TaxTMI 
TaxTMI 
2020 (12) TMI 554
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.... the reassessment proceedings are without jurisdiction as the jurisdictional pre-conditions necessary to be satisfied as per sections 147 to 151 of the Act have not been fulfilled in the present case. 2. The CIT(A) erred in upholding the addition of Rs. 2,60,00,000 by applying the provisions of section 68 of the Act. 3. That provisions of section 68 are discretionary and the facts and circumstances of the present case do not justify the making of such addition. 4. The CIT(A) has erred in overlooking the relevant facts and material forming part of the record and on the contrary relied on material which was not relevant and which was not admissible as evidence in the absence of fulfillment of the requirement relating to natural justice. 3. Brief facts of the case are as under :- The assessee filed return of income for A.Y. 2008-09 on 30/09/2008 declaring total income at Rs. NIL. The return was processed u/s. 143(1) of the Act on 22/09/2009. Subsequently, the assessment was reopened u/s.147 by issue of notice u/s.148 on 28/03/2015. The reopening was done on the basis of information received that the assessee had obtained accommodation entries of Rs. 2,60,00,000/-. Therefore, t....
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....sition to bring the loan creditors before the assessing officer. However the learned CIT(A) was not convinced. In a very short order he upheld the assessing officer's order. He held that he is not convinced that assessee is not in a position to bring those creditors before the assessing officer despite having taken high amount of loan. He also rejected the assessee's reliance upon the various documents submitted and assessee's claim that they have not been rebutted by observing that notices have returned unserved and the inspector has reported the non-existent at the concerned address. The learned CIT(A) also did not offer any comment on the various documents submitted by the assessee 8. Against this order assessee is in appeal before us. 9. We have heard both the Counsel and perused the records. Learned counsel of the assessee submitted that assessee has submitted following documents before the authorities below. * Balance sheet and profit and loss account alongwith audited report of the assessee as well as loan creditors. * Ledger confirmation of loan creditors. * Extract of bank statements reflecting loan received and repaid. * Confirmation from creditors at th....
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.... or examination to dislodge the submissions. The assessing officer is solely relying upon the aspect that section 133 (6) notices have returned unserved. We note that the notices under section!33(6) enable the assessing officer to obtain information and other explanations from the persons to whom the notices have been served. In the present case we note that all the necessary documents from the loan creditors have been supplied to the assessing officer. They include their bank statement, balance sheet, profit and loss account and confirmation. 13. Hence in our considered opinion no adverse inference so much as to treat the unsecured loan as bogus can be drawn solely on the ground of 133(6) notice remaining unserved. The assessee has duly explained before the authorities below that the loans were taken 8 years before and assessee was not in a position to bring the loan creditors before the assessing officer. That loans have also been duly paid back. We note that income tax act contains provision for summoning the concerned person before the assessing officer for examination under section 131(1). However we note that no such summon was issued by the assessing officer. 14. Only othe....
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....ies, therein calling upon them to furnish the requisite information as regards the exact nature of the activity carried out by the respective companies, along with the source from which the loans were advanced to the assessee, was also complied with and the required details viz. details of the loan transactions, copy of ledger accounts, copies of the bank statements etc were furnished by the abovementioned parties with the A.O. In sum and substance, the assessee had placed on record substantial supporting "material‟ to drive home his contention that genuine loans were raised by him from the aforementioned companies. 9. We have perused the observations of the A.O and find that he had in support of his claim that the assessee had obtained accommodation entries from the aforementioned companies, primarily focused on the fact that the said companies as per the information received by him from the office of the DDIT(Inv)-II, Mumbai, were controlled by Shri Praveen Kumar Jain, who as per the information shared by the DDIT (Inv.)-II, Mumbai, was found to be involved in providing accommodation entries of bogus unsecured loans to various parties through companies managed and control....
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....red loan, bogus LTCG, etc. however, in very few cases the end beneficiaries also approach him when they what an accommodation entry. Based on the specific type of accommodation entry required, Mr. Jain either provides the same through the companies under his control or contact other brokers and facilitate the accommodation entries providers. 6. The payment through account payee cheque, if any, does not substantiates the assessee's claim as it is already accepted by the persons. Perusal of information is enough to show that the assessee has taken only accommodation entry in the name of unsecured loan. These entities were not carrying out any business. After going through the facts, information gathered and the above elaborate discussion it is concluded that the assessee has taken accommodation entry of unsecured loan of Rs. 1,05,00,000/- from the above said parties." 10. We have given a thoughtful consideration to the facts of the case, and are unable to persuade ourselves to subscribe to the view taken by the A.O. As per Sec. 68 of the I-T Act, the assessee remains under a statutory obligation to substantiate both the "Nature" and "Source" of a "sum‟ found credited ....
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....e case before us, as the loans had been raised by the assessee from certain companies which on the basis of information received by the A.O from the office of the DDIT(Inv)-II, Mumbai, were stated by the A.O to be the companies which were controlled by Shri. Praveen Kumar Jain, an infamous accommodation entry provider, therefore, it was all the more onerous on the part of the A.O to have demonstrated on the basis of supporting "material‟ that accommodation entries in the garb of loans was provided by the said six companies by adopting the modus operandi of Sh. Praveen Kumar Jain and his group entities. However, we find, that as observed by us hereinabove, the A.O except for harping on the fact that the assessee had raised the loans from the companies which were controlled by Shri Praveen Kumar Jain, had absolutely done nothing which would conclusively prove that no genuine loans were raised by the assessee from the aforesaid companies. On the contrary, the notices which were issued by the A.O under Sec.133(6) to the aforementioned companies, wherein they were called to share certain information viz. nature of activities of the lender companies, source for giving the loans etc....