TaxTMI 
TaxTMI 
2019 (2) TMI 615
X X X X Extracts X X X X
X X X X Extracts X X X X
....4. 2. The assessee is a company and is in the business of manufacturing of polythene liners bags. It filed its return of income on 27/11/2014, disclosing Nil income for the Assessment Year 2013-14. The only issue that arises for our consideration in this appeal is the addition made u/s 68 of the Act. 3. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- The facts leading to the addition are brought out by the Assessing Officer as follows:- "On examination of books of accounts and other details and documents available on record and furnished by the during the cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5. Mindtrack Ventures Pvt. Ltd. 6. Subhlabh Fiscal Services Pvt Ltd. Notices issued to SNV Enterprises and B R Trading Co returned back unserved on 26/02/2016 by postal department with the remarks "insufficient address". However, Contship Commodities (P) Ltd. and Angad Chemicals (P) Ltd. have submitted the reply in response to the summons issued u/s 131 of the I.T. Act on 29/02/2016. Further, show cause letter along with summons u/s 131 was issued on 10/03/2016 to the Managing Director of M/s C K Plastics (PJ Ltd. asking him to produce the loan creditors as identity and creditworthiness of the loan creditors could not be verified. In response to the said show cause the AIR of the assessee company s....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., notice issued by the Assessing Officer was returned with the remarks "insufficient address" and this fact was never put to the assessee and hence the assessee could not furnish the correct address. He submitted that, documents from these two creditors were given before the ld. CIT(A). 6. The ld. D/R, relied on the order of the Assessing Officer and submitted that they were credits in the accounts of the creditors, immediately prior to giving of loan to the assessee which points that these creditors did not have creditworthiness. He submitted that the assessee was bound to produce the creditors before the Assessing Officer for examination and having failed to do so, the addition was rightly made. In reply, the ld. Counsel for the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise." (emphasis ours) 8. The other ground on which the Assessing Officer made the addition was that certain funds were transferred into the accounts of the loan creditors from third parties, prior to the loan being given to the assessee. 8.1. No addition can be made based on such inference as held by the Hon'ble Jurisdictional High Court in the case of CIT vs. Jamna Dass G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established." 10. Applying the propositions of law laid down in each of these cases to the facts of this case, we now examine each of the loan creditors. The assessee furnished the following details in the case of each of these creditors:- 1) Angad Chemical (P) Ltd. - (i) ITR Acknowledgement and Final Accounts for the AY.: 20l3-14 (ii) Copy of Confirmation Certificate (iii) Copy of Ledger Account of the assessee in the boo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s have been proved. In the case of M/s Angad Chemicals Ltd., it has total assets of more than 10.17 Crores. Income earned during the year cannot be the only criteria to determine the creditworthiness. Hence, the addition made on the loan given by M/s Angad Chemical Pvt. Ltd., is hereby deleted. In the case of Contship Commodities (P) Ltd. - the total Net assets are worth of Rs. 22.46 Crores. This proves the genuineness of the transaction and both the identity and the creditworthiness of the creditors are proved. In the case of Mindtrack Ventures (P) Ltd the total Net assets are worth of Rs. 15.32 Crores. This proves the genuineness of the transaction and both the identity and the creditworthiness of the creditors are proved. In the....