Onus to Prove Authenticity of Loan Transactions is on Assessee: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Raipur bench consisting of Ravish Sood, Judicial Member, and Jamlappa D Battull, Accountant Member held that if AO doubts the authenticity of loan transactions, then, the onus is upon the assessee.

The assessee company, M/s. Hanumant Ingots Pvt. Ltd. is engaged in the business of manufacturing of M.S. Ingots had filed its return of income for the assessment year 2012-13 on 26.09.2012, declaring an income of Rs.2,82,249/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. During the course of the assessment proceedings, it was observed by the A.O that the assessee company during the year under consideration, i.e., its first year of operation was in receipt of share capital/premium amounting to Rs.66,65,000/- from 16 persons. Also, it was noticed by him that the assessee company had during the year under consideration raised loans from various parties. In order to verify the genuineness and veracity of the share capital /premium claimed by the assessee to have been received during the year under consideration, the Assessing Officer (AO) called for certain details from the share applicants vide notices issued u/s.133(6) of the Act.

The Tribunal relied on the judgment of the Supreme Court in the case of CIT V. Orrisa Corporation Pvt. Ltd, .therein observed, that now when the assessee had placed on record the names and addresses of the lenders a/w. their income tax credentials i.e. PAN/copies of returns of income (in some cases) and the Revenue had not chosen to carry out any further verification as regards the creditworthiness of the said lenders, then, no adverse inferences were liable to be drawn as regards the authenticity of the loan transactions in question by the A.O The Tribunal observed” the authenticity of the aforesaid documentary evidence that was filed by the assessee with the AO to discharge the primary onus that was cast upon it as regards proving the identity and creditworthiness of the lenders as well as genuineness of the loan transactions in question.”

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