TaxTMI 
TaxTMI 
2011 (4) TMI 1498
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....e by the Assessing Authority as unexplained credits. It is also the ground of Revenue that the Commissioner of Income-tax (Appeals) has erred in deleting consequential interest addition of Rs. 11,58,000/-. 4. In the course of assessment proceedings, the Assessing Officer has found that the assessee company has taken various unsecured loans totaling to Rs. 96,50,000/- during the previous year relevant to the assessment year under appeal. These loans were availed from 87 parties. The Assessing Officer observed that the assessee had filed only confirmation letters in support of those credits and nothing more. The Assessing Officer further observed that mere filing of confirmations of loan balances would not be sufficient to discharge the onus cast on the assessee. He further observed that the assessee was bound to prove the identity, genuineness and creditworthiness of the creditors. Therefore, the Assessing Officer directed the assessee to produce all the loan creditors in person along with their bank statements, PAN Cards and details of the returns filed by those persons etc. The assessee was given time to comply with the above directions. But later on the assessee submitted befo....
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.... been proved whether the creditors had the necessary resources to make loans to the assessee or not. The learned Commissioner submitted that it is not enough that the assessee furnishes the names and address of the creditors and files confirmation letters from them. It is necessary for the assessee to go beyond and prove the genuineness of the transactions by establishing the credit worthiness of the creditors. The Commissioner of Income-tax (Appeals) has taken a casual view on the issue and has erred in coming to a finding that the assessee has discharged the burden of proof cast on it. Therefore, the Commissioner of Income-tax submitted that the order may be set aside. 7. Shri Anil Nair, the learned counsel appearing for the respondent-assessee on the other hand, explained that the Commissioner of Income-tax (Appeals) was justified in deleting the addition of Rs. 96,50,000/- made by the Assessing Officer as un-explained credits. He explained that the names and addresses of all the creditors were furnished to the Assessing Authority. The assessee has produced confirmation letters from the creditors. The Permanent Account Numbers were also furnished. He further explained that si....
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....of the assesseecompany crumbles down. 10. As no details are available on the question of credit worthiness of the creditors from the details furnished by the assessee-company, it became necessary for the Assessing Officer to examine the creditors so that he could assess the resourcefulness of those persons. That is why the assessee was asked to produce them. The assessee did not produce even a single creditor before the Commissioner of Income-tax (Appeals). It is acceptable that the assessee could not produce all the 87 creditors but it is not acceptable that the assessee-company could not produce even a single soul. The Commissioner of Income-tax (Appeals) makes an observation that the Assessing Officer should have made further enquiries after issuing summons. The question of issuing summons in an assessment proceedings involves an element of judgment. Where the Assessing Officer reasonably apprehends that the whole exercise would be of no use, he may not issue summons. It is not possible to insist that the Assessing Officer should always issue summons to make enquiries. The assessee has not explained to the satisfaction of the Assessing Officer that why the assessee was ....
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....ctified u/s.154 of the Income Tax Act, 1961." 17. The Assessing Officer dismissed the rectification petition stating that the points raised by the assessee-company are not in the nature of mistakes apparent from the records. 18. The matter was taken in first appeal. The contention of the assessee before the Commissioner of Income-tax (Appeals) was that adding a sum of Rs. 2,12,01,732/- by the Assessing Officer would amount to double addition as the relevant disallowance has already been made by the assessee-company in its computation of income in obedience of sec.40(a)(ia). In support of the above contention, the computation of total income made by the assessee was examined by the Commissioner of Income-tax (Appeals) in page 3 of his order as below : 19. As seen from the above computation, the Commissioner of Income-tax (Appeals) held that the assessee had already added back a sum of Rs. 2,12,01,732/-. He held that it is a mistake apparent from the record and deleted the addition of Rs. 2,12,01,732/- made by the Assessing Officer. 20. The Revenue is aggrieved on the above point and therefore, the second appeal before us. 21. On going through the computation of total ....