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TMI Blog2023 (9) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, which clearly drags support from the view taken by the Hon'ble Apex Court decision in the case of CIT vs. P. Mohankala, [2007] 161 taxman 169(SC)? (ii) Whether the Appellate Tribunal erred on facts and in law by relying upon the ration of Hon'ble Gujarat High Court decision in the case of CIT vs. Rohinin Builders, 256 ITR 360 and holding that the amount was received and repaid through banking channel, which is fundamentally incorrect, since assessee miserably failed to discharge initial onus to prove the identity of the creditor so also the genuineness of the transactions as envisaged in the provisions of Section 68 of the Act? (iii) Whether the Appellate Tribunal erred in not considering the Hon'ble Gujarat High Court decision in the case of Ariel Sarees (P) Ltd vs. Income Tax Officer, [2014] 46 taxmann.com 417 (guj.), wherein the Hon'ble Court has dismissed assessee's appeal by confirming the addition made u/s 68 of the Act in absence of any evidence or material from the side of the assessee, even though the loans have been taken from group company through banking channels? (iv) Whether the Appellate Tribunal erred in not considering the Hon'ble Supreme Court dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the assessee under the provisions of section 68 of the Act. Accordingly, the amount of Rs. 6,10,35,513/- is added in the total income as income of the year u/s 68 of the LT. Act as an unexplained cash credit of the assessee company. Penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961 are also initiated separately. 2.1 When the matter was carried in appeal, the CIT(A), after considering the various decisions, held as under: "In view of the ratio laid down in above decisions, I am of the view that through accommodation entries of unsecured loans, money laundering takes place and since the appellant has failed to establish creditworthiness as well as genuineness of the transaction in respect of unsecured loan entries shown in the names of Ashmi Marketing Pvt. Ltd, Harish Ambikaprasad and Smt. Kaushalyaben Rajesh, the addition made u/s. 68 by the AO is justified. It is also worthwhile to mention here that the appellant has not produced any of the creditors before A.O in support of its claim. 4.2.3 Cash credit in the name of Pooja Garments Pvt. Ltd. - Rs. 5,84,43,771/- & in the name of Prakash Fortan Softech Ltd - Rs. 94,742/- The appellant has claimed liability of u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and source of credit in its books only and not the sources of source. In the case on hand, the assessee's obligation has been duly discharged by furnishing necessary document which was also confirmed by the party independently in response to notice issued under Section 133(6) of the Act. ii. Be that as it may be, the undisputed fact that the amount of loan received by the assessee was returned back to the loan party during the year itself and all the transactions were carried out through banking channel. Therefore, in the light of judgment of Hon'ble Gujarat High Court in the case of the CIT Vs. Rohinin Builders reported in 256 ITR 360, the genuineness of such credit of loan cannot doubted. The relevant observation of Hon'ble Court in the aforementioned case reads as under: "The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques." 10.10 Thus, in view of the above and after considering the facts in totality we hereby set aside the finding of the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made reference to the several judicial pronouncements. 10.14 In this regard, we note that the amount was not credited during the year under consideration, as such the same was carried forward from earlier years. Therefore, the provision of section 68 of the Act cannot be made applicable on the same in the year under consideration." 3. What is evident is that the Tribunal found on facts that the amount of loan received by the assessee was returned to the loan party during the year itself and all transactions were carried out through banking channel. The ITAT on the decision of Deputy Commissioner of Income Tax Vs. Rohini Builders reported in (2002) 256 ITR 360 (Guj), held in favour of the assessee. 4. On facts therefore, having perused the orders under challenge, we are of the opinion that no error of law is committed by the Ld. ITAT. In the case of Rohini Builders (supra), the Court held as under: "We have considered the rival submissions and have also gone through the order passed by the Assessing Officer, the relevant portion of which we have also extracted in para. 2 above. The Commissioner of Income-tax (Appeals) more or less confirmed the addition on the reasoning gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1963] 49 ITR 723. The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques. Merely because summons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee -from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation [1986] 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee. In the case of six creditors who app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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