TaxTMI 
TaxTMI 
2020 (11) TMI 46
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther on the facts of the instant case the Ld. CIT(A) was correct in deleting the addition made by the AO, when the assessee had failed to discharge its primary onus under section. 68 of the I.T. Act. 3.The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal. 4. The appellant prays that the order of CIT(A) on the above ground be set-aside and that of the assessing officer be restored." 3. The only issue raised by the Revenue is against the deletion of addition of Rs. 9,85,00,000/- by Ld. CIT(A) as made by the AO under section 68 of the Act. 4. At the outset, the Ld. Counsel of the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench of the Tribunal in assessee's sister concern case in ITA No.3593/M/2019 AY. 2011-12 & ors. vide order dated 25.06.2020 wherein the case of the assessee under similar facts have been decided in favour of the assessee by the coordinate bench. The Ld. A.R., therefore, prayed that the present appeal filed by the Revenue may kindly be dismissed following the said de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra 10 of the assessment order. The said company has also furnished the various details before the AO beside submitting that Rs. 9,85,00,000/- were funded to the assessee under Joint Venture Agreement. The details of bank statements and details of collaterals etc were also supplied. The AO came to the conclusion that the assessee has routed its own money through non existent and shell companies and thus not satisfying the three ingredients as envisaged by the provisions of section 68 of the Act. The AO finally added the said loan of Rs. 9,85,00,000/- under section 68 by noting that assessee has failed to provide that even the basic details as called for vide notice issued under section 142(1) of the Act on various occasions and even the entity from whom the assessee had received money has not submitted any authentic details and information as sought from the said entity under section 133(6) excepting the confirmation and undated affidavit. According to the AO the assessee has failed to controvert the findings of investigation wing that Minaxi Suppliers Pvt. Ltd. is one of the paper companies and the assessee is one of the beneficiaries as huge funds were found to be transferred to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... non existent and shell companies is Rs. 9.85,00.000/-. In this context it is pertinent to peruse the provisions of section 68 of the I f Act The provisions of section 68 of the ST Act, 1961 before amendment (i.e. prior to AY 2013-14} are as under: Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Perusal of these provisions divulges that there is an obligation on the part of the assessee to prove the identity genuineness and credit worthtness of the person from where the money is actually received. The above three ingredients -have been taken as basic parameters to be satisfied by the appellant. Further, under what circumstances the invocation of section 68 of the IT Act, 1961 can be resorted to a) When the assessee fails to prove the genuineness of the transaction that has entered into his books of account. b) When....
X X X X Extracts X X X X
X X X X Extracts X X X X
....D. do hereby declare on solemn affirmation as under- 1. That I was the director of the MINAXI SUPPLIERS PVT LTD. (CIN: U51909WB1996PTC078940, PAN: AACCM0476B) in Financial Year 2010-11. I know the entire facts of Joint ventures with ZIMITH PROPERTIES PVT. LTD. 4. Minaxi Suppliers Pvt. Ltd have given a sum of 9,85,00,000/- (Rupees Nine Crore Eighty Five Lakhs Only) toward the Joint ventures for purchase of land. 5. That our company MINAXI SUPPLIERS PVT. LTD. has funded the sum of 9,85,00,000/- (Rupees Eight Crore Twenty Lakhs Only) under Joint Venture with M/s. Supergold Properties Pvt. Ltd. having their address at Room No. 2, Munir Bashir Colony, Near Ghatkoper Police Station, Ghatkoper (West).. Mumbai: 400086 for acquiring the immovable property in Sindhdurg District Maharashtra. 6. That during the period 1/04/2010 to 31/03/2011 MINAXI SUPPLIERS PVT LTD given sum of 9,85,00,000/- (Rupees Eight Crore Eighty. Five Lakhs Only) through RTGS to Supergold Properties Pvt. Ltd. Minaxi Suppliers Pvt. Ltd. had transferred the money in IDBI Bank, Ghatkoper (East) Branch, Mumbai: 400077 vide their Current Account No.033102000005784 through RTGS. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove the ingredients enshrined for complying the provisions Sec 68 of the Act It is to be mentioned here that the existence of the transaction in the books of the assessee is a condition precedent before any addition u/s 68 of Income-tax Act, 1961 is contemplated The amount is duly reflected in the books of accounts of the assessee for the year under consideration. Therefore, the A.O has rightly invoked Sec 68 of the Act in the instant case. Provisions of Sec 68 of the Act in the assessee to satisfy three ingredients namely, the proof regarding identity of the loan creditors, their creditworthiness to give the loan and the genuineness of the transaction as a whole. Initial burden of proof lies on the assessee. The basic precondition for Sec 68 of Income-tax Act, 1961 is that the assessee should file a valid confirmation. The confirmation must contain clear identity of the creditor and indicate complete details of transactions. As far as creditworthiness or financial strength and genuineness of the transaction of the creditor is concerned that can be proved by producing the bank statement of the creditor or copy of return of income and balance sheet, showing it had sufficient balance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ogus or not utilised for business purpose. As explained in the previous paragraphs, the assessee is considered to have discharged its onus after submitting the documents like confirmation letter, financial statements of the creditor/investor and bank statements. The onus then shifts to the AO to initiate a proper enquiry and bring sufficient material on record against the appellant's submissions, if he does not accept the same. It is apparent that the AO did not initiate any independent enquiry by issuing statutory notices/summons to the co-venture to verify the genuineness of the transactions. The reason may be that the assessee produced all the documents to the satisfaction of the AO and there is nothing that can be gathered by issuing notice u/s 133(6) or summons u/s 131 of the Act. It. is the settled law that no assessee can be cast upon with tax liability on the basis of presumption^ surmise and conjecture. The AO had a finding that the assessee did not produce copy of MOU or agreement undertaken by the assessee with MSPL. The addition has been made on the ground of genuineness and it is an undisputed fact that the assessee produced the documents which comply all ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ilise its funds in a particular manner. Similarly, there is no case for the additions made to the total income of the assessee on the basis of dubious transactions of third parties like Lalit Sharma. With regard to funds brought back to the assessee through non existent and shell companies the assessee stated that Minaxi Suppliers Pvt Ltd. was in existent and carrying out business activities during the relevant period. Further, the assessee also submitted that there were no cash deposits in the bank account of lender or in the bank account of the assessee during the relevant period, therefore, the allegation of funds brought back to the assessee through shell companies was not correct. It is also submitted there have been scrutiny assessment made in the case of MSPL for the assessment years 2010-11 & 2012-13 (AY 2011-12 was not under scrutiny as stated by the AR.) With regard to the interest not charged by the lender M/s. MSPL the assessee submitted that the lender in its affidavit has mentioned that the funds are given for pursuing the joint venture activity as mentioned in the submissions made by the assessee during the appellate proceedings. In view of this the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te and the credits are treated as 'income' of the assessee. The assessee can discharge the onus by producing confirmation from the creditor and proving the source of the credits. When the creditor accepts/owns the loan, the assessee is deemed to have discharged his onus and no further responsibility lies on the assessee to prove the source from where the creditor has acquired the amounts advanced to the assessee. ii. Hon'ble Patna High Court in the case of Sarogi Credit Corporation V/s. CIT{1976 }103 ITR 344 (Pat) and Bombay High Court in the case of Shantilal Jain ITXA/687/2004 decided on31.7.2007: When loan is accepted through normal banking channels, the identity of the creditor stands proved. However, merely because amounts have been received through banking channels, it is not sufficient to prove the genuineness of the credits. But the existence of a bank account of the creditor itself proves the existence of the creditor. The reason is very simple. Where the amounts are owned by the creditors, then even if it be presumed that the creditor had advanced the amounts from his undisclosed sources, still it would become the income of the said creditor and not t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Infrastructure 394 ITR 680 (Bom.):This proposition can be had from the proviso inserted in sec.68 by Finance Act, 2012 from AY 2013-14. Under this proviso, where the assessee receives share application monies/premium, the assessee is expected to prove source-of-source as well. Firstly in the case in hand, the amounts received are not share investment and further this proviso would apply only from A.Y. 2013-14. However, the said proviso was inserted because, sec.68 (Unamended) was incapable of obliging the assessee to prove the source-of-source and hence the proviso was required to be inserted. It follows that where the proviso doesn't apply, the sec.68 does not put the burden on the assessee to prove the source-of-source. viii. Hon'ble Supreme Court in the case of CIT V/s. Daulat Ram Rawaltmull 87 ITR 349 (SC): lt is not the business of the assessee to find out the source of the money of his creditors. ix. Hon'ble Apex Court in the case of CIT vs Orissa Corporation Pvt. Ltd. 158 ITR 78 (SC): It is also possible that a creditor may have advanced funds from out of his exempted income. For eg. If the creditor has agricultural income which is exempt, then ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... find that the Id, CIT(A) has passed a well-reasoned order supported by appropriate case laws duly rebutting all the findings of the A.O. Hence we uphold the order of the Id. CIT(A)". 2 M/S. Reliance Corporation Vs. ITO Ward 32 (3) (2), Mumbai, (ITA : 1069 to 1071/Mum/2017) 'D' Bench, Mumbai vide order dated 12.04.2017 for A.Y.2008-09, 2009-10 & 2010-11 & (ITA :4946/Mum/2016) for A.Y.2012-13; In the above case the Hon'ble Members of ITAT 'D' Bench, Mumbai has decided the issue vide order dated 12.04.2017 on page no. 16 para no. 9 & page no. 17 & 18 para no. 10 which is as under. In our considered view the facts of the assessee case are squarely covered by the ratio (aid down in the decisions referred to above. We , therefore, in view of our observations and the ratio laid down by the various decisions are inclined to set aside the order of CIT(A) and direct the A.O. to delete the additions of Rs. 1,29,04,231/-. Since we have decided the issue of addition u/s 68 in favour of the assessee, the addition as sustained by the Id CIT{A) u/s 69C of the Act of Rs. 3, 45,0007- is also ordered to be deleted. In result the appeal of the assessee i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Y.2007-08: In the case of Agarwal Cloth Agency Private Limited, Honourable Mumbai Tribunal has decided as under while deleting the addition of Rs. 1,25,00,OOO/-made under section 68 by the Assessing officer in respect of Loan borrowed from a concern of Pravinkumar Jain & Group was subject to investigation by Mumbai investigation Wing and the information of which is forwarded to the Assessing officer in the order passed vide ITA No. 2969/Mum/2017 of Assessment Year 2007-08 vide order dated 23 August, 2019: 5. ACIT vs Sridham Builders ITAT, Mumbai in ITA No. 5589/Mum/2017 In this case the Tribunal has considered an identical issue of additions made u/s 68,in respect of share capital received from companies controlled and operated by Shri Praveen Kumar Jain, and after considering relevant facts and also by relied upon various judicial precedents held that once, assessee filed necessary evidences to prove identity, genuineness of transactions and also filed necessary documents to prove capacity of the investors, then the AO cannot make additions only on the basis of information received from third parties. The relevant findings of the Tribunal are as under-Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y him is not, in the opinion of the A.O, satisfactory, then the sum so credited may be charged to income tax as the income of the assessee for that previous year. Accordingly, as per the mandate of the aforesaid statutory provision, the assessee is obligated to substantiate on the basis of a plausible explanation the nature and source of a sum found credited in his books of accounts In the case before us, we find, that as is discernible from the records, the assessee in discharge of the "onus" that was cast upon him as regards proving the "Nature" and "Source" of the amount aggregating to Rs. 1,05,00,000/- which was claimed by him to have been raised as loans from the aforementioned six companies, had therein placed on record supporting documentary evidence viz. (i) copies of the returns of the lender companies; (ii) copies of their audited financial statements; (iii) copies of the bank accounts of the lender companies; and (iv) the 'affidavits' of the principle officers of the lender companies, wherein they had confirmed the loan transactions. Further, on a perusal of the bank accounts of the aforementioned lender companies, all of which we find were being assessed to inco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o ought to have made necessary verifications as regards the authenticity of the loan transactions by summoning the principal officers of the aforementioned companies under Sec. 131 of the I-T Act, and also carrying out field inquiries/investigations as regards the identity and creditworthiness of the investor companies, and also the genuineness of the transactions, had however, not even done the bare minimum. Rather, only on the basis of his observations that the search proceedings conducted on Shri Praveen Kumar Jain group revealed that he was engaged in the business of providing accommodation entries, that the A.O had hushed to the view that the loan raised by the assessee from the aforementioned companies were to be dubbed as accommodation entries. We are unable to persuade ourselves to subscribe to the aforesaid view so arrived at by the A.O. In fact, a perusal of the assessment order reveals as if the A.O was framing the assessment in the case of Shri Praveen Kumar Jain, and not in the case of the assessee. It is in the backdrop of the aforesaid factual position, we find, that the CIT(A) observing that as the assessee had duly discharged the ,,onus" that was cast upon him unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are holders & director's details since beginning of those companies. He should have further obtained the DIN (Director's Identification no) of the directors of the companies which is linked with the Permanent Account No or any identification details of the directors. The details from bankers should also have been obtained with respect to the unusual transactions in the account of the investors as per F & U Ind wing as Id AO has alleged that the investors have high value transactions. The Directors, persons operating the accounts of those companies should have been examined by vast powers with the Assessing Officer under the Income Tax Act as well as under the other acts. The Id AO should have also intimated and coordinated with the assessing officer of those companies about the business activity or their assessment history. The similar information should have been obtained from the bankers of the company with respect to the beneficiaries, the account operating instructions, and authorities of those accounts along with copies of the bank account of these parties since the date of opening of accounts. The details from bankers should also have been obtained with respe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ived from several companies. The assessing officer issued summons to the subscriber companies which were returned unserved with remark that no such company exist. The inspectors were also sent for verification of the address of the above companies who also confirmed the same. Moreover, the assessee failed to produce principal officers of the subscribers of the company who could explain the source of such shares of the subscription in that circumstances the addition was confirmed. In the present case there is no enquiry made by the Ld. Assessing officer by issue summons under section 131 of the Income Tax Act or issuing enquiry letter under section 133 (6) of the Income Tax Act. In view of this, the reliance on this decision does not help the case of the revenue. (b) The decision of the Hon'ble Delhi High Court in case of CIT v. Nova promoters and Finlease (p.) Ltd. (Supra) relied upon by the Ld. Assessing officer, Id CIT DR as well as by the assessee. We have already decided the issue in the present appeal relying on the para Nos. 34 -39 of that particular decision. In that particular case before the Hon'ble Delhi High Court, there was a letter from the director of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of assessee in case of receipt of cash from investor when the assessee submits the complete details with respect to those investors then onus are discharged. It was further held that if on verification or during the proceedings the AO cannot contact the share applicants or information becomes unverifiable or there are further doubts then onus shifts back to the assessee at that stage assessee falters then, the consequence would be an addition u/s. 68 of the Act. In fact, in the present case no enquiry has been conducted by the assessing officer with respect to the above sum of loan as well as investment by the companies in share application money. (d) In the case of CIT V. Empire Builder (P.) Ltd. [2014] 43 taxmann.com 269/[2015] 228 Taxman 346 (Mag.)/[2014] 366 ITR 110 (Delhi), which was relied upon by the Ld. CIT DR the fact showing that the summons or the enquiry letters were issued under section 133 (6) to the investors. The investor did not respond to the notice and confirmation was also not submitted. In that particular case also the addition is required to be made only in case of investor whose particulars could not be verified and who did not respond to notices. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... holders stating that they were not share holders later on. There was also an allegation that the company was under the control one Mr. Mahesh Garg who was an entry operator. In those circumstances the addition were made. In the present case before us neither summons were issued nor was assessee asked to produce anybody, There was no allegation about any entry operator also. Therefore, reliance on the decision of Hon'ble Delhi High Court is misplaced. 37. Further, the Hon'ble Delhi High Court in case of Laxman Industrial Resources (Supra) after discussing the several decisions of the Hon'ble Delhi High Court has held that when assessee has provided several documents that could have showed light into whether truly transactions are genuine. That was not the case where the share applicant have merely provided the confirmation but have also provided their assessment particulars, mode of payment, bank statement showing cheque no and transfer of funds to the assessee as well as copies of the balance sheet etc. Therefore, the Hon'ble High Court noted that the AO has strangely failed to conduct any scrutiny of documents rest contended by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shell company. The amount of loan from the company had come through account payee cheques/bank transfers. The same had not come through cash. As per the affidavit submitted by the lender no cash was deposited in the investor company's bank account on dates immediately preceding the dates on the said cheques were issued. Further, the assessee has also submitted that the amount received was under joint venture activity hence, interest was not charged. The statutory requirement u/s. 68 till A.Y. 2012-13 was that the assessee was duty bound to explain the "source". From A.Y. 2013-14 the scope of sec.68 was widened and the Appellant was made liable to explain the source of source. In the year under appeal it is submitted that the assessee had not only explained the source but had also explained the source of source. The assessee has also explained that the observation of the AO stating that the assessee brought back it's own money thorugh shell companies was not based on any evidence but only presumption. The lender is a corporate entity. It is maintaining proper Books of accounts. These books of accounts are subjected to Statutory Audit by In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....19 in case of Goldcity Properties Pvt. Ltd. In the above case, the LD. AO has carefully considered the facts and the evidences and passed re opened assessment order by accepting the returned income of an assessee without making any addition. The said assessment order passed u/s. 143(3} read with section 147 was revised by passing Order u/s. 263 Ld. PCIT -14 against the Goldcity Properties Pvt. Ltd. However, after considering the entire facts, the Hon'ble ITAT in the above, SET ASIDE the Order u/s 263 of Ld. PCIT 14, as the assessment order of Ld. AO was not erroneous and also not prejudicial to the revenue by ITAT Order dated 21/6/2019. Similarly, in this present case, the Ld. AO ought to have accepted the returned income declared by the appellant in the return of income 3. Assistant Commissioner of Income-tax, Central Circle-17, Jhandewalan, New Delhi v. Shyam Indus Power Solutions (P.) Ltd., [2018] 90 taxmann.com 424 (Delhi - Trib.). Assessee had furnished names and addresses of share applicants, their PAN and confirmation with their bank account and Income-tax returns - Moreover, Assessing Officer had not at all carried out any in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....V/s. CIT [1976] 103 ITR 344 (Pat) and (Bombay High Court) in the case of Shantilal Jain lTXA/687/2004 decided on 31.07.2007: When loan is accepted through normal banking channels, the identity of the creditor stands proved. However, merely because amounts have been received through banking channels, it is not sufficient to prove the genuineness of the credits. But the existence of a bank account of the creditor itself proves the existence of the creditor. The reason is very simple. Where the amounts are owned by the creditors, then even if it be presumed that the creditor had advanced the amounts from his undisclosed sources, still would, be become the income of the said creditor and not that of the debtor (the assessee). 9. Hon'ble Apex Court in the case of CIT vs. Lovely Exports Ltd. 216 CTR 195 (SC). The Apex Court in CIT v/s. Lovely Exports (P)Ltd. 317 ITR 218 in the context to the preamended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al may not be followed in this case though the facts are similar. The Ld. D.R. also submitted that though the assessee filed necessary evidences as noted by the Ld. CIT(A) on page No.42 of the appellate order but that itself does not prove that the money raised was genuine which was allegedly paid to the assessee towards the joint venture. The Ld. D.R., therefore, prayed that the order of Ld. CIT(A) may kindly be reversed and that of AO may be restored. 8. After hearing both the parties and perusing the material on record particularly the decision of the co-ordinate bench of the Tribunal in ITA No.3593/M/2019 A.Y. 2010-11 dated 25.06.2020 of sister concern of the assessee, we observe that the issue on similar facts has been decided by the co-ordinate bench of the Tribunal in the said case namely ITO Vs Nextgen Construction Pvt. Ltd. Briefly in that case the facts are that the money was raised towards joint venture under similar facts and the co-ordinate bench of the Tribunal upheld order of Ld. CIT(A) on the ground that Ld. CIT(A) has correctly recorded the findings of facts that assessee has filed all the necessary evidences before the authorities below thereby proving all the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Hon'ble Supreme Court in the case of Lovely Exports P. Ltd. [319 ITR 5], dismissing revenue's appeal, observed as under: - "2. Can the amount of share money be regarded as undisclosed income under section 68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. 3. Subject to the above, Special Leave Petition is dismissed. The ratio of said decision has subsequently been followed by various judicial authorities in catena of judicial pronouncements. The said decision has been followed by Hon'ble Bombay High Court in the case of CIT Vs. Gagandeep Infrastructure Private Limited [80 Taxmann.com 272] & subsequently in CIT Vs. Orchid Industries Private Limited [88 Taxmann.com 502]. The Hon'ble Delhi High Court followed the said decision in Pr. CIT V/s Adamine Construction Pvt. Ltd. [107 Taxmann.com 84] against which revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the stated primary onus of Sec.68. It is pertinent to note that the assessee has produced copy of assessment order passed by revenue in the case of M/s MSPL in scrutiny assessment u/s 143(3) for AYs 2010-11 & 2012-13 which would lead to inevitable conclusion that the said entity was a taxable entity and regularly assessed to tax. In both the years, returned income of M/s MSPL has substantially been accepted by the revenue. 5.4 The perusal of assessee's financial statements, for the year, would show that the assessee has received unsecured loans not only from M/s MSPL but also from various other entities. The aggregate of such loans accepted by the assessee is 26.26 Crores at year-end which would show that impugned transactions are not isolated transactions but regularly carried out by the assessee during the course of its business and a part of which has already been accepted by the revenue. 5.5 Undisputedly, the amount received from M/s MSPL was through banking channels. There is no allegation of immediate cash deposit in the bank account of M/s MSPL before granting loans to the assessee. In fact, it is admitted position by Ld.AO that the unsecured loans were....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Mr. Padvekar, learned counsel for the respondent submits that from the facts and circumstances of the case, it is quite evident that assessee had discharged its burden to prove identity of the creditors, genuineness of the transactions and credit worthiness of the creditors. He submits that the legal position is very clear in as much as assessee is only required to explain the source and not source of the source. Decision of the Supreme Court in NRA Iron & Steel P Ltd (supra) is not the case law for the aforesaid proposition. In fact, the said decision nowhere states that assessee is required to prove source of the source. 11.1. Referring to the orders passed by the authorities below, Mr. Padvekar submits that in the present case, the investigation wing of the department had carried out detailed investigation at Kolkata and found the source of the credit to be genuine. This report of the investigation wing was not taken into consideration by the Assessing Officer. Therefore, lower appellate authorities were justified in deleting the additions made by the Assessing Officer. Being a finding of fact, no substantial question of law arises in the appeal. Therefore, the appeal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....discharged the primary onus contemplated by Section 68 of the Act." 15. It is also a settled proposition that assessee is not required to prove source of source. In fact, this position has been clarified by us in the recent decision in Gaurav Triyugi Singh Vs. Income Tax Officer-24(3)(1). 16. Having noted the above, we may now advert to the orders passed by the authorities below. 17. In so far order passed by the Assessing Officer is concerned, he came to the conclusion that the three companies who provided share application money to the assessee were mere entities on paper without proper addresses. The three companies had no funds of their own and that the companies had not responded to the letters written to them which could have established their credit worthiness. In that view of the matter, Assessing Officer took the view that funds aggregating Rs. 34 Crores introduced in the return of income in the garb of share application money was money from unexplained source and added the same to the income of the assessee as unexplained cash credit under Section 68 of the Act. 18. In the first appellate proceedings, it was held that assessee had produ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the books of assessee, the assessee is required to prove the following(a) Identity of the creditor (b) Genuineness of the transaction (c) Credit-worthiness of the party (i) In this case, the assessee has already proved the identity of the share applicant by furnishing their PAN, copy of IT return filed for asst. year 2010-11. (ii) Regarding the genuineness of the transaction, assessee has already filed the copy of the bank account of these three share applicants from which the share application money was paid and the copy of account of the assessee in which the said amount was deposited, which was received by RTGS. (iii) Regarding credit-worthiness of the party, it has been proved from the bank account of these three companies that they had the funds to make payment for share application money and copy of resolution passed in the meeting of their Board of Directors. (iv) Regarding source of the source, Assessing Officer has already made enquiries through the DDI (Investigation), Kolkata and collected all the materials required which proved the source of the source, though as per settled legal position on this issue, assessee need not to prove t....