TaxTMI 
TaxTMI 
2015 (9) TMI 1233
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.... the creditworthiness of the creditors and genuineness of the transactions 3. The appellant craves leave to add, to alter, or amend any ground of the appeal raised above at the time of the hearing." 3. The grounds raised in the Assessee's Cross Objection read as under:- "1. That the Ld. CIT(A) has erred in law and on facts, to the extent, in treating the interest earned on Margin Money Deposits of Rs. 7,77,656/- as income from other sources and therefore denying deduction u/s. 80-IB thereon. 2. That the Ld. CIT(A) has earned in law and on facts, to the extent, in confirming the withdrawal of deduction u/s. 80IB on the notional profits of Rs. 36,673/- computed on the sale of Rs. 33,66,570/- considering it as trading activity carried on by the respondent. 3. Your respondent craves leave to add, alter, amend or forgo any grounds of cross objection at the time of hearing." REVENUE'S APPEAL 4. The facts narrated by the Revenue Authorities are not disputed by both the parties, therefore, no need to repeat here for the sake of brevity. 5. Ld. DR relied upon the order passed by the AO. 6. On the other hand Ld. Counsel for the assessee relied upon order of the Ld. CIT(A) and ....
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.... that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut the said evidence, it can be used against him by holding that it was a receipt of an income nature." 6.5 In A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807, the Hon'ble Supreme Court has held that it is for the assessee to prove the sources and the nature of the receipts appearing in its books of account. The department has to prove neither the source nor the nature of the receipts, as has been held by the Madhya Pradesh High Court in Seth Kalekhan Md Hanif v. CIT [1958] 34 ITR 669 which decision has been affirmed by the Hon'ble Supreme Court in Kalekhan Mohammad Hanif v. CIT [1963] 50 ITR 1. The same principle has been reiterated by the Hon'ble Supreme Court in CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194, by Calcutta High Court in Shankar Industries Ltd. v. CIT [1978] 114 ITR 689, C. Kant & Co. v. CIT [1980] 126 ITR 63, Oriental Wire Industries (P.) Ltd. v. CIT [1981] 131 IT....
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....g channels which is reflected in the bank statements of the bank accounts of the respective loan creditors and the creditworthiness has been established through submission of their balance sheet and profit & loss account. Needless to mention that the creditworthiness is reflected through sources of funds in the balance sheet, the details of which were made available by the assessee during the assessment! remand and appellate proceedings, on the basis of which it can be concluded that the lenders had sufficient funds to make the investment and to advance loans and those investments / loans have been duly disclosed in its Balance Sheet. It is also noted that in the Remand Report the AO has confirmed that he had examined the Director of Charm Investments Pvt. Ltd. and also recorded his statement on 19-08-2009. 6.7 In view of the discussion made above, I am of the considered view that the A.O. was not justified in making addition on account of unsecured loans to the extent of Rs. 17,50,000/- from the three (3) loan creditors listed in Para 6 above. Therefore, the addition of Rs. 17,50,000/- made on account of unsecured loans from the loan creditors is deleted. As a natural consequenc....
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....sed in its Balance Sheet. We further note that in the Remand Report the AO has confirmed that he had examined the Director of Charm Investments Pvt. Ltd. and also recorded his statement on 19-08- 2009. 8.1 In view of the above, we are of the considered view that the A.O. was not justified in making addition on account of unsecured loans to the extent of Rs. 17,50,000/- from the loan creditors. Therefore, the Ld. CIT(A) has rightly deleted the addition of Rs. 17,50,000/- made on account of unsecured loans from the loan creditors and as a natural consequence, the additions on account of commission to the extent of Rs. 35,000/- was also rightly deleted. Since the Ld. CIT(A) has passed a well reasoned order and therefore, no interference is called for in the impugned order on our part, hence, we uphold the impugned order dated 03.12.2010 passed by the Ld. CIT(A) and accordingly dismiss the appeal of the Revenue. Assessee's Cross Objection 9. With regard to ground no. 2 relating to confirming of withdrawal of deduction u/s. 80IB raised in the cross objection is concerned, the same was not pressed by the Ld. Counsel of the assessee during the hearing, hence, the same is dismissed as ....