2017 (12) TMI 1253

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....icer noted that the assessee had failed to furnish confirmations in respect of following five parties, and added the same in assessee's income. 1. M/s S K International Rs. 86,25,334/- 2. MrGhanshyambhai Jain Rs. 17,00,0007- 3. MrVishal Jain HUF Rs. 22,00,000/- 4. Lalaji Rs. 4,21,000/- 5. Pradeep Dharmesh Kapoor Rs. 15,81,000/-   TOTAL Rs. 1,45,27,334/- 4. By the impugned order, the CIT(A) deleted the additions except addition in respect of following loan creditors. However, department is not in appeal before us for the additions deleted by CIT(A). Before us assessee is aggrieved to the addition confirmed by CIT(A) in respect of the following loan creditors amounting to Rs. 64,52,000/-. 1. Ghisubhai Jain Rs.17,00,000 2. Vishal Jain HUF Rs. 22,00,000 3. Lala Ji Rs. 4,21,000 4. Pradeep Dharmesh Poddar Rs.15,81,000 5. Shah Dhirajlal Harilal Rs. 4,00,000 6. Shah Dhirajlal Harilal HUF Rs. 1,50,000   Total Rs.64,52,000 5. It was argued by learned AR that assessee firm was formed on 01.12.2006 and became operational in the year under reference. The capital was introduced by the partners in the year under reference and then the business ha....

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....ited to the loan repaid to Ghisubhai Jain amounting to Rs. 17 lakhs and repayment made to Vishal Jain HUF Rs. 10 Lakhs. Repayment was also made to Pradeep Dharmesh Poddar amounting to Rs. 15.81 lakhs. In respect of loan taken from Dhirajlal Harilal and Shah Dhirajlal Harilal HUF to Rs. 4 lakhs and Rs. 1,50,000/- respectively. 9. Our attention was invited to the confirmations filed before the AO dated 09/08/2010, 16/12/2010 and 09/08/2011. In respect of loan payment from Ghisubhai Jain and Vishal Jain, our attention was invited to the order of Hon'ble Bombay High Court against a criminal petition filed by the aforesaid parties who were not available when hearing was concluded by the CIT(A). As per High Court decision, the appeals so filed are of civil nature and has specified that the findings of the Police Officer are not conclusive and all contentions are open. In view of the High Court decision it was contended by learned AR that identity of these parties who are basically investors / customers in the project undertaken by the assessee are established and also genuineness of their total investment of Rs. 39 lakhs in the project of the assessee firm was approved. 10. As per lear....

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....e the source of income of the said alleged creditors to find out whether they are 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". 14. In view of the above discussion, it was contended that assessee has duly discharged its onus in respect of the alleged loans and therefore, the addition was requested to be deleted. 15. On the other hand, learned DR relied on the order of the lower authorities. 16. We have considered rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned AR and DR during the course of hearing before us in the context of factual matrix of the case. 17. From the record, we found that in respect of loan payment from Ghisubhai Jain and Vishal Jain HUF, the assessee has filed confirm....

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.... of 2012 dated 29/08/2012. The assessee has filed intervention application dated 05/09/2012 contending the allegation by the lenders to be false. As per the finding of the Police Officer in his report dated 06/09/2012 a sum of Rs. 39,00,000/- has been paid by Mr. Ghisulal Jain & Vishal Jain (HUF) to the assessee. The documents also reveal repayment of Rs. 27 lacs and the intention of the assessee to repay Rs. 12 lacs. The officer noticed no criminal intent. Accordingly, No FIR was registered. 21. In view of the above documents, the Hon'ble High Court held that appeal is of civil nature. The Court has specified that findings of Police Officer are not conclusive and all the contentions are open, the petition was accordingly disposed of by the Hon'ble High Court. 22. In view of the above discussion, we observe that identity of these parties who were basically investors / customers of the project undertaken by the assessee are clearly proved and also genuineness of the total investment of Rs. 39 lakhs in the project of the assessee firm was proved. Under these circumstances, considering the totality of facts and circumstances of the case, we do not find any merit in the addition of R....