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2024 (2) TMI 325 - AT - Income TaxAddition u/s. 68 - Source of cash deposited in the bank - sales credited to profit and loss account and declared as income - HELD THAT:- Admittedly, the assessee deposited cash during the demonetization period for Rs. 50 lakhs in two different bank accounts. The sources of such deposit were explained by the assessee as sales proceeds of jewellery business in which he indulges during the month of October 2016. The assessee, in support of his explanation, furnished a business permission letter from AMC, VAT registration certificate, sales bills and VAT return etc. AO, without pointing any defect in the documentary evidence filed by the assessee held the cash deposit from unaccounted sources merely on reasoning that the assessee has not maintained stock register. Assessee has duly shown the cash receipt from the sale of gold/gold ornaments duly recorded in audited books of the account supported by sales bill and stock details. AO has not pointed out any defect in the books of accounts. Therefore, AO cannot treat the cash generated from sales duly recorded in books of account from unexplained/unaccounted sources unless books of account rejected based on valid reasons. Thus set aside the finding of the CIT(A) and direct the AO to delete the addition made by him Decided in favour of assessee. Addition u/s. 68 being unsecured loans - onus to prove - order of the AO was confirmed by the Ld. CIT(A) by observing that the credit of unsecured loan from the parties cannot be treated as explained merely by providing PAN and bank statement until the proof of identity and credit worthiness of the parties are established - HELD THAT:- The provision of section 68 cast primary onus on the assessee to explain the nature and source of the sum credited in the books of account. This primary onus can be discharged by establishing/furnishing the proof of the identity of the creditor, their creditworthiness and genuineness of transaction. Once the primary evidence in relation to the identity, genuineness and creditworthiness is furnished by the assessee, the burden shifts on the revenue to bring credible material before rejecting the primary document furnished by the assessee. Assessee has discharged the onus cast upon him by furnishing ledger confirmation from the creditor, their PAN, their copy of ITR, and their Bank statements. In our considered view, the identity of the creditor was duly established by furnishing their PAN, ITR and bank statement. Likewise, the genuineness of the transactions also got established by the fact that the transactions were carried out through banking channel which were duly reflecting in their respective bank statements and duly recorded in the books of account as loan which also confirmed by the creditor. Revenue authorities do not bring any material on record suggesting otherwise. AO does not point out any infirmity the in the primary documents nor conducted direct investigation from the creditors/ parties by issuing notice u/s 133(6)/131(1) - we are of the view that the genuineness of transaction cannot be doubted. Creditworthiness of the creditor who lent such sum to the assessee we note that the loan amount received by the assessee from different creditor varying between Rs. 50 thousand to Rs. 2 lacs which are not huge sum. In addition to that the assessee provided PAN details as well as copy of ITR-V of the creditor based on which the revenue authority should have access to financial detail of the creditor. The assessee also furnished copy of bank statement of the creditor showing the availability of fund before lending money to the assessee. The revenue authorities without pointing any infirmity in the documentary evidence furnished by the assessee as well as without bringing independent material on record suggesting that the creditor does not possess the creditworthiness to lend money. Thus revenue authorities failed to discharge the burden shifted on them. Therefore, sum credited in the books of the assessee cannot be treated as unexplained u/s 68. Decided in favour of assessee.
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