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TMI Blog2016 (5) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... taken a statement from the above said person during the course of search action conducted in the Pride Group of Pune and he has admitted in the statement while giving answer to Q.no.11 that the Pride group had approached him to invest in their group in the form of Share Capital as an accommodation entry through M/s ACPL. The revenue has moved a petition to admit the copy of statement taken from Shri Jagdish Prasad Purohit as additional evidence. The grounds of appeal have also been revised bringing above facts. On the contrary, the Ld A.R objected to the admission of the additional evidences by submitting that Shri Jagdish Prasad Purohit has not implicated the assessee in the sworn statement and it is only a inference drawn by the Ld D.R in order to improve the case of the AO. Further Shri Jagdish Prasad Purohit has retracted from the statement given by him before the investigation wing by filing an affidavit. The Ld A.R also furnished a copy of affidavit filed by Mr. Purohit retracting from the statement. Accordingly he contended that the additional evidence sought to be filed by the revenue should not be admitted and even if it is admitted, the revenue cannot place reliance ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A)-32, Mumbai and they relate to the assessment year 2009-10. The additions made by the AO u/s 68 of the Act, having been partially deleted by the Ld CIT(A), both the parties have filed these appeals. 2. We heard the parties and perused the record. The assessee is a partnership firm and is engaged in the business of builders & developers. During the course of assessment proceedings, the AO noticed that the assessee has declared unsecured loans to the tune of Rs. 57.20 crores. The AO noticed that the assessee has availed loans from the following parties located in Kolkatta. (a) M/s Albright Consultant Pvt Ltd (ACPL) - Rs.9.85 crores (b) M/s Nataraj Vinimay Pvt Ltd (NVPL) - Rs.1.30 crores (c) M/s Spectrum Vintrade Pvt Ltd (SVPL) - Rs.0.25 crore Rs.11.40 crores The AO chose to verify the above said loans and accordingly requested the ADIT (Inv), Kolkatta to verify these parties. The ADIT (Inv) deputed an Inspector, who reported that these companies are not available at the addresses given by them. Accordingly, the ADIT (Inv) reported that the identity of the creditors could not be established and further investigation could not be carried out. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has discharged the primary onus placed upon it by sec. 68 of the Act by establishing the identity and credit worthiness of the creditors and the genuineness of the transactions. However, the AO expressed the view that these companies have reported very low income and it will not be possible for them to give such huge sums as loan. The AO endorsed the view taken by DDIT and opined that the assessee has routed its unaccounted money through these loans and they have provided only accommodation entries. 5. The Ld CIT(A) furnished copy of the remand report and the report of the DDIT, Kolkatta to the assessee. The assessee submitted that the identity of these companies have been proved through various documents. Since the loan amounts were received through banking channels, the genuineness of the transactions also stand proved. With regard to the credit worthiness, the assessee placed reliance on the Balance sheets of these companies and submitted the sources of loans stand established. The assessee also explained as to how these companies have generated funds. Accordingly the assessee contended that it has discharged the primary onus placed upon it u/s 68 of the Act and also proved so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it did not charge interest on the loan given to the assessee company. Accordingly, for identical reasons, he confirmed the addition of the loan received from M/s SVPL also. 10. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the addition of loans taken from M/s NVPL and M/s SVPL. 11. We heard the rival contentions and perused the record. The dispute before us relates to the addition made u/s 68 of the Act. It is a well settled proposition that the primary onus is placed upon the assessee u/s 68 of the Act to prove the cash credits. In order to discharge the primary onus, the assessee has to prove the identity of the creditor, credit worthiness of the creditor and the genuineness of the transactions. If the assessee discharges the initial onus, then the burden shifts to the shoulder of the AO to disprove the claim made by the assessee. With these settled legal propositions, we shall now examine the facts prevailing in the instant case. 12. We have noticed that the AO did not consider various documents furnished by the assessee during the course of assessment proceedings in order to discharge the initial onus placed upon him u/s 68 of the Act. The AO gave impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... channels. In the instant case, the loan transactions have been routed through the banking channels. Hence the genuineness of the transactions also stand established. However, the Ld CIT(A) has expressed doubt about the genuineness in respect of loan taken from M/s NVPL and M/s SVPL, since he was of the view that a NBFC company shall not give interest free advances to unrelated parties. In our view, the doubt so expressed by the Ld CIT(A) is beyond the scope of the provisions of sec. 68 of the Act. Since the provision of sec. 68 is a deeming provision, the same is required to be interpreted strictly. The Courts have held that the assessee is required to discharge the initial burden of proof placed on his shoulders. In the instant case, we are of the view that the assessee has discharged the initial onus placed upon it. Hence the burden of proof gets shifted to the assessing officer. 17. From the foregoing discussions, we notice that the tax authorities have not discharged the burden of proof shifted upon their shoulders by bringing any material on record to disprove the claim of the assessee. On the contrary, the tax authorities have merely suspected the genuineness by making cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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