TaxTMI 
TaxTMI 
2017 (2) TMI 266
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.... short M/s. Ganesh) - Rs. 5,07,68,100/- and M/s. Novel Finvest P. Ltd. ( in short M/s. Novel) - Rs. 6,50,00,000/-, totalling to Rs. 18,57,68,100/-. The CIT(A) has deleted the addition so far as it relate to M/s. Wall Street and M/s. Novel amounting to Rs. 13,50,00,000/- and sustained the addition of Rs. 5,07,68,100/- pertaining to M/s. Ganesh. As a consequence, Revenue is in appeal challenging the action of the CIT(A) in deleting the disallowance of Rs. 13,50,00,000/-, whereas assessee in its cross-appeal has assailed the decision of the CIT(A) in sustaining the disallowance to the extent of Rs. 5,07,68,100/-. Since the cross-disputes arise from the common action of the Assessing Officer in invoking section 68 of the Act, they are being taken-up together. 3. In brief, the relevant facts are that the assessee before us is a partnership firm, which is, inter-alia, engaged in the business of trading in shares, F&O activities, etc. For the assessment year under consideration, it filed a return of income declaring a loss of Rs. 22,39,492/-, which was subject to a scrutiny assessment. In the course of assessment proceedings, the Assessing Officer noted that assessee has shown certain ....
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....vance money to the assessee and he has also doubted the genuineness of the transactions. In coming to such conclusion, Assessing Officer noted that the advances were made free of interest and that the income for year returned by the creditors was meagre and that the claim of the assessee that the transactions were not in the nature of loans but in the nature of advances for investments was not acceptable as it was an afterthought. In so far as the afore-stated three concerns are concerned, the Assessing Officer treated the credits as unexplained and also held that 'assessee had introduced its own unaccounted money in the books of account in the garb of loans/advances'. The assessee carried the aforesaid addition in appeal before the CIT(A) by challenging it on facts and in law. From a perusal of the order of the CIT(A), it transpires that even during the pendency of appeal before CIT(A), the Assessing Officer caused further enquires to be made with respect to the aforesaid parties through Investigation Wing of the Department at Kolkatta by issuance of commissions under section 131(1)(d) of the Act dated 04/07/2012 to the DDIT(Inv) Unit 1(3), Kolkatta. It is emerging from record tha....
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....evenue is concerned, the same relates to the credits of Rs. 7,00,00,000/- and Rs. 6,50,00,000/- appearing in the accounts of M/s. Wall Street and M/s. Novel. In both the cases, the amounts have been received and repaid during the year itself. It is also not in dispute that the transactions are through banking channels and both the concerns are income tax assessees. In any case, so far as the identity of these concerns are concerned there is no dispute. Section 68 of the Act casts an onus on the assessee to explain the nature and source of the credit appearing in the books of account. It is a trite law that section 68 of the Act is a rule of evidence and the onus cast on the assessee can be said to be discharged if the assessee is able to establish the identity and creditworthiness of the creditors and the genuineness of the transaction. In the present case, the Assessing Officer has made independent enquiries not only by issuing notice under section 133(6) of the Act to the creditors, but also by issuing commissions of enquiry under section 131(1)(d) of the Act to the Investigation Wing at Kolkatta and the jurisdictional assessing authorities of the creditors in Kolkatta In the Pap....
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....there was no cash deposits in the bank account of the creditors before the amount was advanced to the assessee. The aforesaid plea of the assessee is not controverted by the Revenue and, in any case, the same is also emerging from the material on record. The CIT(A) has taken note of the fact that M/s. Wall Street is a NBFC registered with RBI and the monies advanced to the assessee were out of receipts on account of refund of loans/advances, from their own funds, sale proceeds received from sale of shares, etc. In our considered opinion, considering the material available on record, the CIT(A) made no mistake in setting-aside the action of the Assessing Officer in invoking section 68 of the Act because the Assessing Officer has merely sought to disbelieve the stand of the assessee without any clinching adverse material. 6.1 Now in so far as the credit of Rs. 6,50,00,000/- appearing in the account of M/s. Novel is concerned, herein also the finding of the CIT(A) are parimateria to those in the case of M/s. Wall Street, though the figures of Share capital, Reserve and Surplus and Turnover ,etc. are different. Be that as it may, in our view, the discussion in the aforesaid paras ma....
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....by upholding the addition made by the Assessing Officer u/s. 68 of the Act. 8. In this regard, the Ld. Representative for the assessee has made varied submissions. Firstly, it was submitted that the CIT(A) having accepted the bona-fides of the advances received from M/s. Wall Street and M/s. Novel ought not to have rejected the bona-fides of the advance received from M/s. Ganesh because the enquiries and the evidences gathered in respect of all the three parties were similar. Secondly, it is pointed out that in all the enquiries made by the Revenue, the results were coherent and consistent with the explanations rendered by the assessee and, therefore, the CIT(A) ought not to have doubted the genuineness of the transactions with M/s. Ganesh in isolation. With regard to M/s. Ganesh, the Ld. Representative for the assessee pointed out that the said concern had furnished its books of account, details of payments and receipts, return of income, balance sheet and profits and loss account, PAN and also confirmation of the transactions with the assessee. It was also pointed out that in response to the commission issued by the Assessing Officer to his counterpart at Kolkatta u/s. 131(1)(....