TaxTMI 
TaxTMI 
2024 (12) TMI 497
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....ng the fact brought on record during the course of assessment proceedings. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in not appreciating the fact that creditworthiness of the lenders of the unsecured loans amounting to Rs. 3,73,00,000/- has not been established properly for want of ITR, complete bank accounts and other details during the course of assessment proceedings. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs. 43,73,000/- made by the AO u/s 56(2)(vi)(b)(ii) of the Act, as the assessee had filed no documents with respect to the land sold being in the nature of agricultural land or otherwise during the course of entire assessment proceedings. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3 Noida is justified in pronouncing its decision only based upon the judgements in favor of the appellants by not considering the decision of Hon'ble Supreme Court in the case of Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 wherein it has been held that "If an assessee fails to prove s....
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....an amount of Rs. 23,00,000/-, & Rs. 3,50,00,000/respectively. In support of Identity, genuineness and credit worthiness of the transaction, the confirmed copy of account of both the lenders, copy of bank statements and the copies of respective ITR's and copy of balance sheet of M/s Sunder Singh HUF, with an application under Rule 46A of the I.T. Act, 1962, has been submitted by the assessee along with submission." During the year under consideration, the assessee had received an amount of Rs. 23,00,000/- from Mahendra Dairy Pvt. Ltd. and Rs. 3,50,00,000/- from Sunder Singh HUF as unsecured loan. The AO treated the outstanding amount of Rs. 3,73,00,000/- as income of the assessee u/s 68 of the Income Tax Act, 1961. During the course of appellate proceedings, the submissions of the appellant were forwarded to the AO. The AO in her remand report sent vide letter dated 05.10.2023 filed detailed report. The AO has reported that the assessee has filed documents in support of identity genuineness and creditworthiness of the transactions. The AR during the appellate proceedings submitted various documents in support of the Identity, genuineness and creditworthiness of the Inve....
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....nishing their PAN numbers or Income-tax assessment numbers and shows genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then onus of proof would shift to revenue and just because creditors/share applicants could not be found at address given, it would not give revenue right to invoke section 68-Held, yes" Analysis The addition made by the AO u/s 68 requires the assessee to discharge its onus on the following three issues: a. The Identity of the lender b. The creditworthiness of the lender c. The genuineness of the transactions The onus to prove the three ingredients u/s 68 was discharged. In the recent judgment Hon'ble Apex Court in the matter of Commissioner of the Income Tax Vs. Orchid Industries (P.) Ltd. [2020] 116 taxmann.com 113(SC) dismissed the SLP filed by the department against the judgment of Hon'ble Bombay High court in the matter of Commissioner of Income Tax Vs. Orchid Industries (P.) Ltd [2017] 88 taxmann.com 502 (Bombay), where it was held as under: "The assessee had produced on record the documents to establish the genuineness of the....
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....arties and genuineness of transactions - Further, Assessing Officer had not brought on record any evidence to prove that said sum was undisclosed income of assessee Whether, on facts, impugned addition made undersection 68 on account of said amount received by assessee was unjustified and same was to be deleted - Held, yes [Paras 9 and 11] [In favour of assessee)" Further, the Hon'ble High Court of Bombay in the case of Principal Commissioner of Income-tax-1 vs. Aml Industries (India) (P.) Ltd. reported at [2020] 116 taxmann.com 34 (Bombay) has held as under: Section 68 of the Income-tax Act, 1901- Cash credit (Share application money) Assessment year 2010-11-Assessing Officer noted that assessee had disclosed funds from three Kolkata based companies as share application money - But, since whereabout of above companies were doubtful and their Identity could not be authenticated, Assessing Officer treated aforesaid funds as money from unexplained sources and added same to income of assessee as unexplained cash credit under section 68 - However, it was found that assessee-company bank furnished PAN, copies of income tax returns of creditors as well as copy of ba....
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....company received share capital including share premium and furnished various documentary evidences in form of confirmation from investor, statement of bank account of investor etc. so as to substantiate identity and creditworthiness of investor and genuineness of transaction and revenue failed to bring on record anything adverse to these evidences, impugned addition made Under section 68 in respect of such share capital amount was unjustified. The facts outlined in paras above show that the appellant has duly discharged the onus cast on it to prove the identity, creditworthiness and genuineness of transactions in respect of the lenders. Discharge of burden The intention of law is that unaccounted money should be brought to tax. As per provisions of section 68 of the Act onus is on the person in whose books of account such money has surfaced. If an amount has surfaced in the books of an assessee either in the shape of share application money or a deposit/loan; it is presumed that such money belongs to the person in whose name it has been shown. However, as per provisions of section 68 of the Act, deeming provisions postulate that it is possible that the as....
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....d the bank statements of the loan creditors, evidencing their worthiness, the assessee has discharged its burden. No additions can be made unless a contrary finding is established by the AO." (On Genuineness) It has been held by Hon'ble High Court of Calcutta in the case of CIT Vs. Sahibganj Electric Cables (P) Ltd. reported at (1978) 115 ITR 408 (Cal.) as under: "Amounts of loan were received by cheques and repayment also made by cheques through assessee's bankers. The creditors gave confirmation letters mentioning therein their Income-tax file numbers. ITO without making any further enquiry disbelieving the evidence of the assessee made addition. ITAT held the addition not justified as the assessee discharged the onus. High Court held that the Tribunal was justified in deleting the addition. Similar view was expressed in the case of ACIT vs. Divine (India) Infrastructure (P) Ltd. reported at [2014] 42 CCH 0022 (Del Trib.) In view of above, there appears to be no reason to consider the said credits in the books of accounts of the assessee on account of unsecured loans as unexplained income u/s 68 of the Income Tax Act, 1961, the said add....
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....d before us. 11. This Revenue's appeal is dismissed. Order pronounced in the open court on 6th December, 2024 ============= Document 1 missioner (12) Kamlesh Singh H No 12/09 Mandawa Fazalpur Saket Block Delh Dear SriMasam From Sunder Singh HUF H No 12/09 Mandawa Fazalpur Saket Back Delhi Sub: Confirmation of Accounts 1-Nov-2013 to 29-Nov-2013 Dated 30-Nov-2013 Given below is the delais of your Accounts as standing in my/our Bocks of Accounts for the above mentioned perod Kindly return 3 copies stating your IT . Permanent A/c No. duly signed and sealed, in confirmation of the same Please note that if no reply is received from you within a fortnight, it will be assumed that you have accepted the balanco shown below Date 23-Nov-2013 Bank Particulars Being amount transfer from SBI Ale No. 32505710012 to SBOP A/c No. 55137592929 25.Nov-2013 Bank Being amount transfer from SBI A /c No 32505710012 to SBOP Are No 55137592929 Debt Amcurt 50.00.00000 Date Particulars 50,00,000 00 Creat Amount 23-Nov-2013 Bank 50.00 000 00 Being amount transf....