TMI Blog2019 (12) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness of the creditors and genuineness of the transactions through cogent and credible evidences. In case the assessee did not cooperate in set-aside proceedings, the AO shall be at liberty to adjudicate the issue on merits in accordance with law based on material on record. AO is directed to admit evidences/explanations filed by the assessee in its defense during set aside proceedings. Needless to say that AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law in denovo assessment proceedings - ITA No.1933/Chny/2018 - - - Dated:- 25-11-2019 - Shri Ramit Kochar, Accountant Member And Shri Duvvuru R.L. Reddy, Judicial Member For the Appellant : Mr.G.Surya Narayanan, Adv. For the Respondent : Mr. Guru Bashyam, Addl. CIT ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal filed by assessee is directed against appellate Order dated 27.02.2018 passed by learned Commissioner of Income Tax (Appeals)-15, Chennai (hereinafter called the CIT(A) ), in ITA No.484/2013-14/CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case the loan as well as the repayment has been properly accounted; the creditor has also accounted for the said loan and repayment in their accounts and it is also accepted by their department. Hence both the authorities are wrong in concluding that the said amounts will come under Section 68 is highly improper and liable to be set aside. 6. The order of authorities are liable to be set aside on such further grounds as may be raised at the time of hearing and/or on such further grounds as this Hon'ble Tribunal may deem fit and proper on the facts and circumstances of this case and render justice. 7. It is therefore prayed that the order of the Commissioner of Income Tax Appeals (15) in ITA No. 484/2013 - 14/ CIT (A) - 15 in confirming the order of assessment for the year 2003 - 04 dated 24/12/2007 is liable to be set aside. 3 Briefly stated facts of case are that the assessee is engaged in business of Boarding Lodging and running Bars. The assessee has claimed to have received certain loans, share application money , some of which were received in cash also. The AO invoked provisions of Sec.69D of the 1961 Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on similar lines there was cash receipt from Shri P.M.Balasubramanian, Shri A.Rajkumar and Ms.Saraswathi Gurdas on different dates. Since, no explanation was offered for receipt of cash, the AO initiated penalty proceedings u/s 271D for violation of Section 269SS. On page2, paragraph 4, the AO has tabulated the amounts received by the appellant company in cash totaling ₹ 25,44,388/-. By invoking Section 69D, the AO has concluded that those cash receipts are. unexplained amounts borrowed on a hundi Before the CIT(A), the appellant submitted that out of total credits, only ₹ 15,44,388/- was received in cash, as follows - ₹ 14,82,488/- towards share application money and ₹ 61,900/- towards unsecured loans, and the balance amount of ₹ 10 Lakhs was received by cheque. The appellant has contended before the CIT(A) that since the aforesaid amount was repaid by cheque, provision of Section 69D will not be applicable. In share application money of ₹ 14,82,488, and unsecured loan of ₹ 10,61,900/- the appellant relied on the decision in the case of Uma Polymers Pvt. Ltd. and certain other decisions stating that the AO's addition was unwarranted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed was out of accounted income of the person who advanced the loan. 4.3.5. I have perused the case laws relied on by the appellant and I do not find them applicable to the facts and circumstances of the appellant's case. On the issue of unexplained share application money and unexplained cash credit, I have perused the following decisions in favour of Revenue. A. Provision applies to all credit entries :In the cases where credit entry has been made in the books of the assessee, the ambit of Section 68 is wide and inclusive. Provision applies to all credit entries. The language of Section 68 shows that it is general in nature and applies to all credit entries in whomsoever name they may stand, that is, whether in the name of the assessee or a third party as held in the case of Gumani Ram Siri Ram v. CIT [1975] 98 ITR 337 (Punj. Har.). B. The provision applies to noncommercial loans as well and it was precisely the same as held by the Hon. Calcutta High Court in the case of C. Kant Co. v.CIT [19801 126 ITR 63 (Cal.). observing that Section 68 does not make any distinction between commercial and non-commercial loans. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be explained satisfactorily, it is open to the revenue to hold that it is the income of the assessee and no further burden is on the revenue to show that the income is from any particular source. It may also be pointed out that the burden of proof is fluid for the purposes of Section 68. Once assessee has submitted basic documents relating to identity, genuineness of transaction and creditworthiness then AO must do some inquiry to call for more details to invoke Section 68. 4.3.6. In view of the above remarks, and the decisions relied on, I have come to the conclusion that the appellant could not controvert the AO's observation that the appellant could not discharge its primary onus of explaining the accounted source of its books of accounts to the extent of ₹ 65,44,388. Accordingly, the AO's addition is confirmed and the appellant's grounds are dismissed. 5. In the result, the appeal is dismissed. 5. Being aggrieved by an appellate order passed by learned CIT(A), the assessee has now filed an appeal before tribunal and has raised several grounds of appeal in memo of appeal filed with tribunal assailing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , MCA and prayers are made that the matter/issues may be restored to file of the AO for making necessary enquiries and verification and fresh adjudication . The Ld.DR on the other hand submitted that he had no objection if matter is restored to file of the AO for fresh adjudication. However, it was submitted by learned DR that 10 years have passed and the assessee is adopting delay tactics to protract litigation and prayed that onus is on the assessee to prove that these are genuine loans/deposits which satisfies mandate of Sections 68 69D of the Act. 6. We have considered rival contentions and perused the material on record. We have observed that assessee is engaged in business of Boarding Lodging and running Bars. The assessee has received certain loans/deposits/share application money during year under consideration, aggregating to ₹ 25,44,388/- from various persons, as detailed below:- Name of Lender Amount lent (Cash) Smt.Balagowri V ₹ 2,00,000 Shri Ganesh V.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of contentions made out by assessee were not appreciated by authorities below in right perspective despite all material placed by it before authorities below. It is also made out that appeal of the assessee was kept pending by learned CIT(A) for a period of almost 10 years and effective opportunity was not accorded by learned CIT(A) while disposing the appeal by learned CIT(A). Our attention was drawn to para 3 of learned CIT(A) order . Prayers aremade to set aside the issues in its appeal to the file of the AO for fresh adjudication on merits in accordance with law. We find merit in the contentions of assessee and we are of the considered view that issues in this appeal need to be restored to file of AO for framing denovo assessment on merits in accordance with law. We make it clear that these amounts stood credited in books of accounts of the assessee and primary onus is on assessee to prove identity of the creditors, creditworthiness of the creditors and genuineness of the transactions through cogent and credible evidences. In case the assessee did not cooperate in set-aside proceedings, the AO shall be at liberty to adjudicate the issue on merits in accordance with law based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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