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2018 (11) TMI 1593 - AT - Income TaxUnexplained cash credit u/s 68 - AO treated the amount of unsecured loans received from the concern of Bhanwarlal Jain group during the year under consideration as “unexplained investment” under Section 69 - initial onus to place on record all the documentary evidences to establish the identity and creditworthiness of the lenders and genuineness of the transactions - additions were made on the basis of statement recorded during the investigation carried out providing no opportunity to cross verify HELD THAT:- As perused the confirmation filed by the parties, copies of acknowledgement of return of income filed by the lenders for the year under consideration, copies of the bank statement of lenders, which establish that the payment towards loans were received during the year under consideration. Therefore the identity of the lenders was not in dispute. We have also considered all the documents placed on record by the assessee in the shape of statement of accounts and documents to show that the transactions were carried out through banking channels and the confirmations which were filed in the form of ledger accounts which reflect that the assessee had received the amount through RTGS, affidavits of the lenders. All those documents prove the genuineness of the transactions. Creditworthiness of the lenders are concerned, we have perused the audited accounts of the lenders which shows the creditworthiness of the lenders to grant loans and advances. Further, we also noticed from the record that the lenders have not only granted loans to the assessee but also to various other persons. We have also considered the affidavits of the lenders and from all those documents we find creditworthiness of the lenders to make payment of loans to the assessee. We have also considered that the loans, which were taken by the assessee has also been repaid and all those repayments have been made by the assessee in subsequent years and those details have also been filed by the assessee in the para mentioned above. Also in the present case the additions were made on the basis of statement recorded during the investigation carried out by the Investigation Wing. Since no opportunity of cross examination was given to the assessee in respect of the persons whose statements were relied upon by the Revenue, thus the same was considered as breach of principles of natural justice as held by the Hon'ble Bombay High Court in the case of R.W. Promotions (P.) Ltd. (2015 (4) TMI 980 - BOMBAY HIGH COURT). AO has not looked into all the records furnished by the assessee and even the CIT(A) has also upheld the additions on the basis of suspicion. It is a settled law that suspicion, howsoever strong, may be but it cannot take place of evidence. In the present case, no evidence was brought on record by the AO to show that at any moment cash deposit was made in the bank account of the lenders before making payment to the assessee. - Decided in favour of assessee.
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