TaxTMI 
TaxTMI 
2016 (12) TMI 1678
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....mbers as well as the fact that the sources of the loan givers were from Private Ltd. Co most of whom shared common directors and thus providing beyond doubt that the whole thing is to route the funds." iv. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that these were planned accommodation entries as the assessee was not being charged any interest and that there was no written agreement about the sharing of profit, interest etc. v. "The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." vi. "The appellant craves leave to amend or 0 alter any ground or add a new ground, which may be necessary." 3. We have heard the rival contentions and found that assessee is a partnership firm engaged in the business of builders and developers and during the year under appeal has claimed to have received unsecured loans from the following two companies. Sr. No. Name and Address of the Loans Parties Amount of Loan (Rs.) 1. M/s. Albright Consultants Pvt. Ltd., 1,12,50,000/- 2. M/s. Sital Mercantile Pvt. Ltd., ....
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....ervations in the aforesaid report, issued a show cause letter to the assessee as to why the loan of Rs. 5,12,50,000/- should not be treated as cash credit u/s 68 of the Act. Not satisfied with the assessee's reply, AO added the same u/s. 68 of the IT Act. 7. By the impugned order CIT(A) deleted the addition after having the following observation:- 5.8. I have carefully gone through the assessment order, advance report of DIT(Inv.)., Kolkata dated 22-03-2013, remand report dated 1-10-2014, submissions of Ld. A.R. and the facts of the case. 5.8.1. The AO has made the addition based on the observations in the report of investigation dated 22-03-2013 by the DDlT (lnv.) Kolkata that the identity, genuineness of the transaction and the credit worthiness of the lenders were not established. The DDIT was of the opinion that the loans of the assessment year 2009-10 were nothing but accommodation entries only. He was also of the opinion that it was the money of the appellant which has been routed through these lender companies. The AO while making the assessment for the assessment year under consideration Le 2010-11 has based his findings and conclusion on the aforesaid ....
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....ver, he disallowed the loans from later two parties as no interest / benefit was paid to these parties. Therefore, in my view, the observations and findings of the then CIT(A)-32 are very relevant and applicable for this assessment year also. 5.8.4. Furthermore, it is also a fact that during the assessment proceeding for the assessment year 2010-11,the appellant filed numerous evidences such as confirmations from these two parties along with detailed books of accounts of the loan parties, copy of Pan card of lender company, copy of Audited annual accounts, balance sheet & profit & loss account of lender company, copy of acknowledgement of return filed by the lender, copy of ITR for the assessment year 2010-11 ledger confirmation and ledger account & copy of bank statement of the lender company to prove the identity, credit worthiness and genuineness of M/ s. Albright Consultants Pvt. Ltd.& M/ s. Sital Mercantile Pvt. Ltd. 5.8.5. Further, it is also the fact of the case that during the assessment proceeding for the assessment year 2010-11, A.O. made independent enquiry by issuing notice u/s 133(6) to M/s. Albright Consultants Pvt. Ltd.& M/ s. Sital Mercantile Pvt. ....
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.... of M/ s. Sital Mercantile Pvt. Ltd. was Rs. 16.61 crores till the A.Y. 2007 -08 which has also been noted .in the assessment order of this company passed for the assessment year 2007-08 by the AO u/s. 143(3) dated 025-05-2009 and such funds were available with M/ s. Sital Mercantile Pvt. Ltd. for deployment as per their discretion. The fact of availability of funds is also ascertainable from the Annual Report of the company for the period ended on 31.03.2009 and 31.03.2010. 5.9.3. Such position of funds/own capital available with the creditor companies clearly establish the creditworthiness of these companies to advance the amounts to the extent of fund credited in the appellant's books of accounts. It is also a fact that such amounts advanced to the appellant have clearly been reflected in the accounts of the creditor companies and as such have been confirmed. Under such facts and. circumstances of the case creditworthiness of these two creditors to advance the funds to the extent fund credited in the assessee's books of accounts cannot be doubted. 5.9.4. The A.O. has also observed that both the loan creditors and the companies whose shares were held by ....
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.... to the creditor along with the compensation of Rs. 1 crore. These set of facts clearly establish that the fund which was borrowed from M/ s. Albright Consultants Pvt. Ltd. by the appellant, was for the business purposes of the appellant and, the creditor had advanced such money for its own benefit as well. The transaction has taken place through banking channel. The receipt of advance / loan, corresponding repayment of the entire .advance / loan together with a lumpsum compensation of Rs. 1 crore is clearly evidenced from the records, from the ledger account and from .the confirmation of accounts submitted by the appellant in this regard. Accordingly the genuinity of this transaction of credit of Rs. 1,12,50,000- crores from M/s. Albright Consultants Pvt. Ltd. stands substantiated. 5.10.1.Similarly, it is also submitted by the Ld. A.R. that the amount of Rs. 4,00,00,000/-, which was advanced to the assessee by M/S.Sital Mercantile Pvt. Ltd. during the assessment year 2010-11 was returned back along with advance received in the succeeding assessment year to M/ s. Sital Mercantile Pvt. Ltd. during assessment year 2014-15 together with lumpsum compensation of Rs. 20 lakh. It....
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....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 that the loan creditors did not exist at the address given by them. However, it is pertinent to note that the said report of the Inspector was proved to be false during the course of subsequent enquiries. 13. The Ld CIT(A) also requested the DDIT, Kolkatta to carry out certain investigation. Even though all the companies were represented by a single authorised r....