TaxTMI 
TaxTMI 
2019 (9) TMI 342
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....employees of the companies etc. "Rohan Group" headed by Shri Harresh N Mehta is one of the leading builders of the South and the Central Mumbai and mainly engaged in construction of residential buildings and redevelopment of old and dilapidated buildings. The group has redeveloped over 50 buildings and constructed over 2.5 million sq.ft of residential space. Apart from M/s. Rohan Developers Pvt. Ltd., i.e. assessee herein, other main concerns are M/s. Goodwill Properties Pvt. Ltd; M/s. Silver Arch Builders and Promoters Pvt. Ltd. 3.1. During the course of search and seizure action, certain loose papers were found and seized by the search team. One Shri Samir Shah, finance broker who was arranging funds for the assessee, assessee's group companies and entities through various parties was also searched u/s.132 of the Act simultaneously. During the course of search proceedings, various loose papers relating to loans arranged by him for his clients including the assessee were found and seized. Out of the said seized papers, loose paper bearing page No.206 of Annexure -1 pertained to the assessee herein. According to the ld. AO, this page indicated payment of cash loans amounting ....
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....mann. com 261). 7. Hence, I am satisfied that the assessee had accepted loans in cash of Rs. 20,24,50,000/- as per page No. 206 of Annexure A-l seized from the residence of Shri Samir Shah in contravention of provisions of section 269SS of the Income Tax Act, 1961. No satisfactory explanation is given by the assessee for contravention of provisions of section 269SS of the Income Tax Act, 1961. Hence, I hereby levy penalty of Rs. 20,24,50,000/- u/s. 271D of the Income Tax Act, 1961." 3.3. The ld. CIT(A) confirmed the levy of penalty by observing as under:- "6.3.1 I have considered the submissions of the appellant. The appellant claims that Mr. Samir Shah has furnished evidence to show that all the loans transactions entered into by the appellant were genuine. But the appellant has not produced the evidence ^ purportedly furnished by Mr. Shamir Shah before me for my examination. 6.3.2 The Addl CIT has established beyond reasonable doubt that the appellant had accepted the loans in cash. The appellant has denied receiving such loans in cash in spite of the evidences brought on record. The appellant has claimed that: (i) the loans were accepted th....
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....assessee from Shri Samir Shah in the sum of Rs. 20,24,50,000/- on merits. In this regard, we find that Shri Samir Shah pursuant to the assessment framed in his hands u/s.143(3) r.w.s.153A of the Act on 31/03/2014 had preferred an appeal before the ld. CIT(A)-47, Mumbai wherein among other grounds one of the specific grounds raised by him before the ld. CIT(A) was as under:- "4. The learned Assessing Officer has erred in law and in facts, in making an addition of Rs. 20,24,50,000/- on account of alleged cash loan provided to M/s. Rohan developers Private Limited. 5.1. In the said proceedings before the ld. CIT(A), Shri Samir Shah had filed certain additional evidences which addresses the entire issue in dispute before us in terms of Rule 46A of the Income Tax Rules and the said additional evidences were duly forwarded to the Assessing Officer of Shri Samir Shah for carrying out necessary verification at his end. The Assessing Officer of Shri Samir Shah duly conducted verification of the replies filed by Shri Samir Shah together with all the evidences submitted by him with regard to the entries appearing in loose sheet page No.206, Annexure A-1 and categorically stated in....
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.... him in cash. The amounts are appearing to be pertaining to the period from 01.07.2010 to 30.09.2010. 2. During the penalty proceedings before the assessing officer the assessee had submitted various details like names, address, PAN of the parties and amount of loan given by each of them to Rohan Group during the assessment proceedings. The page no. 62, 63 and 64 of the paper book filed dated 14/03/2017 before your goodself glides the clear cut picture of the loan transactions happened between the parties which through their respective front faces who in turn invested their amounts with the Rohan group (so far as the principal loan amount is concerned). The party wise details of cheque numbers, date of payment, amount and the gross total of all these counts are matching exactly with the contents mentioned on the alleged page no. 206 of the annexure A-l seized during the search action. It has also been verified that the entries reflected on page no. 206 are mentioned in regular books of accounts of Rohan group companies as seen from the books of those companies. 3. During the penalty proceedings the statements of the parties from whom loans were tendered to Rohan g....
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....nied for having paid any cash interest to Shri Samir Shah in his statement recorded which proves the version of Shri Samir Shah mentioned in above explanation to notings found on page no. 206 of annexure A-l was correct that it was just a noting and rough working of the interest amount payable to his clients who had invested the money through him. The narration of the above facts is based on the material available on records and various statements recorded during the search and post search and penalty proceedings under the IT Act 1961." 5.2. The ld. CIT(A) based on the said remand report deleted the addition made in the sum of Rs. 20,24,50,00/- on account of alleged cash loan given by Shri Samir Shah to M/s. Rohan Developers Pvt. Ltd i.e. the assessee herein before us by observing as under:- "14.1 The addition of Rs. 20,24,50,000/- had been made by the AO on account of cash loans u/s. 68 of the Act, based on the c. seized Page No. 206 of Annexure A-l found during the course of search operation at the appellant's residential premises. The Page No. 206 of the seized material being important for the adjudication of the issue at hand is reproduced hereunder: ....