TaxTMI 
TaxTMI 
2018 (11) TMI 555
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....and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Unsecured Loan amounting to Rs. 1,86,30,000/- made by the Assessing Office u/s 68 of the I.T. Act, 1961 without appreciating that in CIT Vs P Mohankala (2007) 291 ITR 278 (SC), it has been held that the addition can be made on proper appreciation of material on record if the assessee does not offer proper, reasonable and acceptable explanation as well as the decision of the Supreme Court in Kachwala Gems vs. JCIT (2006) 206 CTR (SC) 585, 281 ITR 10 (SC) wherein it has been held that the sole facts of supplying of loan confirmation, details of banking transactions by the assessee to evidence the transaction does not mean that the assessee had offered proper, reasonable and acceptable explanation. (iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Unsecured Loan amounting to Rs. 1,86,30,000/- without appreciating the fact that though the identity of M/s. BMPL has been proved, the genuineness and creditworthiness of M/s. BMPL has not been proved due to which the sources of funds received by the assessee c....
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....d exonerated it from the charge of being involved in providing bogus/accommodation entries. Further, it was brought to the notice of the A.O that the order of the CIT(A)-20, Kolkata was accepted by the A.O of BMPL and no further appeal was preferred against the same. However, the A.O was not persuaded to subscribe to the aforesaid contentions of the assessee. It was observed by the A.O that the revenue had accepted the decision of the CIT(A)-20, Kolkata on merits as well as owing to low tax implication. The A.O was of the view that the assessee had not taken any pain to place on record any material evidence in support of its claim that the transactions with BMPL were actual/real transactions. Further, it was noticed by the A.O that the assessee had also failed to furnish any documentary evidence to prove the creditworthiness of BMPL or the real nature of the transactions which were entered into with the said concern. Rather, the A.O was of the view that the only contention of the assessee before him was that BMPL had been declared as a genuine entity by the CIT(A)-20, Kolkata. On the basis of his aforesaid observations, the A.O concluded that the assessee had failed to substantiate....
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....Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee was persuaded to accept the same. It was observed by the CIT(A) that the assessee had submitted proof of identity and confirmation of BMPL, copy of its audited annual accounts, copy of acknowledgment of the return of income, copy of ledger account and copy of bank account duly highlighting the transactions for the year under consideration. It was noticed by him that the aforesaid documentary evidence which had a material bearing on the issue under consideration was not discussed, much the less disputed by the A.O during the course of the assessment proceedings. The CIT(A) was of the view that the assessee company had borrowed funds from BMPL. Further, it was noticed by him that the borrowing and lending of the funds were duly recorded in the audited 'books of accounts' of the assessee and the aforementioned lender viz. BMPL. It was also taken note of by the CIT(A) that BMPL was regularly filing its returns of income and the transactions under consideration had taken place through banking channels. In the backdrop of the aforesaid facts, t....
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....he ld. D.R that the A.O of BMPL had no authority to concede that no further appeal was being filed on merits. Rather, it was submitted by the ld. D.R that concrete information was received from the Central Bureau of Investigation (for short 'CBI') that the assessee company was one of the beneficiaries of the accommodation entries which were provided by the group companies floated by Shri Harsh Dalmia and Shri Arun Dalmia. On the basis of the aforesaid contentions, it was submitted by the ld. D.R that the A.O had rightly held the amount of Rs. 1,86,30,000/- received by the assessee during the year from BMPL as an unexplained cash credit under Sec.68 of the Act. 7. Per contra, the ld. Authorized Representative (for short 'A.R') relied on the order of the CIT(A). The ld. A.R taking us through the order of the CIT(A) submitted, that the latter duly taking cognizance of the fact that as BMPL was exonerated of the charge of having indulged in providing bogus /accommodation entries by the CIT(A)-20, Kolkata, vide his order passed in its appeal for A.Y. 2010-11, thus no adverse inferences on the said count could any further be drawn in respect of the loan received by the assessee from the....
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....unts' duly reflected the funds that have been loaned to the assessee. We are of the considered view that prior to the insertion of first proviso to Sec.68 by the Finance Act, 2012 w.e.f. 01.04.2013, it was not obligatory on the part of the assessee to explain the source of the source of a credit appearing in its 'books of accounts'. Our aforesaid view stands fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Gagandeep Infrastructure Pvt. Ltd. (2017) 394 ITR 680 (Bom), wherein it was observed that it was obligatory on the part of an assessee to prove the source of source of a cash credit appearing in its 'books of accounts' only subsequent to the insertion of the first proviso to Sec. 68, vide the Finance Act, 2012 w.e.f 01.04.2013. It was held by the Hon'ble High Court, as under: "(e) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subjec....
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....his Appeal needs to be admitted. 8. This Court in Commissioner of Income Tax V/s. Gangadeep Infrastructure Pvt. Ltd, 394 ITR 680 has held that the proviso to Section 68 of the Act has been introduced by the Finance Act, 2012 w.e.f. 1st April, 2013 and therefore it would be effective only from Assessment Year 2013-14 onwards and not for the earlier assessment years. In the above decision, reliance was placed upon the decision of the Apex Court in Lovely Exports (supra) in the context of the pre-amended Section 68 of the Act. In the above case, the Apex Court while dismissing the Revenue's Appeal from the Delhi High Court had observed that, where the Revenue urges that the money has been received from bogus shareholders then it is for the Revenue to proceed against them in accordance with law. This would not entitle the Revenue to invoke Section 68 of the Act while assessing the respondent for not explaining the source of its source. In any event, the impugned order of the Tribunal has raised a finding of fact that the respondent had discharged the onus which is cast upon it in terms of the pre-amended Section 68 of the Act by filing the necessary confirmation letters of the c....