TaxTMI 
TaxTMI 
2019 (1) TMI 756
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....malatha, learned Senior Standing Counsel for the respondent/revenue. 3.This Appeal was admitted on 24.02.2011, on the following substantial questions of law:- i.Whether on the facts and circumstances of the case the Appellate Tribunal is right in law in reversing the order of the Commissioner of Income Tax (Appeals) and restoring the addition made in the assessment of loans as 'cash credit' under Section 86 and consequent disallowance of interest paid? ii.Whether on the facts and circumstances of the case the Appellate Tribunal is right in law in holding that the appellant Company had not discharged its burden of proof in regard to the genuineness of the loans disagreeing with the findings of the Commissioner of....
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....s also confirmed the balance as on 31.03.2006. The Assessing Officer appears to have directed the assessee to produce all the loan creditors in person along with their bank statement, PAN card and details of returns filed by them, etc. However, the assessee would contend that for want of time and for impending limitation for completion of assessment on 31.12.2008 the assessee filed a letter dated 12.12.2008 expressing his inability to produce the names of the loan creditors (numbering 87). The Assessing Officer passed an order on 15.12.2008 within three days thereafter, adding the entire loan of Rs. 96.50 lakhs as unexplained cash credit under Section 68 of the Act. Further, the Assessing Officer added back the interest of Rs. 11,58,000/- p....
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....nsequently, the assessment was completed. When the matter was taken on appeal by the assessee before the CITA, the CITA allowed the appeal in entirety and deleted the addition and the disallowance of the interest. 6.In our considered view, the order passed by the CITA is without adequate reasons and the CITA having not examined the genuinity of the loan transactions could not have allowed the appeal in its entirety. Therefore, the revenue was well justified in approaching the Tribunal. In the Memorandum of Grounds of Appeal before the Tribunal, the revenue contended that the CITA atleast ought to have remanded the issue to the Assessing Officer for verification of the creditors. However, the Tribunal while considering the appeal thought ....
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....erence to the material on record and the application of mind is the sine qua non for forming the opinion Further, it was pointed out that in cases where the explanation offered by the assessee about the nature and source of the sums found credited in the books is not satisfactory there is, prima facie, evidence against the assessee, viz., the receipt of money. Then the burden is on the assessee to rebut the same and if he fails to rebut it, it can be held against the assessee that it was a receipt of an income nature. 8.It is no doubt true that the burden is on the assessee to prove that the credits availed by him from 87 persons are genuine. It may be true that mere production of the PAN details, confirmation letters from some of those ....