TMI Blog2019 (7) TMI 1530X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bank statements of the creditors out of which the loans were advanced to the assessee, alongwith the copies of their Income Tax returns, balance sheets and capital accounts, had duly substantiated the same. Now when the assessee had duly discharged the onus that was cast upon him, and had substantiated the nature‟ and source‟ of the aforesaid credits appearing in his books of accounts, therefore, there was no justification on the part of the A.O to have characterised the same as unexplained cash credits in the hands of the assessee - Decided in favour of assessee. Disallowance of the interest paid by the assessee to the aforesaid lenders - HELD THAT:- As the genuineness of the loan transactions advanced by the assessee to the aforesaid parties viz. (i) M/s Minakshi Exports; and (ii) M/s Puspak Gems have been upheld by us, therefore, the disallowance of interest paid by the assessee cannot be sustained. Interest paid by the assessee to M/s Suman Exports is concerned, we find that as observed by the CIT(A), the loan of ₹ 30 lac that was raised by the assessee from M/s Suman Exports was held by him to be genuine while disposing off the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad obtained accommodation entries from M/s Marvin Enterprises which was a group entity belonging to Shri Bhanwarlal Jain, an infamous accommodation entry provider, the case of the assessee was reopened under Sec. 147 of the Act. In compliance to the notice issued under Sec.148, the assessee requested that his original return of income may be treated as a return filed in compliance to the aforesaid notice. 3. During the course of the assessment proceedings it was observed by the A.O that the assessee had claimed to have obtained loans from the following three parties: Entry Provider Name PAN F.Y. Amount Meenakshi Exports AAOFM3213F 2010-11 50,00,000/- Suman Exports AKNPC1507H 2010-11 30,00,000/- Pushpak Gems AADFP2673D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad raised genuine loans from the remaining two parties, viz. (i) M/s Minakshi Exports; and (ii) M/s Puspak Gems. It was observed by the A.O that the assessee had failed to produce the aforementioned parties for cross examination before him. Apart there from, it was noticed by the A.O that the said parties had also failed to comply with the summons issued to them under Sec.131, and had not appeared before him. The A.O holding a conviction that the affidavits of the aforesaid parties did not have any evidentiary value, thus declined to accept the genuineness of the loan transactions in the backdrop of the depositions made by the parties in the said affidavits. The A.O after dwelling at length on the facts that were unearthed in the course of the search proceedings conducted on Shri. Bhanwarlal Jain, an infamous accommodation entry provider, and taking cognizance of the facts that were admitted by him in his statements recorded under Sec. 132(4)/131 of the Act, therein observed that the same sufficed to prove that the assessee had only obtained accommodation entries in the garb of unsecured loans from the aforementioned parties. Accordingly, on the basis of his aforesaid observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AKNPC1507H 2010-11 30,00,000/- Pushpak Gems AADFP2673D 2010-11 20,00,000/- Observing, that the assessee had not raised any fresh loan from M/s Suman Exports during the year under consideration, therefore, no adverse inference insofar the said party was concerned was drawn by the A.O in the hands of the assessee. In fact, it was observed by the A.O that a loan of ₹ 30 lac that was received by the assessee from M/s Suman Exports during the immediately preceding year viz. AY. 2010-11 was treated as an unexplained cash credit in the hands of the assessee while framing the assessment for the said preceding year. Accordingly, the A.O not finding favour with the claim of the assessee that he had raised genuine loans from the remaining two parties viz. (i). M/s Minakshi Exports : ₹ 50 lac; and (ii) M/s Puspak Gems : ₹ 20 lac, therefore, added the same as an unexplained cash credit in the hands of the assessee. As observed by us herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d duly discharged the onus that was cast upon him to substantiate the identity of the loan creditors, genuineness of the transactions and also the creditworthiness of the parties. As is discernible from the orders of the lower authorities, the assessee by placing on record the PAN details and the copies of the returns of income along with the complete addresses of the aforementioned lenders had substantiated the identity of the aforesaid parties. Insofar the genuineness of the loan transactions is concerned, we find, that the same stood duly substantiated from the fact that both the acceptances and repayments of the loans were made through banking channels. Apart there from, the fact that the aforesaid parties had duly responded to the notices issued to them under Sec. 133(6) and confirmed the respective loan transactions also adduces the genuineness of the said loan transactions. As regards the creditworthiness of the lenders, we find that the assessee by placing on record the copies of the bank statements of the creditors out of which the loans were advanced to the assessee, alongwith the copies of their Income Tax returns, balance sheets and capital accounts, had duly substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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