2021 (1) TMI 319

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....come Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2013-2014. 2. The interconnected issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO in part by treating the loan of Rs.22 lakhs as unsecured cash credit under section 68 of the Act and disallowing the corresponding amount of interest on such loan of Rs. 1,48,665.00 only. 3. The facts in brief are that the assessee in the present case is a private limited company and engaged in the business of software development and services. The assessee in the year under consideration has taken loan from various parties including the following: i) Ms Shibani M. Doshi Rs. 10,00,000/- ii) Ms. Ekta A ....

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....ischief of Section 68 of the Act. These are: (i) identity of the investors; (ii) their creditworthiness/investments; and (iii) Genuineness of the transaction. 9.1 The departments exercise starts only when these three ingredients are established prima facie, by the assessee and the department is required to investigate into the facts presented by the assessee. As per the statutory provision of Section 68 of the Act and jurisprudence of the Hon'ble Courts, it is clear that the primarily onus is on the assessee to discharge that the credit received by it is from the sources whose identity can be proved, the genuineness of the transaction and the creditworthiness of the creditor is proved by documentary evidenc....

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....e are in complete agreement with CIT (A) and the Tribunal both, who have concurrently held that the onus which was required to be discharged on the part of the assessee respondent was duly done. Not only the identity of the persons concerned but also the PAN numbers were before the Assessing Officer. In the event of any further inquiry, it was open to the Assessing Officer to make inquiry under Section 133(6) of the Act. On its choosing not to exercise such powers, it was erroneous on the part of the Assessing Officer to make addition of a sum of Rs. 23,00,000/-, despite such cogent evidences having been put-forth by the assessee. Both the authorities have concurrently held the issue in favour of the assessee and moreover, the enti....