TMI Blog2023 (1) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... ned amount is assessee's own money generated out of books of account and the same is introduced in its books of accounts through bogus creditors. If that is so, what evidences AO has collected to place it on record. Once confirmations have been filed, further action, if any, is required to be taken in case of creditor and not in case of assessee. Explanation about 'source of source' or 'origins of origin' cannot be asked from the assessee while making inquiry under section 68 as per ratio laid down in the case of DCIT v. Rohini Builders [ 2001 (3) TMI 9 - GUJARAT HIGH COURT] . We have no hesitation in rejecting the grounds raised by the Revenue. Thus, we do not find any infirmity in the order passed by the Ld. CIT(A), therefore it does not require any interference. Appeal filed by the Revenue is hereby dismissed. - ITA No. 1664/Ahd/2019 & C.O. No. 25/Ahd/2020 - - - Dated:- 4-1-2023 - Shri Waseem Ahmed , Accountant Member And Shri T. R. Senthil Kumar , Judicial Member For the Revenue : Shri Rakesh Jha , Sr. D. R. For the Assessee : Shri S. N. Divatia , A. R. Shri Samir Vora , A. R. ORDER PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Rudra Enterprise for the Assessment Years 2016-17, 2017-18 2018-19. The assessee also produced bank statements of M/s. Rudra Enterprise, wherein the unsecured loan was received and also the bank statement wherein part repayment of loan made to the assessee. 2.3. Furthermore M/s. Rudra Enterprise received the sum of Rs. 2 Crores from Arya Tradex Pvt. Ltd. and its Return of Income for the assessment year 2016-17 wherein had declared a total income of Rs. 33,20,010/- and also enclosed copy of the company master details of Arya Tradex Pvt. Ltd. downloaded from the Ministry of Company Affairs (MCA) website, wherein the paid up share capital of the company is Rs.10 Crores. Thus the networth and creditworthiness of the lenders as well as source of the source is also proved by the assessee. Thus the proposed addition u/s. 68 is against the provisions of law. 2.4. The A.O. considered the above reply and held that the interest income offered by the assessee to M/s. Rudra Enterprise are much less than income shown by the Rudra Enterprise. This clearly proves that M/s. Rudra Enterprise is used for entry providing activity only. Therefore the sum of Rs. 2 Crores is added as the unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned at Rs. 10,00,00,000/-. Hence the networth and creditworthiness of the source of the source is a/so proved by appellant. I have examined the case laws relied by the appellant and facts narrated by the AR who emphasized that the funds have been received and part: repaid through banking channel, I have gone through the para 3.3 of assessment order which is as under: 3.3. Further, the assessee has stated that interest of Rs. 17,51,573/- was paid and TDS was done at Rs. 1-,75,171/-for the F.Y. 2016-17. Also, during F.Y. 2017-18, out of total outstanding balance, a total amount of Rs. 1,00,00,000/- was re-paid back on different dates and interest of Rs. 6,69,777/- and TDS of Rs. 66,977/- was paid for the F.Y. 2017-18. However, on verification of the ROIs of M/s. Rudra Enterprise, it is seen that for A. Y. 2016-17, the firm has shown nil income, for AY. 2017-18, the firm has shown income of Rs. 6,84,390/- and for A.Y. 2018-19, the firm has shown income of Rs. 7,65,550/-. These income are much less than even the interest paid for the unsecured loan by the assessee. This proves that M/s. Rudra Enterprise is used for entry providing activity only. Therefore, the above s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessments of the creditors of the assessee when a co-ordinate Assessing Officer is satisfied with the transaction. We, thus, find that in the case before us the Tribunal below rightly set-aside the deletion made by the Assessing Officer, based on erroneous approach by wrongly shifting the burden again upon the assessee without verifying the Income Tax return of the creditors, The position, however, would have been different if those creditors were not income tax assessees or if they had not disclosed those transactions in their income tax returns or if such returns were not accepted by their Assessing Officers. The primary onus has been discharged by the appellant. The creditworthiness of the creditor(s) cannot be decided by the AO of the appellant. In fact, the AO of appellant can get the matter investigated through the AO of the creditors. The AO of appellant cannot become AO of the creditors. It is not the case of AO that the impugned amount is app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.2,00,00,000/-made on account of unexplained cash credit. (2) The Id. C1T(A) erred in law by not considering the facts mentioned by the AO. (3) It is, therefore, prayed that the order of Id. C1T(A) may be set aside and that of the Assessing Officer be restored. 5. The assessee in its Cross Objection raised the following Grounds of Appeal: 1. On facts and circumstances of case, the Honourable CIT(A) has not erred and was justified in deleting the addition of Rs. 2,00,00,000/-u/s 68 and allow the claim of the respondent that the unsecured loan of Rs. 2,00,00,000/- was not an unexplained cash credit. 2. Considering the facts and circumstances, it is further represented before Honourable ITAT that the respondent had submitted all the necessary documentary evidences during the course of assessment proceedings and appeal proceedings, such as Copy of Confirmation of Accounts, Copy of the ITR and Copy of the Bank statement of the said unsecured lender in order to prove the genuineness of the transaction and to prove the nature and source thereof and to prove the identity, capacity and creditworthiness and accordingly complied with the requirements of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and departmental appeal should be dismissed and assessee s C.O. is to be allowed. 7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. It is an undisputed fact that the assessee during the assessment proceedings provided the copies of the Income Tax Returns, Confirmation Letters, Bank Statement of M/s. Rudra Enterprise and also produced copies of the interest payment on the unsecured loan with TDS for the subsequent Assessment Year 2017-18. The ld. CIT(A) has correctly followed the Jurisdictional High Court Judgment in the case of CIT vs. Ranchhod Jivabhai Nakhava reported at 208 Taxmann.com 35 wherein it was held that the primary onus had been discharged by the assessee by producing the copies of the Income Tax Returns, Bank Statements and Confirmation Letters of the creditors. The creditworthiness of the creditor(s) cannot be decided by the AO of the assessee. In fact, the AO of assessee can get the matter investigated through the AO of the creditors. The AO of assessee cannot become AO of the creditors. It is not the case of AO that the impugned amount is assessee's own money generate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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