TMI Blog2015 (6) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and credibility of the creditors was not doubted in any manner. In this case inherent improbability to produce the creditor could be sufficient cause to reject the assessee’s claim even if simple statement of account of creditors was filed by the assessee. Genuineness of credit cannot be accepted merely because identity is established and amount received by cheque. Being so, in our opinion it is appropriate to remit the entire issue to the file of AO, for fresh consideration, with the direction to assessee to discharge the burden cast upon it so as to prove the identity and capacity of the parties, and the genuineness of the transaction. - Decided in favour of revenue for statistical purposes. - ITA NO. 7542/Mum/, ITA NO. 7850/Mum/2011 - - - Dated:- 25-2-2015 - Shri I.P. Bansal And Shri Chandra Poojari JJ. For the Appellant : Shri Vipul Joshi For the Respondent : Shri Asghar Zain ORDER PER CHANDRA POOJARI, A.M: These are cross appeals directed against the order dated 5/8/2011 passed by the ld. CIT(A) for the assessment year 2008-09. First we take up assessee s appeal in ITA No. 7542/Mum/2011 .Assessee has raised the following ground : 1. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. Counsel for the assessee stated that the assessee has an office at Mumbai and a manufacturing unit in Gandhidham. This borrowing is being used by the manufacturing unit. The only interest paid is in respect of the bank borrowing at the Gandhidham unit. As compared to this, the bank account at Mumbai from which investments are made is not a loan. It is a current account on which there is no interest. Further, the company has share capital of ₹ 48,51,200, Reserves of ₹ 20,48,91,228/- whereas the borrowings are only of ₹ 4,66,76,032/- interest paid during the year on borrowing is ₹ 2,07,76,032/- which are for earning business income in Gandhidham. 4.1 Without prejudice to the above, it is contented that if the interest is to be disallowed u/s. 14A, it may be disallowed bearing in mind that in the assessment order in the calculation of the disallowance u/s. 14A read with rule 8D the investments were considered net off the revaluation reserve i.e. at the cost of investments. Besides, the interest is to be taken after deducting the interest disallowed for the interest free advances in the assessment order from the interest actually paid after which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. Accordingly, the amount of ₹ 1,25,00,000/- was treated as unexplained credit under section 68 of the Act and was added to the total income. 8. On appeal, the ld. CIT(A) observed that there is no justification for the addition made which has been made in a rather casual manner. Even if it is admitted that the assessee filed only a photocopy of the confirmation which is factually incorrect as evident from the assessment records, the contents therein were not doubted in any manner. Moreover, the said creditor being located in Mumbai itself, the AO did not make any effort to make spot verification rather than taking adverse view merely for the fact that no response was made by the said party before completion of the assessment. It is also found that confirmations of the said party sent through post alongwith relevant details called for by the AO have been duly submitted and placed on record. There is sufficient merit in the submissions made by the assessee in the matter. All material facts on record prove the identity of the lender and also genuineness of the transaction. The transaction made through banking channels is duly reflected in the respective bank accounts. Moreov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on further enquiry. He relied upon the order of CIT(A). 10. We have heard the rival parties and perused the material available on record. In this case it is seen that from the bank account of the lender with Bank of India Ghatkopar Branch(W) an amount of ₹ 125.00 lacs was deposited into their account on 7/3/2008, on the same day the same amount has been transferred to assessee/s bank account. When the AO enquired about this credit with the assessee, the assessee filed letter dated 28/11/2010 from DFL attached with a statement of account of Doulos Finance Ltd. where there was outstanding balance of ₹ 125.00 lacs. The assessee also filed copy of balance sheet as on 31/3/2008 of M/s. Doulos Finance Ltd. before CIT(A). We are not able to trace balance outstanding in the name of the assessee to the tune of ₹ 125.00 lacs in that balance sheet. The statement of account filed by the assessee does not contain the name of the signatory or seal of the company. 10.1 It is also noticed that during the course of assessment the AO issued noticed to Doulas Finance Ltd. on 23/11/2010 which was served on 24/11/2010 requiring to provide details like PAN, proof of return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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