9911796707
TMI Blog2024 (7) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. Information submitted by the assessee satisfied the three ingredients of provisions of Sec. 68 - the loan transactions are not believed and alleged as non genuine and treated as unexplained cash credit u/sec 68 of the Act and these unsecured loans were repaid through account payee / banking channels in the subsequent years which is not disputed. AR submitted that the assessee has substantiated the stand by submitting the details before the AO and CIT(A) and discharged the burden. We set-aside the order of the CIT(A) and direct the Assessing officer to delete the addition of unsecured loans and allow these grounds of appeal in favour of the assessee. - SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER And SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER For the Assessee : Ms. Ridhisha Jain and Shri. Karan Jain AR For the Revenue : Ms. Rajeshwari Menon. Sr.DR. ORDER PER PAVAN KUMAR GADALE, JM: The assessee has filed the appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 143(3) r.w.s 147 and u/sec 250 of the Act. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law the Hon'ble CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income filed on 31-03-2015 may be treated as a due compliance and the assessee was provided reasons for reopening of assessment and the assessee has filed the objections, which was disposed off by the A.O on 4.10.2017. Further notice u/sec 143(2) and u/sec 142(1) of the Act are issued and, in compliance the Ld. AR of the assessee appeared from time to time and submitted the details. The A.O dealt on facts of search seizure u/sec 132 of the Act of Shri Vipul Vidur Bhatt group entities. The AO found that the group is engaged in providing accommodation entries in the nature of bogus unsecured loans and the assessee has obtained aggregate unsecured loans of Rs. 1,03,95,000/- from four entities (i) Santoshima Trade Links Ltd Rs. 4,75,000/- (ii) Lunkad Textiles Pvt Ltd Rs. 68,20,000/-(iii)P.Saji Textiles Ltd Rs. 6,00,000/- and (iv) Dolex Commercial Pvt Ltd Rs. 25,00,000/-.The AO has called for the details/information to explain the transactions and produce the loan/ lender parties with supporting sources of funds and bank statements of lenders. Further the notice u/sec 133(6) of the Act was issued on the unsecured loan creditors and the loan creditors have responded to the notices an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment by issuing notice u/s 148 of the IT Act 1961. In response to notice issued u/s. 148 the appellant submitted that the income offered in Return of Income originally filed on 31/03/2015 may be treated as incompliance to notice issued. Thereafter the Ld AO issued notice u/s. 143(2)/142(1) of the IT Act 1961 and completed the assessment u/s. 143(3) r.w.s 147 of the IT Act 1961 at Rs. 1,04,04,880/- by making addition of Rs. 1,03,95,000/- to the returned income by treating the genuine loan availed from M/s Santoshima Tradelink Ltd, M/s Lunkad Textiles Pvt Ltd, M/s P Saji Textiles Ltd and M/s Dolex Commercial Pvt Ltd as unexplained cash credit u/s. 68 of the IT Act 1961. Aggrieved against the said addition we are in appeal before your honour. The issues involved in this appeal are discussed one by by one a as under: First ground of appeal relates to reopening of completed assessment by issuing notice u/s. 148 of the IT Act 1961. For reopening of the completed assessment the Ld AO has relied on the information of investigation wing Mumbai. The reason recorded for reopening is reproduced by Ld AO in para 4.1 of the assessment order. In this regard it is vehemently submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the Ld AO which he found to be genuine. In this connection support is taken from the following decisions: 2. Supreme Court in case of ITO V/s. Lakshmani Mewal Das (1976) 03 ITR 437 (SC) held that the powers of ITO to reopen assessments though wide are not plenary. The words of statute are reason to believe and not reason to suspect . 3. ITAT in case of Paint Trade Linkers v/s. ACIT (2008) 171 Taxman 30 (Luck) (Mag.) held that presumption of escapent of income on basis that accounts have not been audited is simply arbitrary, vavgue and irrational; further mere non filing of return of income could not lead to belief that income chargeable to tax had escaped assessment. From the perusal of reasons recorded your honour will find that there are no sufficient reasons for reopening of assessment hence it is clear that the Ld AO has initiated proceeding under section 147 based on suspicion and mere pretence and not on any reasoned ground or belief. In CIT vs. Kelvinator of India Ltd. [2010] 1 Taxmann 27 the Hon'ble Apex Court has held that Where the Assessing Officer has reason to believe that income has escaped assessment, it confers jurisdiction to re-open the assessment. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent by collecting the material or by making inquiry subsequently after the date of initiation to the proceedings. The Hon'ble Patna High Court has held in the case of Commissioner of Income-tax v. Agarwalla Brothers, 189 ITR 786(Pat) that it is only the recorded reasons which can indicate why the AO was made to believe that the income has escaped assessment for the relevant assessment year. It is not authorized to refer to any other reason even if it can be otherwise inferred and/or gathered from the reports. The Hon'ble Allahabad High Court has also held in the case of Dass Friends Builders Pvt. Ltd. vs. DCIT 280 ITR 77 that u/s 147 of the Act the words has reason to believe and not reason to suspect . ITAT Delhi Bench in the case of ACIT vs. Star Ferro Alloys Pvt. Ltd. 90 ITD 63 has held that proceedings u/s 147 of the Act could not be resorted to for making roving inquiries. Considering the above cases and the ratio laid down therein, we hold that the Assessing Officer has failed to establish that the assessee did not disclose fully and truly all material facts at the time of making the original assessment u/s 143(3) of the Act. Assessing Officer's belief that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai pursuant to search action u/s 132 and stated that his companies are involved in providing accommodation entries in the form of unsecured loan, purchases/sales, share capital etc. The impugned company from which appellant company has availed loan is appearing in the list of companies provided by the main person Shri Vipul Vidur Bhatt. Hence according to the Ld AO it is merely an accommodation entry and not the genuine loan. In this regard it is worthwhile to discuss the facts of the case as under: Appellant company availed the loan from M/s Santoshima Tradelink Ltd, M/s Lunkad Textiles Pvt Ltd, M/s P Saji Textiles Ltd and M/s Dolex Commercial Pvt Ltd by way of a/c payee cheque in FY 2012-13 relevant to AY 2013-14 which was deposited in appellant's bank a/c. The said loan was thereafter refunded in the FY 2014-15 relevant to AY 2015-16. In support of loan availed to prove identity, creditworthiness genuineness we provided all the following necessary evidences of the loan providing companies as under: 1. Copy of confirmation letter duly signed by both 2. Copy of Acknowledgment of ROI filed 3. Copy of profit loss a/c balance sheet 4. Copy of bank statement of bath i.e. the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proof of identity like PAN, confirmation of accounts, bank account details from the bank, other relevant material to prove the genuineness of transaction and to prove credit worthiness the details of payment through banking channel, thereby the appellant proved all the conditions laid down u/s 68 of the Act. Before coming to adverse conclusion against the appellant, the ld AO did not provide opportunity to cross examine the party from whom the loan was availed and repaid. The ld AO even did not provide any information and allegation if any, made therein, which has been used against the appellant. The principle of natural justice, demands that without confronting the appellant of such evidences, if any, or the information, no addition can be made. In this regard reliance is placed on Hon'ble Supreme Court decision of COMMISSIONER OF INCOME TAX- CENTRAL V/S SUNITA DHADDA SPECIAL LEAVE PETITION (CIVIL) Diary No(s).9432/2018 Based on all the above facts it was submitted that your reliance merely on the statement without considering the evidence is against the principles of natural justice and the genuine loans should not be treated as accommodation entry. We lastly submit as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985) 154 ITR 244 (pat) Ashok Lal Daga vs CIT (1996) 136 CTR (MP) 235: (1996) 220 ITR 425 (MP). CIT vs Real Time Marketing (P) Ltd (2008) 10 DTR (Del) 191: (2009) 221 CTR(del) 716 2008 306 ITR 35 (del) CIT vs Metachem Industries (2000) 161 CTR (MP) 444: (2000) 245 ITR 160(MP). Nemichand Kothari vs CIT ANr (2003) 185 CTR(gau) 635 (2003) 264 JTR 254(gau) PK Sethi vs CIT (2006) 206 CTR (Gau) 445: (2006) 286 ITR 318 (Gau.) CIT vs Barjatiya Children Trust (1997) 225 ITR 640 (MP). CIT vs Laul Transport Corporation (2009) 180 Taxmann 185 (P H) Aravalii Trading Co vs ITO (2008) 8 DTR (Raj) 199: (2010) 187 Taxmann 338(Raj). 2.6. It is further brought to Your Honour's notice that Hon'ble Tribunal's have deleted the additions made by the department on identical facts wherein department had relied on the statement of Vipul Vidhur Bhatt and made additions in case of the assessee. The assessee's case herein is covered by number of judgements of Jurisdictional and non-jurisdictional Courts as under: a. The Hon'ble Mumbai ITAT in the case of Shri Darshan K Vakharia Mumbai. Vs Income Tax Officer Ward 2(1), Mumbai has held as under: 9.1 However, the Assessing Officer doubted and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon'ble Jaipur ITAT in the case of M/s. Noble Tradelink Private Ltd. Vs The ITO Ward 1(5), Jaipur [ITA No. 302 303/JP/2021] held as under: 4.5 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the AO while making the assessment in the case of the assessee observed that during the year under consideration the assessee company had taken credit entries in the form of unsecured loan from the entities which are managed by Shri Vipul Vidur Bhatt for providing accommodation entries and rotated unaccounted money of Rs. 80 lacs in its bank through the these companies. Thus the AO added unaccounted money of Rs. 80 lacs to the total income of the assessee company for the year under consideration and the ld. CIT(A) has confirmed the action of the AO. The Bench noted that if any sum is found credited in the books of account of the assessee then the assessee has to prove the identity and creditworthiness of the party from whom the amount is received and the genuineness of the transaction. From the record, it is noted that identity of the creditor is established from the company master data downloaded from MCA Portal. The genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de of Rs. 80 lacs u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the Id. CIT(A) as the assessee has proved the identity and creditworthiness of the party from whom the amount was received and genuineness of the transaction. In this view of the matter, the ground Nos. 2.1 to 2.4 of the assessee are allowed. d. In the case of M/s. Noble Tradelink Pvt Ltd. v/s. ITO, Ward 1(5), Jaipur (ITA NO. 302/JP/2021 for the AY 2012-13), the Hon'ble ITAT Bench of Jaipur has held that In view of the above deliberations, the decisions relied on above, we find that disallowance made of Rs. 80 lacs u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the ld. CIT(A) as the assessee has proved the identity and creditworthiness of the party from whom the amount was 21 received and genuineness of the transaction. In this view of the matter, the ground Nos. 2.1 to 2.4 of the assessee are allowed. and Also, in the case of M/s. Noble Tradelink Pvt Ltd. v/s. ITO, Ward 1(5), Jaipur (ITA No. 303/JP/2021 for the AY 2013-14) the Hon'ble ITAT Bench of Jaipur has held that, In view of the above deliberations, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) on appeal by the assessee deleted the said addition. The ITAT dismissed the appeal made by the revenue stating therefore, respectfully following order of the Tribunal in case of group concern, we do not find any infirmity in the order of CIT(A) for deleting the impugned addition. In the result appeal of the revenue is dismissed. g. In the case of Moraj Realty Pvt. Ltd. V/s. DCIT CC -5(2) (ITA No. 708/Mum/2019 709/Mum/2019) dated 08/12/2020, the Hon'ble ITAT Mumbai held that, Hence, in our considered view, the assessee has discharged his onus of establishing the identity and creditworthiness of the entities from whom, it had obtained the loans in question. The assessee has also established the genuineness of the transaction by adducing necessary evidence. On the other hand the AO has not brought any material on record to rebut the contention of the assessee. In our considered opinion, the findings of the Ld. CIT (A) are based on the established principles of law and in accordance with the decision of the coordinate Bench rendered in the case of DCIT vs. M/s Manba Finance Ltd. (group concern of the appellant) discussed above. The order passed by the Ld. CIT (A) is well r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld.AR supported the submissions on the disputed issues with the material evidences in the paper book and judicial decisions and prayed for allowing the appeal. Per Contra, the Ld. DR submitted that the AO has made enquiry and issued notice u/s 133(6) of the Act and there was no proper response from the parties and the Ld.DR supported the order of the CIT(A) 7. We have heard the rival submissions and perused the material on record. The Ld. AR submitted that the CIT(A) has erred in sustaining the addition u/sec 68 of the Act of unsecured loans though the assesses has filed the requisite details before the assessing authorities and first appellate authority. We find that before the Assessing Officer, the assessee has submitted information in respect of unsecured loan creditors and the A.O. has issued notice u/sec 133(6) of the Act and it was responded with the requisite details. On perusal of the assessment order, the assessee has submitted the documentary evidences but the A.O has over looked the vital documents in respect of the sources filed by the assessee. The assessee has submitted the written submissions before the CIT(A) and the confirmation of loan creditors, PAN, Bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the Tribunal have correctly held that it is not possible for the assessee to compel the appearance of the parties before the Assessing Officer. 8. In the above circumstances, the view taken by the Tribunal is a and possible view in the facts of the present case. no substantial question of law arises for our consideration. 9. The appeal is dismissed. No order as to costs . (ii) The Honble Tribunal in the case of Shri Darshan K Vakharia Mumubai Vs. ITO in ITA No. 1540 1539/Mum/2023 dated 28.07.2023 for A.Y.2012-13 201314 has considered the provisions and facts on the submissions of the assessee on the unsecured loans and granted relief observing at Page 9 Para 9 of the order read as under: 9. Heard the parties and perused the material available on record. As per balance sheet, as on 31st March, 2012 the Assessee has shown the amount of Rs. 20,00,000/- and Rs. 50,000/- as liability towards M/s. Santoshima and M/s. Vasudev respectively and also shown to have paid the interest amount of Rs. 2,40,000/- and Rs. 60,000/- respectively to M/s. Santoshima and M/s. Vasudev. It is not in controversy that the Assessee had taken the said loans in the financial year 2010-11 (AY: 2011-12) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, therefore the amount in question as unexplained expenditure could not arise, hence on this count also, the provisions of section 68 is not applicable and therefore addition u/s. 68 of the Act is un-sustainable. Consequently, we are inclined to delete the addition of Rs. 3 Lacs in total. Resultantly the instant appeal is allowed. (iii) The coordinate bench of Honble Tribunal in the case of ITO Vs. M/s MJD Financial Services Pvt Ltd in ITA No. 6051/Mum/2018 dated 10-09-2020 for A.Y.2012-13 has considered the provisions and facts on the submissions of the assessee and has upheld the order of the CIT(A) dismissing the revenue appeal observing at Page 5 Para 9 10 of the order read as under: 8. We have heard the rival submissions of the parties and perused the material on record including the cases relied upon by the parties. The Ld. CIT (A) has deleted the addition made by the AO holding that the AO has not brought any fact on record to established that cash was introduced prior to advancing the loan to the assessee and there is no evidence on record to show that the assessee had paid cash to the loan creditors in lieu of loan received from them. It is an admitted fact that the unse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is concerned, the assessee submitted balance sheet of all the company to show that the lending companies has enough reserves and share capital. The assessee further submitted that it has furnished the confirmation from the parties. However, the AO rejecting the contention of the assessee made addition of the said amount to the income of the assessee. In the first appeal, the Ld. CIT (A) deleted the addition on legal ground as well as on merits. The revenue challenged the action of the Ld. CIT (A) before the ITAT. The coordinate Bench of the Tribunal upheld the findings of the Ld. CIT (A) holding as under:- 33. We have carefully considered the submissions and perused the records. We find that the first issue in this case relates to the addition of unsecured loan taken from corporate entities u/s. 68 of the Act. In this regard, it is noted that it is the claim of the assessee which has been found correct by the ld. CIT(A) that the assessee has duly paid interest on these loans, deducted TDS, filed the TDS return. The Id. CIT(A) has also found that this loans have been duly repaid. 34. The addition in this case has been made on the ground that some of the corporate entities were fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the following decisions: 1. Andaman Timber Industries v. C.C.E. (2015) 281 CTR 241 (SC) Wherein it is held: Not allowing the assessee to cross examine the witnesses by the Adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullify in as much as it amounted to violation of principles of Natural Justice because of which the assessee was adversely affected. The order was vacated. 2. Kishinchand Chellaram v. C. . . (1980) 1251TR 0713 (SC) 3. Ponkunnam Traders . Addl. . . . Anr. (1972) 83 ITR 508(Ker) 4. ACIT . Tristar Jewellery Exports Put. Ltd. ITA/7593/MUM/2011 (Mumbai ITAT) 36. As regards the merits of the addition, it is noted that the assessee had supplied the following in this regard: (i) Confirmation of the party who gave the loan. (ii) Copy of Return of Income filed by them alongwith PAN No. of the loanees. (iii) Copy of Balance Sheet, P/L Account alongwith all Schedules, (iv) Copy of Certificate of incorporation, original and the latest one. (v) Copy of Bank Statement of the loanee from which the loan have been given to the assessee, as well as Repayment made if any by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o thereto reads as under: Cash credits. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum soO credited may be charged to income-tax as the income of the assessee of that previous year: Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the proviso to Section 68 of the Act which was introduced with effect from 1st April, 2013 would apply in the facts of the present case even for . . 2008-09. The basis of the above submission was that the de hors the proviso also the requirements as set out therein would have to be satisfied. HELD by the High Court dismissing the appeal: (i) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced for removal of doubts or that it is declaratory . Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has submitted following details before the assessing officer: I. PAN details of creditors II. Constitution and address of the creditors Particulars of income-tax returns filed by the creditors. These show that the creditors are legitimate business entities, having the ability to advance the impugned loans to the appellant,] IV. Confirmatory letters given by the creditors V. Audited financial accounts (including balance sheets) of the creditors [These show that the loans are duly reflected in the books of account of the creditors.] VI. Relevant bank statements of the creditors [These show that the loan amounts were paid through legitimate banking channels. Further these bank statements do not reflect any movement of cash, essential to hawala transactions.] 23. The assessing officer has made no enquiry with reference to the above. He did not seek any further explanation or detail from the assessee. He solely relied upon the investigation wing enquiry regarding the Bhanwarilal group. The Id. Commissioner of Income Tax (Appeals) in this regard has correctly made the observation that the assessee having given all the necessary details and has discharged its onus, it was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to several case laws in this regard that when the assessee has supplied all the documents the onus is discharged. In this regard, the ld. Counsel of the assessee has placed reliance upon the several case laws including that from Hon'ble Delhi High Court in the case of Gangeshwari Metal Pvt. Ltd. (supra), CIT v. Varinder Rawley (2014) 366 ITR 232 (P H), Hon'ble Gujarat High Court decision in the case of CIT v. Sachitel Communications P. Ltd. (2014) 227 Taxman 219 (Mag) and others. 42. In our considered opinion, these case laws duly support the proposition canvassed by the assessee. In our considered opinion, the A.O. has not brought on record any cogent, adverse material to rebut the credibility of the corporate entity from whom loan has been taken. As already pointed out by us as above, that these corporate entities were found by the A.O. to have acquired funds by borrowals and acceptance of share capital and share premium. This by itself cannot lead to presumption that these sources are bogus without any enquiry. In these circumstances, in our considered opinion, the ld. DR's request that this issue be again remitted to the file of the A.O. to make further necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate Benches including the decision in the case of DCIT vs. M/s Manba Finance Ltd. (supra) relied upon by the assessee. We therefore, uphold the decision of the Ld. CIT (A) and dismiss the appeal filed by the revenue. Accordingly, we direct the AO to delete the addition made by the AO on account of alleged bogus unsecured loans. In the result, appeal filed by the revenue for assessment year 2012- 2013 is dismissed (iv). The Honble Tribunal Jaipur Bench in the case of M/s. Noble Tradelink Pvt Ltd Vs. ITO. In ITA No.302 303/JP/2021 A.Y. 2012-13 A.Y.2013-14 order dated 10.10.2022 has considered the provisions and facts on the submissions of the assessee on the unsecured loans and granted relief observing at Page 25 Para 7.3 of the order read as under: 7.3 We have heard both the parties and perused the materials available on record. In this case, the AO made an addition of Rs. 54.50 lacs holding it as unaccounted money relating to Shri Vipul Vidur Bhatt for providing accommodation entries and rotating it in its bank account through these companies during the year. In first appeal, the ld. CIT(A) has confirmed the action of the AO. It is not imperative repeat the facts of the case as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... link Ltd. is Rs. 45.78 crores (PB 139-140). Further the Directors of these companies in their affidavits have stated that source of funds for loan given to assessee is out of repayment of loan given to other parties. Thus, assessee has discharged its onus to establish the identity of creditors, genuineness of the transaction and creditworthiness of the creditors. The ld. AR of the assessee further submitted that having discharged its onus, it is the duty of the AO to disprove the evidence filed by the assessee. The AO except referring to the report of Investigation Wing has not brought any material on record to rebut the evidences filed by the assessee. It is not the case of lower authorities that in search of Mr. Vipul Vidur Bhatt any evidence is found that assessee has given any cash for taking the alleged accommodation entry. Had these loans were accommodation entries, the same would not have been repaid within such short duration. The Ld. CIT(A) has incorrectly held that assessee has not demonstrated that these entities are doing genuine business ignoring that the same is verifiable from the financial statements of these creditors and their return of income filed before him whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur vs Shubh Mines Pvt. Ltd. (DBITA No. 96/15 order dated 03-05-2016 (Raj. H.C.) wherein the Hon ble Court observed at para 7. 7. A bare perusal of the assessment order reveals that the AO has made the addition on suspicion which is based on the statements of third party Shri Aseem Kumar Gupta, admittedly, recorded in the back of the assessee. It has come on record that the share application money of Rs. 50,00,000/- was received from Moderate Credit Corporation Ltd., a listed company. It is not disputed before this court that the investment made was received by account payee cheque and the same was refunded by an account payee cheque when the company dropped its project. In the considered opinion of this court, in absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the ITAT, which remains a finding of fact, cannot be said to be capricious or perver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the explanation furnished by the creditor about his source of such advancement has not been accepted by the revenue authority cannot lead to any presumption that the source of such advancement by creditor emanated from the assessee. Therefore, the addition in the income of the assessee as cash credit cannot be sustained. 5. Labchand Bohra vs ITO (2008) 219 CYR 571 (Raj) wherein the Hon ble Court observed that - Identity of the creditors having been established who have confirmed the credits by making statements on oath and the amounts having been advanced by account payee cheques, impugned addition in respect of the entries in the names of said creditors cannot be sustained. Capacity of the lender to advance money to the assessee is not a matter which could be required to be established by the assessee, as that would amount to calling upon him to establish source of the source In view of the above deliberations, the decisions relied on above, we find that disallowance made of Rs. 80 lacs u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the ld. CIT(A) as the assessee has proved the identity and creditworthiness of the party from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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