TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 281
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....es under Section 68 of the Act being loan received by the assessee during the year from M/s . Maharasaa Visions Pvt Ltd on 18/09/2015 holding that assessee failed to establish the creditworthiness of the lender and genuineness of the transaction. 03 The brief facts of the case shows that the assessee is a company engaged in the business of real estate development deriving income from business as well as other sources. The assessee filed its return of income on 13.10.2016 declaring income of Rs. 4,32,810/-. Revised return was also filed on 18.02.2017 declaring income of Rs. 15,29,040/-. 04 During the course of assessment proceedings, ld AO made an addition of Rs. 5 crores on account of loan received from M/s. Maharaasa Visions Pvt. Ltd. on 18.09.2015 under Section 68 of the Act. The ld. Assessing Officer dealt with the whole issue as per under:- " Unsecured Loan : 4.1 A perusal of details filed by the assessee reveals that the assessee has availed a loan of Rs. 5,00,00,000/-(Rupees Five Crores only) from M/s Maharaasa Visions Private Limited on 18.09.2015. Vide notice u/$ 142(1) of the act dated 27.11.2018, the assessee was asked to prove his claim of genuineness of unsecured ....
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....sessee company has received unsecured loan from M/s Maharaasa Visions Pvt Ltd on 18.09.2015. It is seen that M/s Maharaasa Visions Pvt Ltd has filed return of income declaring Nil income for AY 2016-17. The lender company has no source of income and no income generating apparatus in place. Further, it is noted that source of M/s Maharaasa Visions Pvt Ltd is unsecured loan received from M/s MKT Investments Pvt Ltd. A perusal of bank account statement of M/s Maharaasa Visions Pvt Ltd bearing number 10927630000274 with FIDFC bank reveals that loan from M/s MKT Investments has been received on 07.09.2018. The account has negligible transactions. On the same day i.e. 07.09.2018, a cheque is issued in favour of M/s Supreme Build Cap Private Limited. The transactions in the said account over a period of 07.09.2018 to 18.09.2018 are reproduced below:- Date Narration Debit Credit Balance Balance as on 07.09.2015 2411 07.09.2015 Incoming funds from MKT Investments Pvt Ltd 50000000 50002411 07.09.2015 Cheque issued 50000000 2411 18.09.2015 Cheque dated 07.09.2015 Cancelled 50000000 50002411 18.09.2015 BC issuance charges 50 50002361 18....
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.... not be invoked in relation to the unsecured loan transaction. 1 he AO carefully examined the reply to the show cause notice but found it unacceptable. On analysis of the evidences on record the AO noticed that the lender company M/s Maharaasa Visions Pvt. Ltd. had filed return of income declaring Nil income for AY 2016-17. the AO found that the tender company has no source of income and no income generating apparatus in place. The AO noted that source of M/S Maharaasa Visions Pvt. Ltd. is unsecured loan received from M/s MKT Investments Pvt. Ltd. A perusal of bank account statement of M/s Maharaasa Visions Pvt. Ltd. bearing number 10927630000274 with HDFC bank revealed that loan from M/s MKT Investments has been received on 07.09.2018. The AO further noticed that the said account has negligible transactions. On the same day i.e. 07.09.2018. a cheque was issued in favour of the appellant. On further perusal it is noticed that the said cheque was cancelled and thereafter, the amount of Rs. 5,00,00,000/- was issued to the appellant on 18.09,2015. The AO noted that there is very low balance in the said account and there was no transaction except the loan transaction. The AO concluded ....
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....der the genuineness of the transaction is also not established. The AO has analysed the bank statements of the lender company M/s Maharaasa Visions Pvt. Ltd. and M/s MKT Investment Pvt. Ltd. and exposed the true nature of the transaction and conclusively held that the unsecured loan availed from M/s Maharaasa Visions Pvt. Ltd. was not genuine. In this connection reliance is placed on the following judgements : i. In the case of M/s Sanraj Engineering Pvt. Ltd. Vs CIT (ITA 79/2016) (Delhi) the Ilon'ble Delhi High Court held that addition made u/s 68 on account of unsecured loans was justified where initial onus of proving the creditworthiness of the lenders was not discharged by the asscssee. ii. In the case of PC1T Vs Bikram Singh [20171 85 taxmann.com 104 (Delhi)/(2017[ 250 Taxman 273 (Delhi)/]2017[ 399 ITR 407 (Delhi) the Hon'ble Delhi High Court held that even if a transaction of loan is made through cheque, it cannot be presumed to he genuine in the absence of any agreement, security and interest payment. Mere submission of PAN Card of creditor does not establish the authenticity of a huge loan transaction particularly when the ITR does not inspire such confidence. Mere....
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....s received the above loan from M/s. Maharassa Visions Pvt. Ltd., which is one of the group concerns. b. Assessee has discharged its onus by providing the complete details with respect to the above company such as (1) Confirmation of the company, (2) Its annual accounts, (3) Its Income Tax returns and (4) The bank statement of the depositor, (5) Source of the funds received by the lender from MKT Investments Pvt Ltd (Another Group Company) with the annual accounts and bank statement of that party (MKT Investments P Ltd) who provided funds to the lender (6) source of the source of the funds is appellant itself, Assessee deposited money with MKT Investments Pvt Ltd which was given to the lender and in turn lender deposited with the assessee. Bank account/ statements of all these parties, audited accounts of all these parties and confirmation c. Source of the fund, which is invested in the assessee company, is a loan from Assessee Company to MKT Investments Private Limited and from KT Investments to M/s. Maharaasa Visions Pvt. Ltd, which deposited the sum with the appellant company. The whole cycle of funds is explained. d. The funds were repaid by the assessee compan....
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....s formed by the group, did not fructify, there are no assets and liabilities of that company. Above Transactions were sole accounting entries in the books of the company as per above transactions explained. There was unsecured loan from the MKT Investments as Liability, Loans, and advances in assets to the appellant in the books of lender. He submitted that when the above flow of fund is seen, there is clear cut source of funds are available, It is not necessary that there should be income always or assets always with lender. In these peculiar circumstances, it is not. He also submitted that directors are also same group is apparent. He submitted that creditworthiness of the lender is qua transactions. Otherwise, a loss making company cannot give any loan to anybody. With respect to genuineness, he submitted that the whole transaction is so transparent that there is nothing ingenuine in it. In view of this it was the submission that lender company has source of funds available with it in form of unsecured loan from a group company and as it is a group company transaction, there is no doubt about the genuineness of these transaction also. Therefore, he submitted that the addition m....
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.... Maharasaa Vision Pvt Ltd. The assessee by production of the balance sheet has shown that these are transactions from a group company and more precisely subsidiary of the appellant. It is shown by the balance sheet that appellant is owned by Mr Mithlesh Tripathy and his family as shareholders. Appellant company owns 51% share in the lender company as on 31st of March 2016. As on March 2015, in the lender company Mr. Mithlesh Tripathy and Mr Anmol Tripathy owned 50% each. From the above it is apparent that the year in which the loan was received the appellant company was holding 51% share in the lender company. In the balance sheet of the lender, it is apparently shown that there is an unsecured loan received from a related party i.e. MKT Investments Pvt Ltd and unsecured loan granted to a related party i.e. assessee, appellant. Thus, the creditworthiness of the amount given to the assessee by the lender is a source of fund from another group company. Therefore, it is not the case that the lender did not have the source of fund to give loan to the assessee. Further, with respect to the genuineness of the transaction, the loan was obtained from a group company where there is a clear-....