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Deputy Commissioner of Income Tax, Cent. Circle 18, New Delhi Versus Sh. Vivek Nagpal

2016 (3) TMI 505 - ITAT DELHI

Addition under Section 68 - bank statement and ITR of the lender were not submitted - Held that:- On going through order of ld AO. we found that merely because the assessee could not file the bank account statements and income Tax returns of lender company, the addition has been made. When assessee has submitted the confirmation of the company which is having PAN and assessed to income tax the account also shows the receipts by the cheques and in subsequent years, loans of this company was accep .....

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thiness and genuineness of amount credited in the books of accounts , it is left upon assessee to satisfy the assessing officer with the substantial evidence/ documents for discharging his onus. Therefore merely because the bank statement an ITR of the lender were not submitted, in spite of submitting balance sheet and profit and loss account of the company, confirmation stating its PAN and also transactions are through account payee cheques and in absence of any inquiry, we are of the view that .....

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the only ground of appeal that the learned Commissioner of Income Tax(Appeals) has erred in deleting the addition of ₹ 33,15,000/- made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 (for short the Act ). 2. The brief facts of the case are that the assessee is an individual, filed return of income on 16th March, 2010 showing income of ₹ 9,15,680/-. The assessment was framed under Section 143(3) of the Act on 22.12.2011. During the course of assessment, the sta .....

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sessee carried the matter before the Commissioner of Income Tax (Appeals) who deleted the addition. Therefore, the Revenue is in appeal before us. 3. Learned Sr. Departmental Representative submitted that the assessee did not file income tax return and bank statement of the lender and the addition has been made by the Assessing Officer as assessee failed to prove creditworthiness of the lender. He vehemently supported the order of the Assessing Officer. 4. Ld AR submitted that the assessee has s .....

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is fully discharged the onus caste on the assessee under Section 68 of the Act proving identity, creditworthiness and geuineness of the transactions. He further submitted that on submission of these details, no inquiry has been done by the Assessing Officer and in subsequent years loan of this party raised further was accepted by AO. Therefore he contended that CIT (A) has rightly deleted the addition. 5. We have carefully considered the rival contention and could see from the order of the lear .....

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x the account also shows the receipts by the cheques and in subsequent years, loans of this company was accepted by AO. learned Commissioner of Income Tax (Appeals) has dealt the issue in its appeal order as under: 5. I have gone though the above submissions of the appellant and have perused the AD's order and considered the facts and evidences on records and other judicial pronouncements on the issue. On going through the assessment records I found that during the course of assessment proce .....

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ar under consideration that they had sales/income of R.s 22.98 crores. Keeping the audited financial statements of the creditor company, (Zodiac.com Solutions P. Ltd.) into consideration, I fail to understand on what basis the AD came to the conclusion that the appellant has not been able to prove the creditworthiness, identity and genuineness of the transaction. Simply the appellant did not file the copy of income tax return of Zodiac.com Solutions P. Ltd. with the AD does not mean the appellan .....

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cord to show that the confirmation filed by the creditor is not genuine, here I would like to place reliance in the case of CIT vs. Gangour Investment Ltd. (Income Tax Act No. 34/2007) dated 30.1.2009 where it was held that Revenue can make addition under Section 68 of the Act only if the assessee is unable to explain the credits appearing in its books of accounts. In the said case the appellant has duly explained the said credit entries in the form of various documentary evidences. The said doc .....

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he appellant is not genuine. Further nothing adverse has been brought on record by the AD to establish that the money received from Zodiac.com Solutions P. Ltd represents appellant's own undisclosed income. 5.3 The facts and evidence of the case shows that from the very beginning AD had shifted entire burden upon the appellant and no material has been brought by the AD himself to prove his allegation that the transaction of the appellant with Zodiac.com Solutions P. Ltd is not genuine one an .....

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lant has discharged the initial onus of establishing the bona-fides of the transactions by filing the confirmation, audit financial statement and PAN particular of the creditor viz. Zodiac.com Solutions P. Ltd. and the AD was not justified in ignoring these evidences provided to him by the appellant. Thus in view of the above discussion and keeping in view the fact that confirmation of the creditor company its financial statements and PAN number details was filed with the AO, l am of the conside .....

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nquiry made by the Assessing Officer on submissions of these details. Merely non filing of bank account or income tax return of the lender it cannot be said that assessee could not prove creditworthiness of the lender when from the balance sheet it appears that it the lender has sources of funds in share capital and borrowings of ₹ 2.11 crores and sales of ₹ 22.98 crore. Further in subsequent years, this depositor has also deposited money with the assessee where the confirmation has .....

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