2019 (12) TMI 693

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....dentity of the creditor, creditworthiness of the creditor and the genuineness of the transaction which was in turn a accommodation entry from intermediary dubious company M/s Varrenyam Securities Pvt. Ltd. 3. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 26.85 crores on substantiate basis in case of M/s Sidhvandan Enterprises Pvt. Ltd. and confirming protective addition in M/s Varrenyam Securities Pvt. Ltd. without realizing the facts that M/s Varrenyam Securities Pvt. Ltd. is a paper company and not doing any business and has no employees. 4. That the Ld. CIT(A) has erred in law and in ignoring the fact that the source of funds which came as unsecured loans in the assessee company were clearly bogus as has been admitted by the entry operator Sh. Himanshu Verma, on oath. 5(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are that assessee is a company duly incorporated under the provision of The Companies Act,....

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....12-13 (assessed at Rs. 25,11,04,450/-); copy of audited financial statement; copy of PAN card; copy of bank account statement; certified ledger a/c of Varrenyam in books of assessee; incorporation certificate; ITR Ack. - AY 2012-13 (income declared 1.33 Cr.); submission dated 7.9.2015 to CIT(A) and ITAT order of M/s Varrenyam Securities Pvt. Ltd. and in another Paper Book-II which contained pages 1-108 attaching therewith Paper Book-I filed on 29.3.2019; CIT(A)'s order of Varrenyam Securities Pvt. Ltd AY 2012-13; documents showing Varrenyam filed recovery suit no. CS620958.16 on assessee for recovery of outstanding amount - still pending; ledger account f assessee in books of Varrenyam 1.4.11 to 31.8.16 and Audited Financial Statements of 'A' -AY 12-13. Ld. Counsel for the assessee stated that the addition of Rs. 24.78 Crore has been finally made in the hands of M/s Verrenyam Securities Pvt. Ltd. by the AO; Ld. CIT(A) sustained the addition and ITAT has upheld the action of the Ld. CIT(A) by dismissing the appeal of the assessee and no further appeal has been filed against the order of the ITAT. In support of his contention, he also filed the Brief Synopsis, which read as under:- ....

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....refore he has not made any addition in the hands of Varrenyam u/s.68 (1-18, RP-18) Even in the asstt. of assessee, the A.O. has doubted for only those receipts which have been reed. by Varrenyam from 13 companies operated by Himanshu Verma i.e. totaling Rs. 24.78 Cr. and not for bal. Rs. 2.07 Cr. Hence, there is actually no cogent reason assigned in the impugned asstt. for making addition to the extent of bal. Rs. 2.07 Cr. Thus, the complete addition ofRs. 26.85 Cr. is unjustified TWO - On further merits The assessee did not take share capital 1 premium but loan ofRs. 26.85 Cr. (40-43) It was intt. bearing loan @9% wherein the following intt. has been paid by assessee which has been allowed to assessee as a deduction after deduction of TDS A.Y. Interest paid and allowed TDS deducted and deposited Pg.No. of P /B 2012-13 2,17,42,274/- 21,74,227/- 87 2013-14 83,34,376/- 8,33,438/- 87 2014-15 6,00,075/- 60,008/- 88 2015-16 5,62,870/- 56,287/- 88 The complete loan of Rs. 26.85 Cr. was returned back up to A.Y.2013-14, only some intt. ofRs. 94,14,283/- was outstanding....

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.... was satisfied with respect to genuineness of transaction and creditworthiness of 'lA' and, therefore deleted addition.- It was found that total loan of Rs. 1.60 crores was advanced to assessee, out of which Rs. 15 lakhs was repaid to 'lA' -0 Balance loan amount was repaid by assessee in immediately next financial year - Whether when Deptt. had accepted same, addition made by AO was to be deleted - Held yes. For - source of the source can be asked only from A.Y.13-14 and that too in case of share capital PCIT Vs. VEDHATA TOWER (P) LTD. (Bombay High court order dtd. 17.04.18, ITA No. 819 of 2015) CIT Vs. Gagandeep Infrastructure (P) Ltd. 394 ITR 680 (Born.) Held that - Sec. 68 is not applicable in case assessee is not able to explain source of the source. Further, held that the proviso to section 68 has been introduced by the Finance Act, 2012 with effect from 1-4-2013. Thus, it would be effective only from the assessment year 2013-14 onwards. ACIT VS. PREM ANAND (ITA O. 3514 / D / 2014) (DELHI ITAT ORDER DTD. 13.04.2017) "7.1. It is a settled law that the assessee is not answerable to explain source of s....