TaxTMI 
TaxTMI 
2025 (4) TMI 1124
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..... AO as well as before the ld. CIT(A) as the documents submitted was only in support of confirmations and other documents already submitted and no new documents were submitted. 2. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." 3. Succinctly, the fact as culled out from the records is that the assessee filed its return of income for the year under consideration declaring total income of Rs. 4,80,41,000/- on 14.09.2018. The case was selected for Complete Scrutiny assessment under the E-assessment Scheme, 2019 on the following issues :-- S. No. Issues i. Unsecured Loans Issues ii. Deduction Claimed for Industrial Undertaking u/s 80IA/80IAB/80IAC/IB/IC/IBA/80ID/80IE/10A/10AA 3.1 Statutory notices u/s. 142(1) and 143(2) were issued to the assessee along with a detailed questionnaire. Ld. AO on perusal of the details so submitted noted that the assessee is engaged in the business of power generation though windmill at Sangli, Jaisalmer and Barmer and thereby eligible for deduction u/s. 80IA of the Act but the ld. AO based on the discussed so recorded in the order added a sum of Rs.....
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....ve been claimed in the P&L account by the assessee. The business of the assessee is the manufacture of conduct wire and cables and generation of electricity by windmill and hence such expenses as listed by the A.O amounting to printing, dyeing, stitching, embroidery, are neither incurred nor claimed by the assessee. It is not known on what basis the A.O got these details which are not borne out by the facts on record. Accordingly, the addition of Rs 4,02,369/- is deleted and the Ground of Appeal is Allowed. 8. Ground has been raised against Ground No 2: This Ground has been raised against the action of the A.O in making an addition of Rs 32,684/- by disallowing the claim of this amount u/s 80IA of the Act. 8.1 I have perused the assessment order and the submissions of the appellant on this issue. I do not find any justification for the said addition. The A.O has not given any proper reason why the explanation of the appellant that these amounts were on account of the shor late payment of the bills of the 2 units were not to be included in the claim for 80IA especiall- since they are a part of the 10CCB report and audit report. Accordingly, the addition deleted and....
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....such amount by whatever name called, any explanation offered by such company shall be deemed to be not satisfactory unless [As amended by Finance Act, 2012, w.e. 1.1.4.2013]: (a) The person, being a resident in whose name such credit is recorded in the books of suc company, also offers an explanation about the nature and source of such sum so credited and (b) Such explanation in the opinion of the Assessing Officer has been found to be satisfactory. If all the above conditions exist, sum so credited may be charged to tax as income of the taxpayer of that year. 9.4 The Burden of proof is on the assessee who is required to offer an explanation to the satisfaction of the Assessing Officer so as not to ho is required thief of section 68 or for that matter section 69A. This aspect has been deliberated upon by the Hon'ble Supreme Court in numerous decisions. Relevant portion from following case laws are extracted below: i. Sreelekha Banerjee v CIT (1963) 49 1TR 112 (SC) "It seems to us that the correct approach to questions of this kind is this. If there is an entry in the account books of the assessee which shows the receipt of a sum or c....
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.... whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that that income is from any particular source." iii. Sumati Dayal v. CIT [1995] 80 Taxman 89 (SC) "But, in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year the same may be charged to income tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut, the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably." iv. CIT v. P. Mohanakala [2007] 161 Taxman 169 (SC) "The expression "the assessees offer no explanation" means where the assessees offer no proper, reason....
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....rden stands discharged and the burden then shifts to the revenue to show that though covered by cheques, the amounts in question, actually belonged to, or was owned by the assessee himself" The Hon'ble ITAT, Delhi in the case of Pee Aar Securities Ltd. vs. DCIT, Circle- 14(1), New Delhi [(2018) 96 taxmann.com 602 (Delhi - Trib.)] has held as under: "It is also a settled legal position that the onus of the assessee, of explaining nature and source of credit, does not get discharged merely by filing confirmatory letters, or demonstrating that the transactions are done through the banking channels or even by filing the income tax assessment particulars. In the case of CIT v. United Commercial and Industrial Co (P.) Ltd [1991] 187 ITR 596/56 Taxman 304 (Cal), Hon'ble Calcutta High Court has held that "it was necessary for the assessee to prove prima facie the identity of creditors, the capacity of such creditors and lastly the genuineness of transactions". Similarly, in the case of CIT v. Precision Finance (P.) Ltd [1994] 208 ITR 465/[1995] 82 Taxman 31 (Cal), it was observed that "it is for the assessee to prove the identity of creditors, their creditworthiness and ge....
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....he genuineness of the transaction. As held by Hon. Supreme Court in the case of CIT vs. N. Tarika Properties Investment (2014) 51 taxmann.com 387(SC) that "PAN cannot be treated as sufficient disclosure of identity of the person. PANs are allowed on the basis of application without actual de facto clarification of identity or ascertainment of activities, nature of business activity and are just as to facilitate the Revenue to keep track of transactions and thus PAN cannot be blindly and without consideration of surrounding circumstances treated as sufficient disclosing the identity of individual". 9.7 Looking to the assessment order it is seen that the assessee had taken unsecured loans during the year. The loans taken from 24 persons had been squared up during the year, as under :- Sl. No. Name of the Creditors PAN Loan squared- up during F.Y 2017-18 (In Rs.) 1 M/s Nav Bharat Machineries Pvt. Ltd. AAACN4713G 15,00,000/- 2 Arjun Singh ADVPS9417M 10,00,000/- 3. Hulas Chand Shreepal AAAHH8042K 10.00.000/- 4. Jai Kishan Mohit Jajoo AAAHJ6317B 45,00,000/- 5. Jaishree Bhandari 30,00,000/- 6. Ra....
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.... is clear that the non compliance from the rest of the parties showed that the identity and the genuineness of the respective parties had not been proved. The A.O has noted in the order that * Apart from the 10 persons mentioned above, none of the entities furnished the complete replies. Therefore, a reminders Notice u/s 133(6) of the I.T. Act, 1961 were issued for obtaining desired submission but even after reminder replies were not received. Accordingly, it is clear that the balance parties did not submit the replies even after the reminders were issued. Hence it cannot be said that the identity and the creditworthiness of the transactions have been proved. Furthermore, in the present proceedings, the appellant has submitted the confirmation, the ITR acknowledgement as well as the copy of the bank statement of some of the parties. However, looking to the assessment order it is seen that the A.O has mentioned that only the confirmations of the parties were submitted and the rest of the details such as ITR as well as the bank statements were not submitted. The appellant has not given any evidence that these details were also submitted before the assessing officer ....
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....knowledgement of ITR is provided. In the case of Sarthak Bhandari (loan of Rs 55lakhs) again no ITR or bank extract is provided. In the case of Manish Sharda (loan of 7.4 lakhs) the bank statement is not legible. With regard to the rest of the parties from whom loans were taken and squared up during the year, no details have been submitted even in these proceedings. 9.10 Accordingly, it is seen that in the above cases there was no reply received by the A.O during the assessment proceedings. Further even in the instant appellate proceedings the details are either incomplete or raise questions regarding the creditworthiness of the parties. Also reliance has already been placed on numerous judicial decisions to show that merely filing the documents like PAN and ITR etc does not in itself prove the genuineness of the transactions. For all these reasons, it is held that the appellant has failed to discharge the onus of proof u/s 68 of the Act and hence the addition of Rs 1,95,000/- made by the A.O is confirmed. The Ground of Appeal is Not Allowed. 10. Ground No 4 is general in nature and does not require adjudication. 11. Resultantly, the appeal preferred by t....
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....s have furnished incomplete reply. Subsequently, a reminder was issued for submission of desired reply." All these enquiries were conducted by the Learned Assessing Officer at the back of the assessee. Subsequently, the Learned Assessing Officer has mentioned that in the bank account statement submitted by these entities, it was noticed that amount was deposited in the bank account of the creditors prior to transferring the same to the assessee. These transactions have been treated as suspicious and consequently added to the income of the assessee. (Page 12 of the assessment order). Before making addition, the Learned Assessing Officer did not afford any opportunity to the assessee as in how many cases of creditors information was received and in what manner it was incomplete. The particulars of bank account where the money was deposited prior to transferring the same to the assessee were not disclosed to the assessee so as to enable him to furnish its defence. In these circumstances, the addition of Rs. 1,95,25,000/- made by the Learned Assessing Officer without providing adequate opportunity to the assessee is arbitrary and against the principles of equity and justice. A....
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....idence so found. It is the submission of the assessee that the evidences furnished include only copies of IT returns or copy of bank account, which neither can be manipulated or created and hence, these need to be considered in the interest of equity and justice. The Hon'ble Tribunal is humbly requested to admit all these evidences and consider the same sympathetically for deleting the addition made by the Learned Assessing Officer and wrongly sustained by the Learned CIT(A). With this background of the case, the individual grounds of appeal are discussed hereunder :- Ground No. 1 In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 1,95,25,000/- u/s 68 of the Income Tax Act, 1961 without considering the evidences filed before the Learned Assessing Officer as well as before the Learned CIT(A) as the documents submitted was only in support of the confirmations and other documents already submitted and no new documents were submitted. It is submitted that in the case of the assessee, addition of Rs. 1,95,25,000/- has been made under section 68 of the IT Act, wrongly treating the deposits in ....
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....s assessed to ta and copy of his ITR for ASSESSMENT YEAR 2018-19 is filed reflecting income of Rs. 1,31,76,610/ -. Thus, the capacity of the creditor is beyond doubt. Copy of ITR, bank statement and confirmation are furnished 3 Dinesh Kalani AHDPK2216N Rs. 500000 1.The deposits in bank account are just prior to the date of loan. 2.Later on, the balance is below Rs. 1 lac Bank account of the assessee with SBI, Mansarovar, Jaipur (A/c No.00000051009006855) running from April 2017 to January 2018 is furnished . The perusal of the bank account reveals that it has balance of Rs. 3,72,843/- as on 1.4.2017. The loan has been given by this person to the assessee on 29/11/2017. On 28/11/2017, there is deposit on account of LIC of Rs.103050 and on 29/11/2017, there is transfer of Rs. 1,00,000 from HDFC Bank account of Dinesh Kalani. Thus, it is assessee's own money which has come in the bank account of the assessee. There is no outside deposit. It is further submitted that the balance of the assessee has been fluctuating from Rs. 5,27,403/- as on April 13, 2017 to Rs. 63,310/- on 18/1/2018. The perusal of the account reveals that the assessee has been advancing....
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.... of Rs. 197801/- is not a small amount looking to the deposit of Rs. 4 lac only. It is submitted that Purvi Chainani has also advanced loan of Rs. 6 lac to Shri Raj Shree Kumar Rs.600000 to Royal Pharma and Rs.400000 Subash K Bawzi. This shows the capacity of Purvi Chainani. Copy of ITR, Balance sheet and bank account are furnished 7 Raju Krishan Kumar Marfatia HUF AAMHS9614N Rs. 500000 1.Bank statement is not legible Legible copy of bank account is furnished, which discloses loan of Rs.500000 on 04/12/2017. The bank account discloses continuously balance of more than 5 lac from 1/4/2017 and goes up to Rs. 49,57,000/-. The bank account discloses closing balance as on 31/3/2018 of Rs. 6,10,854/-. It is further submitted that there is more than one transaction exceeding Rs. 20 lacs in the bank account, which establishes the capacity of the depositor. 8 Ramesh Chand Gupta ABDPG1277F Rs. 1500000 1. There is deposit in the bank account of Rs. 10 lac just a day before the amount of loan given. The creditor is assessed to income tax having PAN ABDPG1277F. The assessee has furnished confirmation, copy of ack....
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....e of Rs. 62,23,000/ -. It is submitted that the returned income itself establishes the capacity of the depositor for advancing Rs. 15 lacs. Copy of bank account is also enclosed. 12 Arjun Singh ADVPS9417M Rs. 1000000 No comments by the Learned CIT(A) The creditor is assessed to income tax having PAN ADVPS9417M. The assessee has furnished confirmation, copy of acknowledgement of return for AY 2018-19, and copy of bank account of the creditor reflecting the transaction of loan. These evidences establish that the loan is fully explained. The identity of the creditor, its creditworthiness and genuineness of transaction stands established. The ld. AO has made the addition on the basis of surmises and conjectures and without providing adequate opportunity to the assessee to furnish the details. Therefore, the addition made is illegal, unjust and unlawful and deserves to be deleted. 13 Ranjit Lodha ABAPL7896G Rs.10000000 1.Copy of ITR not filed. 2. Copy of bank statement not filed Copy of ITR for A.Y. 2018-19 disclosing returned income of Rs. 50142777/- filed on 26/10/2018 is furnished. The quantum of income shown in the return of income itself establishes....
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.... It is submitted that in the case of the assessee, the Learned Assessing Officer made addition of Rs. 1,95,25,000/- under section 68 treating the 14 squared up loans as unexplained. It is submitted that the Learned Assessing Officer conducted inquiries at his own level by issuing notices u/s 133(6) to the all the 24 creditors. The Learned Assessing Officer got complete information in respect of ten creditors and in the remaining 14 cases, the information furnished was allegedly incomplete and as such, the Learned Assessing Officer sought information in respect of the 14 creditors from the assessee. As mentioned in the assessment order on page 12, the Learned Assessing Officer informed the assessee that in 14 cases, replies received from the parties were not complete. It was also mentioned that in the case of certain parties, money was deposited in bank account and later on transferred to the assessee. Accordingly, in the view of the Learned Assessing Officer these transactions were of suspicious nature. However, the Learned Assessing Officer did not disclose the name of parties where the information was incomplete and there were deposits in bank account just prior to transfer ....
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....ng Officer did not grant enough time to the assessee to enable him to get in touch with the depositors for obtaining copies of the bank account and IT returns. Thus, the addition made by the Learned Assessing Officer was in violation of principles of equity and justice. The Learned CIT(A) was not justified in sustaining the addition without going into the facts and circumstances of the case. Without affording due opportunity to furnish the requisite details, the ld.AO proceeded to make the impugned addition, which action is against the principles of natural justice and fair play. The Learned CIT(A) also sustained the addition without providing sufficient opportunity to the assessee. Thus, there has been complete violation of principles of natural justice in this case and on this count also, the addition made by the ld.AO deserves to be deleted. The following case-laws are quoted in support :- (a) Union of India Vs. Tulsiram Patel (AIR 1985 SC 1416-1469)Hon'ble Supreme Court The Hon'ble Supreme Court held that the principles of natural justice have come to be recognized as being part of the guarantee contained in Article 14 of the Constitution of India beca....
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....132. It is submitted that the information furnished by the assessee was in support of details furnished before the Learned Assessing Officer which were found in complete. The Learned CIT(A) noticed that the assessee has not furnished any application u/s 46 A. However, the Learned CIT(A) went on considering the information furnished by the assessee, but found fault with them inasmuch as the information was found incomplete. In the view of the Learned CIT(A), in some cases, IT return was not furnished and in other cases, copies of bank accounts were not legible whereas in some cases, there were deposits in the bank account of the parties just prior to transfer of the amount to the assessee. On account of all these infirmities in the information furnished by the assessee, the Learned CIT(A) sustained the addition made by the Learned Assessing Officer. It is relevant to mention that both the Learned Assessing Officer as well as the Learned CIT(A) passed orders in a very hasty manner as if they were bent up on in making/sustaining the addition. The Learned Assessing Officer, while making addition of Rs. 1,95,25,000/-, has failed to give the details of this amount. In fact, the total of ....
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....hat the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence- (2) Aravali Trading Co. V/s ITO (2008) 8 DTR (Raj) 199 Hon'ble Rajasthan High Court The Hon'ble High Court held that once the the existence of the creditors is proved and such person own the credits which are found in the books of the assessee, the assessee's onus stand discharged and the latter is not further required to prove the source from which the creditors could have acquired the money deposited with him either in terms of section 68 or on general principle. (3) CIT Vs. Jai Kumar Bakliwal (2014) 101 DTR 377 (Raj) Once the amount was advanced by the creditors by account payee cheque from their respective bank accounts and the creditors were being assessed to income tax, the capacity of the creditor and genuineness of the transaction stood proved. Addition u/s 68 not sustainable. (4) Commissioner of Income Tax Vs. Heeralal Chaganlal Tak HIGH COURT OF RAJASTHAN (2002) 176 CTR 0495, (2002) 257 ITR 0281, (2002) Income-Cash credit-Burden of proof-Identity o....
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....ing channels, amount of share application money could not be treated as assessee's undisclosed income under section 68. (9) DCIT Circle 3(1)(I) vs. Orient News Prints Ltd (2018) 259 Taxman 408 (SC) Where in order to prove the genuineness of share transactions, assessee brought on record all relevant facts, such as, names, address, PAN of share applicants, it was thereupon the duty of the AO to obtain separate confirmation from concerned parties, if required, and where he failed to do so, it could not be a ground to re-open assessment. (10) COMMISSIONER OF INCOME TAX vs. ORBITAL COMMUNICATION (P) LTD. (2010) 327 ITR 0560 (Delhi high Court) Income-Cash credit-Share application money-Tribunal upheld the order of CIT(A) deleting addition made by the AO on account of share application money following the decision of the Hon'ble Supreme Court in the case of CIT vs Lovely Exports (P) Ltd.(2008) 216 CTR (SC) 195 as the assessee produced substantial evidence to establish the identity and creditworthiness of share applicant- Tribunal justified in holding that the share application money cannot be regarded as undisclosed income of the assessee under....
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....or illegal dealings, he cannot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company-If relevant details of address and identity of the subscribers are furnished to the Department along with copies of the shareholders register, share application forms, share transfer register, etc. it would constitute acceptable proof or explanation by the assessee-Department would not be justified in drawing an adverse inference only because the creditor/subscriber fails or neglects to respond to its notices-Tribunal has noted that the assessee-company is a public limited company which had received subscriptions to the public issue through banking channels and the shares were allotted in consonance with the provisions of Securities Contract (Regulation) Act, 1956, as also the rules and regulations of Delhi Stock Exchange-Complete details were furnished-Tribunal has further found that the AO has not brought any positive material or evidence which would indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented company's own income from undisclosed sources-As regards receipt of sha....
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..... CIT(A) were not new documents but he has considered it to be additional and considered while deciding the merits of the case, in the interest of justice the assessee has moved an application u/r. 29A to be considered those evidence even if considered as additional evidence as his alternate plea and the same reads as follows: "1. It is submitted that in the case of the assessee, the Learned Assessing Officer made addition of Rs. 1,95,25,000/- under section 68 treating the 14 squared up loans as unexplained. It is submitted that the Learned Assessing Officer conducted inquiries at his own level by issuing notices u/s 133(6) to the all the 24 creditors. The Learned Assessing Officer got complete information in respect of ten creditors and in the remaining 14 cases, the information furnished was allegedly incomplete and as such, the Learned Assessing Officer sought information in respect of the 14 creditors from the assessee. As mentioned in the assessment order on page 12, the Learned Assessing Officer informed the assessee that in 14 cases, replies received from the parties were not complete. It was also mentioned that in the case of certain parties, money was deposited in....
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.... Industries Ltd Vs. ACIT (2012) taxmann.com 107 (Hyderabad) "Where documents sought to be submitted would help in arriving at right decision, same should be admitted". (2) Jasmine Commerical Ltd Vs. CIT(2011) 200 Taxmann 388 (Calcutta) Under Rules 29 of Appellate Tribunal Rules, Tribunal has discretion to admit additional evidence in interest of justice once Tribunal affirms opinion that doing so would be necessary for proper adjudication of the matter. (3) CIT Vs. Text Hundred India (P) Ltd (239 CTR 263 (Delhi) Where the Tribunal found that CIT(A) had wrongly treated papers filed by assessee as new evidence, said finding was finding of fact and could not be said to be perverse. (4) CIT Vs. Sikka Overseas (P) Ltd (2010 328 ITR 641(Delhi) Once it is found that party intending to lead evidence before Tribunal for first time was prevented by sufficient cause to lead such an evidence and that said evidence would have material bearing on issue and ends of justice demanded admission of such an evidence, Tribunal could pass an order to that effect. (5) Ram Prasad Sharma Vs. CIT (1979) 119 ITR 867 (Allahabad) ....
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....to support the primary one already on record to support the confirmation placed on record and in furtherance ITRs and bank accounts were placed before him. This evidence were necessary to support and discharge justice to the assessee. To support this contention ld. AR of the assessee relied upon the various decisions. On merits of the case the ld. AR of the assessee submitted that the assessee has filed all 24 confirmation and relevant details. Based on those details so placed on record, the ld. AO written letter u/s. 133(6) to all 24 of those depositors. The ld. AO has not shared the details for which he has not received the information u/s. 133(6) from third parties. The ld. AO also did not specify for which of the depositors he made the additions and how the figure of addition is arrived at. The ld. CIT(A) has considered that the assessee has filed all the evidence but only observed that bank statements are not legible for some of the depositors and in some there are not filed. The ld CIT(A) while dealing with the bank statement so placed on record even commented that after transferring the money to the assessee balance remain is meager amount. Here also even though all th....
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....o such application is available on record. Therefore, the assessee has neither filed additional evidences under Rule 46A before Ld. CIT(A) nor under Rule 29 of the ITAT Rules, 1963 before the Hon'ble ITAT Bench. Hence the assessee's case should be heard based on the submission made before the Assessing Officer during the assessment proceedings. 3. The assessee in his written submission aforesaid has quoted case laws in his favour (Sr.1 & 2 at page no 19 and 20 respectively, Sr. 1 to 13 at page no. 26 to 34). The aforesaid case laws are clearly distinguishable on facts. The onus to prove the cash credit u/s 68 of the Act is on the assessee. This has been adjudicated upon by the various courts in the following cases :- S.No. PARTICULARS 1 [2022] 139 taxmann.com 352 (Calcutta) HIGH COURT OF CALCUTTA Principal Commissioner of Income-tax v. Swati Bajaj 2 [1995] 80 Taxman 89 (SC) SUPREME COURT OF INDIA Sumati Dayal v. Commissioner of Income-tax 3 [1958] 34 ITR 807 (SC) SUPREME COURT OF INDIA A. GovindarajuluMudaliar v. Commissioner of Income-tax 4 [1971] 82 ITR 540 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Durga Prasad 5 ....
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....onus u/s 68 was not discharged by the assessee. 4. The assessment order passed by the AO is a reasoned order and is based on the details provided by the assessee during the course of proceedings. The CIT(A) has also adjudicated the issue u/s 68 of the Act by recording proper reasoning regarding additional evidences under rule 46A and on merits. Respectfully submitted for your kind consideration." 10. In the rejoinder the ld. AR of the assessee submitted that on the part of the assessee he has discharged the burden cast upon him as per provision of section 68 of the Act. It was the ld. AO who has exercised the power u/s. 133(6) and has not brought on record which of the depositor information was not received. Not only that he has not specified the fact that that letter came back as unserved or served. In the absence the service of the letter itself proves that there is no fault on the part of the assessee so far as to prove the burden cast upon them. It was the ld. AO need to improve upon the facts placed on record which he failed to do and on that part the addition cannot be sustained merely on the ground that the information called for u/s. 133(6) were not received. Be....
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....on of section 68 of the Act and that too when the notices were served upon those parties and some of them have not replied and some has given incomplete information, do not suggest that the deposit accepted by the assessee are covered within the provision of section 68 of the Act as the responsibility casted upon the assessee to prove the identity, genuineness and capacity of the depositor is proved by the assessee. Merely the letters written u/s. 133(6) reply has not been received will not make the transaction covered u/s. 68 of the Act. In fact, the bench noted that all the letters i.e. 24 first time and 14 second have been served and there is no finding that the same remained unserved. Be that it may so even that details of those 14 parties were not shared by providing the list of parties to the assessee. Thus, so far as regards all these 24 creditors we note that the assessee has filed all the required details and based on that information so placed on record the ld. AO issued a letter u/s. 133(6) of the Act. The ld. AO in that letter issued to third parties called for ITR and bank statements. Consequent to that as noted in the assessment order that the ld. AO has received all ....
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....lay on the respondent-assessee to prove about the cash credit but once all the cash creditors appeared before the AO, their statements having been recorded u/s 131, then in so far as the respondent-assessee is concerned, the onus, which lay upon him (assessee), in our view, stood discharged as he was able to prove identity of the creditors. Once the amount was advanced by account payee cheque from their respective own bank accounts and were being assessed to income tax, then in our view, capacity of the creditor and genuineness of the transaction stood proved. In so far as the respondent-assessee is concerned, it is correct that he is not required to prove source of the source and if the AO had any doubt, then the AO, assessing the respondent-assessee, could have sent the information to the AO, assessing the cash creditors for appropriate action in their cases but in so far as the respondent-assessee is concerned, in our view, the respondent-assessee has been able to discharge the burden which lay upon him. 10. Certainly, deposit of cash and immediate transfer of cheque or clearance of the cheque within a day or two casts a doubt as the transaction appears to be some what ....
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....us to prove that the apparent is not the real is on the party who claims it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of Biswanath, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of Biswanath. A simple way of discharging the onus and resolving the controversy was to trace the source and origin of the amount and find out its ultimate destination. So far as the source is concerned, there is no material on the record to show that the amount come from the coffers of the respondent-firm or that it was tendered in Burrabazar Calcutta branch of the Central Bank, on November 15, 1944, on behalf of the respondent. As regards the destination of the amount, it has already been mentioned that there is nothing to show that it went to the coffers of the respondent. On the contrary, there is positive evidence that the amount was received by Biswanath on January 22, 1946. It would thus follow that both as regards the source as well as the destination of the amount, the materia....
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....mount admitted to be deposited by these four persons belonged to the assessee. The assessee having discharged his burden by proving the existence of the depositors and the depositors owing their deposits, he was not further required to prove source of source. 17. As observed herein above, though u/s 68, AO is free to show with the help of the enquiry conducted by him into the transaction which has taken place between the creditor and the sub-creditor that the transaction between two were not genuine and that the sub-creditor had no creditworthiness, it will not necessarily mean that loan advanced by the sub-creditor to the creditors was income of the assessee from undisclosed sources unless there is evidence direct or circumstantial, to show that the amount which had been advanced by the sub- creditor to the creditor had actually been received by the sub-creditor from the assessee. 18. The logical interpretation will be that while the assessee has to prove as special knowledge i.e. from where he has received the credit and once he disclosed the source from which he has received money, he must also establish that so far as his transaction with his creditor is conce....