TMI Blog2018 (10) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER For the Appellant : Shri Prakash K. Jotwani For the Respondent : Shri Manoj Kumar Singh ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-37, Mumbai [hereinafter in short Ld. CIT(A) ] dated 15.11.2016 for the Assessment Year 2007-08. 2. The only issue in the appeal of the Revenue is in respect of deleting the addition made u/s. 68 of the Act. 3. Briefly stated the facts are that, the Assessing Officer noticed that assessee during the year under consideration received unsecured loan of ₹.50 lakhs from M/s. J.P.K. Trading (I) (P.) Ltd., ₹.77.50 lakhs from M/s.New Plant Trading Co. (P.) Ltd. A.O observed that there is a search and seizure operation in the case of Shri Praveen Kumar Jain Group and Shri Bhanwarlal Jain Group by the Investigation wing of the Department and in the course of proceedings it was established that these persons are in the business of providing accommodation entries to various beneficiary companies. He observed that the said companies have provided accommodation entries as these comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation from M/s. J.P.K. Trading (I) (P.) Ltd. and Page No. 73 of the Paper Book which is the loan confirmation from M/s. New Plant Trading Co. (P.) Ltd. Ld. Counsel for the assessee invited our attention to Page Nos. 71 72 of the Paper Book which are the bank statements wherein the transactions of loans received and paid were reflected. He also submitted that the parties have filed their confirmations, assessee furnished income tax returns of the companies, bank statements of the parties showing the loan transactions. Therefore, it was submitted that all these evidences goes to show that the transactions are genuine. The identify and credit worthiness of the creditors are proved and therefore simply based on the statements given by the Shri Praveen Kumar Jain Group Shri Bhanwarlal Jain Group addition cannot be made treating them as mere accommodation entries. It was also further submitted that the statements given by Shri Praveen Kumar Jain Group Shri Bhanwarlal Jain Group have subsequently retracted by themselves. It was further submitted before us that the Assessing Officer has not provided the cross examination of the persons who gave statements. Therefore, the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer ignored the documentary evidences submitted by the assessee and has exclusively relied on statements of third party in making the addition. In spite of request by the assessee the Assessing Officer did not provide any cross-examination of the parties who have made the submissions. All these aspects have been considered by the Ld.CIT(A) and deleted the addition observing as under: 5.9. From the assessment order, it transpires that the AO has solely relied upon the statement of Mr. Pravin Kumar Jain and did not carry out any worthwhile independent inquiry in the matter. He has totally ignored the documentary evidences submitted by the appellant. The AO in the assessment order has admitted existence of these details. The AO has not pointed out any defect in the above mentioned documentary evidences submitted during assessment proceedings. Without pointing out any lacuna in the evidences submitted by the appellant, the sources and the genuineness of transaction cannot be doubted. Once evidences related to a transaction is submitted before the A.O., the onus shifts on him to prove these as non-genuine. The A.O. has not discharged the onus casted on him. In my op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has also held that the mere statement of a person cannot be a deciding factor for rejecting the genuineness of the purchase of shares by the assessee specially when all other supporting evidences filed by the assessee were neither proved to be false or untrue. The Hon'ble ITAT Mumbai in the case of ITO vs Anand Shelters Pvt.Ltd. (2012) 20 Taxmann.com 153 has enumerated certain principles which would be extremely useful in understanding 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year. In this, case the legislative mandate is not in terms of the words shall be charged to income-tax as the income of the assessee of that previous year . The Supreme Court while interpreting similar phraseology used in section 69 has held that in creating the legal fiction the phraseology employs the word may and not shall . Thus the unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as held by the Supreme Court in the case of CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570. 5.16. After considering the totality of facts, the rival submissions, the applicable law and on the basis of discussions mentioned above, I have come to the conclusion that nature and source of credit in the books of account of appellant stands explained. Consequently, addition u/s. 68 cannot be sustained. Therefore, A.O. is directed to delete the addition of ₹ 1,27,50,000/-. This ground of appeal is allowed. 8. On a careful reading o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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