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TMI Blog2012 (7) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ter cannot be taken unless the findings of the Hon'ble Court in the criminal case are ascertained." 2. Briefly stated, the facts of the case are that the return of the assessee declaring income of Rs.11,73,051 was processed u/s 143(3) of the I.T.Act 1961 (hereinafter referred to as the Act) and this case was selected for scrutiny under CASS. Accordingly, a notice u/s 143(2) of the Act was issued. In response to the notice, the assessee's representative appeared and besides other documentary evidence, he filed bank statements of ICICI bank and Chartered Bank showing that an amount of Rs.45,00,000 was credited in the accounts of the assessee. The assessee filed confirmation from Shri Y.V. Rama Raju stating that the said amounts were provided by him as loan to the assessee. Subsequently, the assessee filed a letter dated 18.11.2010 as a confirmation of loan of Rs.45 lakh from Shri Y.V. Rama Raju (stated to be residing and working in UAE). The assessee also filed a letter from Shri Y.V.Rama Raju in which he threatened the assessee to take legal action since the assessee could not repay the loan and a copy of legal notice by Shri Rama Raju was also brought on record before the AO. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences are sufficient to discharge its primary onus of the appellant as provided u/s 68 of the Income Tax Act as has been held in the case of CIT vs Sahibganj Electric Cables Pvt. Ltd. (1978) 115 ITR 408 (Cal) that where amounts of loans received by cheques and repayment also through cheques and there are confirmation letters submitted wherein income tax file number also mentioned, the assessing officer could not make addition without making further enquiry disbelieving the evidences placed before him. The assessee in such case was found to have discharged the onus u/s 68 of the Income Tax Act." ...... "In the present case, since the loan transaction in question had been through the account payee cheques and the address and PAN were before the AO, the question of identity of the creditor falls into oblivion and such question becomes irrelevant as has been held in the case of Addl.CIT vs Bahri Bros. (P) Ltd. 154 ITR 244 (Pat.). Since the identity of the creditor stands established and the assessee produces evidence that the entry is not fictitious, which is the case as it was submitted before the AO that a legal notice for default of the repayment of loan has been served on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A under sub clause (c) of the above Rule as there is a sufficient cause preventing the appellant from producing the above evidence before the AO as this evidence came to the possession of the appellant after conclusion of the assessment proceedings. As the summon and the criminal complaint are only in furtherance of the legal notice already placed before the AO, the documents are being considered for adjudication of this ground. As seen above, the repayment of loan could not take place for which criminal proceedings have been lodged against the appellant by the said creditor. It is difficult to believe that the appellant will incur the risk of criminal punishment for a default arising out of transaction which is not a genuine transaction. The fact of the legal notice which was before the AO himself and the launching of criminal complaint in the court shows that the transactions of the loan is a genuine transaction. The identity of the assessee is not in doubt as the assessee has the PAN number and the amount of loan has been given through account payee cheques, therefore, the identity of the person and genuineness of the loan cannot be questioned. After the confirmation with the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the appellant, as the assessee failed to repay the loan. Relying on the judgement of Hon'ble High Court of Calcutta in the case of CIT vs Sahibganj Electric Cables Pvt. Ltd. reported as (1978) 115 ITR 408 (Cal), the ld. CIT(A) held that where the amount of loan received by cheques and repayment was also made through cheques and there are confirmation letters submitted wherein income tax file number is also mentioned, the assessing officer could not make addition without making further enquiry, disbelieving the evidence placed before him. The ld. CIT(A) also considered and noted that since the disputed loan transaction had been through the account payee cheques and the address and PAN of creditor were before the AO, the question of identity of the creditor becomes irrelevant and since the identity of the creditor stands established and the assessee produced evidence showing that the entries were not fictitious and in addition to that, the assessee also produced copy of the legal notice sent by the creditor to the assessee for default of the repayment of loan, the onus placed upon the assessee has been discharged and burden shifts on the Revenue to show that the entry of loan ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing notices under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the socalled alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case." 10. In the case of Orissa Corporation (P) Ltd. (supra) the Hon'ble Apex Court held that the Revenue did not examine the source of income of the alleged creditors to find out whether they were creditworthy or were such who could advance the alleged loans. The Hon'ble Court also observed that there was no effort made by the revenue department to pursue the so-called alleged creditors and in those circumstances, the assessee could not d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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