DCIT v. Jainam Investments - Taxpublishers.in

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The Tax Publishers2019 TaxPub(DT) 1074 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Assessee furnished all the details that were called for, including details of loans received, details of interest paid, copies of affidavits given by lenders, and their financial statement of lenders etc., in order to prove identity and creditworthness of lenders and genuineness of loans in terms of section 68 of the Act. Thereafter, assessee sought for copies of documents relied upon by AO and also copies of statements given by Shri Bhanwarlal Jain and others. But AO did not furnish details requested by the assessee and also did not afford opportunity to cross examine the persons. Accordingly, AO had not discharged burden shifted upon his shoudlers and addition made under section 68 could not be sustained.

Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan - Identity, creditworthiness and genuineness

Assessee had taken unsecured loan from various persons. Revenue carried out search and seizure operations in the case of Mr. Bhanwarlal Jain and his group concerns and the search revealed that they were engaged in providing accommodation entries in the form of unsecured loans, to the interested parties. AO took the view that assessee had introduced its unaccounted cash through bogus loans and accordingly, AO made addition under section 68.Held: Assessee furnished all the details that were called for, including details of loans received, details of interest paid, copies of affidavits given by lenders, and their financial statement of lenders etc., in order to prove identity and creditworthness of lenders and genuineness of loans in terms of section 68 of the Act. Thereafter, assessee sought for copies of documents relied upon by AO and also copies of statements given by Shri Bhanwarlal Jain and others. But AO did not furnish details requested by the assessee and also did not afford opportunity to cross examine the persons. Accordingly, AO had not discharged burden shifted upon his shoudlers and addition made under section 68 could not be sustained.

Distinguished:Pt. CIT v. NDR Promoters Pvt. Ltd. ITA No. 49/2018 decided on 17-1-2019 : 2019 TaxPub(DT) 0886 (Del-HC).

REFERRED : Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC) and Andaman Timber Industries v. CIT [Civil Appeal No. 4228 of 2006, dt. 2-9-2015] : 2015 TaxPub(EX) 2155 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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