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TMI Blog2023 (11) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... prehensions or surmises. CIT(A) finally relying on the proposition rendered in the case of CIT Vs. Lovely Exports [ 2008 (1) TMI 575 - SC ORDER] concluded that no adverse finding other than baseless observation given by the AO and also that this is not a case relating to entry operators and the ld CIT(A) has recorded categorical finding that all the parties are regularly assessed to tax and intimation have also sent to various AO to take necessary follow up action. CIT(A) finally concluded the details in the remand report as well as various documents filed by the assessee have clearly established that the onus cast upon the appellant with regard to establishing identity, capacity and creditworthiness of contributor/ investor of share application amount has been discharged. Thus, we are unable to see any ambiguity, perverse to any valid finding recorded by the ld CIT(A) that the onus discharged by the appellant with regard to share application amount and no specific adverse information or evidence has been brought on record by the AO to justify the addition u/s 68 of the Act. Accordingly, we hold that the findings of the ld CIT(A) are quite correct and justified based on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, in deleting the addition of Rs. 2,40,00,000/- made by the AO as unexplained cash credits from undisclosed sources u/s 68 of the I.T. Act. 2. The Ld CIT(A) erred in law and on the facts and circumstances of the case, in deleting the addition of Rs. 35,00,000/- made by the AO as unexplained unsecured loans. 3. The Ld. CIT(A) erred in law and on the facts and circumstances of the case, in restricting the estimated business income from Rs. 2,31,200/- to Rs. 1,00,000/- which is below the returned income. Ground No. 1 3. Apropos ground No. 1 the ld Sr. DR submitted that the assessee received a total amount of Rs. 3,70,00,000/- as share application money during the year and the amount of Rs. 1.30 crores accepted by the AO but an addition of remaining part of it amounting to Rs. 2.40 crores added back to the total income of the assessee as unexplained credit from undisclosed source u/s 68 of the Act. The ld Sr. DR submitted that only a few persons provided fund to the assessee company in the form of share application money and unsecured loans and most of them stated that their source of investment is from sale of shares. The ld SR DR submitted that the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan creditors. The ld CIT(A) also noted annexure A which was attached to the first appellate order containing list of evidences filed by the assessee and examined by the CIT(A) by way of calling remand report by AO and taking on record rejoinder of the assessee. 6. We further note that the ld CIT(A) proceeded to record his findings from page 50 onwards and reproduce the submissions of the assessee and summarized the same in view of the drawing conclusion/ findings thereon. For the sake of completeness we find it appropriate to reproduce the relevant operative portion of the first appellate order as follows:- 3.8. I have gone through the facts and circumstances of the case, observations of the A.O., submissions made by the A.R. of the appellant, remand report of the assessing officer, rejoinder to the remand report, various judicial pronouncements on this issue and the provisions of the I.T. Act. I have also called for the assessment records and examined the same. This ground of appeal is being finalized after making following observations: (a) On going through the assessment it is observed that the assessing officer has considered the total share application money of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y did not exist, or there was no information or material available to establish that the share application money had been manipulated or managed by the appellant company. The assessing officer himself has stated that statements of Sh. Harish Aggarwal and Suresh Aggarwal had also been taken in detail regarding the financial transactions relating to the appellant company, but no adverse comments were brought on record by the assessing officer regarding these statements. The various parties had been specifically investigated by the assessing officer and despite the investigations no adverse findings were brought on record by the assessing officer on the basis of which the addition of Rs. 2.40 crores. (c) The A.R. of the appellant has made detailed submissions which have been reproduced earlier in the order and has also provided a chart regarding the various persons from whom the share application money had been taken. On the basis of the chart which summarises the details about the different parties, it is also clear that the appellant had discharged initial onus of establishing the identity, genuineness and creditworthiness of the various parties through details like PAN, ITR, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions of the A.R. of the appellant regarding the identity, creditworthiness and genuineness of the transaction. The assessing officer has not disputed the various evidences provided by the A.R. of the appellant and also carried out specific enquiries as well as inform the various assessing officers regarding this transaction. In spite of all the investigations and efforts made by the assessing officer, no specific adverse information has been pointed out by the A.O. to come to this conclusion that the amount of Rs. 2.40 crores was not genuine or the persons did not have creditworthiness for providing this amount. In view of the various judicial pronouncements on this issue as well as the provisions of the I.T. Act, I do not see any reason for the assessing officer to have made this addition, specially because no specific adverse information was available with him. (e) with regard to the issue of TEP, it is clear that the TEP had been fully considered by the assessing officer and on the basis of the same statements of Sh. Harish Aggarwal and Shri Suresh Aggarwal have been taken. Despite the information with the assessing officer available through the TEP, there was no specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2095 of 2010 (Del), CIT v. Dwarkadhish Investment in ITA No. 911/2010 (Del). 3.9. After careful consideration of the specific facts of the case, the provisions of the I.T. Act, the evidences and submissions made by the A.R. of the appellant, the enquiries conducted by the assessing officer as well as the replies received from various parties, I am convinced that in this case the onus has been discharged by the appellant with regard to the share application amounts and no specific adverse information or evidence has been brought on record by the assessing officer to justify the addition of Rs. 2.40 crores. Accordingly, this amount of Rs. 2.40 crores is deleted. This ground of the appellant is treated as allowed. 7. The ld CIT(A) first of all observed that the AO has accepted the amount of Rs. 1.30 crores as genuine and rejected the claim of the assessee amounting to Rs. 2.40 crore as not having been explained u/s 68 of the Act. The ld CIT(A) noted that the AO made general remarks stating that response to summons issued u/s 131 of the Act only some persons had responded and provided details and confirmations. The ld CIT(A) noted that it is not the case of any entry opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and even after enquiries made by the AO, when no adverse remark was made how there could be a justification of making addition u/s 68 of the Act. 9. The ld CIT(A) while granting relief to the assessee has relied on the various judgments of Hon'ble Supreme Court and jurisdictional Delhi High court which supports the conclusion drawn by the ld first appellate authority. The ld CIT(A) also considered the allegation made in the tax evasion petition and noted that the despite the information of TEP the AO has not brought any adverse material on record, no addition can be made on general apprehensions or surmises. 10. The ld CIT(A) finally relying on the proposition rendered by the Hon'ble Supreme Court in the case of CIT Vs. Lovely Exports (supra) concluded that no adverse finding other than baseless observation given by the AO and also that this is not a case relating to entry operators and the ld CIT(A) has recorded categorical finding that all the parties are regularly assessed to tax and intimation have also sent to various AO to take necessary follow up action. The ld CIT(A) finally concluded the details in the remand report as well as various documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, noted that as per various judicial pronouncement unless the onus is shifted by the AO with regard to establishing the identity, genuineness and creditworthiness of the transaction or any specific adverse observation or findings are made there cannot be any addition without specific reason and evidence to establish that the amount was not explained. After observing above, the ld. CIT(A) deleted the addition by observing that the evidence and circumstances under which the unsecured loan have been taken and the AO did not controvert the various evidence of facts brought on record, there is no justification to sustain the addition made by the AO u/s 68 of the Act. It is pertinent to mention that on being asked by the bench the ld Sr. DR did not controvert the factual position noted by the ld CIT(A) that the amount of Rs. 31 lakhs was repaid during the same financial period to the respective loan creditor i.e. M/s. Abhinav Leasing and Finance Ltd. 14. In view of the foregoing, we are unable to see any valid reason to interfere with the findings arrived and recorded by the ld CIT(A) and thus we uphold the same. Accordingly, ground No. 2 of the revenue is also dismissed. Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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