TMI Blog2019 (8) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, the AO had not made any dent on these lines. On the other hand the appellant has filed all the details and supporting documentary evidence to prove the identity, genuineness and creditworthiness of these three unsecured loan parties No new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, these ground raised by the revenue stands dismissed. - I.T.A. No. 6561, 6562 & 6564/Mum/2017 - - - Dated:- 3-4-2019 - Sh. Sandeep Gosain, JM And Sh. N. K. Pradhan, AM For the Appellant : Shri Abi Rama Karthikeyan, DR For the Respondent : Shri Rajiv Khandelwal, AR ORDER PER SANDEEP GOSAIN, JUDICIAL MEMBER: The present three Appeals have been filed by the revenue against the order of Commissioner of Income Tax (Appeals)-32, Mumbai, dated 31.08.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, it was held by the AO that the unsecured loan taken by the assessee from M/s Duke Business P Ltd. (JPK Trading Pvt Ltd.), M/s Casper Enterprises Private Limited (Oswal Trading Pvt. Ltd.) and M/s. Nakshatra Business P Ltd. (Hema Trading P Ltd) was nothing but an accommodation entries taken by the assessee. Thus, AO made additions u/s 68 of the Act by treating the amount of ₹ 1,50,00,000/- as unexplained cash credit and accordingly treated it as income and added to the total income of the assessee. 5. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee and deleted the additions made u/s 68 of the Act. 6. Aggrieved by the order of Ld. CIT(A), the revenue has filed the present appeal before us on the grounds mentioned herein above. Ground No. (i) to (iii) 7. These ground raised by the revenue are inter connected and inter related and relates to challenging the order of Ld. CIT(A) in deleting the addition made by AO u/s 68 of the Act, therefore we thought it fit to dispose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uery with regard to the above issue having been made during the assessment proceedings would also indicate absence of application of mind to the tangible material, and reopening is valid. (iii) It was held in the following cases that when there is no discussion on this issue and no details are called for by the AO or filed by the appellant and no findings either positive or negative in the original assessment proceedings, reopening cannot be construed as change of opinion. 1. ALA Firm vs. CIT (102 ITR 622) (Mad HC) 2. Ess Kay Engineering Company Pyf. Lfcf vs. CIT (247 ITR R18)(SC) 3. Revathi CP Equipments Ltd vs. DCIT 0rs (241 ITR 856)(Mad HC) 4. EMA India Ltd vs. ACIT (30 DTR 82) (AIL HC) (iv) The Hon'ble Supreme Court in the case of Kalyanji Mavji Company v. CIT (102 ITR 287) (SC) (1976) has held that there is no change of opinion if the assessment is reopened on new facts which came to notice subsequent^, even though they are already on record. (v) The Hon'ble Gujarat High Court in the case of Praful Chunilal Patel and Vasanth Chunilal P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he can reopen the assessment by recording the reasons. The AO will be within his jurisdiction to reopen the assessment and his jurisdiction cannot be challenged per se Further it is to be understood that mere reopening does not mean that the AO has come to the conclusion that income has escaped' (x) The Hon'ble High Court of Bombay in the case of Eleganza Jewellery Ltd.(2014) 52 taxmann.com 46 has neid mat it is a true law that at this stage only a prima facie view of the AO is necessary to issue notices and not a cast iron case of escapement of income. Similar views were also expressed in the following cases, 1. High Court of Delhi in the case of Mahanagar Telephone Nigam Ltd.(2000)112 Taxman 337 2.SC in the case of Central Provinces Manganese or co. Ltd. (1991) 191 ITR 662 . 3..SC in the case of Selected Dalurbrand Coal Co tj Ltd (1996) 217 ITR 597 (xi) The Hon'ble High Court, of Bombay in the recent decisions in the following cases while dealing with bogus purchase/loans issues has ruled that the initiation of reassessment proceedings on the basis of survey operations, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 1,50,00,000/- During the appellate proceedings, the Id AR has filed detailed submissions and other relevant documents in a paper book. He has also referred to several case laws on which they rely in support of the ground of appeal. I have carefully considered the facts of the case and submissions of the Id AR. I have also gone through the decisions relied on by the AO and Id AR It is observed that during the assessment proceedings the appellant has filed relevant details required to prove the identity and creditworthiness of the investing companies and the genuineness of the transactions in the form of PAN, incorporation certificate, memorandum of associate, IT return copies, confirmations, bank statements audited accounts etc as evident from the record. The Id AR has further argued that the transaction has taken place through banking channels, therefore the genuineness of the investment can not be doubted. Hence the AR argued that appellant has discharged its onus and the identity, genuineness and creditworthiness of the four companies were proved beyond doubt The excessive reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cheque payments. Further he has not provided the corroborative evidence or document which he relied on to the appellant and also failed to prove how the details like PAN, IT returns, audited financials, incorporation certificates, bank statements etc can not be taken note of in this regard. The Hon ble Mumbai ITAT in the case of Anant shelters P ltd 20 Taxmann corn 153(2012}.has laid down certain principles with regard to section 68 which the AO is bound to follow. It has observed as under: (i) section 68 can be invoked when following three conditions are satisfied - (a) when there is credit of amounts in the books maintained by the assessee (b) such credit has to be a sum of money during the previous year (c) either the assessee offers no explanation about the nature and source of such credits found m the books or the explanation offered by the assesses, in the opinion of the Assessing Officer, is not satisfactory. It is only then that the sum so credited may be charged to income-tax as the income of the assessee of that previous year. (ii) The expression the assessee offers no explanation means the assessee offers. no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Amount appearing in the books of account of the assessee is considered a proof against him. He can prove the identity of the creditors by either furnishing their PANs or assessment orders. Similarly, genuineness of the transaction can be proved by showing that the money WOK received by an account payee cheque or by draft. Creditworthiness of [lie lender can be established by attending circumstances. Once the assessee produces evidences about identity, genuineness and creditworthiness of the tender onus of proof shifts to the revenue. 2.4.8 The Honble Apex Court in the case of Lovely Exports Pvt Ltd. 216 CTR 195(SC) 2008 held that the AO is at liberty to bring to tax the amounts in their respective hands of the investors if their identity, genuineness and creditworthiness is not proved. The AO should have made efforts to assess the amounts in the hands of the investors at least on protective basis. Even in case, the creditworthiness of the investors Js not proved it will not automatically give license to the assessing authority to make additions in the hands of the recipient u/s 68 unless it is proved th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3.1 of the order of Ld. CIT(A). It was submitted that the assessee had taken and /or repaid unsecured loans to the parties during the normal course of business or furtherance of business. In this regard, Ld. AR had also drawn our attention to para no. 2.1 of the order of Ld. CIT(A), wherein the detail in the shape of chart has been submitted. It was submitted that the AO had made an erroneous observation that the creditworthiness of the parties was not established whereas during the assessment proceedings, the assessee had submitted the confirmation alongwith all supportive documents in respect of receiving and repaying unsecured loans from the parties. Assessee had also submitted documents in respect of confirmation in respect of unsecured loans from the lending parties. It was submitted that the parties had responded to the notices issued u/s 133(6) of the Act to the lending parties and had submitted the requisite details. The said loans were advanced through proper banking channels and in this respect, proper identity of the lending parties was proved. Ld. AR also relied upon the decision of Hon ble High Court in the case of CIT vrs. Kapurchand Mangeshchand, wherein it was he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sought for by the AO. Whereas the AO while making the additions had excessively relied upon the statement given by the third-party i.e, key persons of Pravin Kumar Jain group, whom the assessee does not know is considered to be not proper as the assessee was never given a chance to cross-examine the persons, who had given such adverse statements. Even the corroborative evidence with regard to payment of cash as against the receipt of cheques has also not been proved. The AO had only believed the solitary statement of the key-persons of Pravin Kumar Jain group by holding that they were involved only in bogus transactions by giving accommodation entries by giving cheques in exchange of cash through their group entities. At the same time, it was ignored that all the statements were retracted by Pravin Kumar Jain and all his associates. In the present scenario, the AO had failed to disprove the genuineness of the transactions of unsecured loans received. We have gone through the paper book filed by the assessee and noticed that the transactions were routed through the banking channels and thus the source cannot be doubted. It is a settled law that suspicious howsoeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a casual manner. Assessee cannot be asked to prove impossible. Explanation about 'source of source' or 'origins of the origin' cannot and should not be called for while making inquiry under section (iv) In the matters related to section 68 burden of proof cannot be discharged to the hilt - such matters are decided on the particular facts of the case as well as on the basis of preponderance of probabilities. Credibility of the explanation, not the materiality of evidences, is the basis for deciding the cases falling under section 68. (v) Though confirmatory letters or account payee cheques do not prove that the amount in question -s properly explained for the purpose of section 68 and assessee has to establish identity and creditworthiness of the creditor as well as the genuineness of the transaction,, it is also true that money received through foreign remittance with RBl approval is a strong indicator of bona fide of the cash credit that has to be disapproved o/;/y vv-m positive evidence. (vi) In matters regarding cash credits, the onus of proof is not a static one. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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