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TMI Blog2013 (1) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the loans of Rs.5,50,000/- (from M/s.Subhodh Enterprises and Rs.2,00,000/- from M/s.Naresh Trading Co. as bogus and adding the same to the income of the appellant and also erred in disallowing the consequential interest paid on such loans amounting to Rs.36,309/- in spite of the appellant discharging the primary onus that rested on him by submitting the copies of confirmation giving names, addresses, Permanent Account Numbers [PAN], Income tax return copies, TDS certificates and copy of accounts. It is submitted that it be so held now and the additions made be deleted. 2. The learned CIT(A)erred in law and on facts in concluding that the loans obtained by the appellant are bogus relying solely on the statement of third party Mr.Ram Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans from the following two parties:- "Sr.No. Name of the party Amount (Rs.) 1. Subodh Enterprise (Prop. Smt.Nandini Manoj Agarwal) 5,50,000/- 2. Naresh Trading Co. (Prop.Amar G.Agarwal) 2,00,000/- Total 7,50,000/-" 2.1. The assessee was required to furnish the confirmation and the facts relating to the unsecured loans. In compliance, the assessee has furnished the bank statement, etc. Further, it was observed by the AO that a survey was conducted in a case, namely Shri Lalith S.Sharma, etc. During the course of the said survey, it was noticed that there was one Shri Ramdinesh Ranjit Sharma who was alleged to be managing the business affairs of certain persons. His statement was recorded where it was found that he had admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has furnished the requisite information, such as, Bank statement, details of cheque issued, interest account with TDS certificate, addresses with confirmation, PAN with income-tax returns, etc. It was argued before ld.CIT(A) that the assessee had discharged the primary onus and the AO was at liberty to call those parties for examination, if he wanted to further verify the genuineness of the loan. However, ld.CIT(A) was not convinced and decided the issue in favour of the Revenue primarily on the basis of the said statement of Mr.Sharma. Ld.CIT(A) has concluded that by simply filing the confirmation, PAN, income-tax return, bank statement have not proved the genuineness of the loan. The action of the AO was confirmed. Now the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed to tax, therefore their respective income-tax records should have been examined by the AO. Ld.AR has also drawn our attention on the bank statement of those parties to demonstrate that the amounts in question were advanced as a loan through account payee cheques. The assessee had paid interest to those parties and also deducted TDS, therefore it was wrong to assume that the loans in question were bogus or not genuine. Copies of Form 16A in respect of the deduction of tax at source as also placed on record. The Ld.AR has also explained the entry which was found recorded in the seized material, contents already reproduced supra. It was explained that nothing adverse was found recorded in the said seized material. The assessee has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remost argument was that the assessee had not discharged the primary onus. The assessee was granted opportunity to cross-examine Mr.Sharma but he had deliberately avoided the opportunity of cross-examination. Merely filing of confirmation and the bank statement have not conclusively proved the genuineness of the loan specially when a statement was recorded that the loans were nothing but accommodation entries. Reliance was placed on the decision(s) of Hon'ble Gujarat High Court in the case of Murlidhar Lahorimal vs. CIT [2006] 280 ITR 512 (Guj.), Hon'ble Supreme Court in the case of CIT vs. P.Mohanakala [2007] 291 ITR 278 (SC), Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC), ITAT Ahmedabad Bench 'SMC' in the case of Prakashchandra Singhvi (HU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.1. The main reason for the impugned addition was a statement recorded under survey of one Mr.Sharma. The survey was not conducted on the assessee but the said survey was conducted in some other cases. In that proceeding, the allegation of the Revenue Department was that a statement of one Mr.Sharma was recorded who had stated that the accommodation entries were given to the assessee in the form of unsecured loans. Now the question is that whether that statement was sufficient to invoke the provisions of section 68 of IT Act. First of all, we want to mention that in the case of Paul Mathews and Sons(supra), it was made clear that a statement elicited during the survey operation had no evidentiary value. Secondly, we have also noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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