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TMI Blog2018 (6) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no material placed on record by the Revenue justifying the addition. It was explained that interest has been paid by the assessee on the loans, which was also disallowed by the Assessing Officer. It was also pleaded that the Ld. Commissioner of Income Tax (Appeal) granted relief after considering the factual matrix and on the interest portion, no appeal has been filed by the Revenue. The ld. counsel further explained that the assessee was doing only one project i.e. Shreedam Splendor and the statement of Shri Arun Jately is having no relevant as it talks about the case of sister concern. It was further pleaded that the loans taken by the assessee were repaid along with interest and no cash was found during the survey. It was empathetically argued that the loans were even repaid before the survey and all the parties appeared before the Assessing Officer during remand proceedings, when the Ld. Assessing Officer recorded the statement and nothing was found against the assessee, therefore, the Ld. Commissioner of Income Tax (Appeal) rightly deleted the addition. It was explained that even Shri Pravin Jain himself appeared before the Assessing Officer for which our attention wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Pravin Kumar Jain, who was alleged to be engaged in providing accommodation bills. The statement of Shri Ajay Maheshwari, one of the partners of M/s Shreedham Builders (sister concern) was recorded on oath under section 131 of the Act on 17/10/2014, wherein, he made a disclosure of Rs. 15.40 crores (Rs.4.70 crores for Assessment Year 2012-13 and Rs. 10.70 crores for Assessment Year 2013-14). On account of bogus unsecured loans by further claiming that all these transactions were carried out through one broker namely Shri Jitu Bhai. The statement of Shri Anil Jately, broker was also recorded. Considering the statement, the Ld. Assessing Officer made addition under section 68 of the Act. Further, the Ld. Assessing Officer also made addition on account of interest payment and disallowed under section 37 of the Act. 2.3. On appeal before the Ld. Commissioner of Income Tax (Appeal), the factual matrix was considered and the additions so made were deleted. The Revenue is in appeal before this Tribunal with respect to the additions made under section 68 of the Act. 2.4. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of proving the source of a sum, found to be received/transacted by the assessee, is on him and where it is not satisfactorily explained, it is open to the Revenue to hold that it is income of the assessee and no further burden lies on the Revenue to show that income is from any other particular source. Where the assessee failed to prove satisfactorily the source and nature of such credit, the Revenue is free to make the addition. The principle laid down in Ganpati Mudaliar (1964) 53 ITR 623/A. Govinda Rajulu Mudaliar (34 ITR 807)(SC) and also CIT vs Durga Prasad More (72 ITR 807)(SC) are the landmark decisions. The ratio laid down therein are that if the explanation of the assessee is unsatisfactory, the amount can be treated as income of the assessee. The ratio laid down in Daulat Ram Rawatmal 87 ITR 349 (SC) further supports the case of the assessee. In the case of a cash entry, it is necessary for the assessee to prove not only the identity of the creditor but also the capacity of the creditor and genuineness of the transactions. The onus lies on the assessee, under the facts available on record. A harmonious construction of section 106 of the evidence Act and section 68 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Group wherein Shri Pravin Kumar Jain is said to have deposed before the authorities that he is indulged in providing accommodation entries in the nature of the bogus bills/sales bills and unsecured loans. As per the information the assessee is one of the beneficiaries of such accommodation entries. In the course of Assessment Proceedings assessee was required to explain unsecured loans and prove genuineness of transactions, identity and creditworthiness of the unsecured loans, records and supporting documentary evidences. In response to the same, assessee furnished loan confirmations, bank statements, I.T. Return acknowledgements of the lender companies and also submitted that money has been borrowed through regular banking channels and it was repaid in subsequent years with interest. TDS was made on such interest. It was also further submitted that Shri Pravin Kumar Jain was retracted the statement which he has said to have been given and therefore it was contended that transactions are genuine and they cannot be treated as unexplained unsecured loans. However, Assessing Officer rejected the submissions of the assessee holding that Shri Pravin Kumar Jain Group only engaged in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther taking us through the Assessment Order, Ld. DR submits that Shri Pravin Kumar Jain has categorically said in his statement that he is providing only accommodation entries and no genuine business was carried on and as per the information assessee is one of the beneficiary to such transactions and therefore the Assessing Officer rightly concluded that assessee has obtained only accommodation entries in the name of unsecured loans and the entities were not carrying out any business. 6. On the other hand, Learned Counsel for the assessee strongly supported the orders of the Ld.CIT(A). He further submitted that the Assessing Officer has relied on the information received from DGIT(Inv), Mumbai regarding the details of accommodation entries provided in the nature of bogus purchases/ sale bills and unsecured loans by Shri Pravin Kumar Jain Group. Further the Assessing Officer has stated in the order that DGIT(Inv) has carried out search and seizure action on Pravin Kumar Jain group. The report mentions Shri Pravin Kumar Jain is one of the entry providers, operating in Mumbai, indulged in providing accommodation entries in the nature of bogus purchases/sale bills and unsecured loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not yet confirmed in his assessments and thus it cannot be considered as evidence. Therefore, it is submitted that the Assessing Officer has made additions merely relying on the report and no evidence was placed on record to make the additions. 8. Learned Counsel for the assessee further referring to Page Nos.24 to 28 of the Paper Book submits that an identical issue came up before this Coordinate Bench in the case of DCIT vs. Bairagra Builders P. Ltd reported in [2017] 51 CCHand submits that the Hon'ble Bench held that the plain reading of the Assessment Order demonstrates that the Assessing Officer merely went by the investigation done by the office of DGIT(Inv), Mumbai.No enquiries or investigation was carried out in the case of parties who lent the money, no evidence to controvert the claims of the assessee was brought on record by the Assessing Officer, even the submissions of Shri Pravin Kumar Jain was not supplied, nothing is on record about the result for investigations done by DGIT (Investigation), Mumbai, papers filed by the assessee do demonstrated identity creditworthiness and genuineness of the transactions, therefore the addition is made merely on surmises an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstated and no material having been found during search to show that assessee paid a sum over and above the stated consideration, no addition could have been made on the basis of retracted statement of assessee recorded during speech. CIT v. Sahibganj Electric Cables (P) Ltd. [115 ITR 0408 (Cal)] Where the amounts of loan were received by cheque and repayment was also made by cheque through assessee's bankers; and confirmation of creditors along with their income-tax file numbers were furnished the assessee discharged its initial burden and ITO was not justified, in the absence of any further investigation, to reject the evidence and Case reference citation Proposition make addition. 9. We have heard the rival submissions, perused the orders of the authorities below, the case laws relied on and the material furnished before us. The only issue involved inthis appeal relates to the deletion of addition of Rs..20 lakhs made by the Assessing Officer towards unexplained unsecured loans and interest thereon amounting to Rs..2,35,246/.Search and seizure action u/s. 132 of the Act has been conducted in the case of Shri Pravin Kumar Jain and statements were recorded from him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Ld. Assessing officer has not made any independent enquiry in order to establish the in-genuineness of loans if any, with contrary evidence. The statements referred to and relied upon by the assessing officer have never been disclosed to the appellant opportunity for cross examination was also not given, hence such statement could not be utilized against the appellant without giving full and proper opportunity of cross examination as has been held vide Mahesh Gulabral Joshi Vs. CIT(A) (2005) 95 lTD 300 Mumbai ITAT and Hon'ble Supreme Court decision in the case of KishanchandChellaram Vs. CIT (125 ITR 713 (SC)). 6.3. Further during the course of assessment proceedings, the appellant has produced copy of a comprehensive Affidavit of Shri. Pravin Kumar Jain dated 25.04.2014 retracting, the statements made before the Investigation Wing. Assessing officer has not given opportunity to the appellant for cross examination of Shri Pravin Kumar Jain. Going by the discussion contained above, it is obvious that the inference drawn by the Assessing officer against the appellant is not sustainable for the simple reason that the principles of natural justice have not been followed. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the evidences filed by the appellant are false, the loan received and repaid by the appellant cannot be treated as bogus. The addition cannot be made merely on the basis of suspicion, surmises and conjectures. There has to be some concrete evidence whether direct or circumstantial. In this case, no such evidence is present. On the contrary, the appellant is showing from the record that he has received loan through account payee cheques from above TWO PARTIES. He has shown that the loans have been repaid through account payee cheque and as long as he was holding the loan, he has paid the interest after deducting TDS. With regard to the disallowance of interest on loans taken from afore-mentioned parties, the appellant submitted that the AO has also ignored the fact that the said interest expenses were incurred wholly, exclusively & necessarily for business of the Appellant. The interest paid on loans was subject to TDS. During the present proceedings, the appellant also submitted the details of the TDS made on the loans wherever it is applicable and the details of amount of TDS paid into the Government account. In the appellant case the addition made towards the said loans is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, this finding in our view is completely justified in view of the facts and circumstances of the assessee's case. 11. An identical issue came up in the case of DCIT vs. Bairagra Builders P. Ltd reported in [2017] 51 CCH 0107 in ITA.No. 4691 and 4692/Mum/2015 dated 14.09.2017 wherein the Coordinate Bench held as under: "6. We have heard the rival submissions along with the orders of the tax authorities below. We noted that during the impugned assessment year, the assessee had taken unsecured loans from the following two parties: Sr. No Name of the Party and Address PAN Loan taken(Rs.) Rate of Interest 1. Javda India Impex Limited CS-1, Silver Anklet, Yari Road, Versova, Mumbal 400 061 AAACA7065L 20,00,000 9% 2. Lexus Infotech Ltd. 626, Panchratna, OperaHouse, Mumbai 400 002 AAACL4646G 20,00,000 9% When the Assessing Officer asked the assessee to prove the genuineness of these loans, the assessee submitted the following documents: a. Copy of acknowledgment of income tax return filed for A.Y. 2007-08. b. Copy of PAN of the parties c. Copy of bank statement of the parties from where the cheque is issued. d. List of directors of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare capital received by the assessee from various companies and during the course of investigation, it was found that the share capital has been received from three entry operators, who are allegedly in the business of providing accommodation entries. Notices issued u/s. 131 to these parties were returned undelivered by the postal authorities with the remark "left"/ "no such person". Under these circumstances, the Hon'ble High Court took a view that the assessee failed to discharge the burden to prove the credit worthiness as well as the genuineness of the transactions. 10. But in the impugned case, we noted that the assessee has submitted all the evidences including the confirmation of the creditors. This is not a case where the creditors have not given confirmations rather they have duly confirmed to giving loan to the assessee, the loans were received and returned through banking channels. The assessee has also submitted copies of bank accounts. The lender has not deposited cash into bank account. The assessee has duly discharged the onus with regard to identity of the lender, credit worthiness of the party and all supporting evidences as required u/s. 68 of the I.T.Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries in the form of bogus bills/sale bills and unsecured loans. As per the information, the assessee involved in the case was beneficiary of such accommodation entries. The assessee was required to explain the genuineness of unsecured loans and identity and creditworthiness. The assessee furnished loan confirmation, bank statement, IT returns acknowledgment of lender companies and the proof of borrowable through regular banking channel. The Bench considered the factual matrix and held that no addition can be made towards alleged unsecured loans. Identical are the facts in the present appeal before us. Thus, this case clearly supports the case of the assessee. Identical ratio was laid down in the case of DCIT vs Bairagra Builders Pvt. Ltd. (ITA No.4691 and 4692/Mum/2015), order dated 14/09/2017 from the Mumbai Bench of the Tribunal. 2.9. The Hon'ble Delhi High court in CIT vs Laxman Industrial Resources Ltd. (ITA No.169 of 2017)(Del), held as under:- "The Income Tax Appellate Tribunal's (ITAT) order upholding the Appellate Commissioner's opinion that the additions made in the course of reassessments were unsustainable, were challenged by the Revenue. The reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. In this analysis, a distillation of the precedents yields the following propositions of law in the context of Section 68 of the Income Tax act. The assessee has to p r ima f a c i e p r o v e ( 1 ) t h e i d e n t i t y o f t h e credi tor/subscriber ; (2) the genuineness of the transaction, namely: whether it has been transmitted through banking or other indisputable channels: (3) the c r edi twor thines s or f inanc ial s t r ength of the creditor/subscriber: (4) If relevant details of the address or PAN identity of the creditor/subscriber are furnished to the Department along with copies of the Shareholders Register, Share Application Forms, Share Transfer Register etc. it would constitute acceptable proof or acceptable explanat ion by the assessee. (5) The Department would not be justified in drawing an adverse inference only because the creditor/subscriber fails or neglects to respond to its notices: (6) the onus would not stand discharged if the creditor/subscriber denies or repudiates the transaction set up by the assess cc nor should the Assessing Officer take such repudiation at face value and construe it, without more, against the assess cc. (7) The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany from alleged bogus shareholders whose names are given to the Assessing Officer, then the Department is free to proceed to assess them individually in accordance with law. The Supreme Court did not find any infirmity with the impugned judgment of the High Court which was a common order along with the decision in CIT v. Divine Leasing & Finance Ltd. [2008) 299 ITR 268 (Delhi). Since the Commissioner of Income-tax (A) has not only found that the identity of each of the shareholders stood established, but has also examined the fact that each of them were income-lax ass essees and had disclosed the share application money in their accounts which were duly reflected in their Income-tax return as well as in their balance sheets. In these circumstances we see merit in what the learned counsel for the appellant has submitted and we feel that the Tribunal was unjustified incoming to the conclusion that the C'IT(A) had not considered the mat ter in the right perspect ive. Consequently, we decide the question in favor of the assessee and set aside the order passed by the Tribunal." 5.4 In the present case the assessee can be said to have discharged its onus under section 68 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Prakash Chand Nahta v. Union of India 12001J 247 ITR 274 in support of the proposition that cross-examination of the witness is must, before the AO relies on the on the statement of the witness for making addition. Reliance is also placed on the decision of Allahabad High Court in the case of nathu Rain Prcmchand v. CIT [1963] 49 ITR 561, wherein the Hon'ble Court explained that it was the duty of the Assessing Officer to enforce the attendance of a witness. if his witness is material in exercise of his powers under order 16. Rule 10 of CPC and where the Officer does not do so, no inference can be drawn against the assessee. Reliance is also placed on the decision of the jurisdictional High Court, i.e. Delhi High Court in CIT v. Pradeep' Kumar Gupta and- Vijay Gupta (2008) 303 ITR 95 (Del) wherein it was held that reopening of assessment is not permissible on mere adverse statements from others. Such statement by itself does not constitute informat ion, unless the As ses sing Of has made enquiries thereon and inferred understatement or Income. lain therefore inclined to agree with the submissions made on behalf of the appellant to the effect that the information ,if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('ITAT') in ITA No.211/Jodh/2009 for the Assessment Year 2004-05 whereby, the ITAT has affirmed the order dated 09.02.2009 passed by the Commissioner of Income Tax (Appeals), Central, Jaipur ['CIT(A)'] partly allowing the appeal preferred by the assessee and deleting the additions made by the Assessing Officer ('AO') in the assessment order dated 28.12.2007 to the tune of Rs. 79,80,000/- on account of unexplained share capital contribution and Rs. 19,950/- on account of unexplained expenditure on commission for getting accommodation entries. 2. Put in brief, the relevant background aspects of the matter are as follows : The respondent Company is engaged in manufacturing of the segments used in the marble sawing. The Company came into existence on 16.06.2003. Thus, the previous year related with the Assessment Year 2004-05 had been the first year of the business of the assessee company. In the original return filed on 01.11.2004 under Section 139 of the Act, the assessee Company declared a loss of Rs. 3,88,740/- . It appears that search and seizure operation under Section 132 of the Act were carried out on 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with the affidavit of the directors of the 5 purchasing companies who had confirmed that they have purchased the regular share and premium shares total at Rs. 79,80,000/- from the assessee-company and made the payment through account payee draft. It is also fact that the ld. A.O. made direct independent inquiry from the directors of the purchaser company by issuing a letter u/s 133(6) of the I.T. Act 1961. The ld. A.O. Sh. V.K. Chakarvarty was heard and the case was discussed with him. On perusal of letter u/s 133(6) I find that no confirmations or comment was asked from the directors of the purchaser company about their statement in the search and seizure operation in their case. The ld. A.O's only reason for rejecting the confirmations and affidavits filed by aforesaid directors of the purchaser companies was that the directors did not retracted their statement in such confirmations or affidavits. The ld. A/R's contention is that the directors of the purchaser companies have fully replied against the ld. A.O's letter u/s 133(6). There is no question to retract against anything which is not mentioned in the letter u/s 133(6). Therefore, the rejection of confirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission of ld. CIT D/R is not helpful to the case of revenue. The Hon'ble Supreme Court in case of Lovely Exports Pvt. Ltd. had clearly held that even if the shareholders are bogus in that case no addition can be made in the hands of the company but AO can reopen the cases of shareholders. The contention of ld. CIT D/R that in case of Lovely Exports Pvt. Ltd. only bogus share application was found but the investors were genuine. However, in the present case even there are no genuine investors as all the companies are fabricated just to provide accommodation entries only as admitted by one of the Directors i.e. Shri Pradeep Jindal. Whether those companies were fictitious or bogus, the moot question here is that whether the assessee company had received share application money or not. It is seen that share capital was received through account payee cheques along with premium amount totalling to Rs. 79,80,000/- from five private limited companies i.e. M/s. Sanraj Associates Pvt Ltd., M/s. Fortress Impex Pvt. Ltd., M/s. Sumit Overseas Pvt. Ltd., M/s. Pushpanjali Caps Pvt. Ltd. and M/s. B.P. Builtech Pvt. Ltd. all these companies are situated at Delhi. All these companies are ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital could be assessed in the hands of the company itself." The findings in these cases are squarely applicable on the facts of the present case and we noted that ld. CIT (A) has already taken a recourse for taking action against the respective shareholders as the Assessing Officer was directed to take necessary action against the purchaser company for such investment in purchase of shares. 10. We have also considered the contention of ld. D/R that the share application money which remained unproved can be added under section 68. We would like to observe here that there is a difference between cash creditor and shareholder. In case of cash creditor, the cash creditor has right to demand the money back from the assessee. However, in case of shareholder, there is no liability of the company to refund the amount as the shares can be sold in the market. Therefore, in case of cash creditor, heavy onus lies on the assessee to prove whether cash creditor was genuine or not. However, in case of shareholder, it is held by various High Courts and H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, the additions made by the AO had been justified and there was no reason for the CIT(A) in deleting the same. 7. Having given thoughtful consideration to the submissions made and having perused the material on the record, we are unable to find any reason to consider interference; and are clearly of the opinion that no substantial question of law is involved in this appeal. 8. The reference to the statements made by some of the persons related with the said investing companies is of no effect because such statements could not have been utilized against the assessee Company when the assesseecompany had not been afforded an opportunity of confronting and crossexamining the persons concerned. There does not appear anything occurring in the statements of the persons relating with the assessee-company so as to provide a basis for the findings recorded by the AO. 9. In any case, the points as sought to be raised by the appellant in the present case are all the matters relating to appreciation of evidence. The relevant factors have been taken into account and considered by the appellate authorities before returning the findings in favour of the assessee. As regards the referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was on record Finding that there was existence of investors and their confirmation has been obtained, were found to be satisfactory. All these conclusions are conclusions of fact based on material on record and, therefore, cannot be said to be perverse so as to give rise to question of law, which may be required to be considered in this appeal under s.260A of the IT Act." 12. The ratio of the decisions aforesaid directly applies to the present case too. Herein, as noticed, the appellate authorities have returned the findings of fact in favour of the assessee after due appreciation of the evidence on record, on relevant considerations, and on sound reasonings. These findings have neither been shown suffering from any perversity nor appear absurd nor are of such nature that cannot be reached at all. 13. Needless to reiterate the law laid down by the Courts consistently that the department is free to proceed in relation to the individual investor in accordance with law but the amount of increased share capital cannot be assessed at the hands of the assessee company itself. 14. In the result, the appeal fails and is, therefore, dismissed." 2.11. In the case of CIT vs Orch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion money and relevant record is produced with regard to the allotment of shares to those parties. The share application form, allotment letter, share certificate are also produced. Even the balance-sheet, profit and loss account, the books of account of these creditors were produced on record showing that they had sufficient funds for investing in the shares of the Assessee. The learned counsel relies on the judgment of the Division Bench of this Court in case of CIT v. Gagandeep Infrastructure (P.) Ltd. [2017] 80 taxmann.com 272/247 Taxman 245/394 ITR 680 (Bom.) and the order of the Apex Court in case of CIT v. Lovely Exports (P.) Ltd. [2008] 216 CTR 195. 4. We have considered the submissions. 5. The Assessing Officer added Rs. 95 lakhs as income under Section 68 of the Income Tax Act only on the ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the Assessing Officer and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared, it was observed that just before issuance of cheques, the amount was deposited in their account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are capital from Rs. 2,50,000/- to Rs. 83.75 lakhs. During the assessment proceedings, the Assessing Officer noticed that the respondent had collected share premium to the extent of Rs. 6.69 crores. Consequently he called upon the respondent to justify the charging of share premium at Rs. 190/- per share. The respondent furnished the list of its shareholders, copy of the share application form, copy of share certificate and Form no.2 filed with the Registrar of Companies. The justification for charging share premium was on the basis of the future prospects of the business of the respondentassessee. The Assessing Officer did not accept the explanation/justification of the respondent and invoked Section 68 of the Act to treat the amount of Rs. 7.53 crores i.e. the aggregate of the issue price and the premium on the shares issued as unexplained cash credit within the meaning of Section 68 of the Act. (b) Being aggrieved, the respondent carried the issue in appeal. By an order dated 24th May, 2011 the Commissioner of Income Tax (Appeals) (CIT(A)) deleted the addition of Rs. 7.53 crores made by the Assessing Officer by holding that the Assessing Officer had given no reason to conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the preproviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective effect nor does the proviso so introduce states that it was introduce 'for removal of doubts' or that it is 'declaratory', therefore, it is not open to give it to retrospective effect by proceeding on the bases that the addition of proviso to section 68 of the Act is immaterial. Thus, we find merit in the argument of the ld. counsel for the assessee. 2.14. Now, we shall deal with the cases relied upon by ld. DR. One such case is from Hon'ble Apex Court in Sumati Dayal vs CIT (1995) 80 taxman 89(Supreme Court) order dated 23/03/1995 that is also with respect to cash credit and addition under section 68 of the Act. In that case, the facts are altogether different, therefore, cannot be applied to the case before us. Even otherwise, there are later decisions from Hon'ble Apex Court/Hon'ble High Courts and also from the Tribunal which on identical facts supports the case of the assessee. Identical is the situation in the case of CIT vs Durga Prasad More (1971) 82 ITR 540 (Supreme Court). The another decision relied upon by Ld. DR is from Hon'ble Gujarat High Court in Pavankumar Sanghvi vs Income Tax Officer (2018) 90 taxman.com 386 (Guj.), wherein, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g survey and the entire transactions were conducted through banking channel/account payee cheque. As per this retraction, the survey party put mental pressure and the statement was recorded under high BP/hyper diabetic conditions. It is noted that the loan confirmations and copy of ITRs of the concerned parties were filed along with the address of the broker Shri Jitu Bhai. Summons were also issued to Shri Ajay Maheshwari. The addresses of the concerned persons were also filed by the assessee. The Ld. Assessing Officer issued summons under section 131 of the Act to all the lenders and other necessary details were collected from the bank. In response to the summons all the lenders filed their replies on 03/02/2005. The Ld. Assessing Officer observed that most of the lender companies opened their new bank accounts in Induslnd Bank, Opera house Branch on the same date/month, therefore, it was presumed that these are companies floated by Shri Pravin Jain. Undisputedly, even the Ld. Assessing Officer mentioned that the assessee repaid the loans taken from these companies in Financial Year 2014-15 out of the funds introduced by partners as capital. The statement of brokers has been repro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 asked the Ld. Assessing Officer to handover the statements pertaining to Shri Pravin Kumar Jain or its staff members or dummy directors to allow the assessee an opportunity to cross examine Shri Pravin Kumar Jain. The Ld. Assessing Officer was also asked to provide the evidences found during the course of survey action or any evidence that payment was made for obtaining unsecured loans and also efforts so made to examine the loan creditors. The Assessing Officer was asked to conduct necessary enquiries with respect to genuineness of the unsecured loans. The Ld. Assessing Officer vide letter dated 07/01/2017, submitted the remand report as has been reproduced at page-10 onwards of the impugned order. It has been mentioned in para 6.3 of the impugned order that Shri Pravin Jain produced the ledger accounts of Shreedham Builders in the books of his companies alongwith bank statement reflecting all the transactions and also audited balance sheet of last four year along with the copy of the retraction of statement filed before CBDT. Nothing objectionable was found in the documents or statements. All the loan creditors were summoned and the statements of the directors were recorded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same was deleted by the ld. FAA and has not been challenged before this Tribunal by the Revenue further fortifies the case of the assessee. The loans were repaid along with interest before the date of survey i.e. 17/10/2014 and no cash was found during survey further fortifies the claim of the assessee. All the concerned parties appeared before the Ld. Assessing Officer during remand proceedings, the Ld. Assessing Officer recorded their statement and nothing adverse was pointed out even Shri Pravin Jain himself appeared before the Ld. Assessing Officer and even during remand proceedings enquiries were carried out and no adverse remark was made by the ld. Assessing Officer. The assessee as well as the other parties furnished all possible documents evidencing that the loans are not bogus. No cash was found deposited in the accounts of alleged six parties, thus, keeping in view, the totality of facts, attendant circumstances, human probabilities, and in the presence of plausible explanation by the assessee, relevant material, and requirement of fulfillment of ingredients, enshrined in section 68 of the Act, we find that onus cast upon the assessee has been duly discharged, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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