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2020 (12) TMI 175 - AT - Income TaxAddition u/s 68 - unsecured loans as well as share application money received from all the 6 entities was held to be non-genuine and a sham claim made by the assessee - assessee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions - Whether AO has erred in not following the instruction of CBDT and has scrutinized and made addition on the issue which was not covered under the CASS while selecting the case under Scrutiny - HELD THAT:- The perusal of bank statement would reveal that the funds have been transferred to the assessee through banking channel, there being no immediate cash deposit before transfer of funds to the assessee. Its financial statements are likewise audited and it has sufficient reserves of more than ₹ 579.50 Lacs to make further investments. Primary onus of establishing the identity of the investor entities, proving their respective creditworthiness and to establish the genuineness of the transactions was duly been discharged by the assessee. The assessee was not required to prove the source of source for this year. Therefore, the onus was on revenue to rebut these evidences by bringing on record cogent material to dislodge assessee’s evidences Except for the fact that summons remained un-served, there is nothing in the armory of revenue to unsettle the assessee’s claim. The allegations are not supported by any corroborative evidences. Once the initial onus was discharged by the assessee, it was incumbent upon revenue to carry out further investigation to support the allegation that the credits were unexplained - nothing of that sort has been shown to have been carried out. So far as the information of DGIT (Inv.) is concerned, we find that these were merely third party statements which were never confronted to the assessee and those statements on standalone basis could not form the basis of making additions in the hands of the assessee. AR, during the course of hearing, advanced arguments for the submissions that the case of the assessee was selected for scrutiny under CASS for the reason that there was large interest expenses relatable to exempt investments u/s 14A. No such additions were made by Ld. AO in the assessment order and therefore, the scope of scrutiny could not be enlarged to make additions of unexplained cash credit u/s 68. However, these arguments do not convince us much since upon perusal of page no. 17, it is quite evident that the type of scrutiny was complete and it was not a limited scrutiny case - AO was quite empowered to make correct assessment of assessee’s income considering all the facts and issues. There is nothing on record which would show that there was any defect in the jurisdiction of Ld. AO, in any manner. - Decided partly in favour of assessee.
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