TaxTMI 
TaxTMI 
2017 (11) TMI 1210
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.... based on the search proceedings carried out in the case of Pravin Kumar Jain Group wherein Shri Pravin Kumar Jain is said to have deposed before the authorities that he is indulged in providing accommodation entries in the nature of the bogus bills/sales bills and unsecured loans. As per the information the assessee is one of the beneficiaries of such accommodation entries. In the course of Assessment Proceedings assessee was required to explain unsecured loans and prove genuineness of transactions, identity and creditworthiness of the unsecured loans, records and supporting documentary evidences. In response to the same, assessee furnished loan confirmations, bank statements, I.T. Return acknowledgements of the lender companies and also submitted that money has been borrowed through regular banking channels and it was repaid in subsequent years with interest. TDS was made on such interest. It was also further submitted that Shri Pravin Kumar Jain was retracted the statement which he has said to have been given and therefore it was contended that transactions are genuine and they cannot be treated as unexplained unsecured loans. However, Assessing Officer rejected the submissions ....
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.... 5. The Ld.DR strongly supported the orders of the Assessing Officer. Further taking us through the Assessment Order, Ld.DR submits that Shri Pravin Kumar Jain has categorically said in his statement that he is providing only accommodation entries and no genuine business was carried on and as per the information assessee is one of the beneficiary to such transactions and therefore the Assessing Officer rightly concluded that assessee has obtained only accommodation entries in the name of unsecured loans and the entities were not carrying out any business. 6. On the other hand, Learned Counsel for the assessee strongly supported the orders of the Ld.CIT(A). He further submitted that the Assessing Officer has relied on the information received from DGIT(Inv), Mumbai regarding the details of accommodation entries provided in the nature of bogus purchases/ sale bills and unsecured loans by Shri Pravin Kumar Jain Group. Further the Assessing Officer has stated in the order that DGIT(Inv) has carried out search and seizure action on Pravin Kumar Jain group. The report mentions Shri Pravin Kumar Jain is one of the entry providers, operating in Mumbai, indulged in providing accommodat....
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....lf subsequently. It is submitted that the alleged statement given by Shri Pravin Kumar Jain is not yet confirmed in his assessments and thus it cannot be considered as evidence. Therefore, it is submitted that the Assessing Officer has made additions merely relying on the report and no evidence was placed on record to make the additions. 8. Learned Counsel for the assessee further referring to Page Nos. 24 to 28 of the Paper Book submits that an identical issue came up before this Coordinate Bench in the case of DCIT vs. Bairagra Builders P. Ltd reported in [2017] 51 CCH and submits that the Hon'ble Bench held that the plain reading of the Assessment Order demonstrates that the Assessing Officer merely went by the investigation done by the office of DGIT(Inv), Mumbai. No enquiries or investigation was carried out in the case of parties who lent the money, no evidence to controvert the claims of the assessee was brought on record by the Assessing Officer, even the submissions of Shri Pravin Kumar Jain was not supplied, nothing is on record about the result for investigations done by DGIT (Investigation), Mumbai, papers filed by the assessee do demonstrated identity creditwort....
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....R 0235 (Mad) Revenue having brought no material on record to establish that consideration shown in the sale deed was understated and no material having been found during search to show that assessee paid a sum over and above the stated consideration, no addition could have been made on the basis of retracted statement of assessee recorded during speech. CIT v. Sahibganj Electric Cables (P) Ltd. [115 ITR 0408 (Cal)] Where the amounts of loan were received by cheque and repayment was also made by cheque through assessee's bankers; and confirmation of creditors along with their income-tax file numbers were furnished the assessee discharged its initial burden and ITO was not justified, in the absence of any further investigation, to reject the evidence and make addition. 9. We have heard the rival submissions, perused the orders of the authorities below, the case laws relied on and the material furnished before us. The only issue involved in this appeal relates to the deletion of addition of Rs..20 lakhs made by the Assessing Officer towards unexplained unsecured loans and interest thereon amounting to Rs..2,35,246/. Search and seizure action u/s. 132 of the Act has been co....
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....ravin Kumar Jain and as communicated by the investigation wing. Thus, it is very evident that the Ld. Assessing officer has not made any independent enquiry in order to establish the in-genuineness of loans if any, with contrary evidence. The statements referred to and relied upon by the assessing officer have never been disclosed to the appellant opportunity for cross examination was also not given, hence such statement could not be utilized against the appellant without giving full and proper opportunity of cross examination as has been held vide Mahesh Gulabral Joshi Vs. CIT(A) (2005) 95 lTD 300 Mumbai ITAT and Hon'ble Supreme Court decision in the case of KishanchandChellaram Vs. CIT (125 ITR 713 (SC)). 6.3. Further during the course of assessment proceedings, the appellant has produced copy of a comprehensive Affidavit of Shri. Pravin Kumar Jain dated 25.04.2014 retracting, the statements made before the Investigation Wing. Assessing officer has not given opportunity to the appellant for cross examination of Shri Pravin Kumar Jain. Going by the discussion contained above, it is obvious that the inference drawn by the Assessing officer against the appellant is not sust....
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....d have summoned the party and recorded the statement. As the AO, has not brought anything in record to show that the evidences filed by the appellant are false, the loan received and repaid by the appellant cannot be treated as bogus. The addition cannot be made merely on the basis of suspicion, surmises and conjectures. There has to be some concrete evidence whether direct or circumstantial. In this case, no such evidence is present. On the contrary, the appellant is showing from the record that he has received loan through account payee cheques from above TWO PARTIES. He has shown that the loans have been repaid through account payee cheque and as long as he was holding the loan, he has paid the interest after deducting TDS. With regard to the disallowance of interest on loans taken from afore-mentioned parties, the appellant submitted that the AO has also ignored the fact that the said interest expenses were incurred wholly, exclusively & necessarily for business of the Appellant. The interest paid on loans was subject to TDS. During the present proceedings, the appellant also submitted the details of the TDS made on the loans wherever it is applicable and the details of amount ....
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....r failed to carry out any fruitful investigation. Therefore, no addition can be made towards unexplained unsecured loans, this finding in our view is completely justified in view of the facts and circumstances of the assessee's case. 11. An identical issue came up in the case of DCIT vs. Bairagra Builders P. Ltd reported in [2017] 51 CCH 0107 in ITA.No. 4691 and 4692/Mum/2015 dated 14.09.2017 wherein the Coordinate Bench held as under: "6. We have heard the rival submissions along with the orders of the tax authorities below. We noted that during the impugned assessment year, the assessee had taken unsecured loans from the following two parties: Sr. No Name of the Party and Address PAN Loan taken(Rs.) Rate of Interest 1. Javda India Impex Limited CS-1, Silver Anklet, Yari Road, Versova, Mumbal 400 061 AAACA7065L 20,00,000 9% 2. Lexus Infotech Ltd. 626, Panchratna, Opera House, Mumbai 400 002 AAACL4646G 20,00,000 9% When the Assessing Officer asked the assessee to prove the genuineness of these loans, the assessee submitted the following documents: a. Copy of acknowledgment of income tax return filed for A.Y. 2007-....
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.... Singh, the assessee could not discharge the onus as laid down by section 68 of the Act. Similarly, in the case of CIT vs. Jansampark Advertising & Marketing Pvt. Ltd. (supra), the additions have been made u/s. 68 in respect of the share capital received by the assessee from various companies and during the course of investigation, it was found that the share capital has been received from three entry operators, who are allegedly in the business of providing accommodation entries. Notices issued u/s. 131 to these parties were returned undelivered by the postal authorities with the remark "left"/ "no such person". Under these circumstances, the Hon'ble High Court took a view that the assessee failed to discharge the burden to prove the credit worthiness as well as the genuineness of the transactions. 10. But in the impugned case, we noted that the assessee has submitted all the evidences including the confirmation of the creditors. This is not a case where the creditors have not given confirmations rather they have duly confirmed to giving loan to the assessee, the loans were received and returned through banking channels. The assessee has also submitted copies of bank accoun....