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TMI Blog2016 (6) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... e only effective ground raised by the Department is as under:- "On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition of Rs. 8,12,44,700, made by the Assessing Officer under section 68 of the Income Tax Act, 1961 for unexplained cash credit." 2. Brief facts are, the assessee a company is engaged in the business of dealing in property as well as trading of shares and stocks. For the assessment year under consideration, assessee filed its return of income on 1st November 2007, declaring total income of Rs. 1,15,778. During the assessment proceedings, it was noticed by the Assessing Officer that in the relevant previous year, assessee has received an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the transaction was through banking channel and no further. The Assessing Officer relying upon certain case laws ultimately held that as the assessee failed to discharge its onus of establishing the genuineness of the share transactions and the creditworthiness of the shareholder the amount credited towards share application money has to be treated as unexplained cash credit under section 68 of the Act. Accordingly, he added back the amount of Rs. 8,12,44,700, as income from other sources. Being aggrieved with the additions so made, assessee preferred an appeal before the learned Commissioner (Appeals). 3. In the course of appeal hearing before the learned Commissioner (Appeals), it was submitted by the assessee that the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary evidences furnished before him called for a remand report from the Assessing Officer and after perusing the remand report of the Assessing Officer observed that out of the total share application money of Rs. 8,12,44,700, an amount of Rs. 5,18,44,700 was received in the assessment year 2006-07, hence, cannot be added in the impugned assessment year. He, therefore, directed the Assessing Officer to take necessary action, if required, in the assessment year 2006-07. As far as balance amount of Rs. 2.94 crore is concerned, he found that this amount was paid form NRO account of Shri Vakil, held in J&K Bank Ltd., which has been certificated by the Bank to be genuine and KYC compliant. He also observed that the Assessing Officer has not bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittedly was not received during the impugned assessment year, hence, under no circumstances, such amount can be added in the impugned assessment year. As far as the balance amount of Rs. 2.94 crore is concerned, learned Authorised Representative submitted, the amount has come from NRO account held by Shri Vakil, with J&K Bank Ltd., which is certified by the concerned bank as genuine and KYC compliant account. He further submitted, to prove the identity and creditworthiness of Shri Vakil, assessee has also submitted copy of passport and his net worth certificate from a Chartered Accountant. Thus, it was submitted the assessee having discharged its onus of proving the genuineness of the share application money no addition is called for. As fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs. 5,18,44,700. However, as far as the balance amount of Rs. 2.94 crore, received by the assessee from Shri Vakil on 29th June 2006, there is no dispute that it was received during the impugned assessment year. Therefore, the assessee has to discharge the initial burden of proving the identity of the creditors, his creditworthiness and genuineness of transaction. To prove the aforesaid ingredients, the assessee had submitted certificates issued by J&K Bank Ltd., Srinagar, stating that the NRO account held by Shri Vakil, is KYC compliant and money was received by the assessee from that account. The assessee has further submitted the net worth certificate issued by a Chartered Accountant in case of Shri Vakil, copy of bank statement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the assessee has not established either the creditworthiness of Shri Vakil or the genuineness of the transaction by producing clinching evidences. The learned Commissioner (Appeals) merely going by the fact that the money has come from a KYC compliant NRO account has treated the transaction as genuine. In our view, merely because the investment of Rs. 2.94 crore has come from a KYC compliant NRO account is not enough to prove either the genuineness of the transaction or creditworthiness of Shri Vakil. In our view, it is not fair on the part of the first appellate authority to put the entire onus on the Assessing Officer to prove that the transaction is not genuine or Shri Vakil has no creditworthiness. When the Assessing Officer in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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