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TMI Blog2018 (5) TMI 1862X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in providing accommodation entry of unsecured loans and related to Bhanwarlal Jain and his group." 3. "On the fact and in the circumstances of the case the finding of the Ld.CIT(A) that the AO has only discussed the facts of Bhanwarlal Jain group and the AO has not appreciated the fact he was not making the assessment of Bhanwarlal Jain. This finding is perverse on facts as the assessee has introduced the accommodation entries of loan from the group concerns controlled by Bhanwarlal Jain as such the AO's finding and reliance placed on the investigation made by the Investigation Wing was right." 4. "On the fact and in the circumstances of the case the finding of the Ld. CIT(A) that the assessee has proved identify, creditworthiness and genuineness of loan is perverse on facts as the assessee has not furnished any evidence to justify the creditworthiness and genuineness of the loan." 5. "The appellant pray that the order of the Ld. CIT(A) on the above ground be set aside and that of the AO be restored." 6. "The appellant craves leaves to amend or alter any ground or add a new ground." 2. The facts of the case are that the assessee, a partnership firm engaged in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2015, submitted that it has loan taken from M/s. A2 Jewels and Jewel Diam and said loans have been taken by cheque. The assessee further submitted that the loans were repaid in subsequent financial year along with interest and also deducted TDS on interest paid on loans. Therefore, merely on the basis of statement of third party, the loans taken from above two parties cannot be considered as accommodation entries. The Assessing Officer after considering relevant submissions of the assessee observed that the assessee has failed to prove the identity of the parties, genuineness of the transactions and creditworthiness of the lenders with necessary evidences in the backdrop of clear findings from the Investigation Wing, wherein Shri Bhanwarlal Jain had categorically admitted before the authorities that he was involved in providing accommodating entries through his companies operated by his employees. The Assessing Officer further submitted that mere production of ledger account and bank statements would not be sufficient compliance of proving the identity, genuineness of transactions and creditworthiness of the parties. Therefore, opined that the assessee has failed to prove the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the issue in hand. It has been stated in the said judgment that over the years, law regarding cash credits have evolved and has taken a definite shape. A few aspects of law u/s 68 can be enumerated 1. Sec. 68 can be invoked when there is a credit of amounts in the books maintained by the assessee, such credit is a sum of money during the previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory is required to be formed objectively with reference to the material on record. 3. Courts are of the firm view that the evidence produced by the assessee cannot be brushed aside in a casual manner. 4. The onus of proof is not static. The initial burden lies on the assessee to establish the identity and the credit worthiness of the creditor as well as the genuineness of transaction. 5. The identity of creditors can be established by either furnishing their PANs or assessment orders. The genuineness of the transaction can be proved if it was shown tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Wing. While the information provided by the Investigation Wing can be the starting point of an enquiry it cannot be a conclusion reached by the AO, The moot point before the AO was to examine the application of section 68 in the case of the appellant. Instead of establishing that the explanation offered regarding the nature and source of credit in the books of the appellant is not satisfactory the AO went to discuss in detail the facts related with Bhanwarlal Jain group of cases. The AO has not appreciated the fact that she was not making assessment of Bhanwarlal Jain group of cases. On the other hand, the appellant was able to establish the identity and the creditworthiness of the creditors as well as the genuineness of transactions. 4.7 Recently the Hon'ble Bombay High Court has passed an order in WP No. 167 of 2015 dated 15.04.2015 in the case of M/s Rushabh Enterprises Vs ACIT 24(3) and Ors. In this case also the assessee had taken loan from related with Bhanwarlal Jain group of cases. In fact, one such namely M/s Jewel Diam also features in the case of the appellant. In its order the Hon'ble Bombay High Court in addition to deciding the legal validity of reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the orders of the authorities below. The Assessing Officer made addition towards unsecured loans from M/s. A2 Jewels and Jewel Diam, on the ground that these parties were engaged in providing accommodation entries of unsecured loans through companies maintained by Shri Bhanwarlal Jain. According to the Assessing Officer Shri Bhanwarlal Jain has admitted in the statement recorded u/s. 132(4) that he is involved in providing accommodation entries through these companies The Assessing Officer further admitted that though the assessee filed certain evidences to prove the identity, he failed to prove the genuineness of the transactions and the creditworthiness of the lenders in the backdrop of the clear findings from DGIT (Investigation), where the fact of providing accommodation entries has been brought out with evidences. The Assessing Officer further observed that although the assessee has filed certain evidences to prove the identity of the parties, the parties failed to appear in response to notice u/s. 133(6). Therefore, mere furnishing of ledger extract and bank statements would not be sufficient compliance to prove the identity and genuineness of the transactions. 7. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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