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2017 (6) TMI 1389 - ITAT MUMBAIAddition u/s 68 - unexplained loan - as per AO assessee has failed to prove the identity, genuineness and creditworthiness of the loan creditors and the loan creditors are not found at the address given and loan creditors are showing nominal income and hence, accumulation of fund to such an extent is not possible - contention of the assessee that he had discharged initial burden cast upon him by filing confirmation letters along with other evidences to prove the identity, genuineness of the transaction and creditworthiness of the parties. Once, three ingredients are proved, the assessee doesn't required to prove the sources of source. HELD THAT:- Assessee has furnished confirmation letters in respect of all loan creditors. We further observed that the assessee has filed income tax returns along with bank statements of all loan creditors. All the loan creditors are assessed to Income tax and loans has been given by cheque. We further observed that the A.O has summoned trustees of the trust who had appeared before the A.O and given a statement u/.s 131, wherein they have clearly admitted that they have advanced loan to the assessee. In respect of remaining three parties, though they are not appeared before the A.O, the assessee has filed necessary details that these loans have been repaid by cheque in the next financial year. Therefore assessee has discharged his initial burden cast upon him by filing identity, genuineness and creditworthiness of the parties. Once, three aspects has been proved, then the onus shifts to the A.O to prove otherwise. In this case, the A.O ignoring all evidences filed by the assessee, simply made additions on the simple reason that creditors are not having sufficient source of income to explain loan given to the assessee. If at all, the A.O having any doubt on the capacity of the loan creditors, he is free to proceed against the loan creditors as per the law, but he cannot make additions towards, loan creditors u/s. 68 of the Act, once the assessee has discharged his initial burden. In this case, on perusal of the facts available on record, we find that the assessee has filed necessary evidences to prove the identity, genuineness of the transaction and creditworthiness of the parties. Therefore, we are of the considered view that the A.O was erred in making additions towards unsecured loans u/s. 68 - Decided in favour of assessee.
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