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2019 (9) TMI 756 - AT - Income TaxAddition made towards unsecured loans u/s 68 - unexplained cash credit - HELD THAT:- The gross revenue from operations for the year ended 31.3.2013 itself proves the creditworthiness of all the loan creditors beyond doubt. Hence all the allegations leveled by the lower authorities with regard to creditworthiness is devoid of any merits and deserves to be dismissed. We find that all the parties are duly assessed to income tax and assessments are framed on them by the income tax department. Hence the identity of the loan creditors stood clearly established. All the transactions are routed through regular banking channels without having any cash deposits in their respective bank accounts. Infact the AO himself had stated in his order that the sale proceeds of diamond business were credited in the bank accounts of the loan creditors which were utilized for advancing loan to the assessee. This itself goes to prove the genuineness of transactions and creditworthiness of parties beyond doubt. Hence we hold that all the three necessary ingredients of section 68 of the Act had been duly established by the assessee in the instant case. Once the assessee has furnished the complete details about the loan creditors together with their latest addresses and affidavits from directors duly notarized and confirmation from them for the loans advanced to the assessee, the onus cast on the assessee u/s 68 had been duly discharged and no addition could be made in its hands merely because the lenders fail to appear before the AO or the assessee failing to produce them before the ld AO. We hold that no addition could be made on mere presumption that the assessee routed its own cash in the form of unsecured loans without any concrete evidence to this effect We find that the directors of the lending companies had filed affidavits confirming the loan transactions before the AO which had not been disputed. Once the averments made in an affidavit are not disputed or refuted, the same are to be construed as true and correct, as held by the Hon’ble Supreme Court in the case of Mehta Parikh & Co. vs CIT [1956 (5) TMI 4 - SUPREME COURT]. We hold that the ld CIT-A erred in confirming the addition made u/s 68 of the Act in the instant case. Gross revenue from operations for the year ended 31.3.2014 itself proves the creditworthiness of all the loan creditors beyond doubt. Hence all the allegations leveled by the lower authorities with regard to creditworthiness is devoid of any merits and deserves to be dismissed.
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