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TMI Blog2024 (8) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... the source of his creditor or to prove the creditworthiness of the source of the sub-creditors. Unexplained cash credit for the loan taken from M/s. Deepika Roadlines - We find that such loan was taken by the assessee, by an account payee cheque, through proper banking channel, and necessary interest have been accrued. Name and address and PAN number of the party from whom the loan was taken, have been submitted by the assessee, before the assessing officer, during the assessment proceedings. We note that in the case of CIT V/s. Ranchod JivabhaiNakhava [ 2012 (5) TMI 186 - GUJARAT HIGH COURT] held that once the assessee has established that he has taken money by the way of accounts payee cheques from the lenders who all are Income Tax assessee, whose PAN have been disclosed, the initial burden u/s 68 of the Act was discharged. Addition on account of difference in the accounts with M/s Star Shine Pvt. Ltd. - HELD THAT:- The assessee has not recorded any transactions in its books of account, as the assessee has not purchased such goods from M/s Vision Impex, the said good was transferred to M/s Star Shine on high sea sale and therefore the said party has credited such transactions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010, declaring total loss at Rs. 2,02,54,264/-. The case was selected for scrutiny manually and notice u/s 143(2) dated 17.09.2010, was issued and served upon the assessee on 24.09.2011. The assessee attended the proceedings and submitted the details/explanations as called for. The assessee is a Private Limited Company, deriving income from Import/Export/Trading of used garments. The books of account are audited and the return is accompanied by Tax audit Report u/s 44AB of the Act. During the year, the assessee company has shown unsecured loans of Rs. 2,11,81,000/- from Shri Kuldeep Singh Grewal, one of the director of Saffire Fine Clothing Ltd. Shree Kuldip Singh Grewal is Resident and citizen of Canada and has not filed any return of income in India. The amounts have been received from different person in India who has been claimed as relatives (Indian Residents) and corresponding credit entry has been made in capital account of Mr. Kuldip Singh Grewal. The assessee-company had received deposits from Indian Residents and not from Shree Kuldip Singh Grewal Canada based, director of the assessee. In such circumstances, the A.O. noticed that submitting the documents to prove identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s details to prove the genuineness of cash credit, such as, (i)Confirmation of account by the depositor, (ii)HDFC Bank Account of depositor Bank Details of Scotia Bank to prove the fund transfer from non-resident director, (iii) Affidavit of the director stating the amount of deposits and the source of such fund, (iv) Affidavit of Shri Sukhwinder Singh to confirm that he has extended loan to Mr. Kuldip Singh Grewal to the tune of Rs. 1,03, 00,000/-, out of amount received from the sale of land by the said person and the copy of agreement to sell the land, (v) Copy of bank statement of Shri Sukhwinder Singh from which the amount loan has been transferred to depositor account. (vi) Copy of affidavit of Shri Sandeep Singh, the relative of Mr. Kuldip Singh Grewal, who has extended loan of Rs. 3,50,000/-, out of his personal agriculture income and from the personal borrowings. Thus, ld Counsel contended that assessee has proved the source of deposits received from Mr. Kuldip Singh Grewal, the director of the company, and has also proved the source of the source, therefore the addition made by the assessing officer may be deleted. 8. On the other hand, Learned Senior Departmental Represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonal borrowings. (vii) PAN Number and address of these persons were also filed before the lower authorities. We find that by submitting these documents and evidences, the assessee has proved the source of the amount. Therefore, we find that assessee has discharged the initial burden of cash credit, and once the initial burden is proved by the assessee then the onus is shifted on the department. 10. As we have noted in above para that the assessee has proved the identity of depositor, genuineness of deposits and the creditworthiness of the depositor, therefore the burden on the assessee has been duly discharged. We find that Hon ble Apex Court in the case of Orissa Corpn. (P) Ltd. (supra) 159 ITR 78 and the Hon'ble Gujarat High Court, in the case of Dy. CIT v. Rohini Builders [2002] 256 ITR 360/[2003] 127 Taxman 523, has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he burden of the assessee to prove the genuineness of the transactions as well as creditworthiness of the creditor is confined to the transactions which have taken place between the assessee and the creditors, and it is not the burden of the assessee to show the source of his creditor or to prove the creditworthiness of the source of the sub-creditors. 12. We note that assessing officer has also made another addition of Rs. 5,00,000/- on account of unexplained cash credit for the loan taken from M/s. Deepika Roadlines during the year. We find that such loan was taken by the assessee, by an account payee cheque, through proper banking channel, and necessary interest have been accrued. Name and address and PAN number of the party from whom the loan was taken, have been submitted by the assessee, before the assessing officer, during the assessment proceedings. We note that Hon`ble Jurisdictional High Court of Gujarat in the case of CIT V/s. Ranchod JivabhaiNakhava, Tax Appeal no.50 of 2011, held that once the assessee has established that he has taken money by the way of accounts payee cheques from the lenders who all are Income Tax assessee, whose PAN have been disclosed, the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with M/s Vision Impex, who subsequently dispatched the goods but whose delivery was refused by the assessee and which was subsequently delivered to M/s. Star Shines Pvt Ltd, through high seas sale transaction. The ld Counsel, therefore stated that assessee has explained the transaction with documentary evidences, hence no addition should have been made by the assessing officer. 17. On the other hand, Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue, argued that if assessee's version of wrongly debiting the account of M/s Star Shines Pvt Ltd, is accepted then there should have been a simultaneous purchase entry from M/s Vision Impex in assessee's books which is not the case here, therefore, the explanation given by the assessee should not be accepted. This way, ld. DR for the Revenue, reiterated the findings of the ld CIT(A) and prays the Bench that addition made by the assessing officer may be upheld. 18. We have heard both the parties. We find that in respect of the addition of Rs. 73,54,821/-, which pertains to being a difference between the ledger account of a sundry debtors in assessee's book and contra ledger account of the assessee in the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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