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TMI Blog2023 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... y the loan creditor in their income tax return. Therefore, we fail to find any justification in the action of ld. AO invoking the provisions of Section 68 - Assessee appeal allowed. - DR. MANISH BORAD, HON BLE ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, HON BLE JUDICIAL MEMBER For the Assessee by : Shri Akkal Dudhewala, FCA For the Revenue by : Smt. Ranu Biswas, Addl. CIT D/R ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi, (hereinafter the ld. CIT(A) ) dt. 07/02/2023, passed u/s 250 of the Income Tax Act, 1961 ( the Act ) for the Assessment Year 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 apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried the matter in appeal before the Ld. CIT(A) without success. 3. Aggrieved, the assessee is in appeal before us. 4. The ld. Counsel for the assessee, firstly objected to the inaction of the AO to provide the reasons recorded for reopening the assessment which according to him was sina qua non to assume jurisdiction u/s 147 of the Act. He thus urged that on this ground alone, the impugned order deserves to be held to be ab initio void. In support, he relied on the decisions of the Hon ble Supreme Court in the case of Pr. CIT Vs V Ramaiah (103 taxmann.com 202) and Pr.CIT Vs Jagat Talkies Distributors (85 taxmann.com 189). 5. The ld. Counsel for the assessee thereafter pointed out that the reasons which were ultimately cited in the assessment order was based on erroneous assumption of facts as it revealed that the information available with the AO was that account of the assessee got credited with cash deposit of Rs. 10,00,000/- from M/s Evermore Sales Pvt Ltd. He further submitted that, assessee had demonstrated before the AO that this reason was factually incorrect in as much as there was no cash deposit in their account and that monies received from M/s Evermore Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he identity and creditworthiness of the lender and genuineness of the transaction. On perusal of the records it is noted that the assessee had received the loan on several dates from M/s Evermore Sales Pvt Ltd holding PAN AACCE8179M, aggregating to Rs. 25,00,000/- through proper banking channel 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 that there was no prior deposit of cash before advancement of loan. The loan has been confirmed by the lender and the same was also subsequently repaid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the inference, it cannot be assumed in the absence of any material that there have been some illegalities in the assessee's transaction. Held, dismissing the appeal, that the allegations against the assessee were in respect of thirteen transactions. The Assessing Officer issued a show-cause notice only in respect of one of the lenders. The assessee responded to the show-cause notice and submitted the reply. The documents annexed to the reply were classified under three categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The Assessing Officer had brushed aside these documents and in a very casual manner had stated that merely filing the permanent account number details, and balance sheet did not absolve the assessee from his responsibility of proving the nature of the transaction. There was no discussion by the Assessing Officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee had discharged his initial burden and the burden shifted onto the Assessing Officer to enquire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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