been discharged by the assessee. The assessee was not required to prove the source of source for this year. Therefore, the onus was on revenue to rebut these evidences by bringing on record cogent material to dislodge assessee s evidences Except for the fact that summons remained un-served, there is nothing in the armory of revenue to unsettle the assessee s claim. The allegations are not supported by any corroborative evidences. Once the initial onus was discharged by the assessee, it was incumbent upon revenue to carry out further investigation to support the allegation that the credits were unexplained - nothing of that sort has been shown to have been carried out. So far as the information of DGIT (Inv.) is concerned, we find that these were merely third party statements which were never confronted to the assessee and those statements on standalone basis could not form the basis of making additions in the hands of the assessee. AR, during the course of hearing, advanced arguments for the submissions that the case of the assessee was selected for scrutiny under CASS for the reason that there was large interest expenses relatable to exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions. Once these three ingredients are shown to be fulfilled by the assessee, the primary onus casted upon him, in this regard, could be said to have been discharged and accordingly, the onus would shift upon revenue to dislodge the assessee's claim by bringing on record material evidences and unless this onus is discharged by the revenue, no addition could be sustained u/s 68. The Hon'ble Supreme Court in the case of Lovely Exports P. Ltd. [319 ITR 5], dismissing revenue's appeal, observed as under: - 2. Can the amount of share money be regarded as undisclosed income under section 68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. 3. Subject to the above, Special Leave Petition is dismissed. The ratio of said decision has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ld. Commissioner of Income-Tax (Appeals)-16, Mumbai, [in short referred to as 'CIT(A)'], Appeal No.CIT(A)-16/ITO-9(1)(1)/IT-402/2015-16 dated 28/02/2018 in sustaining certain additions u/s 68. The grounds raised by the assessee along with Form No.36 has been revised vide letter dated 11/03/2020 which have been taken on record. The revised grounds raised by the assessee read as under: - 1. On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in not following the instruction of CBDT and has scrutinized and made addition on the issue which was not covered under the CASS while selecting the case under Scrutiny. Therefore Addition u/s. 68 of the Income Tax Act 1961, on account of Share Capital Money of ₹ 6,00,000/- and Unsecured Loans of ₹ 2,44,00,000/- has to be deleted. 2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in adding the share capital money of ₹ 6,00,000/- and Unsecured Loans of ₹ 2,44,00,000/- u/s. 68 of the Income Tax Act 1961, without considering the facts of the case." As evident, the assessee is aggrieved by certain additions u/s 68 on account of Share Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these parties. In the above background, Ld. AO proceeded to examine the documents furnished by the assessee in support of the transactions. 3.2 After going through documents of M/s Asan Investment & Finance Services Private Limited, it was observed that huge funds were received and transferred at regular intervals by this entity and there was no genuine business activity. Another reason to doubt the genuineness of the transactions was that the summons sent to the said party was unserved but still the reply was received in Tapal and therefore, it was to be concluded that the said party deliberately avoided attending in-person and submitting relevant evidences in support of the transactions. Therefore, monies received from said entity were held to be nongenuine. More or less, similar was the findings in respect of entities listed at serial nos. 4 to 6. Similar was the findings in respect of entities listed at serial nos. 1 to 2 wherein additional facts were that certain information was received from DGIT (Inv.) Kolkata that one Mr. Prakash Jajodia was involved in providing bogus accommodation entries of varied nature. The entity listed at serial no. 1 i.e. M/s Kurmi Developers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per The Companies Act. The transactions carried out with the assessee have duly been reflected in its financial statements. This entity has Reserves & Surplus of ₹ 632.39 Lacs which have been used to make further investments. Similar are the documents in the case of M/s Khushi Industries Limited. This entity has also filed confirmation of account and it holds valid PAN which is evident from its return of income. The transactions carried out with the assessee are through banking channels and there is no immediate cash deposit before transfer of funds to the assessee. This entity has paid taxes of ₹ 2.08 Lacs during the year. Its financial statements have duly been audited and this entity has Reserves & Surplus of more than ₹ 2281.70 Lacs. Another entity i.e. M/s Kings Mercantile Private Limited has also filed confirmation of account. This entity has paid taxes of ₹ 0.34 Lacs. Its financial statements have duly been audited and it has Reserves & Surplus of ₹ 710 Lacs besides short-term borrowings. These funds have been used to advance loans and advances. M/s Rishi Automation Limited has also filed confirmation of accounts and it has paid taxes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation of DGIT (Inv.) is concerned, we find that these were merely third party statements which were never confronted to the assessee and those statements on standalone basis could not form the basis of making additions in the hands of the assessee. It is trite law that no additions could be based merely on doubts, conjectures or surmises. Therefore, the additions as made by Ld. AO, in our considered opinion, are not sustainable in the eyes of law. The settled legal position as enumerated by us in the opening paragraphs duly support the said conclusion. Therefore, we delete the impugned additions as sustained by Ld. CIT(A). The grounds, thus raised, stand allowed. 6. The Ld. AR, during the course of hearing, advanced arguments for the submissions that the case of the assessee was selected for scrutiny under CASS for the reason that there was large interest expenses relatable to exempt investments u/s 14A. However, no such additions were made by Ld. AO in the assessment order and therefore, the scope of scrutiny could not be enlarged to make additions of unexplained cash credit u/s 68. However, these arguments do not convince us much since upon perusal of page no. 17, it is qui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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