2019 (12) TMI 361 - AT - Income Tax

Addition u/s 68 - unsecured loans as unexplained cash credit - HELD THAT:- In the remand report called for by the Ld. CIT(A), the assessee has filed the necessary evidences in the form of confirmations of the lenders, bank statements, copies of balance sheets, PAN Numbers, ITRs etc. of the lenders. Even the lenders have replied in response to notice issued under section 133(6) of the Act. The copies of ledger accounts and subsequently repayment of loans, loan confirmations, bank statements reflecting the loan given and received back, mode of receipt / payment of loans, details of interest charged and TDS deducted, nature of loan advanced, returns of income filed along with balance sheets, audited reports and PAN numbers with the AO.

In respect of Dev Diamond Surat from whom ₹ 55 lakhs were received was sustained by Ld. CIT(A) whereas the loan from the same party in the hands of Smt. Bharti N. Patel was accepted by the AO in the remand report, a copy of which is filed at page No.35 to 39 and the relevant para is 3.1.

We have also examined the appellate order passed by the Ld. CIT(A) in the case of Smt. Bharti N. Patel dated 14.02.2018 wherein addition made by the AO qua Dev Diamond Surat of ₹ 50 lakhs was deleted.

Even the interest paid on these loans by the assessee after deduction of tax at source were duly allowed as expense by the AO. Under these circumstances, we are not in a position to subscribe and concur with the conclusion of Ld. CIT(A) that these are paper companies and identities of the creditors and genuineness and creditworthiness of the lenders were not proved especially when the information/evidences having been filed by the assessee in the assessment proceedings and remand proceedings and even the lenders have filed all the evidences before the AO which has been admitted by the AO in the remand report. It is nothing but an addition made by the AO and also confirmed by the Ld. CIT(A) on presumption basis. Further, we find that assessee has not been confronted with any information that the said companies were non genuine and paper companies.

In the case of Pr. CIT vs. Veedhata Tower Pvt. Ltd. [2018 (4) TMI 1004 - BOMBAY HIGH COURT] held that assessee has discharged his onus which has cast upon him in terms of preamended section 68 of the Act by filing the necessary confirmation letters from the creditors, their affidavits, their full addresses and their PANs and it was not necessary to prove the source of source prior to 01.04.2013 as has been held in the case of CIT vs. Gagan Deep Infrastructure Pvt. Ltd. . [2017 (3) TMI 1263 - BOMBAY HIGH COURT] wherein it has been held that proviso to section 68 has been inserted to Finance Act, 2012 w.e.f. 01.04.2013 and therefore it would be effective from A.Y. 2013-14 onwards and not earlier assessment years. - Decided in favour of assessee