TMI Blog2020 (11) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri V. Vinod Kumar, Sr. A.R., Shri Sandeep Raj, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The above titled six appeals have been preferred by the Revenue against the orders dated 27.12.2018, 28.12.2018, 27.12.2018 12.12.2019 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] and all relevant to assessment year 2011-12. ITA No.178/M/2020 2. The grounds raised by the Revenue are as under: 1. Whether on the facts of the instant case and in law, the Ld. CIT(A) erred in deleting the unexplained cash credit received from bogus entities as established by the AO and duly supported by the enquiries conducted by the Income Tax Authorities. 2.Whether on the facts of the instant case the Ld. CIT(A) was correct in deleting the addition made by the AO, when the assessee had failed to discharge its primary onus under section. 68 of the I.T. Act. 3.The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal. 4. The appellant prays that the order of CIT(A) on the above ground be set-aside and that of the assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent entities and shell companies. Accordingly, a notice was issued under section 148 on 29.03.2018 to the assessee which was complied with by the assessee by filing a return of income on 26.04.2018 declaring income of ₹ 48,790/-. Thereafter, assessee sought the reasons for reopening the assessment which was duly supplied to the assessee. During the course of assessment proceedings voluminous details were called for from the assessee to prove the identity , creditworthiness of the lender and genuineness of the transactions. The assessee filed the said details from time to time. Besides the AO also issued notice under section 133(6) to Minaxi Suppliers Pvtt. Ltd calling for various details as narrated in para 10 of the assessment order. The said company has also furnished the various details before the AO beside submitting that ₹ 9,85,00,000/- were funded to the assessee under Joint Venture Agreement. The details of bank statements and details of collaterals etc were also supplied. The AO came to the conclusion that the assessee has routed its own money through non existent and shell companies and thus not satisfying the three ingredients as envisaged by the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds to Dolphin Vintrade Pvt. Ltd., G P M Portfolio Management Pvt. Ltd., Impression Suppliers Pvt. Ltd., Avon Vanijya Pvt. Ltd., Dolphin Vintrade Pvt. Ltd., Ratnakar VincomPvt. Ltd.(hereafter referred as Layer Al). From these accounts the funds were routed to Minaxi Suppliers Private Limited and from Minaxi Suppliers Pvt. Ltd. the funds were transferred to the assessee company Thus the assessee had brought back unaccounted money into their books of accounts using banking channel after layering the funds through bank account of mexistent entities and shell companies. As per the information, the unaccounted money rerouted into the books of accounts of the assessee after layering funds through banking channels of various non existent and shell companies is ₹ 9.85,00.000/-. In this context it is pertinent to peruse the provisions of section 68 of the I f Act The provisions of section 68 of the ST Act, 1961 before amendment (i.e. prior to AY 2013-14} are as under: Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liers Pvt. Ltd. during the period under consideration. xiii. Copy of confirmation relating to the amount of contribution received from Minaxi Suppliers Pvt. Ltd. xiv. The Appellant also submitted on 19/12/2018, the copy of Affidavit submitted by MS PL- during the course of Assessment. The contents of the Affidavit is as under: AFFIDAVIT I, Navin Jain, an adult, an Indian inhabitant, and having office address at Damayanti Apartment, Ghosh Para Jyangra, Ground Floor Near Jangra High School, Baguihati, Kolkata : 700059 do hereby for and on behalf of the MINAXI SUPPLIERS PVT. LTD. do hereby declare on solemn affirmation as under- 1. That I was the director of the MINAXI SUPPLIERS PVT LTD. (CIN: U51909WB1996PTC078940, PAN: AACCM0476B) in Financial Year 2010-11. I know the entire facts of Joint ventures with ZIMITH PROPERTIES PVT. LTD. 4. Minaxi Suppliers Pvt. Ltd have given a sum of 9,85,00,000/- (Rupees Nine Crore Eighty Five Lakhs Only) toward the Joint ventures for purchase of land. 5. That our company MINAXI SUPPLIERS PVT. LTD. has funded the sum of 9,85,00,000/- (Rupees Eight Crore Twenty Lakhs Only) under Joint Venture with M/s. Supergold Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n business, thus company was not charged any interest on funded amount with the agreed terms. 7. That PAN of our company is AACCM0476B and addressed to income tax Kolkata, India. 8. That our company's shareholder's fund was 79,31,57,250/- as on 31.03.2010 as per the Audited Balance Sheet of the Company with is filed Income tax as well as Register of Companies. 9. That above investment of 9,85,00,000/- (Rupees Nine Crore Eighty Five Lakhs Only) was from our own fund and not from borrowed fund. 10. The company has filed Return of Income voluntarily every year time to time. Whatever stated above is true and correct to the best my knowledge and belief Verified Day of Kolkata The assessee during the assessment proceedings and also during the appellate proceedings, submitted its financial statements, Confirmation letter from the investor, Company master data of the investor, and financial statements of the investor and copies of various judgements it relied upon in support of its contention and claimed that it complied with the provisions of Sec 68. During the course of appellate proceedings, the appellant filed name, address and PAN of the investor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT Vs M/s Precision Finance Pvt Ltd (208 ITR 465). In this case the appellant has produced a valid confirmation letter proving the identity of the creditor. Similarly, ledger account and bank statements prove the genuineness of the transaction. The balance sheet submitted by the appellant proves that the investor had sufficient own money to invest proving creditworthiness of the party. For enhancing the evidentiary value, the appellant produced assessment orders passed u/s 143(3) of the Act in the case of MSPL for AY 2010-11 and AY 2012-13. (AY 2011-12 was not under scrutiny as stated by AR. Therefore, the material produced on record are adequate to comply with the provisions of Sec 68 of the Act. The AO has rejected the -submissions on the ground that the assessee failed to explain the nature and genuineness of the receipt of the funds from MSPL on the basis of report of Investigation Wing. The assessment order reveals that the addition is entirely based on the report received from Investigation Wing, The AO did not bring any corroborative evidence or supporting material to prove that the money has been routed from various hawala parties as alleged in the Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigation u/s 68 of Income-tax Act, 1961. The AO has analysed the financial strength of the appellant company and also the creditor M/s. MSPL to disprove the genuineness of the transaction and has presumed that the transaction was not as per business prudence. It is already mentioned that addition cannot be made on the basis of presumption, surmise and conjecture. The AO has also doubted the source of funds of the coventurer. The provisions of Sec 68 as stood during the year under consideration do not entail the assessee to prove the source of source of funds. The assessee further informed that the lender M/s. MSPL's bank account for the relevant period did not show any cash deposits; on this count also the assessee has explained that the source of funds, when there were no cash deposits in the bank account of either the assessee or the lender, merely on suspicion the inference cannot be drawn. The above contention of the assessee has got force, hence, the same is considered. Further, the AO had a finding that MSPL liquidated its investments in unquoted shares to give noninterest bearing advances to the assessee company. On the other hand the assessee submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s MSPL were submitted wherein the MSPL had a networth of ₹ 79,31,57,250/- as on 31,03.2011 which proves the creditworthiness of the lender. It is also submitted by the assessee that the lender affirmed in the Affidavit that it had advanced the amount to the assessee from their own fund but not from borrowed fund. This categorically proves the creditworthiness of the lender. This also proves that there were no cash deposits in the Bank account of the lender during the relevant period. From the above, it can be said that the assessee has done everything in its control to establish the bonafides of the transaction. After considering relevant facts and various judicial precedents it is to be held that, once assessee files necessary evidences to prove identity, genuineness of transactions and also files necessary documents to prove capacity of the investor, then the AO cannot make additions. The appellant- has also relied on the following case laws wherein the facts are similar to the assessee's facts. i. Hon'ble Bombay High Court in the case of Orient Trading Co. Ltd. V/s. (1963) 49 ITR 723 (Bom.).: Where any credits are found in the books of the assessee, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and in law the Tribunal is correct in interpreting Sec. 68 to hold that the A.O. was not entitled to enquire into the source of the source to come to a finding that a particular credit was not genuine in terms of Sec. 68. After detailed discussion, the Hon. Court held that the assessee has submitted all the required details, the assessee is not supposed to explain the Source of Source of Receipts. Besides, the Statute by an amendment to Sec 68 of the Act w.e.f. 1.stApril, 2013, effective from asstt.year 2013-14. Therefore during the subject asstt.year there was no requirement to explain the Source, of the Source. Be that as it may, the impugned order of the Tribunal held that the respondent assessee had discharged the onus placed upon it under Sec. 68 of the Act by filing confirmation letter, the Affidavits, the full address and PAN Numbers of the Creditors Therefore, the Revenue had all the details available with it to proceed against the persons whose source of funds were alleged to be not genuine as held by the Apex Court in CIT v. Lovely Exports (P) Ltd. (2009) 319 ITR (ST) 5 (SC). Hence the Court held that the Department cannot ask the Source of the Sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance of share capital and share premium. This by itself cannot lead to presumption that these sources are bogus without any enquiry. In these circumstances in our considered opinion, the Id. DR's request that this issue be again remitted to the file of the A.O. to make further necessary enquiries cannot be entertained. The decision of the Hon'ble Karnataka High Court referred by the Id. DR was on a different set of facts, wherein, the Hon'ble Karnataka High Court on the facts and circumstances of the case had upheld the certain direction of the ITAT in the present case, as pointed out hereinabove, in our considered opinion, the assessee has discharged its onus. As noted above, the A.O. has not brought on required cogent material to rebut the documentary evidence submitted by the assessee nor he made any enquiry. As noted above, the assessee has given all the necessary evidence including the confirmation letters, bank statement, financial statements of the corporate entities. Hence, in our considered opinion, the identity, creditworthiness, genuineness of the transaction has been proved by the assessee and the onus cast upon the assessee has been discharged. In the back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing officer in respect of Loan borrowed from a company subject to investigation by the Kolkata Investigation Wing and the information of which is forwarded to the Assessing officer in the order passed vide ITA No.7460/Mum/2016 of Assessment Year 2009-10 and ITA No. 6807/Mum/2018 of Assessment Year 2010-11 vide order dated 26 June, 2019: We find that the identity, credit worthiness and genuineness of the M/s Basant Marketing Private Ltd is not in dispute. Sufficient evidence has been given in these cases to prove the identity, genuineness and creditworthiness of the M/s Basant Marketing Private Ltd. The CIT(A) has specifically pointed out this fact that no evidence is on record to which identity, creditworthiness and genuineness of the claim of the loan can be doubted, Taking into account was all these facts and circumstances, we are of the view that CIT(A)has decided the matter of the controversy judiciously in correctly which is not liable to be interfere with at this appellate stage Accordingly, these issues are decided in favour of the assessee and against the revenue. 4. ITO -4 (1) (3), Mumbai vs Aqarwal Cloth Agency Pvt Ltd (ITA : 2969/Mum/2017) order dated 23.08.2019 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter and considering the case laws discussed hereinabove, we are .of the considered view that the Ld. CIT(A) has rightly deleted additions made by the AO towards share capital received from three companies, on the basis of various evidences filed by the assessee, including confirmation letter from ITA No.2969/Mum/2017 Agarwal Cloth Agency Pvt. Ltd. the shareholders. We do not find any error or informative in the findings of Ld. CIT{A) and hence, we are inclined to uphold order of the Ld. CIT(A) and dismissed appeal filed by the revenue. 6. Income tax Officer 20(2)(5), Mumbai v.Smt. Pratima Ashar, reported in (2019) 107 taxmann.com 135 (Mum Tribunal), 11 dated 6th June, 2019. We have given a thoughtful consideration to the facts of the case, and are unable to persuade ourselves to subscribe to the view taken by the A.O. As per Sec. 68 of the I-T Act, the assessee remains under a statutory obligation to substantiate both the Nature and Source of a 'sum' found credited in his books of accounts maintained for any previous year. In case, the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O to be the companies which were controlled by Shri. Praveen Kumar Jain, an infamous accommodation entry provider, therefore, it was all the more onerous on the part of 'the A.O. to have demonstrated on the basis of supporting 'material that accommodation entries in the garb of loans was provided by the said six companies by adopting the modus operandi of Sh. Praveen Kumar Jain and his group entities. However, we find, that as observed by us hereinabove, the A.O except for harping on the fact that the assessee had raised the loans from the companies which were controlled by Shri Praveen Kumar Jain, had absolutely done nothing which would conclusively prove that no genuine loans were raised by the assessee from the aforesaid companies. On the contrary, the notices which were issued by the AO under Sec.133(6) to the aforementioned companies, wherein they were called to share certain information viz. nature of activities of the lender companies, source for giving the loans etc., were duly complied with by the said concerns and the requisite documents were placed on the record of the A.O by the aforementioned companies. We find that the A.O who ought to have made necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f all these companies from whom the assessee has taken unsecured loan as well as share application money, the Id Assessing Officer has not at all carried out any investigation to show that: a. those companies do not exist but are paper company, b. they are not having worth of investing in the company and the transaction lacks genuinity despite having their income tax details and annual accounts. c. Despite specific request, no details are called for either from the assessee or form the investor/lender companies or from bankers. d. Despite specific request by assessee, no summons u/s. 131 or inquire letter u/s. 133 (6) of the act were issued. e. No inspector report with respect to the investor/lender company was obtained or available with AO. f. Investigation wing report was not mentioned or shown about the assessee. 35. In fact, Id Assessing Officer should have either obtained the complete details from the MCA Website or should have issued 133(6) query letter to the Registrar of Companies for obtaining the annual reports, annual returns under the Companies Act and share holders director's details since beginning of those companies. He should have further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t extent he must do the investigation and inquiry, but we are of the view that he is bestowed up on with immense power under the income tax act as well as other acts. None of them has been looked at leave aside the exercise of such powers. In such .circumstances,- it is apparent that Id AO does not have any evidence to allege that share application money as well as such loans taken by the assessee is bogus. Hence, we are of the view that assessee has discharged initial onus cast-up on him u/s. 68 of the act with respect to loan as well as share application money. 36. The Id CIT DR relied upon plethora of decisions to support the case of the revenue, but in absence of any evidence collected by the Id AO, they do not advance the case of the revenue, still, we deal with them as under:- (a) Ld. CIT DR heavily relied up on the decision of Hon'ble Delhi High Court in CIT V. Nipun builders Developers (P.) Ltd. [20131 350 1TR 407/214 Taxman 429/30 taxmann.com 292 (Delhi) wherein addition under section 68 was made with respect to the share capital received from several companies. The assessing officer issued summons to the subscriber companies which were returned unserved wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies. The Ld assessing officer has also sent the Inspector who went to examine some other companies but not the companies from which the assessee has taken unsecured loan or has received share application money. No direction has also been given to the assessee to produce the directors of the companies for examination. The case before us is complete lack of any enquiry by the assessing officer. Further, in that decision itself 'Hon'ble Delhi High Court has held that if the assessee furnishes the requisite information available with him and assessing officer does not make any enquiry on such information, then in such cases no addition u/s. 68 can be made. (c) The next decision relied upon by the Ld. CIT DR is of NR Portfolio (P.) Ltd (Supra) wherein case of a private ltd company where specific summons were issued to- the shareholders of the company who did not attend investigation proceedings before the Ld. Assessing Officer and the notices were received unserved. The Hon'ble Delhi High Court has held that the duties of assessee in case of receipt of cash from investor when the assessee submits the complete details with respect to those investors then onus are dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase there is no allegation of any entry operator involved as well as the shares are not at all allotted during the year but remained share application money only. Therefore, the facts of the above case are different. (g) The Ld. CIT DR further relied upon the decision of the Hon'ble Supreme Court in case of Novadaya Castles (P.) Ltd V- CIT , f20151 56 taxmann.com 18/230 Taxman 268 (SC) wherein the special leave petition filed by the assessee against the decision of the Hon'ble Delhi High Court Navodaya Castles (P.) Ltd. (Supra) has been dismissed. In that particular decision the facts were that summons were issued to the alleged shareholders and they were required to personally come and depose. The summons remained unserved therefore, the assessee was asked to produce the share holder. Further, huge cash deposits were also deposited regularly in the accounts of the share holders and then cheques were issued to the assessee. The assessee also expressed its inability to produce the share holders stating that they were not share holders later on. There was also an allegation that the company was under the control one Mr. Mahesh Garg who was an entry operator. In those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amalgamating company i.e. AETIUS Constructions Pvt. Ltd. previously known as Nextgen Construction Pvt. Ltd. wherein similar issue related to receipt under Joint Venture Arrangement from Minaxi Suppliers Pvt. Ltd. as has been decided in favour of Amalgamating Company M/s. Nextgen Construction Pvt. Ltd. by CIT (A) v- 22 vide order dated 28/02/2019. In nutshell the AO's findings and submissions of the Appellant are as under: - Section 68 casts the initial onus on the assessee to establish the identity and credit worthiness of the .investor and to prove the genuineness of the transaction. In the instant case it is observed that the Appellant has discharged the initial onus by furnishing the Name, Address, PAN, Copy of ITR, Copy of Bank Statement and Confirmation from the Investor/Creditor. Details of assessment completed for the A.Y. 2010-11 2012-13 of lender also have been filed. Further, the assessee also explained that it was not a shell company. The amount of loan from the company had come through account payee cheques/bank transfers. The same had not come through cash. As per the affidavit submitted by the lender no cash was deposited in the investor company' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .com 424. ITAT Delhi, Sarogi Credit Corporation V/s. CIT [1976] 103 ITR 344 (Pat) Shantilal Jain ITXA/687/2004(Bombay High Court). Rushabh Enterprises vs ACIT 60 Taxman com 134 (Bom.): CIT VS. Gagandeep infrastructure ITA No. 1613 of 2014 (Bom.) CIT vs. Daulat Ram Rawaltmuil 87 ITR 349 (SC), CIT vs Onssa Corpn (P) Ltd. 159 ITR78, (SC), CIT vs. Stellar Investment Ltd 251 ITR 263 and M/s Lovely Exports Private Limited v. CIT [2008] 216 CTR 195 SC. Gist of some of the cases are as under:- 1. No, CIT(A)-22/ACIT- 14{2){3)/iT-302/201G-17 of Nextgen Construction Pvt Ltd. dated 28/02/2019 Nextgen Construction Pvt. Ltd. Wherein, similar issue related to receipt under Joint Venture Arrangement from Minaxi Suppliers Pvt. Ltd. as has been decided in favour of Amalgamating Companies by CIT (A) - 22 vide order dated 28/02/2019. 2. Hon'ble ITAT Mumbai ref. no. ITA No.2179/ Mum/ 2019 in case of Goldcity Properties Pvt. Ltd. In the above case, the LD. AO has carefully considered the facts and the evidences and passed re opened assessment order by accepting the returned income of an assessee without making any addition. The said assessment order passed u/s. 143(3} read with sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e money of his creditors. 7. Hon'ble Bombay High Court in the case of Orient Trading Co. Ltd. V/s. [1963] 49 ITR 723 (Bom.): Where any credits are found in the books of the assessee, the onus is on the assessee to prove the genuineness of the same and on failure of the assessee, the presumption u/s. 68 becomes absolute and the credits are treated as income of the assessee. The assessee can discharge the onus by producing confirmation from the creditor and proving the source of the credits. When the creditor accepts/owns the loan, the assessee is deemed to have discharged his onus and no further 'responsibility lies on the assessee to prove the source from where the creditor has acquired the amounts advanced to the assessee. 8. Hon'ble Patna High Court in the case of Sarogi Credit Corporation V/s. CIT [1976] 103 ITR 344 (Pat) and (Bombay High Court) in the case of Shantilal Jain lTXA/687/2004 decided on 31.07.2007: When loan is accepted through normal banking channels, the identity of the creditor stands proved. However, merely because amounts have been received through banking channels, it is not sufficient to prove the genuineness of the credits. But the existen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of co-ordinate bench of the Tribunal in assessee s sister concern s case as stated supra. The Ld. D.R. relied heavily on the order of AO by submitting that assessee has brought back its own unaccounted money into the books of accounts through layering in non existent and shell companies as brought out by the investigation wing, Kolkata. The Ld. D.R. submitted that this is a big racket of hawala operators who are receiving cash from various parties and by depositing into bank accounts of one entity and thereafter transferring into various other shell and non existent entities which have no creditworthiness and genuinity and finally giving the money back to the same persons from whom the money was received. The Ld. D.R., therefore, prayed that the order of co-ordinate bench of the Tribunal may not be followed in this case though the facts are similar. The Ld. D.R. also submitted that though the assessee filed necessary evidences as noted by the Ld. CIT(A) on page No.42 of the appellate order but that itself does not prove that the money raised was genuine which was allegedly paid to the assessee towards the joint venture. The Ld. D.R., therefore, prayed that the order of Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Pr.CIT V/s Veedhata Towers Pvt. Ltd. (2018 403 ITR 415). More pertinently, the said proviso is not, at all, applicable in case of unsecured loans or deposits, which is the case of the assessee. 5.2 It is settled position of law that to avoid the rigors of Section 68, the assessee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions. Once these three ingredients are fulfilled by the assessee, the primary onus casted upon him, in this regard, could be said to have been discharged and accordingly, the onus would shift upon revenue to dislodge the assessee's claim by bringing on record material evidences and unless this onus is discharged by the revenue, no addition could be sustained u/s 68. The Hon'ble Supreme Court in the case of Lovely Exports P. Ltd. [319 ITR 5], dismissing revenue's appeal, observed as under: - 2. Can the amount of share money be regarded as undisclosed income under section 68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 showing payments on various dates between May and October 2010 and amount outstanding as at 31-03- 2011 at ₹ 10,20,00,000. (iv) Copy of assessment orders u/s.143(3) a. dated 26-03-2013 for A.Y.2010- 11 assessing total income at ₹ 8,23,220 and b. dated 11 -02-2015 for A.Y.2012-13 assessing total income at ₹ 1,32,500. (v) Company master Data showing details of Minaxi Suppliers P. Ltd., showing Jashmin Ramesh Bhayani and Sagar Pankaj Bhayani as its directors. The Ld. AO, in its findings, has accepted the fact that the source of extending the loan by M/s MSPL was liquidation of investment in unquoted shares. Therefore, upon perusal of these documents, it could be said that the assessee had discharged the stated primary onus of Sec.68. It is pertinent to note that the assessee has produced copy of assessment order passed by revenue in the case of M/s MSPL in scrutiny assessment u/s 143(3) for AYs 2010-11 2012-13 which would lead to inevitable conclusion that the said entity was a taxable entity and regularly assessed to tax. In both the years, returned income of M/s MSPL has substantially been accepted by the revenue. 5.4 The perusal of assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has taken the view favorable to the assessee. The relevant observations were as under: - 10. Mr. Suresh Kumar, learned standing counsel, revenue has taken us through the assessment order and submits therefrom that it cannot be said that assessee had discharged the burden to prove credit worthiness of the creditors. His further contention is that the assessee is also required to prove the source of the source. In this connection, he has placed reliance on a decision of the Supreme Court in Pr. CIT Vs. NRA Iron Steel Pvt Ltd. He, therefore, submits that the finding returned by the Tribunal is wholly erroneous and requires to be interfered with by this Court. 11. Per contra, Mr. Padvekar, learned counsel for the respondent submits that from the facts and circumstances of the case, it is quite evident that assessee had discharged its burden to prove identity of the creditors, genuineness of the transactions and credit worthiness of the creditors. He submits that the legal position is very clear in as much as assessee is only required to explain the source and not source of the source. Decision of the Supreme Court in NRA Iron Steel P Ltd (supra) is not the case law for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the credit-worthiness of the creditor / subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the inquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act. 15. It is also a settled proposition that assessee is not required to prove source of source. In fact, this position has been clarified by us in the recent decision in Gaurav Triyugi Singh Vs. Income Tax Officer-24(3)(1). 16. Having noted the above, we may now advert to the orders passed by the authorities below. 17. In so far order passed by the Assessing Officer is concerned, he came to the conclusion that the three companies who provided share application money to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioning of the same in the assessment order, besides not providing a copy of the same to the assessee. In the report by the investigation wing, it was mentioned that the companies were in existence and had filed income tax returns for the previous year under consideration but the Assessing Officer recorded that these creditors had very meager income as disclosed in their returns of income and therefore, doubted credit worthiness of the three creditors. Finally, Tribunal held as under: 5.7 As per the provisions of Section 68 of the Act, for any cash credit appearing in the books of assessee, the assessee is required to prove the following(a) Identity of the creditor (b) Genuineness of the transaction (c) Credit-worthiness of the party (i) In this case, the assessee has already proved the identity of the share applicant by furnishing their PAN, copy of IT return filed for asst. year 2010-11. (ii) Regarding the genuineness of the transaction, assessee has already filed the copy of the bank account of these three share applicants from which the share application money was paid and the copy of account of the assessee in which the said amount was deposited, which was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a thorough consideration of the matter, we are of the view that the first appellate authority had returned a clear finding of fact that assessee had discharged its onus of proving identity of the creditors, genuineness of the transactions and credit- worthiness of the creditors which finding of fact stood affirmed by the Tribunal. There is, thus, concurrent findings of fact by the two lower appellate authorities. Appellant has not been able to show any perversity in the aforesaid findings of fact by the authorities below. 22. Under these circumstances, we find no error or infirmity in the view taken by the Tribunal. No question of law, much less any substantial question of law, arises from the order of the Tribunal. Consequently, the appeal is dismissed. However, there shall be no order as to cost. 5.9 Considering the entirety of facts and circumstances, we are of the considered opinion that the assessee has discharged the primary onus to demonstrate fulfilment of primary ingredients of Sec.68 and it was incumbent upon revenue to dislodge the assessee's claim by bringing on record, cogent material to establish that the assessee's unaccounted money was routed in its b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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