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2014 (7) TMI 675 - AT - Income TaxBogus accommodation entries Held that:- The assessee has enclosed copies of account, income tax and assessment particulars, balance-sheet of all the parties in support of these entries under the certificate below the index of the paper book that those were filed before the authorities below and with this submission that all these entries have been duly recorded in the books of accounts and there is no case of any adverse inference - the AO has not bothered himself to verify the correctness of the documents filed by the assessee in support of the genuineness of the claimed unsecured loan from the companies - assessee had furnished the primary evidences, like copy of account, income tax return and assessment particulars as well as balance-sheets of all the parties with this submission that all these entries are duly recorded in the books of accounts and that the entire loan amount was paid through cheques/drafts - the initial burden to establish the genuineness of the claimed unsecured loan was discharged by the assessee - onus was shifted on the AO to dislodge those primary evidences as unreliable evidences to establish his allegation that these were nothing but accommodation entries only - an addition cannot be made merely on the basis of statements recorded during search or survey surrendering an amount for the addition unless it is corroborated by further evidence. CIT(A) has rightly held the action of the AO in making the addition u/s 68 of the Act as unjustified Relying upon CIT Vs. Lovely Exports (P) Ltd [2008 (1) TMI 575 - SUPREME COURT OF INDIA] - even if the share application money received by the appellant company is from alleged bogus shareholder, whose identity is produced by the appellant company, the revenue can always proceed against such shareholders and if necessary re-open their individual assessment - CIT(A) has passed a comprehensive and reasoned order after discussing the case of the parties on issue in details Decided against Revenue. Adjustment of unexplained expenses against credits Held that:- The contention of the assessee cannot be accepted that entries made in the ledger account are rough work as the entries are narrative mentioning the date, mode of payment page no of folio with the amount debited and credited as well as the balance - the surrender made by Shri R. C. Goyal was corroborated with the annexure found during the course of survey which was confronted with him and thereafter Shri R. C. Goyal had surrendered the amount for tax - CIT(A) has thus rightly upheld the action of the AO with the finding that the AO has arrived at the figure after verification - CIT(A) has however following settled principle of law and accountancy, has held that the benefit of netting cannot be denied to the assessee - the statement recorded during the survey was also on the basis of the netting principle - CIT(A) was justified in sustaining the addition to the extent of the net amount Decided against Revenue. Undisclosed cash receipts Held that:- Retraction was made by the assessee and as such the survey statement is even otherwise not admissible - there was totaling mistake of significant nature, it was necessary and obligatory for the AO to bring relevant facts and evidence in support of allegation about receipt of cash - It is self-evident that in the referred document, neither there is reference to any cash receipt or any details relating to name of the party or name of the properties - the principle of natural justice and real income and in the absence of details of the parties and properties in respect of which alleged cash was stated to have been received, there could be no ground for any addition on the basis of vague and unsubstantiated notings Relying upon CIT Vs. Anil Bhalla [2010 (2) TMI 7 - DELHI HIGH COURT] - no addition could be made on the basis of mere jotting on paper in the absence of independent material or proper enquiry or investigation - the order of the AO and CIT(A) cannot be upheld Decided in favour of Assessee.
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