Kanchan Plastics Private Limited, ... vs Deputy Commissioner Of Income Tax Asmnt ... on 22 March, 2023
A perusal of the decision of the Hon'ble
High Court of Gujarat High Court in the case of Rohini Builders (supra)
shows that under identical circumstances, the Hon'ble High Court has held
that in case the AO was not satisfied with the cash amount deposited by
those creditors in their bank accounts, the proper course would have been
to make assessments in the cases of those creditors by treating the cash
deposits in their bank accounts as unexplained investments of those
creditors u/s.68 of the Act. This view of the Hon'ble High Court has been
reiterated and confirmed by the principles laid down by the Hon'ble
Supreme Court in the case of Lovely Exports, reported in 216 CTR 1989
(SC), wherein, it has been categorically held that once the initial burden of
the identity is proved, then the Assessing Officer is at liberty to proceed on
the creditors in accordance with law but the same sum cannot be treated as
unexplained credit of the assessee. This view has been reiterated again in
the case of Steller Investment, 115 taxmann.com 99. In these
circumstances, as it is noticed that the assessee has produced the details of
the creditors before the Assessing Officer, the creditors have independently
confirmed the transaction before the Assessing Officer and no evidence is
found by the Assessing Officer to disprove the confirmation given by the
creditors. The assessee has discharged its burden of proving the identity,
creditworthiness and genuineness of the transaction in respect of the loan
P a g e 11 | 12
ITA No.198/CTK/2022
Assessment Year : 2017-18
from six creditors to the extent of Rs.28.50 lakhs. Consequently, the
addition as made by the AO and confirmed by the ld CIT(A) stands deleted.