TaxTMI 
TaxTMI 
2019 (3) TMI 2016
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....he A.Ys. 2008-09 to 2010-11 and 2012-13 to 2013-14 were reopened and the assessment for the A.Y. 2014-15 was completed u/s. 143(3) of the Act. 3. In the course of the assessment proceedings the Assessing Officer required the assessee to prove the genuineness, identity and creditworthiness of the creditors. Assessee submitted that, assessee has taken loans from the creditors through account payee cheques and the said loans were repaid through account payee cheques. Assessee furnished confirmations from the creditors, bank statements of the creditors, bank statement of the assessee, and the affidavit of Shri Praveen Kumar Jain retracting from his earlier statement that he is providing accommodation entries. It was also contended before the Assessing Officer by the assessee that even in the course of search proceedings in PKJ Group nothing has been unearthed to prove or even suggest that the assessee has received cash or cash has been given to PKJ Group companies. Ld. Counsel for the assessee submits that the Assessing Officer has not provided the assessee with statements of the persons he is relying on nor an opportunity to cross examine such persons. Referring to the notice issued ....
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..... Counsel for the assessee submits that no further enquiry has been made by the Assessing Officer except relying on the statements and the investigation report to prove that the loan transactions were non-genuine. Ld. Counsel for the assessee also placed reliance on the decision of the Coordinate Bench in the case of M/s. Shree Laxmi Developers v. JCIT in ITA.No. 6090/Mum/2017 dated 07.03.2018 and submitted that following the decision of the Coordinate Bench in the case of M/s. Shree Laxmi Developers v. ITO in ITA.No. 2562/Mum/2017 dated 29.12.2017 deleted the similar addition. 6. Ld.DR vehemently supported the orders of the authorities below. 7. Heard the rival submissions, perused the orders of the authorities below. Assessee during these Assessment Years raised loans from various creditors as under: - A.Y. Amount (Rs.) Name of the Creditors 2008-09 10,00,000 Natasha Enterprises 2009-10 16,00,000 Jasoda Exports 2010-11 1,25,000 Nakshtara Business Pvt Ltd Ryan International 5,00,000 Ryan International 2012-13 5,00,000 Nakshatra Business Pvt Ltd 2013-14 4,00,000 Casper Enterprises Pvt Ltd 20,00,000 Falak Trading Co Pvt Ltd 7,50,000 Josh Trading Co Pvt Ltd ....
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....er: - 4. The first issue that came up for our consideration is addition made by the AO towards unsecured loan u/s 68 of the Act. The AO made addition towards unsecured loans alongwith interest thereon received from Josh Trading Company Pvt Ltd and Viraj Mercantile Pvt Ltd on the ground that these are bogus accommodation entries received from group companies of Shri Pravinkumar Jain. According to the AO, the assessee is the beneficiary of accommodation entries provided by Shri Pravinkumar Jain from his bogus companies. The AO further observed that though the assessee has furnished details of identity, failed to prove genuineness of transactions and creditworthiness of the parties in the backdrop of clear findings of Investigation Wing that Shri Pravinkumar Jain has admitted that he was indulging in providing accommodation entries. This fact has been further confirmed by Shri Dinesh Choudhary, broker involved in arranging accommodation entries with Shri Pravinkumar Jain, who stated that Shri Pravinkumar Jain is indulging in providing accommodation entries, therefore, the AO opined that unsecured loans stated to be received from those companies are unexplained credit and hence made ....
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....rties. The assessee also furnished evidences to prove that the parties have responded to the notices issued u/s 133(6) by AO by filing various details. The assessee also filed bank statements to prove that the said unsecured loans have been repaid in the subsequent financial years. Therefore, we are of the view that there is no reason for the AO to doubt the genuineness of transactions despite furnishing necessary evidences including their financial statements, bank statements and IT returns. 6. The AO has made addition u/s 68 of the Act, on the ground that the unsecured loans are bogus accommodation entries provided by Shri Pravinkumar Jain through his hawala companies. The provisions of section 68 deal with cases where any sum found credited in the books of account of the assessee in any financial 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 AO, satisfactory, then sum so credited may be charged to income-tax as the income of the assessee of that previous year. A plain reading of section 68 makes it clear that the initial burden of proof lies on the assessee. It is well settled le....