TaxTMI 
TaxTMI 
2023 (10) TMI 40
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in ITA No. 18/SRT/2017 for the A.Y. 2014-15, the Revenue has preferred this appeal under section 260A of the Income Tax Act, 1961 [for short 'the Act']. 2. The Revenue has raised the following substantial questions of law: "(a) Whether in the facts and circumstances of the case and in law, the order of the Hon'ble ITAT is exfacie perverse, because, Hon'ble ITAT has held that the credit worthiness of the creditors and genuineness of transaction have been established, despite the facts that the identity of creditors have not been proved and that the three tenets of the issue operate in the sequence of (i) Identity of creditors (ii) creditworthiness of creditors and (iii) genuinity of transactions and not in any random sequence or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom such parties, show cause notice dated 16.12.2016 was issued requiring the assessee to show cause as to why unsecured loans as reflected in the balance sheet should not be treated as unexplained cash credit and should not be added to the total income for the year under consideration under section 68 of the Act. 6. The assessee in response to such notice, filed the details with regard to unsecured loan received by it in form of (i) confirmation of accounts or transaction (ii) a copy of the bank account of the creditor showing transaction to the assessee (iii) copy of income tax returns filed for A.Y. 2014- 15 by the lenders (iv) copy of audited final account in case of the companies and copy of balance-sheet capital account in case of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the Tribunal could not have remanded the matter back to the Assessing Officer to verify the identity of the assessee when the assessee has failed to discharge the same though the assessee could have been said to have discharged the onus of proving creditworthiness and genuineness of the persons from whom unsecured loan was received by him during the year under consideration. 11. It was further submitted that the Tribunal has committed an error by holding that as identity of the persons who have advanced loan to assessee is not established, one more chance is given to the assessee to prove the identity of the lenders by remanding the matter is contrary to the decision of the Apex Court in case of Principal Commissioner of Income Tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rror by considering the facts of the case. "8.1 It is observed that the status of both the companies are duly considered as Active Status in the records of the Company Master Data obtained from the Ministry of Company affairs. The lenders were maintaining and having operative banking accounts with regular dealings in these accounts. Copies of the bank accounts of all the lenders, including the three individuals were also furnished to the AO and the loans claimed were duly reflected in these. All the claimed creditors are assessed to tax in Surat only and their confirmations have been filed. Besides the loans have been all returned through banking channels before the close of the next financial year and much before the impu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of Principal Commissioner of Income Tax vs. NRA Iron and Steel Pvt Ltd. (supra) has observed as under: "11. The principles which emerge where sums of money are credited as share capital/premium are: (i) The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors and creditworthiness of the investors who should have the financial capacity to make the investment in question to the satisfaction of the Assessing Officer, so as to discharge the primary onus. (ii) The Assessing Officer is duty-bound to investigate the creditworthiness of the creditor/subscriber verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are....