TMI Blog2014 (1) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest free unsecured loans received - additions u/s 56 rw.s. 68 - Held that:- the appellant has furnished all necessary evidence, namely, confirmations, copy of returns, copy of balance sheet and P&L A/c and the copy of bank statements evidencing obtaining and repayment of loans in question. Therefore, the primary burden placed on the appellant to prove the identity and creditworthiness of the creditors and genuineness of transactions was duly discharged - in the course of remand proceedings, all the creditors have appeared before the AO and their statements have been recorded. Therefore, the case of the appellant is that the issue of loans/cash credits cannot be decided on the basis of a solitary failure on the part of the appellant to produce the creditors in the course of assessment on short notice - merely because at a particular point of time they were not found at the given addresses would not be sufficient to hold that the said companies are non-existent entities and the transactions are bogus - Decided against Revenue. - I.T.A. No. 5400/Del/2011 - - - Dated:- 17-1-2014 - Shri I. C. Sudhir And Shri Shamim Yahya,JJ. For the Petitioner : Sh. S. N. Bhatia, Sr. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that with the introduction of 'online computerized' trading of securities, the transactions are automatically recorded by the stock exchanges and there is no requirement of physical delivery of said certificates etc. The purchase and sale is routed through demat accounts and the only way to find out the profit and loss on the purchase and sales of securities made through a broker is the account statement submitted by such broker from time to time. In the present case, the appellant has maintained all the regular books of accounts and all necessary details have been filed before the AO in the course of assessment proceedings. Therefore, in my view, the AO was not justified in holding the loss of Rs. 66.35 lacs as speculative in nature. Accordingly, he is directed to treat the loss of Rs. 66.35 lacs as normal business loss as has been done by his predecessors and successor in the AYs 2005-06, 2006-07 and 2008-09." 5. Against the above order the Revenue is in appeal before us. 6. We have heard both the counsel and perused the records. We find that clearing difference of Rs. 66,35,210/- has been determined on the basis of statement of purchase and sales of shares of security made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two days as per which on 28/8/06, there are deposit of two cheques of Rs. 4 lakhs and one lakh and on the same day cheque of Rs. 5 lakhs has been shown given to the assessee and on next day of 29/8/06, the bank balance is only Rs. 1861/- and bank deducted Rs. 94/- for not keeping minimum balance. In the case of Paras Infotech (P) Ltd only copy of acknowledgment of filing of return is filed as per which its retuned income is only Rs. 10,693/-. Assessee was asked but he failed to produce these two parties for examination. Thus submissions in respect of these t\'/o parties are not accepted and these are treated as unexplained cash credits in the books of the assessee. B. In the case of Loan of Rs. 10,00,000/- from M/s Salwan Developers Promoters Pvt. Ltd. the assessee filed only confirmation of account, however, neither any copy of Income Tax Return nor the balance sheet was filed. Its copy of bank account filed is only for one day as per which there is deposit by cheque of Rs. 10 lakhs on 28/8/08 and on I .the same date, cheque of Rs. 10 lakhs has been issued to the assessee and on the very day, bank deducted Rs. 57/- for not keeping minimum balance in the account. Assessee was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the returned income of the assessee in light of the discussions made in this para." 8. Against the above order the Assessee appealed before the Ld. CIT(A). Assessee also filed additional documents. Ld. CIT(A) also obtained the remand report from the Assessing Officer. Considering the submissions of the assessee, Ld. CIT(A) agreed with the contention of the assessee and he observed as under:- "I have carefully considered the submissions made on behalf of the appellant and the findings recorded by the Ld. AO. On consideration, I find that the appellant has furnished all necessary evidence, namely, confirmations, copy of returns, copy of balance sheet and P L A/c and the copy of bank statements evidencing obtaining and repayment of loans in question. Therefore, the primary burden placed on the appellant to prove the identity and creditworthiness of the creditors and genuineness of transactions was duly discharged. As regards, the fact that the creditors were not found at their respective places at the time of inspectorial enquiries, the appellant has clarified that all the creditors are corporate entities duly registered with ROC and are also regular income tax assessees. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, if not earlier. As per the said balance sheets, almost all the creditor companies were having sufficient share capital an9 reserve and surplus not only in the year under consideration but also in the earlier years." 8.1 Thereafter, Ld. CIT(A) has made elaborate analysis of the balance sheet of the parties. Considering the same, Ld. CIT(A) further held as under:- "A perusal of the aforesaid reveals that Labhtronics Overseas (P) Ltd. had share capital and reserve and surplus aggregating to Rs. 10159065/- as on 31.03.2006 and therefore, it cannot be said that it did not have capacity to advance the loan of Rs. 5 lacs to the assessee. Similarly. Paras Infotech (P) Lt9. had share capital and reserve and surplus of Rs. 14515959/- as on 31.03.2007 and should not have had any difficulty in advancing a loan of Rs. 3 lacs to the assessee. Likewise, Salwan Developers and Promoters (P) Ltd. had share capital and reserve and surplus of Rs. 18799200/- as on 31.03.2007, Bhalotia Agro Indus. Ltd. had capital and reserve and surplus of RS.39972000/-, First Hi fin Ltd. had own funds of Rs. 122530700/-, Monisha Impex (P) Ltd. had Rs. 72376500/- and U.P. Electricals Ltd. had surplus fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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