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TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 671
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....ion 69B of the Act, without considering that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings in the case of the Director of the assessee company and also ignoring the detailed findings given by the Assessing Officer in the assessment order? (B) Whether on the facts and circumstances of the case and in law, the Appellate Tribunal is justified in upholding the decision of the Ld.CIT(A) in deleting the addition of Rs.1,62,44,073/- made by the Assessing Officer on account unexplained unsecured loans for the reason that the assessee as well as the lenders failed to prove their creditworthiness? (C) In addition and in alternative to ground [B], whether on the facts and circumstances of the case and in law, the Appellate Tribunal is justified in deleting the addition made by the Assessing Officer on account of unexplained loans, without considering that the assessee has failed to prove the creditworthiness of the lenders and these were only managed entries?" 2. The brief facts leading to the present appeal are as follows : 2.1 The assessee company is a company incorporated on 24.11.2011 and is r....
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....12-13 and 2013-14, the very piece of document has been admitted and taken into consideration by the authority and accordingly the additions have been deleted on the ground that the Director had admitted this amount and the only difference in the present year is of absence of signatures of either the seller or anybody else. We deem it appropriate to hear the other side by issuing the notice on finding prima facie substance in the version given by learned senior standing counsel. 4. So far as the second question is concerned, we notice that during the course of assessment proceedings, the assessing officer noticed that the assessee has received loans from the Directors as well as others aggregating to Rs.1,62,44,073/-. The list of unsecured loans is forming part of the record in the assessment order. The assessees were required to prove the identity, creditworthiness and the genuineness of the loan. 5. According to the Assessing Officer, the assessee failed to establish this and accordingly invoking the provision under Section 68, an addition of Rs.1.62 crores (rounded off) has been made determining the total income of the appellant accordingly. The company has not accepted the....
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.... justify the cash credit entries under section 68 of the Act by the Hon'ble Calcutta High Court in the case of CIT Vs. Precision finance (p) Ltd reported in 208 ITR 465 wherein it was held as under: "It was for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. On the facts of this case, the Tribunal did not take into account all these ingredients which had to be satisfied by the assesee. Mere furnishing of the particulars was not enough. The enquiry of the ITO revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently, the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. The Tribunal did not apply its mind to the facts of this particular case and proceeded on the footing that since the transactions were through the bank account, it was to be presumed that the transactions were genuine. It was not for the ITO to find out by making inve....
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....ls) and the Tribunal have concurrently held against the revenue by giving cogent reasons. Even otherwise, it is a settled law that once the identity, genuineness of transactions and the creditworthiness have been established, no additions can be made. 9. In the instant case, initially the Assessing Officer had doubted all the three, however, subsequently in the remand reports, he had not questioned the identity as well as the genuineness of the transactions. He had later questioned only the creditworthiness of all the lenders. The CIT (Appeals) and Tribunal, when have found that the transactions were made through the banking channels, the first also and that had been admitted by the person concerned, the report of the money, substantially in most of the cases and a small portion of the total amount in some, would not, in any manner question the creditworthiness of the transaction. We are reminded of the decision rendered by this Court in the case of Commissioner of Income Tax V/s Chanakya Developers, where this Court was considering the cash credit received by the assessee from four different persons on account of booking the flat. For establishing the genuineness of transact....