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2019 (6) TMI 1007 - KERALA HIGH COURTUnexplained cash credit u/s 68 - genuineness of the cash credits - HELD THAT:- Assessee as well as the creditor had offered their explanations. The creditor had explained his source of income, the transactions were effected through bank, which fact was substantiated by producing a certificate from the bank. It was in such circumstances that the CIT (Appeals) and the ITAT found that the assessee had established the identity of the creditor, source for the credit and genuineness of the transaction. Department had accepted a similar explanation offered in the previous assessment year assume relevance in the above context. Further, the Settlement Commission had also held similar cash transactions during the previous years to be genuine. Finding of the AO is that the assessee had not proved the credits by producing satisfactory evidence regarding the capacity of the remitter to advance the money and that the wife of the remitter being a partner in Chandragiri Construction, the proper course was to credit the amount in the capital account of the wife or to show the same as a loan from the creditor. A careful reading of the decision in Mohanakala [2007 (5) TMI 192 - SUPREME COURT] shows that even after rejecting the explanation given by the assessee, the assessing authority should consider the crucial aspect as to whether on the facts and circumstances of the case it could be inferred that the sums credited in the books of the assessee. As far as the instant case is concerned, both CIT(Appeals) as well as the ITAT had found the assessee to have discharged his burden of explaining the genuineness of the cash credits in his account by providing confirmation from the creditor regarding remittance and the source of funds and certificate from the assessee's bank. The explanation offered by the assessee, coupled with the fact that a similar explanation regarding remittances during the previous year was accepted by the Assessing Officer and similar remittances during the period prior had been accepted by the Settlement Commission, had weighed with the CIT(Appeals) and the ITAT. - Decided against revenue.
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