TaxTMI 
TaxTMI 
2015 (4) TMI 675
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....lled for details of fresh loans obtained during the year relevant to the AY 2008-09. The assessee filed confirmation letters obtained from the loan creditors, their respective income tax returns and bank statements relevant to the loan transactions. The AO examined the income tax returns filed by the respective creditors and noticed that each of them is disclosing income at a low level, which is no commensurate with the loan given to the assessee. Further, he noticed that there was rotation of funds between the creditors. For example, the Loan received from Chintamani Exports was Rs. 1.20 crores and M/s Chintamani Exports was declaring an income of Rs. 2,45,272/-. Further, according to the AO, the said income tax return was also suffering from certain mistakes. Accordingly, the AO came to the conclusion that the assessee has failed to prove the credit worthiness of the above said creditor. In the similar way, the AO examined the income tax returns and bank statements of all other creditors and came to the identical conclusions. The names of the creditors, whose income tax returns were examined by the AO, are given below:- (a) Chintamani Exports (b) B.Ashok Kumar & Co. (c) Yogi D....
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....egate amount of Rs. 2.33 crores as income of the assessee and also disallowed interest expenditure of Rs. 2.01 crores relating to the creditors assessed in AY 2008-09 and 2009-10. In the appellate proceedings, the ld CIT(A) deleted the assessment made u/s 68 of the Act for identical reasons given by him in the appeal relating to AY 2008-09 and consequently deleted the interest disallowance also. 7. We heard the parties and perused the record. It is well settled proposition that the initial burden of proof to prove the cash credits is placed upon the assessee, i.e., the assessee is required to discharge three main ingredients in respect of the cash creditors, viz., the identity of the creditor, the genuineness of the transactions and credit worthiness of the creditor. If the assessee discharges the initial burden so placed upon him, then the burden of proof gets shifted upon the assessing officer to disprove the submissions of the assessee. In the instant case, the identity of all the creditors in both the years stand established, since the assessee has furnished their confirmation letters, income tax returns and further the AO has also identified the owners of all the concerns. Th....
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....ioned about the cash credits, which was remained to be enquired by the Assessing officer, but after receipt of evidence and detailed written submission of the appellant, Ld CIT-15 had dropped the proceedings u/s 263 admitting the evidence on record and satisfactory explanation of the appellant vide order dated 15.3.2010 u/s 263. Therefore, there is no valid reasons whatsoever with the present Assessing Officer to discard the evidence on record and finding of the then Assessing Officer as well as the CIT, being his supervisory authority. 9. In paragraph 14.1 of his order, the ld CIT(A) has pointed out that the assessee has discharged the initial burden of proof placed upon it u/s 68 of the Act. He has further observed that the assessing officer has not brought any material on record to show that the explanation furnished was, in any manner, unsatisfactory or there was no reliable evidence with the assessee. Accordingly, the Ld CIT(A) has given a definite finding that the evidences filed by the assessee remained un-rebutted. Accordingly, by ITA. N o.5 0 6 6 / M um/ 2 0 1 1 and 4 9 9 2 / M / 2 01 2 6 placing reliance on the following case law, the Ld CIT(A) held that the addition mad....
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....he creditors also stand established by the assessee. The following observations made by Ld CIT(A) would show that the assessing officer did not bring any material on record to rebut the evidences furnished by the assessee:- "....On a perusal of the order sheet (page 4, 5 & 6) which is annexed to the assessment order, it is seen that the A.O has done nothing to rebut the evidence already placed on record by the appellant. He has not even put any leading questions to these loan creditors which establish beyond any shadow of doubt that the A.O was satisfied about the genuineness of the loan transactions & their credit worthiness." 11. The AO, after reaching conclusions about certain creditors, has applied the same to the remaining 10 creditors also. The Ld CIT(A) noticed that the assessing officer did not afford enough opportunity to the assessee with regard to the remaining creditors. The Ld CIT(A) further noticed that most of the remaining creditors (7 creditors) were existing creditors and their genuineness was examined by the AO in AY 2006-07 & 2007-08. Further certain creditors did not advance fresh loans during the year under consideration. The Ld CIT(A) also noticed that the ....