TaxTMI 
TaxTMI 
2018 (11) TMI 1242
X X X X Extracts X X X X
X X X X Extracts X X X X
....in quantum assessment u/s 143(3) on 27/03/2015. 2.1 Briefly stated, the assessee being resident individual engaged as commission agent and dealer in shares under proprietorship concern namely V.R. Tours & Travels was saddled with impugned additions of Rs. 106.48 Lacs u/s 68. Pursuant to receipt of certain information from DGIT (Investigation), Mumbai, it was found that the assessee obtained loans aggregating to Rs. 106.48 Lacs from 6 entities, the names of which were appearing in the list of beneficiaries of accommodation entries given by entry provider group of Bhanwarlal Jain. The detail of alleged bogus loans taken by the assessee was as follows:- No. Name Amount (Rs.) 1 Abhiman Gems Pvt.Ltd Rs.3,08,590/- 2 Moh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not found to be satisfactory by the AO then the sum so credited may be charged to income tax as the income of the assessee of that previous year. From a plain reading of section 68 it is absolutely clear that addition u/s 68 can be made for that previous year in which such sum is found credited in the books of the assessee. This view also derives support from the judgment given by the Hon'ble Delhi High Court in the case of CIT Vs Usha Stud Agricultural Farms Ltd. 301 ITS 384 (DEL). In this case also the CIT(A)s had deleted addition on ground that the said cash credit was appearing in books of assessee over past 4 to 5 years and thus it was not fresh credit entry pertaining to relevant assessment year. The order of the CIT(A) w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3/ consisted of an amount of Rs. 79,00,000/- of old loans, Rs. 20,50,000/- of fresh loans and interest accrued on loans. AO, however, did not even check whether the sums of Loan have been credited in the books of the appellant during the concerned previous year and added the entire closing balance of loan together with interest u/s 68 of the IT Act. As mentioned earlier there is a legal requirement for section 68 to be applicable in a concerned assessment year that the credit of sum in question has to be made in the concerned previous year of that particulars assessment year. Since it is a matter of fact and record that loans totaling up to Rs. 79,50,000/- were not credited in the books of the appellant during the concerned previou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 20 Taxrnann.com 153 has enumerated certain principles which would be extremely useful in understanding the issue in hand. It has been stated in the said judgment that over the years, law regarding cash credits have evolved and has taken a definite shape. A few aspects of law U/s 68 can be enumerated 1. Sec. 68 can be invoked when there is a credit of amounts in the books maintained by the assessee, such credit is a sum of money during the previous year and either the assessee offers no explanation about the nature and source of such credits or the explanation by the assessee in the opinion of the AO is not satisfactory. 2. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory is requir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st such loans and such interest payments have been subject to TDS. The creditworthiness of the lenders can be established from the financial statements of the lenders which were filed before the AO. 3.10 Recently the Hon'ble Bombay High Court has passed an order in WP NO.167 of 2015 dated 15.04.2015 in the case of M/s Rushabh Enterprises Vs. ACIT 24(3) and Ors. In this case also the assessee had taken loan from concerns related with Bhanwarlal Jain Group of cases. In its order the Hon'ble Bombay High Court in addition to deciding the legal validity of reopening of assessment also discussed the facts of the case. The Hon'ble Bombay High Court in para 8 of its order stated ".... according to her (AO) the revenue has received....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in providing relief to the assessee in view of the fact that search operations on the tainted group clearly revealed that the said group was engaged only in providing accommodation / bogus entries. Reliance has been placed on the judgment of Hon;ble Delhi High Court rendered in CIT Vs. Jansampark Advertising & Marketing P. Ltd. [56 Taxmann.com 286]. Per contra, Ld. Auhtorized Representative for Assessee [AR], Shri N.N.Jambusaria, submitted that no addition could be made u/s 68 to the extent of Rs. 79 Lacs since the credit of the same was not received in the impugned AY. Regarding the balance, it was fairly submitted that the matter may be remitted back to the file of Ld. AO for fresh adjudication. 5. We have heard the rival contention....