TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 692
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....ion from the office of DGIT, Investigation Wing, Mumbai as collected during search operation under section 132 of the Act on Bhanwarlal Jain Group. The AO issued notice under section 148 after coming to the conclusion that the said information constituted tangible material and has reason to believe that the amount raised to the extent of Rs. 63,44,882/- from five parties as mentioned on page No.2 of the assessment order are bogus parties and are engaged in the business of giving bogus accommodation entries without doing any actual business. The said hawala racket came to the light when a search was conducted on Bhanwarlal Jain Group a leading entry provider whose statement was recorded under section 132 of the Act who admitted that he and his associate concerns are engaged in issuing accommodation entries only without doing any real business. Thereafter, the assessee filed objection to the issuance of notice under section 148 which was disposed of by the AO by passing a speaking order on 29.09.2015. The AO also issued notice under section 133(6) of the Act to five parties on 07.12.2015. Thereafter, AO issued a final show cause notice vide order sheet entry dated 13.03.2015 to the a....
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.... assessee, such credit is a sum of money during the previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory is required to be formed objectively with reference to the material on record. 3. Courts are of the firm view that the evidence produced by the assessee cannot be brushed aside in a casual manner. 4. The onus of proof is not static. The initial burden lies on the assessee to establish the identity and the credit worthiness of the creditor as well as the genuineness of transaction. 5. The identity of creditors can be established by either furnishing their PANs or assessment orders. The genuineness of the transaction can be proved if it was shown that the money was received by a/c payee cheque. Creditworthiness of the lender can be established by attending circumstances. 4.4 During the course of assessment proceedings, the following details were filed before the AO. 1. Loan Confirmation from the lenders. 2. PAN No. of the lenders. 3. ....
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....ed with Bhanwarlal Jain group of cases. The AO has not appreciated the fact that he was not making assessment of Bhanwarlal Jain group of cases. On the other hand, the appellant was able to establish the identity and the creditworthiness of the creditors as well as the genuineness of transactions. 4.7 Recently the Hon'ble Bombay High Court has passed an order in WP No. 167 of 2015 dated 15.04.2015 in the case of M/s Rushabh Enterprises Vs AC1T 24(3) and Ors. In this case also the assessee had taken loan from concerns related with Bhanwar al Jain group of cases. In its order the Hon'ble Bombay High Court in addition to deciding the legal validity of reopening of assessment also discussed the facts of the case. The Hon'ble Bombay High Court in para 8 of its order Stated "......according to her (AO) the revenue has received information from the DGIT (Inv) that the assessee has taken unsecured loans from the above parties by way of unaccounted cash/accommodation entries. We are unable to agree since the petitioner has clearly stated that all the payments were made by a/c payee cheques which were encashed in the bank account of the petitioner in the regular course of busin....
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....the evidences called for by the AO. Under these circumstances, the AO has completely erred in making the addition under section 68 of the Act when all the three ingredients such as identities of the parties, capacity and creditworthiness of the parties and genuineness of the transactions were proved beyond doubt more so when the parties involved in lending money to the assessee have by way of filing affidavits confirming the loan transactions, confirmations of loans and other supporting evidences proved beyond doubt that the transactions were genuine. The Ld. A.R. vehemently relied on the order of Ld. CIT(A) which is reasoned and speaking one and submitted that the same has been passed after considering the various judicial pronouncements wherein it has been held that even in the case of Bhanwarlal Jain Group entities , the transactions are not to be doubted. In support of his argument the Ld. A.R. has relied upon the decision of the ITAT in assessee's own case titled ACIT vs. Gujarat Estate in ITA No.6990/M/2016 A.Y. 2007-08 dated 18.05.2018 wherein the co-ordinate bench of the Tribunal has decided the issue in favour of the assessee in which the facts were materially same i.e. th....