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2024 (4) TMI 741 - AT - Income TaxBogus unsecured loans and bogus share capital money - not providing cross-examination of maker of the statement on which AO relies upon to take adverse view against an assessee - CIT(A) deleted addition - HELD THAT:- Merely because the lenders did not appear before the AO, cannot be the sole reason for drawing adverse view against the assessee/transaction in question. Since the assessee filed the aforesaid relevant documents by the assessee, we find it had discharged the burden to prove the identity and creditworthiness of the lenders parties and genuineness of the loan given to assessee We rely on the decision of Andaman Timber Industries Vs. CCE [2015 (10) TMI 442 - SUPREME COURT] wherein it was held that not providing cross-examination of maker of the statement on which AO relies upon to take adverse view against an assessee is a serious flaw which render the action of AO a nullity. Same view was reiterated in the decision of CIT v Odeon Builders Pvt. Ltd. (2019 (8) TMI 1072 - SUPREME COURT). Further, we note that the assessee has shown the nature of the receipt as unsecured loan, and has discharged the burden casted upon it u/s 68 of the Act by providing proof of creditors i.e. identity of the lender by furnishing their PAN details, their ITR acknowledgment for AY. 2009-10; and from a perusal of the relevant financials of share subscribers, we note that they had sufficient creditworthiness to make investment in assessee company; and from perusal of the bank statement it reveals that loan was given and repaid through banking channel. We further note that AO has not been able to find any infirmity in the aforesaid evidence furnished by the assessee. In such a scenario, we agree with the impugned action of the Ld. CIT(A) deleting the addition - Therefore, we uphold the action of Ld. CIT(A) the deleting the addition. Investment in the form of share capital in earlier years - Merely on the basis of information given by Investigation Wing and the statement recorded by Shri Pravin Kumar Jain (accommodation entries provider) the AO without applying the mind made an addition of Rs. 80 Lakhs, despite the fact that the assessee has infused share capital of only Rs. 50,000/- in the year AY. 2009-10, and thus erred in making an addition of Rs. 80 Lakhs which action of the AO cannot be countenanced and the Ld. CIT(A) rightly noted that the impugned share capital of Rs. 80 Lakhs has not been infused in the relevant year under consideration from the companies named by AO as noted (supra). In such a scenario, we do not find any infirmity in the action of the Ld. CIT(A) deleting the addition which we confirm. Appeal of the revenue stands dismissed.
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