TMI Blog2022 (5) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Hon ble Supreme Court in the case of CIT v. Lovely Exports Private Limited [ 2008 (1) TMI 575 - SC ORDER] wherein, it has been held 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 CIT v. Steller Investment Ltd. . [ 2000 (7) TMI 76 - SC ORDER] 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 and the AO should bring some evidences to prove that sum credited in the books of accounts of the assessee is undisclosed income. Further, once name and address, PAN of creditors is furnished to the AO, then the Department is free to re-open the individual assessment of creditors, but some received from the parties cannot be regarded as unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, it is prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer restored. 3. The brief facts of the case are that the assessee is an individual carrying on business in the name and style of M/s.Date Homes, filed his return of income for the AY 2016-17 on 14.07.2017 admitting total income of Rs.30,43,030/-. The case has been taken up for scrutiny and during the course of assessment proceedings, the AO noticed that the assessee had taken loans from the following persons: Sl.No. Name of the Party PAN Amount of loan (in Rs.) 1 Mr.Mohammed Lawfir AFOPM 7717 B 3,50,00,000 2 M/s.Seahawk Lines Pvt. Ltd. AAGCS 0053 E 1,75,00,000 3 Ms.R. Meharunisha AIJPM 7927 R 20,00,000 4 Mr.Syed Ibrahim ABQPS 2095 A 65,00,000 5 Mr.Kaja Moideen Rafludeen AAJPR 4134 K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de u/s.68 of the Act, amounting to Rs.6.68 Crs., the Ld.CIT(A) deleted the additions to the extent of Rs.6.40 Crs. being loan taken from five parties and confirmed addition to the extent of Rs.28 lakhs being amount of loan taken from M/s.Rich Gold Hardware. 5. Aggrieved by the order 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 made by the AO. 7. The Ld.AR for the assessee supporting the order of the Ld.CIT(A), submitted that the assessee has discharged onus by filing all evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough proper banking channel and further, the borrower and the lender are income tax assessees, then the AO cannot make addition towards loan u/s.68 of the Act, only for the reason that they have declared minimum income for the relevant assessment years. In this case, as regards loan taken from five parties, what we noticed from the order of the Ld.CIT(A) is that the assessee has proved identity of parties and genuineness of transactions. The assessee had also proved creditworthiness of the parties by filing their ITR copies for the relevant assessment years, which is part of assessment records. Once, the assessee has discharged his onus by filing all possible evidences, then the onus shifts to the AO to prove otherwise. In this case, the AO only on the basis of minimum income declared by the creditors, has drawn an adverse inference against the assessee, even though, the assessee has discharged its onus cast upon him as per Sec.68 of the Act. This legal principle is supported by plethora of judicial precedents, including the decision of the Hon ble Supreme Court in the case of CIT v. Lovely Exports Private Limited reported in [2008] 216 CTR 195 (SC), wherein, it has been held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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