TaxTMI 
TaxTMI 
2018 (1) TMI 1144
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.... "'1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions mace u/s. 68 of the Act in respect of money received from MIS. Albright Consultant amounting to Rs. 1.50 crores without considering that - (a) The creditworthiness of the creditor is not proved as the creditor did not have sufficient income during the year to advance such huge amount to the assessee. (b) No written agreement about sharing of profit or interest with respect to the specific project in which the amount was claimed to be invested is in existence. (C) The sources of the source of loan given are claimed to be coming from sae of shares of third party private limited companies, most of which are related to the same group. (d) All companies including MIs, Albright Consultant Pvt. Ltd., the upfront loan giver, the various companies from whom this company received funds to finance their fund transfer to the above assessee were all belonging to one group having common address, chambers, officers and directors which proves that it is an arrangement to route the funds. (e) The identity, creditworthiness and genuinity o....
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....t, Letters from the Reserve Bank of India, Bank statement, Auditor's report, Audited Financial Reports etc. and also submitted bank statement, the detail of the source of transaction. The AD has rejected the explanation of the appellant in respect of loan transaction with M/s. Albright Consultants P. Ltd. without making proper enquiry. Proper enquiry must be made by the AO before making any. addition under section 68. The AO must make proper enquiry before making any addition under section 68. In Khandelwal Constructions v. CIT 227 ITR 900 (Gau), it has been held that section 68 of the Income Tax Act, 1961 empowers the Assessing officer to make enquiry regarding cash credit. If he is satisfied that these entries are not genuine he has every right to add these as income from other sources. But before rejecting the assessee's explanation, A.O. must make proper enquiries and in the absence of proper enquiries, addition cannot be sustained. 5.5 The appellant has also taken loan from M/s. Albright Consultants P. Ltd., during the A:Y.2011-12 The AD has made an addition on account of loan transaction with M/s. Albright Consultants P. Ltd. During e A.Y.2011-12. The CIT(A) ....
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....e tribunal in assessee's own case wherein addition made in the immediate preceding year was deleted by Tribunal vide its order dated 09/05/2016 in ITA No.2034/Mum/2014, wherein Tribunal observed as under:- 11. We heard the rival contentions and perused the record. The dispute before us relates to the addition made u/s 68 of the Act. It is a well settled proposition that the primary onus is placed upon the assessee u/s 68 of the Act to prove the cash credits. In order to discharge the primary onus, the assessee has to prove the identity of the creditor, credit worthiness of the creditor and the genuineness of the transactions. If the assessee discharges the initial onus, then the burden shifts to the shoulder of the AO to disprove the claim made by the assessee. With these settled legal propositions, we shall now examine the facts prevailing in the instant case. 12. We have noticed that the AO did not consider various documents furnished by the assessee during the course of assessment proceedings in order to discharge the initial onus placed upon him u/s 68 of the Act. The AO gave importance to the report of the Inspector belonging to the investigation wing, who had stated ....
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....ted through the banking channels. Hence the genuineness of the transactions also stand established. However, the Ld CIT(A) has expressed doubt about the genuineness in respect of loan taken from M/s NVPL and M/s SVPL, since he was of the view that a NBFC company shall not give interest free advances to unrelated parties. In our view, the doubt so expressed by the M/s. H.K. Pujara Builders Ld CIT(A) is beyond the scope of the provisions of sec. 68 of the Act. Since the provision of sec. 68 is a deeming provision, the same is required to be interpreted strictly. The Courts have held that the assessee is required to discharge the initial burden of proof placed on his shoulders. In the instant case, we are of the view that the assessee has discharged the initial onus placed upon it. Hence the burden of proof gets shifted to the assessing officer. 17. From the foregoing discussions, we notice that the tax authorities have not discharged the burden of proof shifted upon their shoulders by bringing any material on record to disprove the claim of the assessee. On the contrary, the tax authorities have merely suspected the genuineness by making certain adverse inferences. It is pertinent to....