TaxTMI 
TaxTMI 
2011 (4) TMI 1498
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....ses out of the assessment completed under sec.143[3] and the appeal for the assessment year 2007-08 arises out of the order passed under sec.154 of the I.T. Act, 1961. 2. First, we will consider the appeal filed by the Revenue for the assessment year 2006-07. 3. The first ground raised by the Revenue is that the Commissioner of Income-tax (Appeals) has erred in deleting the addition of ₹ 96,50,000/- made 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 ₹ 11,58,000/-. 4. In the course of assessment proceedings, the Assessing Officer has found that the assessee company has taken various unsec....
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....n these two additions were taken before the Commissioner of Income-tax (Appeals), he found that the assessee had filed confirmation letters from 74 loan creditors and also had filed the names, addresses and PAN details of those loan creditors. The Commissioner of Income-tax (Appeals) observed that the particulars filed by the assessee-company are sufficient to discharge the onus cast on it to prove the bona fides of the loan creditors. He observed that the failure on the part of the assessee-company to produce the loan creditors in person before the Assessing Authority cannot be treated as a ground to make an addition against the assessee. The Commissioner of Income-tax (Appeals) observed that once the assessee has discharged its initial bu....
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....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 ₹ 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 since all these pa....
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....ot furnished any details regarding the resourcefulness of the creditors to establish that the creditors were actually in a position to advance loans to the assessee-company to the extent of the amounts recorded against their names. Confirmation letters do not provide any details other than a mechanical statement confirming the advancement of loans. The factum of loan has to be supported by probability of evidence. It is for that purpose, it is off and on reiterated that credit worthiness of the loan creditors need to be established by an assessee. In the present case, the assessee has not whispered anything regarding the credit worthiness of a single creditor against total of 87 creditors. When there is nothing available on record to suppor....
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....hy it was not possible for the assessee-company to produce even a single creditor before the Assessing Authority. 11. Therefore, in the facts and circumstances of the case, we find that the assessee has not proved the genuineness of the credits either by deed or by word. We do not find that the finding of the Commissioner of Income-tax (Appeals) regarding the burden of proof is acceptable in this case. Once we find that the assessee had failed to establish the genuineness of the credits, we have to uphold the order of the Assessing Authority on this point. Accordingly, the two additions made by the Assessing Authority are restored and the order of the Commissioner of Income-tax (Appeals) on these additions is set aside. 12. The Revenue su....
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....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 ₹ 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. ....