M/s. Delighted Holdings (P) Ltd. , Kolkata V. DCIR, Cir-8(2), Kolkata, Kolkata

ITA 625/KOL/2023

AI Insights

The case involves appeals by M/s. Delighted Holdings (P) Ltd. against the orders of the CIT(A), National Faceless Appeal Centre, Delhi, which confirmed the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961, for the assessment years 2012-13 and 2013-14. The additions were related to share capital and share premium received, which were treated as unexplained cash credits. The Tribunal examined the evidences provided by the assessee, including confirmations, financial statements, and other relevant documents, and found that the lower authorities had not properly addressed these evidences. The Tribunal relied on various precedents and legal principles to conclude that the assessee had discharged its burden of proof, thereby allowing the appeals and directing the deletion of the additions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124748 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2023
• Other Referred Cases: CIT Vs. Orissa Corporation Pvt. Ltd., CIT Vs. Orchid Industries Ltd., Crystal Networks Pvt. Ltd. Vs. CIT, ITO Vs. M/s. Cygnus Developers India Pvt. Ltd., Joy Consolidated Pvt. Ltd. Vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Question of law; Valuation report; Accommodation entries; Onus to prove; Set aside
• Section: 147; 131; 68; 148; 144; 143(3); 142(1); 133(6); 143(1); 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. Nos. 625 & 626/Kol/2023 Assessment Years: 2012-13 & 2013-14 M/s. Delighted Holdings (P) Ltd., 12A, Room No. 102, Shyamkunj, Annapurna Apartment, Lord Sinha Road, Kolkata-700071. (PAN: AABCE0588P) Vs. Income-tax Officer, Ward-8(2), Kolkata. Appellant Respondent Date of Hearing 30.08.2023 Date of Pronouncement 22.09.2023 For the Appellant Shri Abhishek Bansal, AR For the Respondent Shri B. K. Singh, JCIT, Sr. DR ORDER Per Rajesh Kumar, AM: Both these appeals preferred by the assessee against the separate orders of Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 23.05.2023 for AYs 2012-13 and 2013-14. Since both the appeals have been heard together and grounds are mostly common, except variance in amount, we dispose of these appeals by this consolidated order for the sake of convenience. 2. First, we take up ITA No. 625/Kol/2023. At the time of hearing the assessee prays before the Bench the only issue on merits which is against the order of Ld. CIT(A) confirming the addition of Rs.3,05,00,000/- as made by the AO in respect of share capital and share premium as unexplained cash credit u/s. 68 of the Act. 3. The facts n brief are that the assessee filed the return of income on 25.09.2012 declaring total income at Rs.9,98,690/-. The case of the assessee was selected for scrutiny through CASS and notice u/s. 143(2) of the Income- tax Act, 1961 (hereinafter referred to as the “Act”) was duly issued and served on the assessee. The assessee did not appear personally before the AO, however, filed the details as called for. The AO on perusal of the Balance Sheet observed that assessee has raised share capital of Rs.30,50,000/- and share premium of Rs.2,74,50,000/- by issuing 3,05,000 2 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 equity shares at face value of Rs. 10/- at a premium of Rs.90/-. The AO noted in the assessment order that summons were issued u/s. 131 of the Act to the Director of the assessee company requesting to produce the share subscribers for verification. However, the said summons were returned unserved. The AO noted that since details of share applicant could not be verified and assessee did not comply with the summons u/s. 131 of the Act, assessment was made u/s. 144 of the Act as best judgment assessment and an addition of Rs.3,05,00,000/- was made as unexplained cash credit u/s. 68 of the Act. 4. In the appellate proceedings also, the Ld. CIT(A) simply confirmed the order of AO by recording his finding that despite the assessee being granted sufficient opportunity to present its case and to comply with the summons, however, the assessee did not file any evidence before the AO nor the summons issued u/s. 131 of the Act were served. 5. The Ld. AR vehemently submitted before us that both the authorities below have ignored the evidences placed by the assessee on record in respect of the share subscribers comprising letter of confirmation, master data, allotment advice, copies of ITR, audited financial statement, tax audit report, source of funds and assessment order passed u/s. 143(3) for AY 2012-13 in respect of Supriya Fincom Private Limited from whom the amount received was Rs.2,25,00,000/- towards share subscriptions and the same documents were filed in respect of Marubhumi Vincom Private Limited from whom the assessee had received Rs. 80,00,000/- except the assessment order. The Ld. AR submitted that the assessee has filed all these evidences before the AO as well as before the Ld. CIT(A). However, instead of examining these evidences both the authorities below have passed their orders in the mechanical and stereo type manner without pointing out any defect or deficiency but rather stated in the order that the assessee has not filed any evidences. The Ld. AR brought to our notice that the reply filed before the 3 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 AO vide letter dated 29.12.2014 which was filed in response to notice issued u/s. 142(1) dated 23.12.2014. The Ld. AR also submitted that both the authorities below have wrongly recorded a finding that notice issued u/s. 131 of the Act dated 17.02.2015 to the Director of the assessee company were returned unserved. However, as a matter of fact, the said notice was duly served and the assessee was even filed reply before the AO. The Ld. AR stated that reply was wrongly filed in response to summons issued u/s. 131 of the Act in the office of ITO, Ward-7(3), Aayakar Bhawan, Chowringhee Square, Kolkata instead of ITO, Ward-8(2), Kolkata. Thereafter, the assessee applied to the ITO, Ward-7(3) vide letter dated 31.05.2019 requesting him to confirm whether these documents, which were wrongly filed with the said ITO had even transferred to ITO, Ward-8(2), Kolkata and the ITO, Ward- 7(3), Kolkata vide letter dated 03.06.2019 informed that the letter received on 11.03.2015 from the assessee was sent to ITO, Ward-8(2), Kolkata on 17.03.2015. The Ld. AR stated that since all these documents were before the AO before framing the assessment which was framed on 23.03.2015, therefore, the addition made by the AO merely on presumption and surmises and on the pretext that assessee had not produced the directors of the subscriber companies and consequently the verification could not be done are devoid of any merit and may be deleted. The Ld. AR stated that the addition cannot be made merely on the ground that the compliance was not made to the summons issued u/s. 131 of the Act where assessee has filed all the evidences and the authorities have not pointed out any defect or deficiency or have not carried out any investigation on these evidences. In defense of his argument, Ld. AR relied on the following decisions: (i) CIT Vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC); (ii) CIT Vs. Orchid Industries Ltd. 397 ITR 136 (Bom); (iii) Crystal Networks Pvt. Ltd. Vs. CIT 353 ITR 171 (Kol); (iv) ITO Vs. M/s. Cygnus Developers India Pvt. Ltd.(ITA No. 282/Kol/2012) and (v) Joy Consolidated Pvt. Ltd. Vs. ITO (ITA No. 547/Kol/2020. 4 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 6. The Ld. DR, on the other hand, strongly relied on the orders of authorities below by submitting that assessee has failed to furnish the requisite details before the AO as well as before the Ld. CIT(A). The Ld. DR stated that mere filing of some evidences could not automatically prove the genuineness of the transactions. When the Ld. DR was put a query as regards recording of wrong finding by both the authorities below to the effect that notice issued u/s. 131 was returned unserved, the Ld. DR stated that he strongly relied on the orders of the authorities below so far as this issue is concerned. Finally, the Ld. DR prayed before the bench that order of Ld. CIT(A) may be confirmed while dismissing the appeal of the assessee. 7. We have heard the rival submissions and perused the material available on record. We observe from the records placed before us in the form of copy of submissions filed before the AO, correspondences as regards compliance of summon u/s. 131 that assessee has furnished the details before the AO as well as Ld. CIT(A). However, both the authorities below have failed to point out any defect or deficiency in the said evidences. We note that assessee has filed reply before the AO vide letter dated 29.12.2014 in compliance to notice issued u/s. 143(1) dated 23.12.2014 which was duly acknowledged in the office of the ITO, Ward-8(2). The summons issued u/s. 131 dated 17.02.2015 were also complied by filing the requisite details though no personal attendance was recorded before the AO. We note that the assessee has wrongly filed the reply before ITO, Ward-7(3), Kolkata which was to be filed before the ITO, Ward-8(2), Kolkata. However, the reply filed by the assessee before ITO, Ward-7(3) on 11.03.2015 was transferred and sent to ITO, Ward-8(2) on 17.12.2015 and this has been confirmed by the ITO, Ward-7(3), Kolkata vide letter dated 07.03.2019, a copy of which is placed in the paper book. We also note that assessee has filed copies of confirmations, application of shares, allotment advice, ITR, audited financial statements, bank statement, source of funds and assessment order u/s. 143(3) for AY 2012- 13 in respect of Supria Fincom Pvt. Ltd. (supra) before the Ld. CIT(A) and similar documents were filed in respect of Marubhumi Vincom Pvt. Ltd. (supra) except the assessment order. We note that assessee has even filed the valuation report of the fair market value of equity share as on 31.03.2012 as per Rule 11UA of I. T. Rules. 1961. Considering these facts into totality, we are of the view that both the authorities below have 5 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 failed to discharge the onus which was shifted to them consequent to the assessee filing all the details/evidences. The case of the assessee is squarely covered by the decision of Joy Consolidated Pvt. Ltd. (supra) in which all the decisions relied on by the assessee as referred to above were discussed in detail and the issue was decided in favour of the assessee. The operative part is reproduced as under: “6. We observe from the orders of authorities below that none of the authorities have commented of the evidences filed by the assesse proving the sources of investments with the aid of necessary documents as stated above. The case of the assessee finds support from decision of the Hon’ble Supreme Court in the case of CIT vs. Orisssa Corporation Pvt. Ltd. [1986] 159 ITR 78 (SC) which is on the issue of share premium. The relevant extracts of the Hon’ble Apex Court decision is reproduced as under: “That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under Section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case.” 7. Similar ratio has been laid down by the Hon’ble Mumbai High Court in the case of CIT Vs Orchid Industries (P) Ltd 397 ITR 136 by holding that provisions of section 68 of the Act can not be invoked for the reasons that the person has not appeared before the AO where the assessee had produced on records documents to establish genuineness of the parties such as PAN ,financial and bank statements showing share application money . 8. The case of the assessee is also squarely covered by the decisions of Hon’ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT 353 ITR 171 (Cal ) wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: “We find considerable force of the submissions of the learned Counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble of examining of all other materials and documents viz., 6 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: “The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income-tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law.” The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. Taking inspiration from the Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed.” 9. The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012) the operative part whereof is extracted below: “8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to the decision of Hon’ble Allahabad High Court in the case of CIT vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 wherein the Hon’ble Allahabad High Court took a view that non-production of the director of a Public Limited Company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of ITO vs. Devinder Singh Shant in ITA No. 208/Kol/2009 vide order dated 17.04.2009. 7 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 9. We have considered the rival submissions. We are of the view that order of Ld. CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the revenue that the revenue disputed only the proof of identity of share holder. In this regard it is seen that for AY 2004-05 Shree Shyam Trexim Pvt. Ltd. was assessed by ITO, Ward-9(4), Kolkata and the order of assessment u/s 143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd. was assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward-9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon’ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non- production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue.” 10. In the instant case before us also, the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. We also note that the assessee has received unsecured loans from three parties who were either directors or their relatives qua whom filed necessary evidences as in the case of share capital and share premium. Considering the facts and circumstances of the case and the ratio laid in the above decisions, we are inclined to set aside the order of ld. CIT(A) and direct to delete the addition of Rs. 2,70,30,857/-.” 8. Since fact of the case before us are materially same vis-à-vis the facts of the case as decided by the Co-ordinate Bench (supra), we are inclined to set aside the order of Ld. CIT(A) and direct AO to delete the addition. The appeal of the assessee is allowed. 9. Now, we are coming to ITA No. 626/Kol/2023. Though the assessee has filed this appeal on legal issue as well as on merits, however, at the time of hearing the Ld. Counsel for the assessee pressed only the issue on merit which is against the order of Ld. CIT(A) confirming the addition of Rs.1,60,00,000/- by Ld. CIT(A) as made by the AO in respect of unsecured loan being unexplained cash credit u/s. 68 of the Act. 10. Brief facts of the case are that the AO, upon receipt of information from DDIT (Inv.) Wing 2, Kolkta on 15.03.2018 to the effect that assessee company has received accommodation entries from Jajodia Finance Ltd., reopened the case of the assessee u/s. 147 by issuing notice u/s. 148 on 27.03.2018 after obtaining the approval from the competent 8 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 authority. The notices were duly issued and served upon the assessee. In order to verify this transaction of loan on various dates, as advanced by M/s. Jajodia Finance Ltd., the ITO called upon the assessee to furnish necessary evidences which were filed by the assessee stating that loan was received vide four account payee cheques and submitted that the lender of the money is duly assessed to tax. The AO noted from the reply of the assessee that assessee received Rs.1,60,00,000/- which was invested on Reliance Mutual Fund on the very next day which was again encashed on 16.11.2022 after a span of seven days and forwarded to other entities. The AO finally concluded that these were accommodation entries received by the assessee and added the same as unexplained cash credit u/s. 68 of the Act to the income of the assessee vide order dated 16.11.2018 framed u/s. 147 read with section 143(3) of the Act. In the appellate proceedings, the Ld. CIT(A) simply confirmed the addition as made by the AO by observing that these were accommodation entries and rightly added by the AO. 11. Ld. AR submitted before us that assessee has complied with all the notices as issued by the AO and all the queries raised were duly answered. The Ld. AR referred to the notice issued by the AO u/s. 142(1) of the Act, a copy of which is filed as page 81 and 82 of the paper book dated 03.11.2018 which was duly replied by uploading the response of the assessee on 13.11.2018 along with annexures. The assessee filed a copy of confirmation of e-proceeding response acknowledgment at page 83 of the paper book, reply along with annexure from page 84 to 102 of the paper book. The Ld. AR, therefore, submitted that all the evidences were duly filed before the authorities below. However, instead of pointing out any defect or discrepancy in the said evidences the authorities below have straight away relied on the theory of shell companies and their mode of operation and finding of the Investigation Wing and thus, the addition was made and confirmed sans any substantive basis. The Ld. AR, therefore, prayed that the addition as confirmed by the ld. CIT(A) is wrong and may kindly be deleted. The ld. AR relied on the following decisions: (i) PCIT Vs. Sree Leathers 448 ITR 332; (ii) PCIT Vs. Overtop Marketing Pvt. Ltd. (2023) 148 taxmann.com 94; (iii) Poddar Realtors Vs. ITO (ITA No. 265/Kol/2023) and (iv) PCIT Vs. Ambe Tradecorp Pvt. Ltd. 145 taxmann.com 27 9 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 12. Per contra, the Ld. DR relied on the orders of the authorities below and submitted that the money received by the assessee is in the form of accommodation entries which is quite prevalent in Kolkata and mere filing of evidences could not exonerate the assessee from proving the genuineness of these transactions. The Ld. DR, therefore, prayed that the order of Ld. CIT(A) be confirmed by dismissing the appeal of the assessee. 13. We have heard the rival submissions and perused the material available on record. We find that the case of the assessee was reopened u/s. 147 of the Act by issuing notice u/s. 148 on 27.03.2018 after the AO received information from DDIT, Inv. Wing, Unit 1(2), Kolkata on 15.03.2018 that the assessee is a beneficiary of accommodation entry of Rs.1,60,00,000/- from M/s. Jajodia Finance Ltd. We note that assessee has received the loans vide four cheques on different dates in the month of May and June. The assessee has furnished before the AO the evidences for this money raised and however, the AO instead of carrying out further investigation on the evidences filed simply concluded that the assessee has received the money from shell company and made addition u/s. 68 of the Act as unexplained cash credit. Similarly, the Ld. CIT(A) simply confirmed the finding of the AO. We note that even before Ld. CIT(A), the assessee has filed a detailed reply filing all the evidences. We note that the loan creditor M/s. Jajodia Finance Ltd. has regularly assessed to tax and the counsel of the assessee has placed before us the order passed u/s. 143(3) for AYs 2014-15, 2015-16 and 2017-18, copies whereof are attached at page nos. 129 to 137 of the paper book. One more important fact, we would like to record that the said loan has been repaid in the subsequent years. In our opinion, the order of Ld. CIT(A) is not sustainable as it has enquired all the evidences on records. The case of the assessee find support from the decision of Hon’ble Calcutta High Court in the case of PCIT Vs. Sree Leathers (supra) wherein it has been held as under: “■ This provision of section 68 deals with cash credits. It states that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. The crucial words in the said provision are 'assessee offers no explanation'. This would mean where the assessee offers no proper, reasonable and acceptable explanation as regard the amount credited in the books maintained by the assessee. No doubt the burden of proof is on the taxpayer. However, this is only the initial burden. In cases 10 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 where the assessee offers an explanation to the credit by placing evidence regarding the identity of the investor or lender along with their conformations, it has been held that the assessee has discharged the initial burden and, therefore, the burden shifts on the Assessing Officer to examine the source of the credit so as to be justified in referring to section 68. After the Assessing Officer puts the assessee on notice and the assessee submits the explanation with regard to the cash credit, the Assessing Officer should consider the same objectively before he takes a decision to accept or reject it. If the explanation given by the assessee shows that the receipt is not of income nature, the department cannot convert good proof into no proof or otherwise unreasonably reject it. On the other hand, if the explanation is unconvincing, the same can be rejected and an inference shows that the amount represents undisclosed income either from a disclosed or an undisclosed source. The explanation given by the assessee cannot be rejected arbitrarily or capriciously, without sufficient ground on suspicion or on imaginary or irrelevant grounds. [Para 4] ■ Further to be noted that where the assessee furnishes full details regarding the creditors, it is up to the department to pursue the matter further to locate those creditors and examine their creditworthiness. While drawing the inference, it cannot be assumed in the absence of any material that there has been some illegalities in the assessee's transaction. Thus, more importantly, the onus of proving that the appellant was not the real was on the party who claims it to be so. Bearing the above legal principles in mind, in the instant case, it is clear that the Assessing Officer issued show cause notice only in respect of one of the lender FGD. The assessee responded to the show cause notice and submitted the reply. The documents annexed to the reply were classified under 3 categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The Assessing Officer has brushed aside these documents and in a very casual manner has stated that mere filing PAN details, balance sheet does not absolve the assessee from his responsibility of proving the nature of transaction. There is no discussion by the Assessing Officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee has discharged his initial burden and the burden shifts on the Assessing Officer to enquire further into the matter which he failed to do. In more than one place the Assessing Officer used the expression 'money laundering.' Such usage is uncalled for as the allegations of money laundering is a very serious allegations and the effect of a case of money laundering under the relevant Act is markedly different. Therefore, the Assessing Officer should have desisted from using such expression when it was never the case that there was any allegations of money laundering. Much reliance was placed on the statement of AKA which statement has been extracted in full in the assessment order and it cannot be disputed that there is no allegation against the assessee-company in the said statement. There is no evidence brought on record by the Assessing Officer to connect the said entry operator with the loan transaction done by the assessee. Therefore, the statement is of little avail and could not have been the basis for making allegations. ■ The Assessing Officer ignored the settled legal principle and inspite of the assessee having offered the explanation with regard to the loan transaction, no finding has been recorded as regards the satisfaction on the explanation offered by the assessee. Therefore, the Assessing Officer ignored the basic tenets of law before invoking his power under section 68. Fortunately, for the assessee, the Commissioner (Appeals) has done an elaborate factual exercise, took into consideration, the creditworthiness of the 13 companies the details of which were furnished by the assessee. More importantly, the Commissioner noted that all these companies responded to the notices issued under section 133(6) which fact has not been denied by the Assessing Officer. On going through the records and the net worth of the lender companies, the Commissioner (Appeals) has recorded the factual findings that the net worth of those companies is in crores of rupees and they have declared income to the tune of Rs. 45,00,000/- and 75,00,000/-. Therefore, the Assessing Officer if in his opinion found the explanation offered by the assessee to be not satisfactory, he should have recorded so with reasons. However, there is no discussion on the explanation offered by the assessee qua, one of the lenders. Admittedly, the assessee was not issued any show cause notice in respect of other lenders. However, they are able to produce the details before the Commissioner 11 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 (Appeals) who had rightly appreciated the facts and circumstances of the case. As pointed out earlier, the Assessing Officer brushed aside the explanation offered by the assessee by stating that merely filing PAN details, balance sheet does not absolve the assessee from his responsibilities of proving the nature of transactions. It is not enough for the Assessing Officer to say so but he should record reasons in writing as to why the documents which were filed by the assessee along with the reply does not go to establish the identity of the lender or prove the genuineness of the transaction or establish the creditworthiness of the lender. ■ In the absence of any such finding, it is held that the order passed by the Assessing Officer was utterly perverse and rightly interfered by the Commissioner (Appeals). The Tribunal re- appreciated the factual position and agreed with the Commissioner (Appeals). The tribunal apart from taking into consideration, the legal effect of the statement of AKA also took note of the fact that the notices which were issued by the Assessing Officer under section 133(6) to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the Assessing Officer and there is no discussion on this aspect. Thus, the tribunal rightly dismissed the appeal filed by the revenue. [Para 5]” 14. Similar issue has been dealt with by the Hon’ble Calcutta High court in the case of PCIT Vs. Overtop Marketing Pvt. Ltd. (supra) wherein the Hon’ble court has held as under: “After elaborately hearing the learned advocates for the parties and carefully perusing the order passed by the Commissioner of Income-tax [Appeals] -2, Kolkata [CIT(A)] and that of the learned tribunal we find that the creditworthiness of the lenders of the respondent/assessee have been examined in depth the factual details have been noted and all the lenders of the respondent/assessee have directly submitted documents before the assessing officer. However, the assessing officer proceeded to hold the Company under the control of Shri Raj Kumar Kothari to be sold company only by referring to certain answers given by the selected questions. The said answers have been recorded by the said Mr. Kothari and also specifically alleged that it was obtained under threat and coercion. In any event, both the CIT[A] as well as the tribunal had independently assessed the factual position and arrived at a decision. The CIT[A] had also noted the decision of this court in the case of CIT v. Dataware (P.) Ltd. [ITAT No. 263 of 2011, dated 21-9-2011] and allowed the appeal filed by the assessee. The tribunal while affirming the said order has given elaborate reasons as to how the creditworthiness of the lenders have been established. Thus, we find there is no substantial question of law arising for consideration in this appeal.” 15. We, therefore, respectfully following the ratio laid down by the Hon’ble Calcutta High Court set aside the order of Ld. CIT(A) and direct AO to delete the addition as the AO has made the addition without doing any further verification on the evidences filed by the assessee. 16. In the result, both the appeals of the assessee are allowed. Order is pronounced in the open court on 22 nd September , 2023 Sd/- Sd/- (Sonjoy Sarma) (Rajesh Kumar) Judicial Member Accountant Member Dated: 22nd September, 2023 JD, Sr. PS 12 ITA Nos. 625&626/Kol/2023 M/s. Delighted Holdings Pvt. Ltd., AYs 2012-13 & 2013-14 Copy of the order forwarded to: 1. Appellant– 2. Respondent . 3. CIT(A), NFAC, Delhi 4. CIT, 5. DR, ITAT, Kolkata, (sent through e-mail). True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata