INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Alleged unexplained unsecured loan received as 'accommodation entries - Burden of proof discharged by assessee

AO had made the additions by treating the 'unsecured loans' received by the assessee from 34 parties belonging to BJ Group as 'unexplained loans received by the assessee', under section 68. Intimation was received by the revenue from the DDIT(Inv), Mumbai to the effect that assessee was one of the beneficiaries of accommodation entries for loan from various concerns/entities which were benami concerns, managed and controlled by BJ Group. The Investigating Wing of the department had examined all the loan creditors wherein all the creditors had appeared and confirmed the transactions of loans advanced to the assessee. The AO had primarily made the additions by believing and relying upon the admission of B J by ignoring the fact that nowhere in the statement of BJ or any of his associates recorded under section 132(4) had admitted that any of their concerns had ever given accommodation entries by way of unsecured loans to the assessee. CIT(A) deleted the addition. Held: Actually, the assessee had already discharged the onus cast upon him to prove the identity, creditworthiness and genuineness of transactions. But on the contrary, the AO had not brought on record any evidence to controvert or rebut the claim of the assessee and even no findings were recorded by the AO to the effect that the evidences produced by the assessee were untrustworthy or lack credibility. The repeated request made by the assessee to AO to furnish copies of print outs of a pen drive seized from BJ of date of transactions pertaining to the assessee and relevant to assessment years 2012-13 and 2013-14 was not adhered to. Apart from that the AO was also asked to furnish any other evidence in his possession in regard to the unsecured loans procured by the assessee from various entities of B J Group. But the AO did not supply the same also. Apart from that the AO had also failed to provide copy of 'party-wise ledger account' of the assessee containing details of corresponding cash received against loans on various dates and commission charged by BJ thereon. Therefore in such circumstances, AO had no valid basis for treating the 'unsecured loans' as 'accommodation entries'.

Followed:ITAT ITA No. 6099/Mum/16 for assessment year 2012-13 in assessee's own case.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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