TMI Blog2020 (6) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out through banking channel confirmation account with PAN and address were filed and the loans have been repaid in subsequent year/years - AO has not carried out any further investigation nor pointed out any instance from the bank statement or other documents of these 3 cash creditors to raise suspicion about the genuineness of the loan transactions. If the assessee filed ample evidences to discharge the burden carted upon him and the assessing officer fails to bring any material on record to show that explanation filed by the assessee are unsatisfactory, then addition u/s 68 of the Act for unexplained cash creditors is not justified. Personal appearance of 10 cash creditors out of 13 cash creditors and in the remaining 3 cases also the loan taken has been repaid in subsequent years and all the necessary documentary evidences stands filed, we, are of the considered view that the CIT(A) has rightly deleted the addition for unexplained cash credit u/s 68 - Decided against revenue. - ITA No. 270/Ind/2018 - - - Dated:- 1-6-2020 - Kul Bharat, Judicial Member And Manish Borad, Accountant Member For the Assessee : S/Shri Kunal Agrawal Amit Choudhary, CAs For the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 65,42,060/- made u/s 68 for the reason that assessee could not submit confirmation of the loan creditors to prove the genuineness of the same. The appeal against the above additions were allowed by the Hon'ble CIT (Appeal) vide order dtd.19.01.2018 as under- 1.Basis of deleting addition made u/s 69C of ₹ 2,19,13,800/- Above addition have been made u/s 69C on the basis of Stock Item Movement Analysis Statement which is drawn from the Audited Books of accounts but no defects have been found in such Books of account Bills (Sale Purchases) vouchers produced, not only during the assessment proceedings but also during the remand proceedings (See CIT(A) order page no. 49 to 51 of the paper book) . No defects pointed by the Ld.A.O. in his remand report Dtd. 31.10.2017 while verifying the Correct Statement Movement Analysis Statement with Books of Accounts, Bills (Sale Purchases) vouchers. (See page no. 229 to 232 of the paper book) . The above addition made on the basis of incorrect data furnished by the accountant of the assessee. The information relates to incorrect quantity movement. There was no physical verification of stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase, it was submitted that there occurred unintentional mistake committed by the Accountant employee of assessee in the preparation of item movement analysis sheet. It was also submitted that overall quantitative details i.e. opening stock, purchase and sales and closing stock are duly supported by the documentary evidences and there was no negative stock at any point of time during the year. These submission were not sufficient to satisfy the assessing officer and he after applying the rate of gold i.e. ₹ 2113.80 per gram as on 15.04.2011 and ₹ 2640.00 per gram as on 12.10.2011, completed that the alleged unexplained purchase at ₹ 2,19,13,800/- and made addition u/s 69C of the Act for the unexplained expenditure. 10. When the matter came up before Ld. CIT(A), assessee again reiterated the submissions and Ld. CIT(A) after going through the audited financial statements, remand report by Assessing Officer and other relevant details deleted the addition made u/s 69C of the Act of ₹ 2,19,13,800/- observing as follows: 5.1 'Ground No.l, 2, 3 4 :- Through these grounds of appeal the appellant has challenged the addition of ₹ 2,19, 13,80/- u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m up the account. The AO merely proceeded to make addition which is not permissible under law. The A.O. has not pointed any defects in the additional evidence in the form of , Corrected Stock Movement AnalysisA Statement' submitted which was verified by the A.O. not only with the Books of accounts, Sales and Purchase Invoices but statement of assessee, his accountant and auditor were also taken. Even after verification and checking no defects have been pointed by the A.O. Therefore, the addition made by the AO amounting to ₹ 2,19,13,800/- is Deleted. Therefore, the appeal on these grounds is Allowed. 11. We have gone through the detailed finding of facts by the ld. CIT(A) and also gone through the available records. It is noteworthy that the books of accounts are regularly audited u/s 44AB of the Act. Ld. Assessing Officer had not rejected these books of accounts. As per the audited financial statements and the return of income filed the following particulars showing the quantity and value wise details of opening stock, purchase and sales and closing stock of gold bullion for the financial year 2011-12 stands undisputed:- Statement showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings before the Ld. CIT(A) remand report was called for from the assessing officer and during the remand proceedings the corrected stock movement analysis statement was placed for verification before the assessing officer along with books of account, sales and purchase bills and quantitative records and after verification of all these details Ld. Assessing Officer had not pointed out any defect in the remand report related to any incorrectness in quantity of goods purchased during the year nor any observation of negative stock. 14. Thus, in our considered view, the addition made by the assessing officer seems to base on an incorrect Item Movement Analysis sheet prepared by the Accountant and looking to the overall records maintained by the assessee this mistake seems to be insignificant. Hon ble Apex Court in the case of CIT vs. Padamchand Ramgopal [1970] 76 ITR 719 held that insignificant mistake cannot form basis for rejection of books of accounts. Similarly Hon'ble Apex court in the case of Umacharan Show and Bros vs. CIT (1959) 37 ITR 271(SC) has observed that there was no material on which the Income Tax Officer or the Appellate Tribunal could come to the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r they were Ashya Pratap Soni, Komal Bai Dhammani Sandeep Gupta who gave loan of ₹ 1,12,450/-, ₹ 1,12,450/- ₹ 3,20,295/- during the year. Confirmation of account, bank statement and bank details were duly filed. It was also placed on record that the loans taken from Sandeep Gupta, Komal Bai Dhammani Ashya Pratap Soni were fully repaid during the A.Y.20120-13, 2013-14 and 2014-15 respectively. Based on these details and the remand report Ld. CIT(A) deleted the addition u/s 68 of the Act at ₹ 65,42,060/- observing as under: 5.2 Ground No.5, 6, 7 8:- Through these grounds of appeal the appellant has challenged the addition of ₹ 65,42,060/- u/s 68 of the LT. Act. The AO made the addition on the ground that the appellant failed to furnish the loan confirmation of 13 parties. The appellant during the course of appellate proceedings furnished the loan confirmation in respect of all parties. The loan confirmation has been forwarded to the AO for verification. The AO called all the persons and has taken the statement. The appellant produced the 10 creditors before the AO. The AO examined all the 10 creditors who in turn accepted that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (2012) 19 IT J 52 (Trib. Indore) Identity and credit-worthiness proved-Assessee took loan of ₹ 1,,OO,OOO/- confirmation of creditor was filed-Lower authorities made addition u/s 68 holding that amount was deposited in cash in the bank account of lender immediately prior to date of loan -'HELD-Assessee has established the identity- The party has confirmed the transaction-If AO doubted the transaction, AO should have called creditor u/s 131-Addition cannot be made. Therefore, the addition made by the AO amounting to ₹ 65,42,060/- is Deleted. Therefore, the appeal on these grounds is Allowed. 19. From perusal of the above details filed during the appellate proceeding which have been rightly appreciated by the ld. CIT(A) in the light of the judgment, we are of the considered view that the assessee to the best of his ability has furnished requisite documentary evidences to prove identity, genuineness and creditworthiness of the 13 cash creditors from whom loan of ₹ 65,42,060/- stood taken at the close of the year. It is also noteworthy that out of 13 cash creditors 10 have appeared before the Ld. AO and explained the transactions and for the remaining three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the evidence filed by the assessee remain unrebutted. 21. In the light of above decision we observe that if the assessee filed ample evidences to discharge the burden carted upon him and the assessing officer fails to bring any material on record to show that explanation filed by the assessee are unsatisfactory, then addition u/s 68 of the Act for unexplained cash creditors is not justified. 22. Hon'ble Jurisdictional High Court in the case of CIT vs. Metachem Industries (2001) 116 Taxman 572 held that when cash credit is found in assessee firms books and assessee has established that amount has been invested by a particular person, responsibility of firm is over and there is no requirement on part of assessee-firm to further show whether amount invested has been properly taxed in creditor s hands. 23. Further in the case where the assessee discharge his duty satisfactorily given all required details the burden shifts on the revenue to disprove the evidences filed by the assessee and if it is unable to do so then the assessee deserves relief. Hon'ble Supreme Court in the case CIT vs. Orissa Corporation P. Ltd. 159 ITR 78 laid down ratio had held that when t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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