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TMI Blog2023 (7) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of incorrect appreciation and recording of wrong findings. Assessee has discharged onus lay on it as per mandatory requirement sec 68 - Per contra, as per discussion made hereinabove based on self speaking documentary evidences of the assessee we are compelled to hold that the assessee has properly discharged said onus by way of sustainable explanation and documentary evidence showing and establishing identity, capacity creditworthiness of lenders and genuineness of transaction therefore no addition can be made in the hands of assesses u/s. 68 or any provision of the Act. - Decided in favour of assessee. - ITA No. 1267/Del/2023 - - - Dated:- 28-7-2023 - Shri Chandra Mohan Garg, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Assessee : Shri Dinesh Kumar Aggarwal, CA For the Revenue : Shri Om Prakash, Sr. DR ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of Ld. NFAC, New Delhi dated 08.03.2023 for AY 2012-13. 2. The ld. assessee s representative submitted that the assessee, except ground no. 10, does not want to press other grounds of appeal hence, other grounds of appeal are dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account share application money, share capital and share premium etc. and this does not apply to transactions in the nature of unsecured loans therefore the addition is not sustainable on this count. 4. The ld. AR also submitted that the assessee has discharged onus lay on it by filing documentary evidence establishing identity creditworthiness of lender. He further submitted that the assessee by submitting confirmation of account, copy of PAN, acknowledgment of ITR, financial statement and audit report, copy of bank account and incorporation detail of lender companies also establish capacity and creditworthiness of lender as well as genuineness of transaction therefore addition cannot be made in the hands of assessee without praising any doubt or discrepancy in the said documentary evidence filed by the assessee. The ld. AR also pointed out that the criteria for establishing creditworthiness is not confine to their returned or declared income but net worth of the lenders is to be seem for deciding said point. He also pointed out that the examination of source of source is right of Assessing Officer and at the same time this cannot be ignored the creditors are income tax asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsecured loans of Rs. 10 lacs on the interest at the rate of 10% per annum on 04.07.2011 which was repaid including interest on 14.05.2013 by repaying Rs. 12 lac including interest. The ld. AR, therefore submitted that in view of above factual position of availability of owned funds with the lender company and repayment of loan along with interest after deduction of TDS again supports the explanation of assessee establishing genuineness of transaction. Therefore no addition is required to be made in the hands of assessee. 7. Replying to the above, the ld. Senior DR strongly oppose to the above contentions of assessee and drawing our attention towards relevant part of the orders of the authorities below submitted that since the assessee has claimed to have received amount from a company which was controlled by an establish entry provider Shri Anirudh Joshi, who himself admitted before the investigation wing that he has provided accommodation entries through his sister concerns. The ld. Senior DR also pointed out that since the assessee failed to establish creditworthiness of lenders and genuineness of transaction discharging onus as per requirement of sec 68 of the Act, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Pvt. Ltd. lenders company these documents have been placed at pages 203 to 242 of assessee paper book. 10. Copies of confirmation of both the lender companies available at pages 243 to 247 reveals that the notices u/s. 133(6) of the Act, were duly responded by the lenders company confirming the alleged transactions, receipt of interest and repayment of loan to the respective lender by the assessee in the subsequent assessment year. So far as contention of assessee that the opportunity of cross objection was not provided is concerned the ld. CIT(A) at page 19 top para last sentence wrongly noted that there is no request from the assessee seeking cross examination of the witness as the copies of request letters placed at pages 65 to 71 clearly reveals that the assessee vide applications dated 05.10.2019, 13.10.2019 and 18.11.2019 consistently requested the Assessing Officer to provide cross examination on the witness Shri Anirudh Joshi which was never provided to the assessee and this omission on the part of revenue is fatal to the case of Assessing Officer and the same is clear violation of principles of natural justice as the use the said statement against the assessee withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecording of wrong findings. 13. Our above noted conclusion also gets support from the judgment of Hon ble High Court of Allahabad in the case of CIT vs Kapoor Chand Mangesh Chand (2013) 38 taxmann.com 239 (Allahabad) and judgment of the Hon ble Supreme Court in the case of Dhananjaya Reddy vs. State of Karnataka, 2001 (4) SCC 9, as vehemently relied by the ld. AR, to submit that where there is no material to destroy the identity and creditworthiness and genuineness of transaction particularly when the lender companies are being regularly assessed to tax and has produced their financial bank statement before the authorities below then it has to be held that the assessee has discharged its primary onus of proving the identity, capacity and creditworthiness of creditor and genuineness of transactions and in such situation no addition u/s. 68 of the Act is called for. 14. In view of forgoing discussion we reach to a logical conclusion that the authorities below were not correct and justified in holding that the assessee has not discharged onus lay on it as per mandatory requirement sec 68 of the Act. Per contra, as per discussion made hereinabove based on self speaking document ..... X X X X Extracts X X X X X X X X Extracts X X X X
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