TMI Blog2018 (8) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... discharges its onus by proving the satisfactory nature of the loan transactions, then the onus shift upon the AO and in his wisdom, the AO has option of making inquiries from the alleged lenders - No reasons to interfere into or deviate from the findings recorded by the Ld.CIT(A). - Decided in favour of assessee. - I.T.A. No. 7105/Mum/2016 - - - Dated:- 30-8-2018 - SH. R. C. SHARMA, AM SH. SANDEEP GOSAIN, JM For the Appellant : Shri Chaitanya Anjaria, DR For the Respondent : Shri Suchek Anchaliya, AR ORDER Per Sandeep Gosain, Judicial Member: The present Appeal filed by the revenue is against the order of Ld. CIT (Appeal) 30, Mumbai dated 16.09.16 for AY 2012-13 on the grounds mentioned herein below:- 1. Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) erred in holding that the accommodation entries in the names of Marvin Enterprises, Meenakshi Exports, Meenakshi Diamonds Pvt. Ltd. and Mukti Exports were genuine when in the search by the Investigation Wing and later it was conclusively proved that these are accommodation entries only. 2. Whether on the facts and circumstances of the case and in Law, the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nwarlal Jain, during the financial year relevant to the assessment year under consideration. The amount of loans taken from those six dummy concerns is to the tune of 3,83,10,000/- for the year under consideration. In response to the show cause notice issued by the AO, the assessee furnished details of loans received and the interest paid on the loans and copies of the affidavits of the loan lenders etc., through their letters dated 07-01-2015 19-03- 2015. AO considered the submissions and stated that in the search conducted by the investigation wing it was conclusively proved that the group concerns are providing accommodation entries and the unsecured loans in the books of account of the appellant remained unverifiable. AO, arrived at the conclusion that the appellant has taken unsecured loan entries from certain parties to introduce unaccounted cash in its books of account and the creditworthiness and genuineness of the loan creditors/ lender was not established and corroborated by relevant supporting documents. AO also stated that mere filing of evidences such as copies of bank statement showing payment through account payee cheque cannot be conclusive proof or sacrosanct, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him and it would be for the revenue to prove that the transaction is not satisfactorily explained and provisions of section 68 of the Act are applicable. 6.3.28 In the case before me, the record also shows that to prove the genuineness of the impugned loan entries from the 6 creditors, the appellant has furnished to the Assessing Officer the following details copies of which were also furnished in the present proceedings: I. PAN details of creditors II. Constitution and address of the creditors III Particulars of income-tax returns filed by the creditors [These show that the creditors are legitimate business entities, having the ability to advance the impugned loans to the appellant.] IV. Confirmatory letters given by the creditors V. Audited financial accounts (including balance sheets) of the creditors [These show that the loans are duly reflected in the books of account of the creditors.] VI. Relevant bank statements of the creditors [These show that the loan amounts were paid through legitimate banking channels. Further these bank statements do not reflect any movement of cash, essential to hawala transactions.] VII. Details of interest paid to the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been relied upon; and, (4) failure to recognise the satisfactory nature of the explanation / evidence tendered by the appellant to explain identity of creditors, creditworthiness of the creditors and the genuineness of the loan transactions. Hence, the impugned addition of ₹ 3,83,10,000/- is hereby deleted. 7. In the later part of Ground No. 1, the appellant raised the issue of addition made towards the disallowance of interest payment of ₹ 21,30,894/- on the said non-genuine loans. 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 deleted after discussing the issue in detail in the above paragraphs. In view of the reasons stated above, since the loans are treated as genuine and the interest is debited to the profit and loss account on the said loans, the disallowance of interest is also deleted on the same facts and legal position as discussed above. Ground No. 2 is with regard to initiation of penalty proceedings u/s 271(1)(c) of the Act, by the Assessing Officer. As far as challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of interest paid to the creditors and viii) Details of TDS deducted and paid. 8. In this way, the assessee has provided all possible documentary evidence to prove the identity of the creditors from whom the impugned loan was obtained. 9. Another important aspect of this case is that, that all the loans as were obtained were also repaid through the banking channel regarding this, a duly notorised affidavit was filed by the assessee and the details of which are already contained in para no. 6.3.12 of the order of Ld. CIT(A). Even otherwise, it is a settled law that once the assessee discharges its onus by proving the satisfactory nature of the loan transactions, then the onus shift upon the AO and in his wisdom, the AO has option of making inquiries from the alleged lenders. 10. Even the Coordinate Benches of ITAT in series of decisions have deleted the additions under the similar circumstances. In this respect, we refer case tiled ITO Vrs. M/s Vikram Muktilal Vora in ITA Nos. 842/Mum/2017, ITO Vrs. Gujrat Construction in ITA No. 7040/Mum/2016, ACIT Vrs. Shri Dilip Chimanlal Gandhi in ITA No. 7079/Mum/2016, Shri Naresh Hiran Vrs. ITO in ITA No. 1236/Mum/2017, ACIT Vrs ..... 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