2020 (12) TMI 669

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....here was a repayment of Rs. 3.05 Crores in the subsequent assessment year and sustaining the addition of Rs. 3.05 Crores by the Ld. CIT (A) is not justified. The Id. A.R. Relied on the following judgments:- a)In the case of CIT v. Orissa Corporation P. Ltd. In [1986] 159 ITR 78 (SC) wherein held that "in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit worthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some e....

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....as proved by providing bank accounts. The loan account was squared off in the same assessment year through payment by M/s.Forsee Financial & Consultancy Services and its associated concern through M/s.Aurobindo Finance & Hire Purchase Pvt. Limited, which was paid on behalf of assessee, namely Mr.C.V. Ravi. Similar contention of the ld. A.R. was that loan outstanding from M/s.AR.Com was repaid on behalf assessee by M/s.Aurobindo Finance & Services Limited and M/s.Forsee Financial & Consultancy Services. The said repayments were made by these group concerns for the assessee on different dates during the financial years 2008- 09, 2009-10 and 2010-11 by the firm which is not in existence. Out of the said amount of Rs. 3.80 crores in total, a sum of Rs. 2.55 crores was settled by these entities towards loan. But the fact remains that only a sum of Rs. 23,93,000 is shown as outstanding as against a sum of Rs. 2.55 Crores paid by M/s.Forsee Financial Services Ltd. The said figure of Rs. 23.93 lakhs is not tallying with any of the entries in the books or in the bank statement. Since the said amount of Rs. 2.55 crores is not figuring in the name of Shri C.V. Ravi and it was also ob....

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.... Inspector vide his report dated 08.12.2011 and 09.12.2011 stated that M/s.AR.Com is bogus entity and the address of the two partners are also fake / bogus. The assessee had completely failed to prove the genuineness of the transaction either way i.e., at the stage of "loan advanced" by M/s.AR.Com to the assessee and at the stage of so-called "repayment" of the said loan, by the assessee to M/s.AR.Com. Further, the assessee has also completely failed to show / establish the nexus between the loans stated to be repaid by M/s.Forsee and M/s.Aurobindo on behalf of the assessee, and the flow of funds, if any, from the hands of the assessee himself to the said entities, as clearly highlighted in the Remand Report. 3.5.Being so, the loan standing the name of M/s.AR.Com cannot be considered, as a genuine loan. The assessee, even failed to prove the identity of the creditors and genuineness of the transactions. The burden cast on assessee would shift to assessee only when assessee proved the identity of the creditors. Then only the AO could probe the matter further and investigate the material available before him to come to an independent conclusion before rejecting the explanati....

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.... the said previous year, which was paid off substantially through banking channels and merely because the Assessee failed to produce the confirmation and the person, the owner of M/s.AR.Com, an adverse inference against the Assessee could not have been drawn by the Authorities below to make such additions. He further emphasized that the same financial company through whom the advance of the other two Creditors was repaid namely, M/s.Aurobindo Finance & Hire Purchase Private Limited and M/s.Forsee Financial & Consultancy Services and those credits and repayments were believed by the Assessing Authority, there was no reason not to believe a similar advance and repayment with regard to M/s.AR.Com. also. He therefore submitted that the learned Tribunal has erred in drawing such conclusion and the findings of facts, therefore, are perverse and the question of law does arise from the order of the learned Tribunal. 3. Per contra, learned Senior Standing Counsel for the Revenue supported the impugned order and even drew our attention to the statements of the Assessee recorded under Section 131 of the Income Tax Act, 1961, which has been quoted in the Assessment order dated 20.12.2011....

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....se state that how did you procured the loan amount of Rs. 3.05 crores? Ans: I am unable to furnish the information as the entire transaction an arranged one. At that time to subscribe the promoters issue of 16.25 lakhs number of shares of M/s.Sanguine Media Limited, I needed a source in bank for subscribing the same. Hence I approached my friends, and they suggested that if I would give the money in cash they would arrange cheques for the same. Hence I paid the cash of Rs. 3.05 crores to one of my friend who arranged the cheques for the above amount. As the entire money is belonging to me I have not executed any loan agreement / document for the above transaction. Hence I have not repaid the money to M/s.AR.Com. As I stated earlier that I never met anybody from M/s.AR.Com, in fact, I do not know whether it is a company or proprietorship concern or Partnership firm. Q.14.In answer to question No.11, you have stated that you have paid cash amounting to Rs. 3.05 crores for obtaining cheques, Please state what is your source for this amount of Rs. 3.05 crores ? Ans: The above amount of Rs. 3.05 Crores is out of my earnings as well as fund mobilized from my fr....

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....sed by you? Ans: Yes Q.5.Have you gone through your confirmation given by your in your own handwriting about the mode of recording of your sworn affidavit. Ans: Yes, I have gone through confirmation given by me on 01.02.2010. Q.6.Why at present you are retracting your statement? Ans: At that time under stress and I gave that statement now I am in clear better state of mind to retract the statement deposed by me. " 5. The learned Senior Standing Counsel for the Revenue Mr.T.Ravi Kumar, therefore submitted that on account of failure of the Assessee to produce any confirmation or the Assessee himself, the additions made in the hands of the Assessee with regard to the alleged loan of M/s.AR.Com is justified and the findings of facts do not deserve to be disturbed by this Court and they are binding on this Court under Section 260A of the Income Tax, 1961. 6. Having heard the learned counsel for the parties at length and having perused the materials on record, we are satisfied that no question of law, arises in the present appeal filed by the Assessee. On account of failure of the Assessee to produce any confirmation from the said allege....