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2015 (4) TMI 675 - AT - Income TaxAddition of cash credits u/s 68 of the Income Tax Act, 1961 - Failed to prove credit worthiness of creditors - Disallowance of Interest expenses - Held that:- We notice that the assessee has discharged the initial burden of proof placed upon it u/s 68 of the Act by proving the credit worthiness of all the creditors. As pointed out by Ld CIT(A), the quantum of income declared in the income tax returns is not the sole factor that determine the credit worthiness. On examination of the Balance sheet filed by the creditors, the Ld CIT(A) has given a definite finding that all the creditors were having enough sources, either received through realisation of sundry debtors or through loans, for giving advance to the assessee. Before us, the Ld D.R could not controvert the above said findings given by Ld CIT(A). We notice that he assessing officer, as observed by the first appellate authority, has proceeded to assess the creditors u/s 68 of the Act on surmises and conjectures without rebutting any of the evidences furnished by the assessee. Hence, we do not find any reason to interfere with the order passed by the Ld CIT(A) in AY 2008-09. We have earlier noticed that the assessing officer has followed his reasoning given in the assessment order passed for AY 2008-09 to make the addition of creditors u/s 68 of the Act in this year also. However, the Ld CIT(A) has considered the financial statements furnished by the assessee in respect of each of the creditors and has given a definite finding that the creditors have enough sources to advance the loan to the assessee. Thus, the Ld CIT(A) has held that the assessee has discharged the initial burden of proof placed upon it u/s 68 of the Act. Hence, we do not find any reason to interfere with his order in AY 2009-10 also. Since the creditors are held to be genuine, the disallowance of interest made by the AO is also liable to be deleted. Accordingly we confirm the order of Ld CIT(A) on that issue also. - Decided against the revenue.
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