TaxTMI 
TaxTMI 
2012 (4) TMI 800
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....he facts discussed in the assessment order. In fact, these credit entries represented the assessee's own cash introduced in the business through Ganga Ram Group of cases who have already admitted that they are engaged in business of providing entries and earning income therefrom. 2. That the CIT(Appeals)-I, Agra has erred in law and on facts in deleting the disallowance of ₹ 10,54,199/- of interest claimed to have been paid to the above named creditors on unexplained credit entries. 3. That the CIT(Appeals)-I, Agra has erred in law and on facts in observing that it has not been shown that the depositors have ever admitted that they were engaged in the business of giving bogus entries or that they had given bogus entries to the assessee, ignoring the fact that the assessments of the depositors have been completed holding that they were engaged in entry business. They have admitted this fact and no appeal order has been filed by them against the assessment. 4. That the order of the CIT(Appeals)-1, Agra is bad in law and on fact because in allowing the assessee's appeal he has completely ignored the fact that it has vehemently been proved that the amounts introduced as cre....
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.... in respect of the said loans. The AO also added ₹ 71,250/- @ 1.5% of the impugned loans as unexplained expenditure presumably incurred by the assessee for obtaining the impugned loan entries. 3. The assessee challenged the addition before the ld. CIT(A) and submitted that the deposits have been received by account payees cheques, the depositors are all assessed to income-tax. The depositors have confirmed giving of the loans to assessee and have also mentioned the source of money advanced as loan in their confirmation letters. It was also submitted that there is no concrete evidence on record with the AO to prove that it was the assessee's unaccounted money which was routed through the depositors and therefore, the addition made u/s. 68 of the IT Act is not justified. Since identity & creditworthiness of the depositors and the genuineness of the transactions stand proved, therefore, the deposits in question cannot be brought to tax in the hands of the assessee in absence of any evidence that the cash of the assessee has traveled and reached the creditors. The assessee also submitted that the AO has nowhere shown that the depositors have ever admitted that they were engaged ....
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....ed the burden to prove the identity of the creditor, the genuineness of the transaction which was carried out through banking channel and the credit worthiness of the creditor. After the assessee had discharged the burden, it was for the department to have disproved these facts. The AO did not examine the assessee nor brought any material on record to prove specifically that the loan transaction of ₹ 1,00,000/- was fake or bogus. The amount of loan was subsequently repaid again through banking channel. In the absence of any material to the contrary, the transactions carried out in regular course and through banking channel have to be accepted as genuine. To repeat, the department has not been able to show by concrete proof that the transaction of loan was not genuine. On the basis of the above, we do not find any scope to interfere with the findings of the learned CIT(A). The grounds raised by the Revenue are, therefore, rejected." 5.1. As in the above cited case, in the present case also, there do not appear any cash deposits in the concerned bank accounts of the lenders prior to the advance of the impugned loans to the appellant. On the contrary, in para 6 on page 7 of th....
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.... DR relied upon the order of ITAT, Jabalpur Bench in the case of Vishwanath Prasad Gupta, 129 ITD 95. 5. On the other hand, the ld. counsel for the assessee reiterated the submissions made before the ld. CIT(A) and submitted that all the depositors have explained their source of giving loan to the assessee. No cash have been deposited in their accounts and sufficient balances are available with them to give loan to the assessee. The confirmations of all the parties were filed alongwith their bank statements. The depositors are subjected to tax and have also confirmed giving of loan to the assessee. The assessee made request before the AO vide letter dated 17.11.2008 (PB-9) and 01.12.08 (PB-7) to summon all the creditors at the expenses of the assessee for proving the genuineness of the transactions in the matter. However, the AO has not summoned any of the creditors despite requests made by the assessee. He has submitted that in the case of same assessee for the assessment year 1997-98 & 1999-2000, the ITAT, Agra Bench vide order dated 30.09.2008 (supra) dismissed the departmental appeals on identical facts and the said order has been followed by the Tribunal in the case of assess....