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TMI Blog2024 (5) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... ss ought to have elicited from him about the genuineness of the lenders viz M/s. Shipra Fabrics Pvt. Ltd. and M/s. Lunkad Textile Pvt. Ltd. i.e, whether these companies actually conducted any business or were only his paper companies engaged in providing accommodation entries. AO, however, has not endeavored to take such a course of action and instead has brushed aside the Affidavit of retraction on the specious plea that the DDIT Investigation Report is silent about it. Such action of the AO cannot be accepted and since, the assessee has discharged his burden to prove the identity, creditworthiness and genuineness of the loan creditors, and the assessee has shown to have re-paid loan the loan in question the addition made u/s 68 of the Act cannot be sustained. Moreover, the only material on the basis of which Assessing Officer has taken adverse view against assessee was the untested statement of Shri Vipul Bhat, who admittedly has not been allowed to be cross-examined by assessee, so in view of retracted statement (Affidavit), it would be unsafe to draw adverse view against assessee. Therefore, the additions made deserves to be deleted. For taking such a view, we rely on the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies operated by Shri Vipul Vidur Bhatt. According to the AO, the assessee had shown to have taken loan amounting to Rs. 77 Lakhs from M/s. Shipra and Rs. 40 Lakhs from M/s. Lunkad (total of Rs. 1,17,00,000/-) which loan according to the AO were mere accommodation entry. And therefore, he recorded his satisfaction that there was escapement of income and he reopened the assessment. The assessee participated in the re-assessment proceedings wherein he was directed by the AO to prove the nature and source of Rs. 77 Lakhs and Rs. 40 Lakhs credited in his books of accounts in the relevant assessment year (AY. 2014-15). Pursuant thereto, the assessee filed copy of return of income along with computation of income, Balance-Sheet, P L Account, Audit Report, details of bank accounts, details of short term capital gains on sale of land/DRC, copy of confirmation from M/s. Shipra Fabrics Pvt Ltd and M/s. Lunkad Textile Pvt. Ltd. After acknowledging receipt of the aforesaid documents, the AO expressed his dissatisfaction with regard to genuineness by the cash credit in the books of account to the tune of Rs. 1,17,00,000/-. (Rs. 77 Lakhs Rs. 40 Lakhs) According to the AO, he had issued notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 347 paper companies were discovered; and he admitted that he was controlling these entities either as a Director or through his dummy Directors. And that he was mainly engaged in providing accommodation entries to beneficiaries. And since the assessee had shown to have transaction with two of the paper companies of Shri Vipul Bhat to the tune of Rs. 1.17 cr., the AO asked the assessee to prove the nature and source of Rs. 1.17 cr. Pursuant to which, the assessee replied that he had taken loan of Rs. 77 Lakhs from M/s. Shipra and Rs. 40 Lakhs from M/s. Lunkad; and in order to prove the nature and source of the same, the assessee filed copy of return of income along with computation of income, Balance-Sheet, P L Account, Audit Report, details of bank accounts, details of short term capital gains on sale of land/DRC, copy of confirmation from M/s. Shipra Fabrics Pvt Ltd and M/s. Lunkad Textile Pvt. Ltd. The AO issued notice u/s 133(6) of the Act to M/s. Shipra as well as M/s. Lunkad, which according to the AO did not elicit any reply from them though it was served upon them. Therefore, the AO was not satisfied with the aforesaid documents submitted by assessee to prove the nature sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income of M/s. Shipra which is found placed at page no. 1 to 12 of PB, which reveals that the PAN of M/s. Shipra is AAACS5527M and that it is a Pvt. Ltd Company which falls in the jurisdiction of Central Circle-39, Mumbai and has shown gross total income of Rs. 22,66,889/- in AY 2014-15. The Paper Book (PB) filed before us, reveals that loan amount of Rs. 77 Lakhs has been received by assessee on 08.07.2013 through banking channel which is discerned from perusal of page no. 10 11 of PB. The bank statement of Bank of Baroda of the assessee company A/c 12460200000447 shows that on 08.07.2013 an amount of Rs. 77 Lakhs has been credited in the account of the assessee. The assessee has also filed the confirmation of the loan transaction from M/s. Shipra which is found placed at page no. 9 of the PB. And in order to prove the creditworthiness of the M/s. Shipra, the Ld. AR drew our attention to the balance-sheet of the ibid company as on 31.03.2014 which is found placed at page no. 13 of PB which reveals that it has share capital and reserves surplus to the tune of Rs. 3.42cr and it has given assessee loan of only Rs. 77 Lakhs. Thus, according to the assessee, the creditworthiness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and coercion on the part of the search team, the AO brushed it aside by pointing out that the DDIT (Inv.) report did not mention anything about the purported retraction. According to the AO, therefore loan shown by the assessee from these two concerns of Shri Vipul Vidur Bhatt were bogus transaction and therefore, he added the entire amount of Rs. 1.17 cr u/s 68 of the Act and the interest expenditure to these entities to the tune of Rs. 4.80 cr was disallowed/added, which action of the AO was confirmed by the Ld.CIT(A). We do not countenance the impugned action of the Ld.CIT(A) for the simple reason that the assessee has discharged the burden to prove the nature and source of the credit entries of Rs. 1.17 Crs. (from M/s. Shipra Fabrics Pvt. Ltd., Rs. 77 lakhs and Rs. 40 lakhs from M/s. Lunkad Textile Pvt. Ltd.) by adducing primary/relevant documents/material as discussed supra; and the AO has not been able to find fault with the primary/relevant documents filed by the assessee to prove the nature and source of the credit entries. Once, the assessee has discharged the burden to prove prima-facie nature and source of the credit entries, onus shifted to the AO to rebut it with coge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing for the Appellants revolves upon the stand taken by the Appellants whether the shareholders who have invested in the shares of the Respondents are fictitious or not. In this connection, the Respondents in support of their stand about the genuineness of the transaction entered into with such Companies has produced voluminous documents which, inter alia, have been noted at Para 3 of the Judgment of the CIT Appeals which reads thus: - The assessment is completed without rebutting the 550 page documents which are unflinching records of the companies. The list of documents submitted on 09.03.2015 are as follows: - 1. Sony Financial Services Ltd- CIN U74899DL1995PLC068362- Date of Registration 09.05.1995 (a) Memorandum of Association and Article of Association (b) Certificate of Incorporation (c) Certificate of Commencement of Business (d) Acknowledgement of the Return of Income AY. 2008-09 (e) Affidavit of the Director confirming the investment (f) Application for allotment of shares (g) Photocopy of the share certificate (h) Audited account and Directors report thereon including balance-sheet, Profit and Loss Account and Schedules for the year ended 31.03.2009. (i) aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. 9. This Court in the Judgments relied upon by the learned Counsel appearing for the Respondents, have come to the conclusion that once the Assessee has produced documentary evidence to establish the existence of such Companies, the burden would shift on the Revenue-Appellants herein to establish their case. In the present case, the Appellants are seeking to rely upon the statements recorded of two persons who have admittedly not been subjected to cross examination. In such circumstances, the question of remanding the matter for re-examination of such persons, would not at all be justified. The Assessing Officer, if he so desired, ought to have allowed the Assessee to cross examine such persons in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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