NEMINATH DEVELOPERS,UJJAIN vs. ACIT2(1), UJJAIN

– AY 2015-16 21. Thereafter, Ld. AR carried us to the relevant portion of order of first- appeal passed by CIT(A) upholding the addition made by AO, reading as under:

8.8. With respect to the amounts borrowed during the year from M/s Helpful Vinrade Private Limited, M/s Justify Vanijya Private Limited, and M/s Royal Pet Commodeal Private Limited, the Assessing Officer, in paragraph 11.2 of the assessment order, analysed the responses received from the parties pursuant to notices issued under Section 133(6) of the Act. The officer concluded that these companies appeared to be bogus shell or paper entities with negligible and questionable creditworthiness. Furthermore, it was observed that the responses from these companies were all submitted by a single individual at the same post office and at the same time, raising doubts about the genuineness of the unsecured loans claimed by the appellant. Additionally, the Assessing Officer noted discrepancies between the income reported by these companies and the loans purportedly extended to the appellant, further questioning their financial credibility. It was also highlighted that the group of companies outlined in paragraph 11.2 of the assessment order shared similar addresses and the same set of directors, with some having been classified as shell companies according to an intelligence report received by the Assessing Officer. 8.9. While the appellant claims to have furnished copies of ITRs for Assessment Year 2015-16, auditor's reports, balance sheets, profit & loss accounts, bank statements, and account confirmations from these companies, there remains a gap in establishing both the creditworthiness and genuineness of the transactions. Moreover, the appellant did not present any substantive evidence before this authority to rebut the observations or comments made by the Assessing Officer in the assessment order. Accordingly, the addition made by the Assessing Officer regarding the above three concerns stands confirmed.

Page 18 of 23 – AY 2015-16 23. In so far as the first observation is concerned, Ld. AR submitted that the AO has himself recorded that the assessee/concerned creditors in response to notices u/s 133(6) have furnished various documentary evidences such as (i) ITRs, (ii) Audit Reports, (iii) Balance-Sheets, (iv) Profit & Loss Accounts, (v) Bank statements, (vi) Account confirmations and (vii) details of loan transactions. These are contemporaneous documents and the documents like ITRs and Financial Statements are very much part of official record of the Income-tax Department itself. It is submitted that no defect whatsoever has been pointed out by the lower authorities in any of these documents. However, the adverse inference has been drawn merely on the basis that the replies to notices u/s 133(6) were dispatched from the same post office and around the same time. According to Ld. AR, such circumstance, by itself, cannot be a decisive factor to disregard otherwise valid documentary evidences.

Therefore, according to Ld. AR, the adverse view taken in respect of these three creditors is a contradictory approach of department and such approach must be rejected.

Basically, the issue for our consideration is whether the assessee has discharged the onus cast upon it u/s 68 of the Act in respect of the impugned loan transactions. It is an undisputed fact that the assessee has furnished documentary evidences such as (i) ITRs, (ii) Audit Reports, (iii)

Balance-Sheets, (iv) Profit & Loss Accounts, (v) Bank statements, (vi)

Account confirmations and (vii) details of loan transactions. It is a further fact that the creditors have also responded to the notices issued u/s 133(6) by AO and the creditors have filed some of those documents directly to AO.

It is a settled position of law that once the assessee furnishes primary evidences to establish identity of creditor and creditworthiness of creditors and genuineness of transactions, the onus shifts upon the Revenue to rebut the same with cogent material. In present case, the adverse inference drawn by the AO is primarily based on surrounding circumstances such as Page 20 of 23 – AY 2015-16 common postal dispatch and low returned income, without pointing out any specific defect, discrepancy or falsity in the documentary evidences placed on record. In our considered view, such general observations and suspicion, howsoever strong, cannot take place of proof and are not sufficient to justify the addition made u/s 68 of the Act.

Ground No. 5:

Ground No. 6:

Ground No. 7:

Accordingly, this ground does not require any adjudication from us.

Page 22 of 23 – AY 2015-16 34. Resultantly, this appeal is partly allowed in the terms indicated above.

Order pronounced in open court on 10/04/2026