AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 92
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....arrying on transport business filed its return of income for the assessment year 2008-09 on 29.9.2008 declaring total income of Rs. 47,91,250/-. The case has been selected for scrutiny under CASS. Accordingly, notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter called as 'the Act') was issued. In response to notice, the A.R. of the assessee appeared from time to time and furnished the books of accounts and other details called for. During the course of assessment proceedings, the A.O. noticed that the assessee has shown loan creditors of Rs. 15 lakhs. To ascertain the correctness of the claim made by the assessee, the A.O. issued a show cause notice and asked to furnish the details of loan creditors including confirmation letters fro....
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....oans from 4 persons aggregating Rs. 15 lakhs. It is further submitted that it has obtained confirmation from the parties which was furnished before the A.O. The A.O. without examining the confirmation letters simply, disbelieved the confirmation letters and made additions u/s 68 of the Act. It is further submitted that with regard to amount received from two persons namely Sri T. Bosu Babu and G. Vijaya Lakshmi who happened to be husband and wife, shri T. Bosu Babu is working in Antario and the loan has been given out of his past savings. The payment has been made through account payee cheque and the parties have confirmed the loan transactions. Therefore, the A.O. was not correct in coming to the conclusion that the assessee has not discha....
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....ains in doubt. The CIT(A) further observed that mere filing of confirmation letter would not discharge the burden of the assessee. It is settled law that the assessee is required to prove the identity, creditworthiness and genuineness of the loan transactions. The assessee has failed to prove the creditworthiness of the so called creditors and genuineness of the transactions. With these observations, confirmed the additions made by the A.O. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 5. The Ld. A.R. of the assessee submitted that the CIT(A) is not justified in sustaining the additions of Rs. 15 lakhs made by the A.O. u/s 68 of the Act towards unexplained cash credits. The A.R. further submitted that the assessee h....
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....g the necessary confirmation letters. The identity of the parties has been proved. The genuineness of the transactions and creditworthiness of the parties also have been proved. Once all the ingredients of section 68 are proved beyond doubt, the A.O. cannot make any additions u/s 68 of the Act. The Ld. D.R. on the other hand, strongly supported the order of the CIT(A). 6. We have heard both the parties and perused the materials available on record. The A.O. made additions of Rs. 15 lakhs u/s 68 of the Act towards unexplained credits. The A.O. was of the opinion that the assessee has not proved the genuineness of the transactions and creditworthiness of the parties. It was further observed that mere filing of confirmation letters would no....
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....f the parties. Once the initial burden discharged by the assessee, then the burden shifts to the revenue to prove otherwise. But, the assessee needs to discharge the initial burden by filing the necessary details to the satisfaction of the A.O. 8. In the present case on hand, on perusal of the details filed by the assessee, we find that although the assessee stated to have filed the confirmation letters, the other two ingredients of the section i.e. the genuineness of the transactions and the creditworthiness of the parties are in doubtful. Out of the four loan creditors, two creditors namely Shri T. Bosu Babu and his wife Smt. G. Vijaya Lakshmi have advanced an amount of Rs. 10 lakhs. It is the claim of the assessee that Shri T. Bosu Ba....