2015 (10) TMI 2846

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....yl and other media. A search action u/s. 132 of the Act was carried out in RMD group of cases including the case of Assessee on 20.01.2010 consequent to which proceeding u/s. 153A were initiated. Accordingly notice u/s. 153A was issued on 09.09.2011 and in response to which assessee filed its return of income on 10.10.2011 for A.Y. 2006-07 declaring total loss of Rs. 10,82,637/-. Thereafter assessment was framed u/s. 153A r.w.s. 143(3) vide order dated 28.12.2011 and the total income was determined at Rs. 4,20,795/-. Aggrieved by the order of AO, Assessee carried the matter before ld. CIT(A) who vide order dated 28.11.2013 granted substantial relief to the Assessee. Aggrieved by the order of ld. CIT(A), Revenue is now in appeal before us an....

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....oving identity, capacity of the creditor and genuineness of the transactions. (ii) The loan was taken by the appellant by receiving cheques from M/s RSA Marketing. A perusal of the bank statement of M/s RSA Marketing reflects that there were no cash deposits immediately before issuing cheques to the appellant (iii) The observation of the AO that the income of M/s RSA Marketing as per return was only of Rs.1,03,619/- is not relevant as the Income of an assessee is computed after taking into account various factors like deductions, exemptions etc. Income as per return, by no means, can be taken as a criteria to judge the financial capacity of a person. There are many big industries having turnover and financial transactions of thousands....

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....e creditor is doubtful then mere fact that loan was taken by cheques, does not make the loan genuine. This is the ratio of this judgement. But it does not mean that all loan transactions by cheque are non-genuine. As stated above, all relevant factors have to be considered before coming to a conclusion. 5.4.2 The conditions for the applicability of section 68 are: I. The existence of books of accounts maintained by the assessee himself; II. A credit entry in the books of account; and iii. The absence of a satisfactory explanation by the assessee about the following: (i) Identity of creditor (ii) Capacity of creditor, and (iii) Genuineness of transaction Appellant has maintained regular books of accounts reflecting cr....