TaxTMI 
TaxTMI 
2019 (12) TMI 1157
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....by the A.O on 27.12.2016 determining income at Rs. 1,75,00,000/-. During the course of assessment proceedings, the Ld. AO observed that as per the information received from investigation wing of the IT department a search action u/s 132 of the Act was conducted in the case of Mr. Pravin Kumar Jain & Group on 03.10.2013. As per the said information, the assessee company reported to have received unsecured loans amounting to Rs. 1,75,00,000/- as under Sr. No. Name of party Amount 1 Duke Business Pvt Ltd., 50,00,000 2. Pragati Gems Pvt Ltd., 35,00,000 3. Falak Trading Company Pvt Ltd., 25,00,000 4. P Saji Textiles Ltd., 10,00,000 5. Shyam Alcohol and Chemicals Ltd., 15,00,000 6 Shipra Fabrics Pvt Ltd., 40,00,000 3.1 The A.O alleged that all the above persons were engaged in providing accommodation entries by way of Share Capital or unsecured loans to various Parties and the assessee was one of such beneficiaries who obtained accommodation entries as regards unsecured loans from them. Based on the above facts, the AO concluded that the above loans obtained by the assessee were not genuine and made an addition of Rs. 1,75....
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....en found in the course of search to establish the fact that he was in the business of providing the accommodation entries. The LAR has also contended that an opportunity of cross examination was not granted to the assessee In case of CIT v Ashish International High Court of Bombay (ITA NO 4299 of 2009) the Jurisdictional the Hon'ble Bombay High Court has held that the Tribunal has recorded a finding of fact that the assessee had disputed the correctness of the statement of the Director of M/s. Thakkar Agro Industrial Chem Supplies P. Ltd. and admittedly the assessee was not given any opportunity to cross examine the concerned Director whose statement was relied upon by the Director. In case of Heirs And LRs of Late Laxmanbhai S. Patel v. CIT 22 CTR 0138 (Guj) the legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of crossexamination, if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice. This is clearly stated by the Hon'ble Supreme Court in the case of KishinchandChellaram vs. CIT (s....
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.... be charged as the assessee's income in the absence of any material to indicate that they belong to the assessee. The AO has to take cognizance of the evidence filed by the assessee company like, income tax details, PAN, bank account, mode of payment (by account payee cheques), loan confirmation, etc unless provided otherwise. The Hon'ble Gujarat High Court in the case of Murlidhar Lahorimal v. CIT 280 ITR 512 has held that 'an assessee can be asked to prove the source of credit in the books, but he cannot be asked to prove the source of the source". Under the circumstances and facts of the case, the AO has not placed any evidence on record to suppor t i ts claim that the transaction was accommodated except merely relying on the retracted statement and has taken no action to rebut the evidences produced by the assessee. On the other hand, the assessee has provided all the documents to prove the genuineness of the transaction entered into. In CIT v. Orissa Corporation P. Ltd. [1986] 159 ITR 78 (SC), the Hon'ble Supreme Court held that once the primary onus of establ ishing the genuineness of the transaction is done by the assessee by furnishing the details l....
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....t was reopened and was completed under section, 143(3) r.w.s. 147 on 30.03.2015 determining total income at Rs. 82,89,890. The addition made and agitated in this appeal is the addition made u/s 68 of the Act to the tune of Rs. 75,00,000. The Assessing Officer has observed that during f inancial year 2006- 07, the appellant company had received a sum of Rs. 75,00,000 as share capital including premium. As per the Assessing Officer the entire sum was received from certain companies managed by one Mr. Praveen Kumar Jain who has admitted that this money was routed through bogus share applications. According to the Assessing Officer, the said sum of Ps. 75,00,000 represented the amounts received from shell Companies. Therefore, the Assessing Officer had added the entire sum of Rs. 75,00,000 as unexplained credit u/s 68 of the Act. The Hon'ble ITAT held that Ld. CIT(A) failed to note that the learned Assessing Officer merely relied on the information received from DGIT (Investigations), Mumbai to reopen the assessment and neither the assessment order nor the reasons communicated indicate that the Assessing officer had applied his mind to the issue and therefore the entire re....
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....)(4) ITA No. 4930 / MUM / 2015 quashed the reopening of the assessment where the facts were similar like in the case of the assessee. Having considered all of the above, I am of the view that the assessee has discharged his onus of establishing the genuineness of the transaction and the onus was on the department. The AO has not discharged his duties and proved otherwise except for relying on the statements of Shri Praveen Kumar Jam, Shri Gautam Jain and Mr. Vipul Bhatt of which the statements of Shri Praveen Kumar Jain and Mr. Vipul were retracted by them later. The AG has not granted the-opportunity of cross examination of all the three parties on whose statement he has relied upon. The AO also failed to make any further inquiries with the lender companies to establish the genuineness of the transaction and also failed to consider the various evidences filed by the assessee to prove the identity, creditworthiness and genuineness of the loans. The AO has not pointed out any defect / deficiencies in the evidences adduced by the assessee. All these clearly establishes that the principle of natural law and justice is violated and addition has been made u/s. 68 of the Act by ....
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.... from DDIT (Inv), Unit-7(4). The A.O has incorporated the fact of various documents filed by the assessee in respect of loans taken in part 4.5 of the assessment order i.e loan confirmations, Bank statement of Lender parties, ledger copy etc. AO rejected assessee's contention and made the addition. 6.1 From the record, we found that in respect of show cause notice as mentioned in para 7.4 of the assessment order, assessee has relied on all the documents and evidences filed in respect of these loan parties and also submitted that the three persons on whose statements department has relied have not mentioned name of the assessee in their statements. A.O has not accepted the reliance placed by assessee on various judgments which were submitted before the A.O. The A.O has relied on provisions of Sec. 292C of the Act, which raises a presumption against the persons in whose case search is conducted. However, in the case of assessee, no search or survey has taken place. 6.2 By the impugned order the Ld. CIT(A) has deleted addition after threadbare dealing with all the contentions of the A.O. On page No. 6 of the order, the Ld. CIT(A) has incorporated various decisions of Hon'ble ITA....
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.... case of M/s. Skylark Build in ITA No. 616 of 2016 dated 24.10.2018, 2018-TIOL-2323-HC-Mum-IT. 7.3 Further more Ld. CIT(A) has incorporated various judgments on page No. 18 of the order according to which by filing various documents the creditworthiness of lender parties is established. Ld. CIT(A) has incorporated the submission given by assessee in response to show cause notice issued by A.O on page No. 19 of his order. Ld. CIT(A) has given findings starting from page No. 20 of his order and relied on various judgments. The final findings are at page No. 25 of the order. Detailed finding so recorded by CIT(A) has not been controverted by Ld. DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings so recorded by CIT(A) which are as per material on record. 7.5. We had also carefully gone through the order of the Co-ordinate Bench in the case of group concern M/s.Manba Finance Ltd. dated 05/10/2010, wherein under similar facts and circumstances, the Tribunal have confirmed the order of CIT(A) for deleting the addition so made after having the following precise observation:- 41. We have carefully considered thi....