TaxTMI 
TaxTMI 
2019 (12) TMI 665
X X X X Extracts X X X X
X X X X Extracts X X X X
....Appeals) in confirming the order of the assessing officer is highly illegal, improper, against the facts and circumstances of the case, against the material evidence on record, perverse and liable to be set aside. 2. The authorities below failed to consider that Rs. 14,82,488/- representing the share application money had been accounted for and the proper proof as to return of allotment in Form 2 and annual return filed with the registrar of companies were enclosed with the appeal grounds and produced before the assessing authority and both of them failed to consider the same by holding that no material evidence was produced for the said purpose is highly perverse and without considering the material document is highly illegal, and liable to be set aside. 3. The appellate authority failed to note that for no fault of the appellant that appeal was kept pending for 10 years and all of a sudden in a haste and without offering a persona! hearing would show that the appeal has not been decided in accordance with law and the order is liable to be set aside. 4. The assessing Officer as well as appellate authority failed to note that only the initial onus that will be on the appellan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sory notes in support of aforestated loans and hence these cash loans were deemed to be income of the assessee by AO , vide assessment order dated 24.12.2017 passed by AO u/s 143(3) read with Section 147 of the 1961 Act 4. Being aggrieved by an assessment framed by AO , the assesse filed first appeal with learned CIT(A) who was pleased to dismiss appeal of the assessee , vide appellate order dated 27.02.2018 passed by learned CIT(A) , by holding as under: 4.3. CIT(A)'s remarks and decision : I have carefully gone through the observation of the AO in the assessment order as mentioned above under para 4.1 and the appellant's submission before the CIT(A) under para 4.2. 4.3.1. After perusing the ledger folios for loan account and building construction, the AO noticed receipt of cash from Srhi P.M.Gurudas towards share application money and 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as received as unsecured loans. In this regard, the appellant's contention that Rs. 10 Lakhs was repaid by cheque in subsequent year does not absolve the appellant of its primary onus of proving the identity, genuineness and capacity of the lender at the time of receipt in this AY. Since the appellant has not controverted the AO's observation that the appellant received unsecured loan in cash, I concur with the AO's addition to the extent of Rs. 10,61.900/- u/s 69D. As per Section 69D, a cash loan received shall be deemed to be income of the person borrowing unless it is proved that the said amount is the income of any other person. Here, the appellant has not submitted any material evidence to demonstrate that the amount borrowed 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he transaction. Only when these three ingredients are established prima facie, the department is required to undertake further exercise." E. Onus of proof: Prima facie onus is always on the assessee to prove the cash credit entry found in the books of account of the assessee. In land mark cases like Kale Khan Mohammad Hanif v CIT [1963] 50 ITR 1 (SC), Roshan Di Hatti v CIT [1977] 107 ITR (SC) it has been held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee, is on him. Where the nature and source thereof cannot 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 n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cognizance of these details. It is also claimed that some of loans were even repaid by account payee cheque along with interest which has not been considered by authorities below. It is submitted that with respect to share application moneys received, the shares stood allotted to the persons advancing share application money. The assessee has filed an affidavit of Shri P.M.Gurudas, Managing Director of the company along with Form No. 2 , list of shareholders and Annual Return of the assessee company filed with Registrar of Companies, 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 as....