TaxTMI 
TaxTMI 
2017 (5) TMI 1214
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....are that the return of income was filed on 16.10.2007 declaring total income of Nil. The assessee is a firm engaged in business of building and construction. A search & seizure action was conducted in the Bhanwarlal Jain group of cases by Investigation Wing, Mumbai. As a result of search it was found by the Investigation Wing that his group is a leading entry provider of Mumbai. There are many concerns floated by the group who provide accommodation entries of bogus loan. The AO received an information that the appellant has also taken loan from three concerns found in the list of entry providers related with Bhanwarlal Jain group of cases namely M/s. Amit Diamonds, M/s A2 Jewels & M/s White Stone. The AO asked the assessee to show cause as ....
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....68 can be enumerated. 1. Sec. 68 can be invoked when there is a credit of amounts in the books maintained by the assessee, such credit is a sum of money during the previous year and either the assessee offers no explanation about the nature arid source of such credits or the explanation by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory is required to be formed objectively with reference to the material on record. 3. Courts are of the firm view that the evidence produced by the assessee cannot be brushed aside in a casual manner. 4. The onus of proof is not static. The initial burden lies on the assessee to establish....
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....ugh banking channel and the entities concerned have arranged the paper work the transaction cannot be held as genuine. From the assessment order it is seen that the AO had issued notice u/s 133(6) to the lenders to verify the genuineness of the loans. From a perusal of assessment order it appears that the lenders have filed confirmation as well as their balance sheet and P&L a/e. The AO has mentioned that the' characteristic features of the lenders financial statements point to the fact that these concerns are bogus. However, in order to make addition u/s 68 AO had to establish that either the transactions were not genuine or the lenders did not have credit worthiness or their identity was not established. As mentioned in para 4.5 above....
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....ing the legal validity of reopening of assessment also discussed the facts of the case. The Hon'ble Bombay High Court in para 8 of its ord-er stated "...according to her (AO) the revenue has received information from the DGIT (lnv) that the assessee has taken unsecured loans from- the above parties by way of unaccounted cash/accommodation entries. We are unable to agree since the petitioner has clearly stated that all the payments were made by a/c payee cheques which were encashed in the bank account of the petitioner in the regular course of business. We find that the petitioner has also paid interest on this loans after deduction of tax at source and TDS returns are also accordingly filed. There is no dispute in regard to the above. W....