TMI Blog2018 (12) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... as held in the case of Kishanchand Chellaram vs. CIT [1980 (9) TMI 3 - SUPREME COURT] that the materials, which were not supplied to the assessee, could not be used against the assessee. The Hon’ble Supreme Court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] has held that, if the statements of the witnesses were the basis for passing the orders, then not allowing assessee to cross examine witnesses by Adjudicating Authority amounted in serious flaw which make impugned order nullity as it amounted to violation of principles of natural justice. Hence, for these reasons also, the impugned additions cannot be sustained. - Decided in favour of assessee. - I.T.A. No. 6442/Mum/2017, I.T.A. No. 6443/Mum/2017 - - - Dated:- 12-9-2018 - Shri B.R. Baskaran (AM) Shri Ramlal Negi (JM) For the Assessee : Dr. P. Daniel For the Department : Shri Abhi Rama Kartikiyen ORDER Per B.R. Baskaran (AM) : Both the appeals filed by the assessee are directed against a common order dated 7.8.2017 passed by the learned CIT(A)-41, Mumbai and it relates to A.Y. 2011-12 2012-13. The assessee is aggrieved by the decision of the learned CIT(A) rendered in both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warlal Jain. The Assessing Officer, by placing reliance on the decision rendered by Hon ble Supreme Court in the case of Kachwala Gems Vs. JCIT (2006) 288 ITR 10, took the view that receipt of loan amount by way of account payee cheque in itself is not sufficient to establish genuineness of transaction. Accordingly, the Assessing Officer took the view that M/s. Prime Star is benami concern of Shri Bhanwarlal Jain, who utilised the said concern to give accommodation entries to various parties. Accordingly, the AO took the view that the assessee has failed to prove the genuineness of loan of ₹ 75 lakhs taken by him from M/s Prime Star. Accordingly he added the same as income of the assessee in A.Y. 2011-12 u/s. 68 of the Act. The AO also disallowed interest claimed on the above said loan. 4. In A.Y. 2012-13, as observed earlier, the assessee had taken a loan of ` 25 lakhs from M/s. Sonam Gems Pvt. Limited. Following his decision taken in A.Y. 2011-12 in respect of M/s. Prime Star, the Assessing Officer held that the loan amount of ` 25 lakhs received from M/s. Sonam Gems P. Ltd. is also unexplained and accordingly assessed the same in A.Y. 2012-13 as income of the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Kachwala Gems (supra) in order to hold that the transactions through banking channels alone will not prove the genuineness of transactions. The Ld A.R submitted that the Hon ble Supreme Court has no where stated so in the above said decision and hence the tax authorities are not justified in placing reliance on the above said decision. The Ld A.R further submitted that the onus to disprove the documents has been shifted to the shoulders of the assessing officer, but he has not discharged the onus shifted upon its shoulders. He submitted that the AO is not entitled to make addition u/s 68 of the Act without making further enquiries to disprove the case of the assessee. In support of this proposition, he placed reliance on the following case laws:- CIT Vs. Varinder Rawlley (2014) 366 ITR 232 (P H) CIT Vs. Jai Kumar Bakliwal (2014) 366 ITR 217 (Raj) CIT Vs. Gangeshwari Metal P. Ltd. (2014) 361 ITR 10 (Del) DCIT Vs. Rohini Builders (2002) 256 ITR 360 9. The Ld A.R submitted that the assessee has furnished the financial statements and proved the source of the cash credits. He submitted that in the following cases, it has been held that the source of so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to prove the cash credits. In order to discharge the onus, the assessee is required to prove three main ingredients, viz., the identity of the creditor, the credit worthiness of the creditor and the genuineness of transactions. In the instant cases, there is no dispute that the assessee has furnished all the documents and evidences to prove the above said three ingredients. Once the assessee discharges the initial onus, then the onus to disprove them is shifted to the shoulders of the assessing officer. 15. We notice that the assessing officer, in the process of discharging the onus placed upon its shoulders, has asked the assessee to produce the creditors. The assessee has also produced the creditors before the AO and the AO has also taken statements from them. In the statement, both the creditors have confirmed the loan transactions. When the AO confronted the statements given by them earlier, they have disputed the original statements. In any case, on the basis of original statements, the investigation wing has only come to the conclusion that the directors/partners of the above said concerns are under the control of Bhanwarlal Jain. Thus, we notice that the AO, throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the contrary to hold that in spite of the assessee's explanation, the entries could still be held to represent the assessee's income. The Assessing Officer failed to invoke the provisions under section 131 of the Act, the Tribunal had rightly concluded that it was sufficient to delete the addition. 17. Identical view has been expressed by Hon ble Rajasthan High Court in the case of CIT vs. Jai Kumar Bakliwal (366 ITR 217). The Hon ble Delhi High Court has also taken the view that the AO is required to make further enquiry if the assessee has furnished all the materials to prove the cash credits. If the AO fails to do so, he is not entitled to make addition u/s 68 of the Act. It was further held that the mere rejection of evidence without giving reasons is not justified. 18. In the instant case also, the AO did not make further enquiries on the evidences furnished by the assessee. The AO has simply rejected them without assigning any reasons. In fact, the assessee has produced the lenders before the AO, who have also confirmed the loan transactions. Instead the AO has placed reliance on the report given by search officials, brushing aside the confirmation given by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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