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TMI Blog2017 (6) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... ee ingredients are proved, the assessee doesn t required to prove the sources of source. HELD THAT:- Assessee has furnished confirmation letters in respect of all loan creditors. We further observed that the assessee has filed income tax returns along with bank statements of all loan creditors. All the loan creditors are assessed to Income tax and loans has been given by cheque. We further observed that the A.O has summoned trustees of the trust who had appeared before the A.O and given a statement u/.s 131, wherein they have clearly admitted that they have advanced loan to the assessee. In respect of remaining three parties, though they are not appeared before the A.O, the assessee has filed necessary details that these loans have been rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of purchase and sales of shares and dealing in derivatives transaction, filed her return of income for the assessment year 2009-10, declaring total income of Rs. Nil. The case was selected for scrutiny and notice u/s. 143(2) of Income Tax Act, 1961 was issued and served on the assessee. In response to notice, the authorised representative appeared from time to time and submitted the requisite details called for. 3. During the course of assessment proceedings the AO noticed that the assessee has incurred loss from trading in shares and derivatives of Rs. 1,14,35,207/- and has taken unsecured loans of Rs. 1,91,61,486/-. The assessee has filed confirmation letters in respect of unsecured loans. Summons were issued in respect of four pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r observed that the loan creditors are not found at the address given. The loan creditors are showing nominal income and hence, accumulation of fund to such an extent is not possible. Though, the assessee has filed bank statements to prove the acceptance of loan by cheque, but the fact remains that prior to payment of loan equal amount has been credited to the bank account of the loan creditors, therefore opined that the loan creditors doesn't have capacity to lend such a huge amount of loan to the assessee. Accordingly, rejected explanations of the assessee and made additions of Rs. 22,40,000/- u/.s 68 of the I.T. Act, 1961. In addition, the A.O made disallowance of Rs. 2,68,800/- towards interest on loan. 4. Aggrieved by the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to explain the loan advanced to the assessee. On further verification of income tax returns of the creditors, it was noticed that these trusts are indulged in merely giving entries of loan by providing accommodation entries. It was further observed that in respect of Sheshram Mali Trust and D.K. Mali Trust, these trusts have filed their return of income with meagre total income and its trust fund and capital is fully utilised for advancing loans without their being any interest income, therefore opined that these trust are merely existed for providing accommodation entries, therefore held that the assessee has not discharged its primary onus cast upon him u/s 68 of the Act. In so far as, Hariram M. Choudhary, Rekhaben Parasmal Borana and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating the said loans as unexplained income of the assessee. 7. The Ld. DR, on the other hand strongly supporting order of the CIT(A), submitted that the assessee has failed to prove the initial burden cast upon him by proving the identity, genuineness and creditworthiness of the parties. The A.O as well as the CIT(A) has brought out clear facts to the effect that these are bogus creditors existed merely for providing accommodation entries, therefore the A.O has rightly made additions u/s. 68 of the Act, and his order should be upheld. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O made additions towards unsecured loans u/s. 68 of the Act, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e additions on the ground that the assessee has not proved the identity and genuineness of the transactions, despite the fact that the assessee has furnished all evidences to prove the loans. 9. Having heard both the sides and considered material on the record, we find that the assessee has furnished confirmation letters in respect of all loan creditors. We further observed that the assessee has filed income tax returns along with bank statements of all loan creditors. All the loan creditors are assessed to Income tax and loans has been given by cheque. We further observed that the A.O has summoned trustees of the trust who had appeared before the A.O and given a statement u/.s 131, wherein they have clearly admitted that they have advance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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