Asst Cit 25(3), Mumbai vs Shree Ganesh Developers, Mumbai on 20 November, 2018
5.11 Further, it has been held by the Hon'ble Bombay High Court,
in the case of CIT vs. Smt. Sushiladevi Khadaria [2009] 319 ITR
(Bom) that when loans were taken by account payee cheques and the
record indicated that there was no cash payment in the account of the
borrower prior to the issuance of such cheques, the loans and interest
paid on such loans were not includible in the total income of the
assessee u/s. 68 of the Act. It was also held by the Hon'ble ITAT
(Mumbai) in the case of ITO vsAnant Shelters (p) Ltd. [2012] 051 SOT
0234 that in matters regarding cash credit the onus of proof was not a
static one. As per the provisions of the section 68, the initial burden of
proof lies on assessee. Amount appearing in books of accounts of the
assessee was considered a proof against him. He can prove the identity
of the creditors by either furnishing their PANS or assessment orders.
Similarly, genuineness of transaction could be proved by showing that
money was received by an account payee cheque or by draft. Credit
worthiness of the lender could be established by attending
circumstances. Once assessee produces evidences about identity,
genuineness and credit worthiness of the lender, onus of proof shifts to
revenue. Therefore, it was held that assessee had furnished all the
details regarding genuineness of cash credit, i.e., he had discharged his
burden of proof. AO did not make any attempt to discharge his burden
of proof to rebut the evidences produced by assessee. No addition
u/s.68 can be sustained
5.12 From the assessment order, it transpires that the AO has solely
relied upon the statement did not carry out any worthwhile independent
inquiry in the matter. He has totally ignored the documentary evidences
submitted by the appellant. The AO has not pointed out any defect in
the above mentioned documentary evidences submitted during
assessment proceedings. Without pointing out any lacuna in the
evidences submitted by the appellant, the sources and the genuineness
of transactions cannot be doubted. Once evidences related to a
transaction is submitted before the A.O., tne onus shifts on him to prove
these as non-genuine or bogus. The A.O. has not discharged the onus
casted on him. In my opinion, merely based on the statement of a third
person without any corroborative evidence will not make the loan
transactions, in question, as accommodation entries. As such, in the
absence of any contrary evidence placed on record, the transaction
cannot be treated as accommodation entries.