TMI Blog2014 (2) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... erably failed to prove the source available with M/s Great Valley Co. Pvt Ltd, i.e., the credit worthiness of the said company with supporting evidences. In fact, the submission of the Ld A.R was that the assessee could not enforce the above said company to furnish the financial details, which appears to be very strange to us. Hence, in our view, the assessee cannot take support of this decision also. The issue considered in the case of Smt. Susila Ramasamy [ 2009 (4) TMI 554 - ITAT CHENNAI ] was about the applicability of provisions of sec. 69 of the Act on an assessee, who was a Non- Resident Indian. In the instant case, we are concerned with the applicability of the provisions of sec. 68 to an Indian assessee on the loan received by it. Hence, in our view, the assessee cannot take support of the case of Smt. Susila Ramasamy (supra) also. In the instant case, it is a fact that the assessee did not furnish any material to prove the credit worthiness before the AO. However, before the Ld CIT(A), the assessee has furnished a certificate obtained from M/s Barclays Bank to the effect that the funds were transferred to the assessee company from out of the balance available in a B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HDFC bank. On examination of the details filed by the assessee, the AO took the view that the assessee has only proved the identity of the company and the details of flow of money through the banking channels and it has failed to prove the credit worthiness of M/s Great Valley P Ltd in terms of sec.68 of the Act. Hence, the AO added the amount of ₹ 21.76 crores to the total income of the assessee treating the same as unexplained cash credit u/s 68 of the Act. 3.1 Before the ld CIT(A) the assessee filed certain additional evidences including a certificate obtained from the bank named Barclays Bank PLC. It is pertinent to note that the Ld CIT(A) did not consider the said certificate and he also did not seek comments from the AO on the additional evidence filed by the assessee. The ld CIT(A) also took the view that the assessee has only proved the identity of M/s Green Valley Pvt Ltd and also the genuineness of the transaction i.e. flow of money through banking channel. Since the assessee did not furnish any document to prove the creditworthiness of M/s Great Valley Co P Ltd, the ld CIT(A) afforded an opportunity to the assessee to furnish relevant documents. However, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to RBI for reporting the impugned financial transaction. He further submitted that the foreign company referred above has made investments not only in the assessee company, but also in other companies. Since the assessee is receiving funds from it, the assessee was not in a position to enforce the foreign company to furnish the details of their Balance sheet and other financial information. The Ld Counsel further submitted it is the prerogative of the foreign company either to give or not to give copies of its account, since the assessee is in the receiving end. The Ld Counsel submitted that the Ld CIT(A) was not justified in sustaining the addition made u/s 68 of the Act for the following six reasons:- (a) The provisions of sec. 68 of the Act are not applicable to the international transactions. (b) The provisions of sec. 68 is applicable only to the resident assessees, which is evidenced by the first proviso to sec. 68 inserted with effect from 1.4.2013. (c) The tax authorities have accepted about the identity of the subscriber of the debentures. (d) The transactions have been carried through banking channels. Further the assessee has reported about the receipt of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee herein has obtained loans in the form of debentures and hence he is required to prove all the three main ingredients stated above. However, the assessee, in the instant case, has failed to prove the creditworthiness of the company M/s Great Valley Co P Ltd., even though an opportunity to prove the same was afforded by the ld CIT(A) also during the course of appellate proceedings. The ld DR further submitted that the assessee has only furnished copies of forwarding letters addressed to Reserve Bank of India and it did not furnish any document to show that the RBI has given its approval to the funds received by it from the Mauritius company. The ld DR further submitted that approval granted by the RBI was also one of the essential documents to prove the genuineness of the loan. The ld DR further submitted that the decision rendered by the Hon ble Supreme Court in the case of R P Ganapathy and others (supra) shall be squarely applicable to the instant case and hence it is the responsibility of the assessee to prove the creditworthiness of the transaction. The ld D.R has also placed reliance on the decision of the Supreme Court in the case of A K M Govindaswamy Chet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee could not enforce the above said company to furnish the financial details, which appears to be very strange to us. Hence, in our view, the assessee cannot take support of this decision also. The issue considered in the case of Smt. Susila Ramasamy (supra) was about the applicability of provisions of sec. 69 of the Act on an assessee, who was a Non- Resident Indian. In the instant case, we are concerned with the applicability of the provisions of sec. 68 to an Indian assessee on the loan received by it. Hence, in our view, the assessee cannot take support of the case of Smt. Susila Ramasamy (supra) also. 8. The Delhi bench of Tribunal, in the case of Russian Technology Centre, has considered the decision rendered by the co-ordinate bench of Delhi Tribunal in the case of Finlay Corporation (84 TTJ 788) and has extracted certain observation in paragraph 11 of its order. In the case of Finlay Corporation, the Delhi bench of Tribunal, in paragraph 12, has made following observations:- It is the settled legal position that burden is on the Revenue to prove that income of an assessee falls within the net of taxation. Once it is so proved then the burden is on the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk to the effect that the funds were transferred to the assessee company from out of the balance available in a Bank account. It is pertinent to note that the said certificate is very bald in nature, i.e., it did not give any detail about the Bank account, i.e., the Bank account number, the account holder name, when the account was opened, details of dates and amounts of deposit in the said bank account etc. Be that as it may, the fact remains that the said certificate has not been examined by the Ld CIT(A) or by the AO (in the remand proceedings). Whatever may be the worth, the assessee has furnished a certificate obtained from M/s Barclays bank in order to prove the credit worthiness of the foreign company, referred above and hence, in our view, the tax authorities should have examined the same and there after, they should have taken a decision. Hence, in our view, the issue before us needs to be examined afresh at the end of the assessing officer by duly considering the material furnished by the assessee to prove the credit worthiness. Accordingly, we set aside the order of Ld CIT(A) and restore the issue to the file of the AO with the direction to examine the issue afresh by du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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