TMI Blog2022 (3) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... supreme court in case of Durga Prasad More [ 1971 (8) TMI 17 - SUPREME COURT] With respect to the identity of the party, we find that the assessee has furnished the details such as copy of bank statements, ITR and audited financial statement of the lender party. We also note there was assessment framed in case of lender parties which was challenged before the first appellate authority. Thus, from the above, there remains no doubt with regard to the identity of the party, as it has been proved beyond doubt. With respect to the genuineness of transaction and creditworthiness, we note that the assessee has submitted the copy of own bank statement as well as bank statement of party showing the transaction carried out through banking channel, audited balance sheet and copy of ITR. The assessee has also furnished affidavit of the director of the lander company. However the AO without pointing any defect in all these document or without bringing any cogent material on record in nutshell and without conducting independent enquiry disbelieved genuineness of transaction merely on the basis of statement given by one Shri Arun Dalimia before CBI. Therefore, in the given facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd advances for ₹ 8,71,00,000/- from M/s Basant Marketing P. Ltd. The assessee during the re-assessment proceedings submitted that it has provided all the detail of loan transaction with M/s Basant Marketing Pvt. Ltd. during assessment proceeding under section 143(3) of the Act where genuineness of the loan was also accepted. The assessee further furnished the copy of affidavit from the director of M/s Basant Marketing Pvt. Ltd and claimed that the director of the creditor company before CBI has not made adverse remark against the loan provided to him (the assessee). 4.2 However, the AO found the assessee has also not filed documentary/ supporting evidences in support of his argument. Therefore, the AO held that the same is not acceptable. It was the duty of the assessee to provide proof of the identity, genuineness of transaction and credit worthiness of the lender, but the assessee failed. The AO further observed that Joint Director CBI Zone-1 Mumbai in search conducted on Sh. Arun Dalmia, Shri Harsh Dalmia and M.S. Bali found that they are engaged in money laundering and for that purpose they incorporated 20 companies which includes M/s Basant Marketing Pvt. Ltd. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. iii) M/s Basant Marketing P. Ltd. is assessed to Income-tax at Kolkata and the appellant filed its PAN before the AO. In the case of M/s Basant Marketing P. Ltd., for AY 2010- 11, the CIT{A)-20, Kolkata has given the findings as mentioned below vide order dated 30-01-2015. Para-15 of the CIT(A) order is reproduced below : I have considered the rival submissions and perused the material placed on record, I have : already discussed at length the various aspects of the factual arid legal position in the present Appeal. In view of such discussions, I am of the opinion that there is no material on record to back the finding of the AO that the assessee company was involved in providing accommodation entry, I am unable to accept the finding of the AO that the documents which were maintained by the assessee company in the normal course'of its business and which were being presented regularly to the ROC as well as to the income tax department were fabricated, I am also unable to uphold the order of the AO that no income was earned or no expenditure was incurred by the assessee company or that its total income had to be treated as nil. In view of the above, I am of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (2014) 43 Taxmann.com 91(Guj) where in the Honorable Gujarat High Court has categorically held that once name, address, PAN, confirmation and bank statement of party are provided, the primary onus which was to be discharged by the assessee has been discharged and no addition U/s 68 should be made. c) S. 68 : CIT, A'bad IV vs. Sachitel Communications (P.) Ltd. [2014] 51 taxmann.com 205 (Gujarat) where in the Honorable Gujarat High Court has held that assessee proved identity of creditor and capacity to pay and that payment was made through banking channel - no addition could be made on account of unsecured loan U/s 68. d) S. 68 : Commissioner of Income-tax - I vs. Dharamdev Finance (P.) Ltd. [2014] 43 taxmann.com 395 (Gujarat) where in the Honorable Gujarat High Court has held that It was found that in respect of said credits assessee had filed PAN of creditors, their confirmation and their bank statement which established their creditworthiness -Moreover, transactions were made through banking channels - No addition could be made to assessee's income U/s 68. e) In the case of Ranchhod Jivabhai Nakhava [2012] 208 Taxman 35 (Gujarat) wherein it was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan commenced only after the case of the assessee was selected under income escaping assessment, therefore no credence to the assessee can be given on account of repayment of the loan. The learned DR vehemently supported the order of the AO. 9. On the other hand the learned AR before us filed paper book running from pages 1 to 185 and contended that the learned CIT-A of M/s Basant Marketing P. Ltd. has accepted the genuineness of the activities of such company i.e. M/s Basant Marketing P. Ltd. Likewise, the ITAT in series of the cases has also accepted the genuineness of the company namely M/s Basant Marketing P. Ltd. The learned AR in support of his contention has drawn our attention on various case laws which are available on record. 9.1 The learned AR also contended that the addition has been made by the AO without giving the opportunity of cross-examination which was mandatory before making the addition in the hands of the assessee. The learned AR also filed the affidavit of the director of the company demonstrating that the loan given to the assessee was not out of the accommodation entry. The learned AR vehemently supported the order of the learned CIT-A. 10. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, the word creditworthy has been defined as under:- creditworthy, adj. of one who is a good risk as a borrower. 10.5 It the duty of the assessee to establish that the party has capacity to make such advances and having requisite fund in its books of account and banks. The capacity to make advance can be established by showing sufficient income, capital and reserve or other fund in the hands of investor. It is required by the AO to find out the financial strength of the investor to make investment with judicious approach and in accordance with material available on record but not in arbitrary and mechanical manner. 10.6 In the light of the above discussion, we proceed to adjudicate the issue in hand. With respect to the identity of the party, we find that the assessee has furnished the details such as copy of bank statements, ITR and audited financial statement of the lender party. We also note there was assessment framed in case of lender parties which was challenged before the first appellate authority. Thus, from the above, there remains no doubt with regard to the identity of the party, as it has been proved beyond doubt. 10.7 With respect to the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,14,85,500/- from the group companies namely Basant Marketing P. Ltd. who was assessed to tax with them who provided accommodation entry and Department issued notice and Ld. A.O. made addition in the case of Harsh Dalmia 8. Thereafter in appeal before the Ld. CIT(A) relief was granted to the assessee and thereafter Department appeal was dismissed by the ITAT holding that activities of Basant Marketing are found to be genuine. And thereafter no appeal was filed by the Department against the order of the ITAT Mumbai Benches. So considering above all these facts, we are of the opinion that order of Ld. CIT(A) is detailed and reasoned and same does not require any kind of interference at our end. 10.9 Apart from above order of this tribunal, there were several orders of different Tribunal in case of different parties which were relied before us by the learned AR where loan taken from M/s Basant Marketing Pvt Ltd has been held as genuine. Some of those cases are detailed as under: 1. ITO v/s M/s Artilink Vintrade Pvt Ltd. in ITA No. 1121/Kol/2016 for A.Y. 2006- 07 2. ITO v/s Shri Harsh Dalmia in ITA No. 7449/Mum/2016 for A.Y. 2008-09 3. DCIT v/s M/s Udaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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