2021 (1) TMI 998

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.... with the cross-objection filed by the assessee being C.O. No. 19/Kol/2020. 2. The common issue relating to the addition of Rs. 14,76,47,829/- made by the AO on account of unsecured loan which is sustained by the Ld. CIT(A) to the extent of Rs. 1,45,01,400/- is raised in ground no. 1 to 3 of the revenue's appeal and ground no. 1 of the assessee's cross-objection which read as under: Grounds of Revenue's appeal: "1. The Ld. CIT(A) erred in restricting the addition of unsecured loan to Rs. 1,45,01,400/- only without appreciating the fact that the assessee could not establish genuineness of entire loan amount of Rs. 14,76,47,829/-by filing supporting documents. 2. The Ld. CIT(A) erred in holding that the A.O. had conduc....

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..... 3,53,989/- u/s 40A(3) of the Act. 4. The Cross-objector craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds." 3. The assessee in the present case is a society registered under the West Bengal Registration Act, 1961 on 02.02.2005 and is running educational institution in Burdwan, West Bengal. The return of income for the year under consideration was filed by it on 31.03.2015 declaring a loss of Rs. 3,57,26,308/-. In the balance sheet filed along with the said return, unsecured loan to the tune of Rs. 14,76,47,829/- were shown by the assessee on the Liabilities Act. The said loans were appearing in the name of twenty one parties and in spite of sufficient opportunity a....

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.... while the assessee has also filed its cross-objection. 5. We have heard the arguments of the sides on this issue and also perused the relevant material available on record. As rightly submitted by the ld. DR, the primary onus to prove the unsecured loans of Rs. 14,76,47,829/- representing cash credits by establishing the identity and capacity of the concerned loan creditors as well as the genuineness of the loan transactions was on the assessee and there was a failure on the part of the assessee to discharge the same during the course of assessment proceedings as pointed out by the AO in the assessment order. As further submitted by the ld. DR, Ld. CIT(A) appears to have ignored this vital aspect and allowed substantial relief to the as....

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....er necessary verification. Ground No. 1 to 3 of the revenue's appeal are thus treated as partly allowed while ground no. 1 of the assessee's cross-objection is treated as allowed for statistical purpose. 7. As regards the issue raised in ground no. 2 of the assessee's cross-objection relating to the disallowance of Rs. 4,39,84,532/- made by the AO and confirmed by the Ld. CIT(A) on account of finance cost incurred by the assessee society, it is observed that the finance cost of Rs. 4,39,84,532/- claimed by the assessee under "Capital-Work-in- Progress" was disallowed by the authorities below on the ground that the assessee society was not registered u/s 12AA of the Act. As claimed by the assessee society by way of raising additional grou....