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TMI Blog2022 (5) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. Commissioner of Income Tax(Appeals) is contrary to the law and the facts of the case. 2. The Ld. CIT(A) has erred in law and on facts in holding that the income offered for tax by the creditors may not be the criteria to disprove the credits u/s.68 of the Act, and it is not in the mandate of the Act. 2.1 The Ld. CIT(A) has failed to note that mere filing of confirmation letters and acknowledgement copy of returns not supported by financial statements are not sufficient to prove the creditworthiness of the creditors. 2.2 The Ld. CIT(A) ought to have noted that the assessee has not fulfilled his primary onus of proving the creditworthiness of the loan creditors by not fully furnishing the documents in support of his cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to show that the amounts were received through banking channel. The assessee had also filed their ITR acknowledgment copies to prove that all loan creditors are Income Tax payers. The AO, however, was not satisfied with the explanation furnished by the assessee and according to the AO, although there is no dispute with regard to the identity of the loan creditors and genuineness of transactions, but when it comes to creditworthiness of the parties, none of the loan creditors does have capacity to explain huge amount of loan given to them. Therefore, rejected the arguments of the assessee and made addition of Rs.6.68 Crs. as unexplained credits u/s.68 of the Act. 4. Being aggrieved by the assessment order, the assessee preferred an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Ld.CIT(A), the Revenue is in al before us. 6. The Ld.DR, submitted that the Ld.CIT(A) erred in deleting additions made by the AO towards loan taken from five parties without appreciating the fact that the assessee needs to satisfy all three conditions including creditworthiness of the parties. The Ld.DR further submitted that although, the AO had accepted identity of the creditors and genuineness of transactions, but doubted creditworthiness of the creditors, mainly on the basis of their ITRs filed for the relevant assessment year. As per which, they had declared meagre income which is not sufficient to explain huge amount of loan given to assessee. The Ld.CIT(A) without appreciating the above facts simply deleted the additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of transactions. In fact, the assessee filed confirmation letters from all five parties along with their bank statements for the relevant assessment years and also ITR acknowledgment filed for the relevant assessment years. From the details filed by the assessee, the Ld.CIT(A) had recorded categorical findings that Mr.Mohammed Lawfir from whom assessee had received a sum of Rs.3.5 Crs. loan through cheque had declared income of Rs.48,98,470/-. Further, the loan had been taken through proper banking channel. As regards, the observation of the AO on creditworthiness of the parties, we find that when the AO never disputed identity of the parties and genuineness of transactions, he cannot make additions only on the basis of minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that once names of creditors are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law, but some received from them cannot regard as undisclosed income of the assessee. This legal position further supported by the decision of the Hon'ble Supreme Court in the case of CIT v. Steller Investment Ltd. reported in (2001) 251 ITR 263 (SC). The sum and substance of ratio laid down by various decisions of the Hon'ble Supreme Court and High Courts is that once assessee discharged its burden by filing various evidences including confirmation letters from the parties, their bank statements and ITR field for the relevant assessment years, onus cast upon the assessee shifts to the Revenue an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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