Case Law Details
ITO Vs Hi Link City Homes Pvt. Ltd (ITAT Indore)
ITAT held that merely for not producing the cash creditors before the Ld. AO even when all the necessary documents as required to prove the identity, creditworthiness and genuineness of the cash creditors are furnished by the assessee, cannot be a reasonable basis to make addition for unexplained cash credit u/s 68 of the Act.
During assessment-proceeding, Ld. AO treated M/s Jayant Securities and Finance Ltd. and M/s Jay Jyoti India Pvt. Ltd. as paper companies and the loans taken by assessee therefrom as mere accommodation-entries and, therefore, assessed the loans as undisclosed income of assessee u/s 68 of the act. During appellate-proceeding before Ld. CIT(A), the assessee made a detailed submission with documentary evidences to prove that the loans were genuine. The Ld. CIT(A) carefully considered the submission of assessee and deleted addition by holding as under:
“5.17 It is clear from the above facts and judicial decisions so discussed above that the AO had made the addition solely on the basis of nonappearance of the Principal Officer before the AO. But in the written reply, the appellant has relied on the decision of Delta Transformer (supra) of Jurisdictional Bench of ITAT, Indore wherein the Hon’ble Bench had given its findings that merely for not producing the cash creditors before the Ld. AO even when all the necessary documents as required to prove the identity, creditworthiness and genuineness of the cash creditors are furnished by the assessee, cannot be a reasonable basis to make addition for unexplained cash credit u/s 68 of the Act. Further, the appellant has also submitted all the required documents to prove the identity, creditworthiness and genuineness of the transactions. Hence, keeping in view the various judicial decisions so discussed above, the documents so submitted by the appellant and the fact that none of these evidences could be controverted by the AO neither in the assessment-order nor in the remand-report so submitted; the addition so made by the AO is hereby deleted and accordingly, this ground of appeal is hereby allowed.”
During hearing before us, representatives of both sides fairly agreed that the lenders i.e. M/s Jayant Securities and Finance Ltd. and M/s Jay Jyoti India Pvt. Ltd. have been found as genuine companies and the loans taken by other assessees from those lenders have been found to be genuine and additions made by revenue u/s 68 in the assessment of those assessees, have been deleted in a plethora of decisions by ITAT, Indore Bench.
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