9911796707
TMI Blog2023 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2013-14 which is arising out of the assessment order framed u/s 143(3) of the Act dt. 27/09/2021. The assessee has raised the following grounds of appeal:- "1. For that on the facts and in the circumstances of the case, the addition of Rs. 25,00,000/- made u/s 68 was factually as well as legally unsustainable and therefore the same deserves to be deleted. 2. For that on the facts and in the circumstances of the case, the authorities below were unjustified-in not appreciating that the assessee had duly discharged its onus of establishing the identity, genuineness & creditworthiness of the loan creditor and in that view of the matter the addition of Rs. 25,00,000/- made by way of unexplained cash credit u/s 68 was untenable on facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. Upon examining the details furnished by the assessee, the AO noted that the assessee was unable to explain the purpose of loan and that the genuineness of transaction remained unproved as there was cash deposit and immediate withdrawal. The AO finally concluded that cash was deposited by M/s Evermore Sales Pvt Ltd in their bank account to advance loan to the assessee and that the assessee in this guise had brought back its accounted income into regular books of accounts. Hence, the receipt of loan of Rs. 25,00,000/- was added by way of unexplained cash credit u/s 68 of the Act. 2.1. Aggrieved the assessee carried the matter in appeal before the Ld. CIT(A) without success. 3. Aggrieved, the assessee is in appeal before us. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- in the bank account of M/s Evermore Sales Pvt Ltd prior to advancement of loan to the assessee which represented routing of account of unaccounted monies of the assessee. The Ld. Counsel for the assessee explained that even the ultimate finding was factually perverse as there was no cash deposit in the bank account of M/s Evermore Sales Pvt Ltd, copy of their bank statement was placed at Pages 44 to 46 of the paperbook. To substantiate the identity, creditworthiness and genuineness of the loan transaction, the assessee placed before us the copy of the audited financials, bank statement, loan confirmation and IT Acknowledgment of M/s Evermore Sales Pvt Ltd and the details of repayment as well, which was done much prior to issuance of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that there was no cash deposited in the bank account of the assessee , as wrongly alleged in the recorded reasons. It is thus noted that the reasons recorded prior to reopening proceeded on incorrect assumption of facts and thus ex-facie was untenable. 7. We further find, that the lender had sufficient own funds to advance the loan to the assessee. The loan is noted to carry interest at the rate of 9%. The assessee has provided the said interest in its books and deducted TDS thereon as well. The interest income has been accounted for by the lender and the same form parts of the return of income filed by M/s Evermore Sales Pvt Ltd for the relevant AY 2013- 14 dated 23.12.2013. The bank statement of M/s Evermore Sales Pvt Ltd evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This would mean that the assessee offers no proper, reasonable and acceptable explanation as regards the amount credited in the books maintained by the assessee. No doubt the Act places the burden of proof on the taxpayer. However, this is only the initial burden. In cases where the assessee offers an explanation to the credit by placing evidence regarding the identity of the investor or lender along with their confirmations, the assessee has discharged the initial burden and, therefore, the burden shifts on the Assessing Officer to examine the source of the credit to be justified in referring to section 68 of the Act. After the Assessing Officer puts the assessee on notice and the assessee submits the explanation concerning the cash credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the matter which he failed to do. In more than one place the Assessing Officer used the expression "money laundering". Such usage was uncalled for as the allegation of money laundering is a very serious allegation and the effect of a case of money laundering under the relevant Act is markedly different. The order passed by the Assessing Officer was utterly perverse and had been rightly set aside by the Commissioner (Appeals). The Tribunal had rightly deleted the additions under section 68." 9. As noted earlier, the loan was repaid in 2014-15 and, therefore, the allegation of the AO that assessee was a beneficiary of the loan cannot be sustained on these facts and is liable to be deleted. We gainfully refer to the judgment of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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