TaxTMI 
TaxTMI 
2021 (5) TMI 174
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....tances of the case, the ld. CIT (A) has erred in deleting the addition of Rs. 10,91,67,051/- made on account of unexplained unsecured loans." 3. In the ITA No.5858/Del/2017, following grounds have been raised by the revenue: "1. That the order of the ld. CIT (A) is not correct in law and on facts. 2. On the facts and circumstances of the case, the ld. CIT (A) has erred in deleting the addition of Rs. 46,00,17,516/- made on account of unexplained credits in the books. 3. On the facts and circumstances of the case, the ld. CIT (A) has erred in deleting the addition of Rs. 4,15,141/- made u/s 14A r. w. Rule 8D." 4. The Appellant is a practicing Lawyer running a Law Firm by the name of M/s K.R. Chawla and Co. As against the returned Income of Rs. 89, 58,460/- as per the return for A. Y. 08-09 filed on 29.09.08, the income was assessed u/ s 143(3) at Rs. 40,36,11,984/-. 5. Information has been received by the Assessing Officer from the Deputy Director of Income tax (Inv.) Unit-II(3) New Delhi containing the details pertaining to RC-21 & 22/2008/ SVPS/365 dated 17.08. 2009 from the office of the Director-Cum-Commissioner, Vigilance Gangtok Sikkim. 6....
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.... (seized during the course of search from my residence on 28.02.2007) as an expression of his serious interest in the deal. This deal did not materialized and the Cheque was never presented. The Nursing Home is still in the name of the original owner. (b) He introduced me in M/ s Storm International. I acted as a legal consultation to M/s. Storm International while they were in the process of obtaining a license for casino in India. 3.5 A perusal of the e-mail dated 19. 12.2007 from Mr. Michael Boettcher ([email protected]) to Sh. Harvansh P. Chawla shows that money was received by Sh. Harvansh P. Chawla. However, Shri Harvansh P. Chawla has denied having received this money. The relevant portion of his statement in this regard is reproduced below: "Q9. In the e- mail dated 19.12.2007 from Mr. Shri Michael Boettcher ([email protected]) addressed to you Mr. Michael Boettcher written as below:- "Mr. Chawla, Mr. Singh the minister from Sikkim called me today and advised me that you told him you had not received any payment from Storm for the casino license(s). I tried to reach you by telephone without success. I do not have to tell you....
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....t, 1961 is not applicable. C. That the aforesaid print of email is a kind of Dumb Document which cannot be used against the assessee. D. That in the email there is no indication of receipt of any money or accrual of any income in favour of the assessee. E. That even in your show cause notice dated 13.12.2010 nothing is mentioned about receipt of any money or accrual of any income by the assessee. F. That in Para 2 of show cause notice dated 13.12.2010, you have mentioned 'In the email conversation there is mention of remittance of $ 7,000,000 on the instruction of Sh. Narender Grover. Sh. Narender Grower also acknowledges the receipt of this money. This suggests that the assessee did not receive any money and he was also not responsible for the receipt of $ 7,000,000 by Sh. Narender Grover as both are independent persons. G. That in Para 4 of show cause notice it is mentioned that the money was received with the knowledge of Shri Harvansh P. Chawla (assessee). Though there was no evidence about the knowledge of the assessee yet mere keeping the knowledge of receiving the money by some independent person (not an agent) does not make the a....
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....he details regarding the background of the person. Thus Shri Chawla has not been telling the truth. * The assessee admitted the fact that the email from Mr. Micheal Boettcher was received by him. He has further accepted his association with M/ s. Storm International. * The email clearly mentions but money has been received by the assessee and fixes the liability on him to pay back alongwith interest in the event of Casino license being cancelled. * In view of the circumstances listed above, it is clear that the evidence points to assessee has received. USD 7,000,000/- through undisclosed sources. Hence, these USD 7,000,000 are treated as his undisclosed income. The rupee equivalent at prevailing rate of USD on 31.03.2008 is Rs. 28,00,00,000/-. An addition of Rs. 28,00,00,000/- is made under the head income from other sources. 12. The ld. CIT (A) deleted the addition. 13. Before us, the respective parties relied on the submissions and information available on record. 14. The submissions of the assessee with regard to this issue before the ld. CIT (A) are as under: * On going through the assessment order dated 28.12.2010 para 3, it is evid....
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....eared before the Ld. A.O. and his statement was recorded on oath. The appellant in his statement categorically denied about the receipt of any money as mentioned in the email (under dispute) cither by himself or by anybody else on his behalf. Since the appellant has complied the summon issued u/ s 131 he should not be punished by making the addition of Rs. 28,00,000/- without having any evidence. Those who did not comply the summons, no action have been taken against them. The appellant being law abiding person should not be penalized by making the addition of Rs. 28,00,00,000/- without having any evidence. Hence, the addition is unjustified and the same is liable to be deleted. * That in response to show cause notice issued during course of assessment proceeding, the appellant filed a written submission dated 20.12.2010 before the Ld. A.0 explaining the factual and legal position in respect of alleged receipt of Rs. 28,00,00,000/- as mentioned in the disputed email. However, the Ld. A.0 without appreciating the factual position and legality of the issue, wrongly added Rs. 28,00,00,000/- in the impugned assessment order. Hence, the addition of Rs. 28,00,00,000/- i....
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.... only on the reason that he (Shri Grover) sent the email by using the official server of the appellant. * That since Shri Narender Grover was working in the office of the appellant on temporary basis in connection with work of M/s Storm International (appellant's client). He was allowed the office facilities including the email addresses in order to professional practice and requirement. Accordingly, he might have sent the emails to Shri Ivo Mujjiser through the appellant office server by misusing the facilities provided by the appellant However, this may not be basis for holding that the said USD 70,00,000 was received either by the appellant or by anybody else on behalf of the appellant. Thus, the addition made merely on the reason of sending the email by Shri Narender Grover from the office server of the appellant is unjustified. Hence, the same is liable to be deleted. * That though the sending of email by Shri Narender Grover through the office server of the appellant may be a basis for enquiry, yet, it cannot be a basis for the addition in the case of appellant without having supporting evidences. No doubt, the Ld. A. O has correctly enquired the matter ....
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....ion of Rs. 28,00,00,000/- in the ease of appellant, though, there was no evidence against the appellant In substance, the appellant did not receive the said sum USD 70,00,000 equivalent to Rs. 28,00,00,000/-. Thus, the addition of Rs. 28,00,00,000/- is not justified. Hence your goodself is requested to kindly delete the said addition. * That in response to show cause notice dated 13. 12.2010 para 2 & 4 the appellant had submitted following explanations before the Ld. A. O: "That in para 2 of show cause notice dated 13.12.2010, you have mentioned "In the email conversation there is mention of remittance of $70,00,000 on the instruction of Sh. Narender Grover. Sh. Narender Grover also acknowledges the receipt of this money." This suggest that the assessee did not receive any money and he was also not responsible for the receipt of $70,00,000 by Sh. Narender Grover as both are independent persons. That in para 4 of show cause notice it is mentioned that the money was received with the knowledge of Sh. Harvash P Chawla (assesseee)- Though there was no evidence about the knowledge of the assessee yet mere keeping the knowledge of receiving the money by some in....
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....0 and the Ld. A. O has also quoted the certain portion of the said explanation in the assessment order. In the said explanation dated 20.12.2010, certain case laws (including the cases decided by the Delhi ITAT. Hon'ble Delhi High Court and also by Hon'ble Supreme Court) have been quoted explaining the; legal position of the disputed printouts of the email. However, the Ld. A.O did not consider the case laws under reference as he neither accepted the ratio of these cases nor rejected the same in the assessment order. In fact, the Ld. A.O kept mum with reference to the case laws mentioned in the explanation dated 20.12,2010. Hence, the Ld. A. 0 being quasi judicial authority was not justified ignoring the case laws as quoted in the written submission and making the addition of Rs. 28,00,00,000/-. The addition made by Ld. A. O was against the principle laid by the Delhi ITAT, Jurisdictional High Court and by the Hon' ble Apex Court, which were binding in nature. Hence, the addition of Rs. 28,00,00,000/- is liable to be deleted. (b) That in the light of copy of explanation dated 20. 12.2010 enclosed as Annexure-1 submitted before the Ld. A.O., it is brought t....
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....ding is reproduced below:- "While completing an assessment the AO is not a Court He is also not hound by technical rules of evidence. He may consider material which would be wholly inadmissible in a Court of law. He may draw his conclusion and inferences on the cumulative effect of various circumstances based upon the test of human probability. At the same time though technical rules of evidence do not apply, the AO is bound by the principles of natural justice. He cannot draw his inferences on the basis of suspicion, conjectures and surmises. Suspicion howsoever strong, cannot take place of the material in support of findings of the AO. The AO should art in the judicial manner, proceed with the judicial spirit and come to a judicial conclusion. Swadeshi Cotton Mills Co. Ltd. vs. ITO 1976 CTR [All] 6: (1978) 112 ITR 1038 (All) and Dhakeshwari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775 (SC) applied. In the light of facts and circumstances of the case, legal provision and judicial pronouncements, it is brought to your kind notice that the addition of Rs. 28,00,00,000/- was made only on the basis of printout of emails exchange which was seized from the prem....
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.... of supporting evidences. (c) The person from whom such print out of email was seized, was liable to explain and not the assessee. (d) The assessee is not involved in email exchange; no action is required to be taken against the assessee. (e) The assessee being law abiding person appeared before the Ld. AO and his statement on oath was recorded and thereafter the addition of Rs. 28,00,00,000/- was made. The persons who did not comply the summons, no action have been taken against them. (f) In email no where it is mentioned that he assessee has received USD 70,00,000. On the contrary, through email dated 22.11.2007 it is evident that Sh. IVO Mujjser transferred USD 70,00,000 in six different amounts in three banks. (g) Further, through email dated 26.11.2007 Sh. Narendra Grover confirmed the receipt of said amount. (h) These two emails in which the transaction of USD 70,00,000 has been, mentioned, was neither sent nor received by the assessee but the sender is Mr. IVO Mujjser and the receiver is Mr. Narendra Grover both are persons and they are neither agent of the assessee nor they were working for and on the behalf of the asses....
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....s of the documents seized from third person. M. There is no legal provision for making the addition of Rs. 28,00,00,000/- merely on the basis of email print out seized from a third person on following reasons: (a) Section 4 is a charging section which speaks about the 'Total Income'. The term Total Income' has been defined under section 2(45) which refer to Section 5 of the Income Tax Act, 1961. (b) Section 5 refers about either receipt of income or accrual of income. In the instant case of the assessee, there is no evidence that the assessee has received the money. On the contrary, in email dated 19.12.2007 Mr. Chawla has denied the receipt of the money. (c) Further there is no evidence that there was accrual of any income in favor of the assessee. In absence of any receipt or accrual of income, no addition can be made in case of the assessee. (d) Without prejudice, if it is presumed that the amount was received by the assessee even then, no addition can be made of the gross amount as there is description of payment in email for sake of licenses of two casinos. Once the amount is presumed to be received, it can also be presu....
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....8 (letter No. RC-21 & 22/2008/ SVPS/365 dated 17.08.2009. 6. Evidence that the above documents have been confronted to the appellant. 7. Comments in detail on the identity, genuineness and credit worthiness of each person who have allegedly advanced loan to Shri Harvansh P. Chawla and addition regarding which have been made by the Assessing Officer under section 68 and whether you are satisfied or not regarding the source of the unsecured loans claimed by the appellant as per the bank account furnished by the appellant and forwarded by you. 8. How have share application money been received from abroad in case of Pvt. Ltd. Company i.e. M/s. Karina Hotels Pvt. Ltd., M/s. Storm Hotels Pvt. Ltd. and M/s. K R Chawla Consulting Pvt. Ltd, You are also required to specify that if the amount received in foreign currency is not share application money then what is the nature of the foreign currency receipt and whether these are in any way connected to the amount referred to in the e-mails, addition in respect of which has been made in assessment year 2008-09 in the case of the appellant. 9. Whether there is any amount paid by Storm International to Shri Ha....
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....r para 3.3 of the assessment order for A.Y. 2008-09, summons were issued to Sh. Narinder Grover to the address of M/ s. K.R. Chawla & Co.- a law firm owned by the assessee. These summons were returned by the assessee's law firm with the comments that Sh. Narinder Grover was no longer available there, and they did not have any contact with him or his forwarding address. Thus, it is clear that the assessee was given sufficient opportunity to produce Sh. Narinder Grover, if he desired to do so. 3.4 As regards efforts made to confirm the transaction from Michael Boettcher and Ivo Mujjser, it is stated that the assessee was confronted, with the documents and seized material during the assessment proceedings, and no plausible explanation could, be given by him to rebut the presumption of being the beneficiary of the amount in question. No further confirmation was required in the circumstances of the case. 3.5 In connection to the documents regarding details of US$ 759,485 from SBI Gangtok and other documents including statement of account relating to Kanchan Distilleries Pvt. Ltd. forwarded later by Director cum Commissioner of Vigilance Department, Sikkim reference to ....
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....query regarding receipt of Share Application Money from abroad appears to be not much related to the present case. The contention of Revenue has been that the lenders which advanced unsecured, loans to the assessee did not have sufficient means, and as such, it was assessee' s own money which was being routed through. Nature of entry in the hands of Pvt. Ltd. Companies (the lenders) does not, in any way affect the above proposition. However, in case any new line of investigation is contemplated, the undersigned, would be most willing to carry out further investigation to the extent possible. It may not be out of place to mention that the undersigned does not have jurisdiction of the companies mentioned above. 3.9 As regards any amount paid to M/ s Strom International, it is stated that even if some amount was paid by the assessee to M/ s Strom International, it does not affect the Revenue's case in any way. The question whether M/s Storm International was a client of the assessee or not is not related to the Revenue's case brought out in para 3.10, 3. 11 and 3.12 of the assessment order for A. Y. 2008-09. However, in case any new line of investigation is contemplated, the ....
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....ver, even from the email, it is not clear as to what payment was even alleged to be paid to the Appellant. The contents of the email from Sh. Michael Boettcher to Sh. Harvansh P Chawla dated 19.12.07, as reproduced in Para 3.5 of the Assessment Order 28.12.10 are as under: "Mr. Chawla, Mr. Singh the minister from Sikkim called me today and advised me that you told him you had not received any payment from Storm for the casino license(s). I tried to reach you by telephone without success. I do not have to tell you how disappointed I am especially you have had the opportunity in build something unique and special that would have put Sikkim firmly on the map as well as creating increased, employment and visions in the region based on the investments by Storm as well as the possibility of a very positive future business together. I am also advising you on behalf of Mr. Singh to sent $2.5 m to Mr. Singh tomorrow. If you not he will (quite correctly in my opinion) to withdraw the casino licence. In the case of the casino license being withdrawn you will be required to return to Storm the full amount of the sum we paid to you plus any interest ....
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....received any money from M/ s Storm International nor he was entrusted with any money by M/ s Storm International or Michael Boettcher. The Appellant further stated that the email in question was sent erroneously or in mistaken belief. He further, averred that neither he nor his family or associates Firms had received the money could be verified from there Bank Statements. 8.46 Perusal of the Assessment Order shows that the Assessing Officer rejected the contentions of the Appellant and has solely relied upon the abovementioned email from Sh. Michael Boettcher to hold that Appellant had received the amount of $ 7 Million. Such conclusion has been drawn on the basis of his logic in Para 3.7 and 3.8 on Page 6 of the Assessment Order as under: i. "no sane person would receive unaccounted income in his account or in the accounts of any of the concerns related to him", (observation in Para 3.7 of the Assessment Order) ii. "the email clearly fixes the liability to pay back on Sh. Chawla in the event of licenses been cancelled" (observation in Para 3.8 of the Assessment Order) iii. "there is also a mention of the repayment alongwith Interest" (observatio....
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....r that " the email clearly fixes the liability to pay back on Sh. Chawla in the event of licenses been cancelled" and that "there is also a mention of the repayment alongwith Interest". However, these are claims or allegations made by the email sent to the Appellant. There is no confirmation from the Appellant regarding the claim that any payment was received by him. Further, the Assessing Officer has ignored a very relevant aspect of the email that the opening lines of the email very clearly record that the Appellant had denied having receipt any payment at all from M/ s Storm for the Casino Licenses. It is stated in the opening part of the email as under: "Mr. Singh the minister from Sikkim called me today and advised me that you told him you had not received any payment from Storm for the casino license(s)". 8.50 Thus the email itself clearly records the denial of the Appellant of having received any payment from M/ s Storm for the Casino Licenses. Thus we have a situation where rather than having a confirmation from the Appellant of having received any payment, we have a clear denial from the Appellant recorded in the email itself. In such a situation, merely ....
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....Officer himself is not sure whether the Appellant was a beneficiary directly or indirectly. Once the Assessing Officer desires to hold that an Assessee was a beneficiary, then there should be clarity as to whether the Assessee was a direct beneficiary or any indirect beneficiary. In the present case, the Assessing Officer could not show that the Assessee was a direct beneficiary or an indirect beneficiary and has still given the finding that the Assessee was a beneficiary. The doubt of the Assessing Officer is well recorded in the finding that the Appellant was "directly or indirectly the beneficiary", and it goes on to further show that the Assessing Officer has failed to appreciate the facts of the case. 8.55 In fact, the above findings and conclusion of the Assessing Officer show that once the allegation had been put upon the Assessee that he had received some Unaccounted Money, the Assessing Officer rushed to conclude that the Assessee had indeed received that money, and in that process, ignored the basic facts of the case. If there is no evidence that any such amount was actually sent, then drawing conclusions merely on the basis of emails that such amount was sent, a....
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.... 2.5 m to Mr. Singh" and that if the Casino License was withdrawn, the Appellant should "return to Storm the full amount of the sum we paid to you plus any interest incurred". 8.57 An analysis of the letter dated 17.08.09, No. RC- 21&22/2008/S VPS/365 from the Senior Superintendent of Police, Sikkim Vigilance Police, Gangtok from the office of the Director-cum-Commissioner, Vigilance, Gangtok shows that it has been clearly stated that in the said email one Mr. Singh has been mentioned as a Minister from Sikkim. However, the letter dated 17.08.09 itself makes it very clear that "there was no minister in Sikkim with the Surname Singh." 8.58 From the above, it is clear that once there was no Minister in Sikkim with the Surname Singh, the claim by the above mentioned email from Sh. Michael Boettcher that Mr. Singh, the Minister from Sikkim had called Sh. Michael Boettcher was false or was the result of fraud or mistake, and also that there was no valid person to whom the Appellant or any other person could have given $ 2.5 m, i.e. 2.5 Million US Dollars. 8.59 In fact, the above mentioned letter dated 17.08. 09 itself again makes it very clear that the above m....
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....t had been received by the Appellant, as the conclusion was that the Appellant was "directly or indirectly the beneficiary of the amount of USD 7,000,000 mentioned in the email, which was a totally unjustified conclusion as discussed in Para 8.54 and 8.55 above. 8.63 The Assessing Officer has also stated in Para 3.8 that " If is a settled legal principal that in a situation where the evidence and preponderance of probability points against the assessee, the onus is on the assessee to disprove the evidence. The only way the assessee could have discharged the onus is by furnishing the names and other details of the beneficiaries." However, as discussed above neither the evidence nor any preponderance of probability points against the Assessee and hence the Onus was not upon the Appellant, tut was rather upon the Assessing Officer, who in the absence of any direct evidence or material, money trail or Statement or any other factor against the Appellant has sought to conclude that an amount of $ 7 Million was received by the Appellant. The Assessing Officer has failed to discharge that onus. 8.64 The Assessing Officer has further mentioned that the Appellant has admitt....
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....cts him of irresponsible acts, and that too without any proper justification. It is seen that the use of the facilities of M/ s K.R. Chawla & Co. by Sh. Narinder Grover was on behalf of M/ s Storm International B.V. and that the use of these facilities was billed to the Client M/ s Storm International B.V. Hence, the; drawing of any adverse inference against the Appellant was not at all justified. 8.65 In Para 3.11 of the Assessment Order the Assessing Officer has made the following observations, on the basis of which he has drawn final conclusions: 1. The Assessee admitted the fact that the email from Mr. Michael Boettcher was received by him. 2. The Assessee accepted his association with M/ s. Storm International B. V. 3. The email clearly mentions that money has been received by the Assessee and fixes the liability on him to pay back alongwith Interest in the event of Casino license being cancelled. 8.66 As discussed above, none of the above points can lead to the conclusion that the Appellant received any money. The Appellant was a legal consultant to M/ s Storm International B.V., which he has openly admitted, and was fully justifie....
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....ld have been received by someone, and that someone could have been the Appellant, is certainly in the realm, of irrationality and speculation. As already mentioned above, the Sikkim Vigilance Police itself has stated in the letter dated 17.08.9 itself makes it very clear that '' there was no minister in Sikkim with the Surname Singh.", and hence it is obvious that, the claim by the above mentioned email from Sh. Michael Boettcher that Mr. Singh, the Minister from Sikkim had called Sh. Michael Boettcher was false or was the result of fraud or mistake, and also that there was no valid person to whom the Appellant or any other person could have given $ 2.5 m, i.e. 2.5 Million US Dollars. The above mentioned letter dated 17.08.09 itself again makes it very clear that the above mentioned Sh. Kunwar Onkar Singh could have committed fraud or misrepresentation, as the letter states that " In all probability Shri Kunwar Onkar Singh might have posed himself as a Minister while contacting M/ s Storm International, Russia", from which it is clear that the Sikkim Vigilance Police itself was of the opinion that Sh. Kunwar Onkar Singh was committing fraud upon M/ s Storm International, or at leas....
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....,34,000/- 3. M/ s. Navya Securities Pvt. Ltd. Rs. 7,01,49,880/- 4. M/ s. KP & Associates Rs. 98,80,000/- 5. M/ s. Strom Hotels Pvt. Ltd. Rs. 46,50,000/- 6. M/ s. HN Consultant Pvt. Ltd. Rs. 9,93,171/- 7. Shri NK Ahuja Rs. 30,00,000/- 8. M/ s. Karina Hotels Pvt. Ltd. Rs. 28,00,000/- 9. M/ s. Navya Securitie Rs. 1,79,201/- 10. M/ s. KR Chawla Consulting Pvt. Ltd. Rs. 9,16,42,740/- 11. M/ s. K. R. Chawla Infra & Aviation Academy Pvt. Ltd. Rs. 32,88,93,299/- 12. M/ s. Mansion Hotels Pvt. Ltd. Rs. 2,80,00,000/- 13. H T Recon Construction Pvt. Ltd. Rs. 85,02,276/- Total Rs. 56,91,84,,567/- 23. During course of Assessment proceedings the assessee filed the confirmation, copy of ITR, copy of Balance Sheet, Bank Statement and other relevant evidences in respect of all the parties except from Sh. NK Ahuja who was no more at that time. 24. The AO mentioned the evidences filed in the Assessment Order and made the addition holding that " the assessee appears to be bringing in unaccounted money in to his books after creating the layers of intermediaries. Hence the cr....
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....s through banking channel. Hence, the identity of the creditor, genuineness of the loan and creditworthiness of the creditor is proved. Hence, the addition of Rs. 30,00,000/- was deleted. We have gone through the contents and find no infarction of law. Hence, we decline to interfere with the order of the ld. CIT (A). 31. Before the ld. CIT (A), the assessee has submitted as under: "I. Legal Provisions in case of Cash Credit (i) That in respect of genuineness of loan, it is necessary to examine the legal provision of Section 68 of the Income Tax Act. 1961. which is reproduced as below:- "Where any sum is found credited in the book of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the (Assessing) Officer, satisfactory, the sum so credited may be charged to income tax as the assessee of that previous year". That going through the provision of Section 68, it is evident that following ingredients are required for the application of provision of Section 68 of the I.T Act, 1961 and also for proving the genuineness of l....
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....ation furnished by the assessee and for rejecting the same arbitrarily and without assigning any reason for the same. The ratio of the judgment in this case is that the assessee's explanation must, be examined carefully and if it is found not to be acceptable, the proper reason for rejecting the explanation should be given in the order. The relevant portion of the judgment is reproduced fpr your kind perusal. "The ITO did not examine the merits of those explanations. He rejected them by merely observing that they were not satisfactory. The explanations offered by the assessee are not prima facie absurd. They were capable of being examined by the ITO. It was possible for the ITO to go into the extent of the immovable property owned by the HUF and its income. He did not care to do so. It was also possible for the ITO to go into the question of remittances made by Kannan Kunhi from Ceylon. Here again the ITO did not choose to do so. It was not even suggested by the ITO that the assesses was having any business activity in India prior to 17th Aug., 1950, or any other source of income taxable wider the Act If the explanation given by the assessee that part of the i....
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.... credit as genuine. a. The identity of the creditor, b. The capacity of such creditor to advance the loan, and c. The genuineness of the transaction, (ii)) That Hon' ble Calcutta: High Court in C. Kant and Co. vs. CIT (1980) 126 ITR 63(Cal) held that in case above three ingredients have been proved by adducing the evidences, it will be presumed that the assessee has discharged his onus in proving the genuineness of the loan and no addition u/ s 68 can be made. (iii)) That Hon' ble Gujarat High Court in the case OF CTT VS Rohini Builders (2002) 256 ITR 360 (Guj) held that where the assessee has proved the identity of the creditors, and the amounts were received by account payee cheques, the initial burden on the assessee is discharged. The finding of the tribunal that cash credit should be treated as proved in absence of any further material to discredit the same has to be upheld. (iv)) That Hon' ble Guahati High Court in the case of Kundanmal Kothari(HUF) vs. CIT (1997) 93 Taxmann 620 (Goa) found that the loan of Rs. 1,25,000/- was entered in the books of account and the creditor was also identified. The creditor himself....
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....the addition of Rs. 17,000/-. That ITAT Delhi Bench in the case of Pankaj Sawhney vs. Income Tax Officer (2004) 3 SOT 1 (Del) held that assessee having furnished considerable material in support of identity of donors and having established all of them to be income tax assessee, addition was liable to be deleted. That ITAT, Amritsar Bench in the case of ITO vs Parveen Kumar (2004) 2 SOT 77 (Asr) held that the identity of the creditor was disclosed and also source of the creditor was disclosed through an affidavit, the creditworthiness of the creditor was proved by giving the source as the creditors received money from Lucky Draw. In this regard, before the AO relevant certificate was also produced, there was no violation of Rule 46 A by the CIT(A). Considering the totality of the facts and in the absence of any new evidence/ material, against the order of the learned CIT(A), the CIT(A) rightly deleted the addition and no interference is required in the order of the CIT(A). The same is hereby upheld. The assessee should not be asked to prove the source of sources. That on going through the provision of Section 68 of the Income Tax Act, 196....
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....entity of the third party is established before the ITO and other such evidence are prima facie placed before him pointing to the fact that the entry is not fictitious, the initial burden lying on the assessee can he said to have been duly discharged by him. It will not, therefore, be for the assessee to explain further as to how or in what circumstances the third party obtained the money and how or why he came to make an advance of the money as a loan to the assessee. That Hon' ble Guahati High Court in the case of Nemi Chand Kothari vs CIT(2003) 264 ITR 254 (Gua) relying on the judgment of Assam High Court in the case of Tola Ram Dhaga vs CIT (supra) held that once the assessee discloses the source(s) from which he has received, the loans, his burden under Sec. 106 of the Indian Evidence Act stands discharged and the onus, then, shifts to the AO to show, if he wants to treat the, loan as an income of the assessee from undisclosed source. The Hon'ble High Court further observed that the harmonious construction of Section 106 of the Evidence Act and. Section 68 of the IT Act will be that though apart from establishing the identity, of the creditor, the assessee must es....
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....b. CIT(Addl.) vs Precision Metal Works (1985) 156ITR693 (Del) V Addition in the case of creditor and not in the case of assessee. (i) That the Ld. Calcutta ITAT in the case of Addl. CIT vs Unique Builders held that in case the creditors is assessed to tax and his identity is proved but the source of loan amount is disbelieved, in such, circumstances no addition can be made in the assessee case but the said amount shall be treated as unexplained in the case of the creditor only." 32. In respect of the loan of Rs. 10,61,67,051/-, the evidences relating to each party are summarized below: "i. Loan of Rs. 1,01,60,000/- from Kareena Hotel Pvt. Ltd. ii. Loan of Rs. 1,03,34,000/- from Kareena Hospitality Pvt. Ltd. iii. Loan of Rs. 7,01,49,880/- from Navya Securities Pvt. Ltd. iv. Loan of Rs. 46,50,000/- from Storm Hotel Pvt. Ltd. All the aforesaid parties are the legal entities registered with ROC. There details are verifiable from MCA21 website. They are regularly assessed to Income Tax in Delhi itself. The creditors have filed their confirmation showing their PAN, their copy of acknowledgement of ITR, copy of Balance Sheet and Pro....
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....us of each loans are as under: Loan of Rs. 1,01, 60,000/- received from M/s Karina Hotels Pvt. Ltd. That the M/ s. Karina Hotels Pvt. Ltd. was incorporated on 03.09.2007 and its last AGM was held on 23.05.2011 and Balance Sheet as on 31.03.2011 was filed to the Registrar of Companies. These facts are verifiable from the Master Details from the MCA 21 website. The company is assessed to tax with ITO, Ward 5(1), New Delhi. The appellant received the unsecured loan of Rs. 1,01,60, 000/- on 18.03. 2008 through banking channel. Confirmatory letter showing the (PAN AADCK7127) of the creditor, copy of bank statement of the creditor, copy of the balance sheet as on 31.03.2009 showing the previous year figures has been filed. On going through the Balance Sheet of M/s. Karina Hotel Pvt. Ltd. as on 31.03. 2008, it is evident that the said loan amount of Rs. 1,01,60,000/- is appearing in Schedule - 3. The creditor Balance Sheet tallies to the extent of Rs. 5,55, 95,520/- with suggest that the creditor had capacity to give the loan to the extent ofRs. 1,01, 60,000/-. That enclosing the aforesaid evidences pertaining to the creditor M/ s Karina Hotel Pvt. Ltd.....
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....dences, your goodself will appreciate that all the conditions required proving the genuineness of the loan is fulfilled in this case. Hence, the Ld. A.0 was not justified to treat the unsecured loan as unexplained and made the addition of Rs. 1,03,34,000/-. Loan of Rs. 7,01, 49,880/- received from M/ s. Navya Securities Pvt. Ltd. That the M/ s. Navya Securities Pvt. Ltd. was incorporated on 05.05.1995 and its last AGM was held on 30.09.2010 and Balance Sheet as on 31.03.2010 was filed to the Registrar of Companies. These facts are verifiable from the Master Details from the MCA 21 website. The company is assessed to tax with ITO, Ward 13(1), New Delhi. The appellant received the unsecured loan of Rs. 7,01,49,880/- during the year through banking channel. Confirmatory letter showing the PAN- AAACN3106 H of the creditor, copy of bank statement of the creditor, copy of the balance sheet as on 31.03.2008 was filed before the A.O. and the same are against enclosed. On going through the Balance Sheet of M/s. Navya Securities Pvt. Ltd. as on 31.03.2008, it is evident that the said loan amount of Rs. 5,92,32,577+ 1,09,17,303 = Rs. 7,01,49,880/- is appearing in Schedule - ....
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....required proving the genuineness of the loan is fulfilled in this case. Hence, the Ld. A.O. was not justified to treat the unsecured loan as unexplained and made the addition of Rs. 98,80,000/-. (E) Loan ofRs. 46.50, 000/- received from M/s Storm Hotels Pvt. Ltd. [a] That the M/ s Storm Hotels Pvt. Ltd. was incorporated on 01.01.2008 and its last AGM was held on 30.09.2010 and Balance Sheet as on 31.03.2010 was filed to the Registrar of Companies. These facts are verifiable from the Master Details from the MCA 21 website. The company is assessed to tax with, in Delhi. The appellant received the unsecured loan of Rs. 46,50,000/- on 17.03.2008 through banking channel. Confirmatory letter showing the PAN- AAMCS0343K of the creditor, copy of bank statement of the creditor, copy of the balance sheet as on 31.03.2009 has been filed. On going through the Balance Sheet of M/ s Storm Hotels Pvt. Ltd. as on 31.03.2009, it is evident, that the said loan amount of Rs. 46,50,000/- is appearing in Asset Side. The creditor Balance Sheet tallies to the extent of Rs. 99,46,918/- which suggest that the creditor had capacity to give the loan to the extent of Rs. 46,50.000/-....
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.... all the creditors are assessed to income tax and all the creditors had sufficient funds in their bank accounts to give the loan to the appellant. Further, there is no evidence on the part of Ld. A.O. to prove that the appellant had deposited the funds in the bank account of the creditors and thereafter he received the same by obtaining the cheque from such creditors. In this situation, the creditworthiness of the creditors and source of loan amounts have also been proved. In the light facts and circumstances of the base, your goodself will find that all the loans have been received through banking channel. The creditors are assessed to tax. All the creditors except M/s KP & Associates are the legal entities and their status are verifiable from the website of the ROC. M/s KP & Associates is also a firm. All the creditors have filed their confirmatory letters with supporting evidences. In the situation, the identity of the creditors, genuineness of the loans & credit worthiness of the creditors are proved. Hence all the ingredients required U/ S 68 of the IT Act, 1961 are fulfilled. The Ld. A.O. have made addition of Rs. 10,61,67,051/- (10,91,67,051- 30,00,000), on the reas....
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....e the Assessee submitted a confirmation from M/ s Karina Hotels Pvt. Ltd. and filed a copy of Income Tax Return Acknowledgment, Bank Statement and Balance Sheet. It has been observed by the Assessing Officer that the Lender Company has shown an Income of only Rs. 13,497/- and that the Loan given to the Appellant has been financed through borrowing and the Company does not have any significant funds of its own. The Assessing Officer has further observed that "The assessee appears to be bringing in unaccounted money into his books after creating layers of intermediaries'", and on such basis has concluded in Para 5.1 of the Assessment Order that "the creditworthiness of the lender and genuineness of the transaction are not established'. Thus, despite the fact that there was no doubt about the Identity of the Lender and the availability of funds with the Lender and the fact that the funds were actually given to the Appellant, the Assessing Officer has drawn adverse conclusion merely on the basis that the Lender Company had itself borrowed funds and has got the suspicion that the "Assessee appears to" be bringing in unaccounted money into his books having created layers of intermedi....
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....ting to Rs. 1,01,60, 000/- from M/s Karina Hotels Pvt. Ltd,, as Unexplained, and hence the addition of Rs.l,01,60,000/- made by the Assessing Officer treating this Loan as Unexplained is hereby deleted. Karina Hospitality Pvt. Ltd. The Assessing Officer has stated that the Assessee received Unsecured Loan of Rs. 1,03, 34,000/- from M/s Karina Hospitality Pvt. Ltd. during the F.Y. 07-08 and that the Assessee was required to furnish the details of the amount received and evidence in support of identity and creditworthiness of the Lender and also the genuineness of the transactions. The Assessment Order mentions that in response the Assessee submitted a confirmation from M/s Karina Hospitality Pvt. Ltd. and filed a copy of Income Tax Return Acknowledgment, Bank Statement and Balance Sheet. It has been observed by the Assessing Officer that the Lender Company has shown a Loss of Rs. 33,80,530/- and that the Loan given to the Appellant has been financed through borrowings and Share application money and that the Company does not have any significant funds of its own. The Assessing Officer has further observed that "The assessee appears to be bringing in unaccounted mon....
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....ailability of funds with the Lender and the flow of funds from the Lender to the Assessee. No doubt, the Assessing Officer can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/Reports from the Joint/ Addl. Commissioner heading the Range only reiterate the stand of the Assessing Officer and there is nothing to add to the contentions and conclusions of the Assessing Officer. In view of the entire facts of the case, there is no justification to treat the Unsecured Loan amounting to Rs. 1,03,34,000/- from M/s Karina Hospitality Pvt. Ltd. as Unexplained, and hence the addition of Rs. 1,03,34,000/- made by the Assessing Officer treating this Loan as Unexplained is hereby deleted. Navya Securities Pvt. Ltd. The Assessing Officer has stated that the Assessee received Unsecured Loan of Rs. 7,01,49,880/- from M/s Navya Securities Pvt. Ltd. during the F.Y. 07-08 and that the Assessee was required to furnish the details of t....
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....9,17,303 = Rs. 7,01,49,880/- is appearing in Schedule - 5. The creditor Balance Sheet tallies to the extent of Rs. 8,93,60,445/- which suggest that the creditor had capacity to give the loan to the extent of Rs. 7,01,49,880/-." It is seen that merely because the Lender Company had substantial funds through borrowings, the Assessing Officer suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the Unsecured Loan and treated it as Unexplained merely on the basis of such suspicion, without giving any finding regarding the claim and the documents submitted in support of the claim regarding availability of funds with the Lender and the flow of funds from the Lender to the Assessee. No doubt, the Assessing Officer can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/Reports from the Joint/ Addl. Commissioner he....
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....funds through borrowings, the Assessing Officer suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the Unsecured Loan and treated it as Unexplained merely on the basis of such suspicion, without giving any finding regarding the claim and the documents submitted in support of the claim regarding availability of funds with the Lender and the flow of funds from the Lender to the Assessee. No doubt, the Assessing Officer can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/ Reports from the Joint/ Addl. Commissioner heading the Range only reiterate the stand of the Assessing Officer and there is nothing to add to the contentions and conclusions of the Assessing Officer. In view of the entire facts of the case, there is no justification to treat the Unsecured Loan amounting to Rs. 9,93,171/- from M/s H.N. C....
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....Learned Counsel of the Appellant relied upon the Section 2 (17) of the Companies Act which defines 'Financial Year' in relation to any Body Corporate and upon the Section 210(4) of the Companies Act which permits the Body Corporate to made accounts for a period of more than an year. 8.81 It is seen that the Lender Company from which the amount of Rs. 46,50,000/- was received was a genuine Company and its Identity could not be rejected merely because the Lender Company did not file Income Tax Return for the first year of operation. In any case, the Assessee had placed before the Learned Assessing Officer, the documents evidencing the making of accounts for more than an year, but rather than Investigating further, the Assessing Officer merely took the non filing of Income Tax Return for A.Y. 08-09 by the Lender Company as an excuse to deny its Identity, Creditworthiness and Genuineness of the transactions. Once the accounts for the extended year had been placed before the Assessing Officer, alongwith Bank Statement, Confirmation from the Lender Company, documents from RoC etc., then the non filing of Income Tax Return for A.Y. 08 -09 and the source of funds being primarily f....
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....rrowings, the Assessing Officer suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the Unsecured Loan and treated it as Unexplained merely on the basis of such suspicion. No doubt, the Assessing Officer can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/Reports from the Joint/ Addl. Commissioner heading the Range have not brought to light anything against the Appellant, despite specific directions for inquiry by Commissioner (Appeals). 8.91 The most notable aspect for this addition is that the Assessing Officer, in addition to observing that the Loan appeared to be an accommodation entry, was of the opinion that the " identity of the Lender is not established as the relationship of Sh. Krishan Prasad Sharma and the Lender M/s K. P. & Associates is not furnished'. The Assessing Officer has do....
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.... to suspect that the concern M/ s K.P. & Associates, which had given Confirmation and copy of Bank: Statement etc. did not belong to Sh. Krishan Prasad Sharma, as the PAN was the same, and both these documents were present before the Assessing Officer in the assessment proceedings. Hence, the doubts of the Assessing Officer regarding the identity of the Lender and the relationship of the Sh. Krishan Prasad Sharma with the Lender, M/s K.P. & Associates was totally unfounded. As already discussed above, there was no cogent reason with the Assessing Officer to hold that the Loans from M/s K. P. & Associates ' appeared' to be an 'accommodation entry'. 8.93 In view of the entire facts of the case, as discussed above, there is no justification to treat the Unsecured Loan amounting to Rs. 98,80,000/- from M/ s K. P. & Associates as Unexplained, and hence the addition of Rs. 98,80,000/- made by the Assessing Officer treating this Loan as Unexplained is hereby deleted." A.Y. 2009 -10 Karina Hotels Pvt. Ltd. The Assessing Officer has stated that the Assessee received Unsecured Loan of Rs. 28,00,000/- from M/s Karina Hotels Pvt. Ltd. during the F.Y. 08 -09 ....
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....rom the Master Details from the MCA 21 website. The company is assessed to tax with ITO, Ward 5(1), New Delhi. The appellant received the unsecured loan of Rs. 28,00,000/- during the relevant year through banking channel. The following evidences which were filed before the Ld. A. O. are again enclosed as Annexure-4: (a) The Copy of Confirmatory letter showing the PAN- AADCK7127J of the creditor, (b) The copy of Bank Statement of the creditor, (c) The copy of the Balance Sheet as on 31.03.2009 of the Creditor. On going through the Balance Sheet of M/s Karina Hotel Pvt. Ltd. as on 31.03.2009, it is evident that the balance loan amount of ' Rs. 1,17,92,000/ which includes Rs. 28,00,000/- is appearing in Schedule - "3" in the name of K.R. Chawla & Co. The creditor' s Balance Sheet tallies to the extent of Rs. 5,84,96,104/- which suggest that the creditor had capacity to give the loan to the extent of Rs. 28,00,000/-. (d) The copy of Acknowledgment of ITR of Karina Hotel Pvt. Ltd for AY 2009- 10 is also enclosed." 8.28 It is seen that merely because the Lender Company had substantial funds through borrowings, the Assessing Of....
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.... in the name of M/s Navya Securities Pvt. Ltd. with the observation that the assessee did not file the confirmation, copy of ITR, Bank Statement and the balance sheet of that party. In absence of these evidences, the Ld. A. O. held that the credit worthiness and genuineness of the loan was not proved. In this regard, it is brought to your' kind notice that the appellant in A.Y. 2008 -09 had received the loan from the said party against which there was a opening credit balance of Rs. 7,01,49,880/- in this year. During the year the appellant has repaid Rs. 1,52,25,846/- against such opening balance of Rs,7,01,49,880/-. II. That in respect of receipt of Rs. 1,79,201/- during the year, it is brought to your kind notice that the said sum of Rs. 1,79,201/- included the credit of library expenses of Rs. 29,201/-. It means, the net receipt is only for Rs. 1,50,000/- during the year. In this regard, it is explained that due to certain reason M/s Navya Securities Pvt. Ltd. refunded Rs. 1,50,000/- out of repayment of Rs. 1,52,25,846/-. Hence, the Ld. A. O. was not justified to treat the said amount of Rs. 1,50,000/- being receipt out of refunded amount and expenditure of....
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....asis has got the suspicion that the " Assessee appears to" be bringing in unaccounted money into his books having created layers of intermediaries, and on basis of such suspicion has concluded that the creditworthiness of the lender and genuineness of the transaction are not established. 8.32 It is seen that merely because the Lender Company did not give any separate Confirmation for A.Y. 09 - 10 and other documents separately in the assessment proceedings for A.Y. 09-10, the Assessing Officer suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the amount of Rs. 1,79,201/- received during the year from that party and treated it as Unexplained merely on the basis of such suspicion. However, the transactions with the party, i.e. M/s Navya Securities Pvt. Ltd. have to be looked into in totality, particularly with reference to the Unsecured Loan of Rs. 7,01,49,880/- given by that party in the A.Y. 08-09 (i. e. the immediately preceding year), and it having also submitted Confirmation for the same alongwith ITR, Bank Statements etc. No doubt, the Ass....
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....ssessing Officer that the Loan given to the Appellant has been financed through borrowings and the Company does not have any significant funds of its own. The Assessing Officer has further observed that "The assessee appears to be bringing in unaccounted money into his books after creating layers of intermediaries", and on such basis has concluded in Para 7.1 of the Assessment Order that " the creditworthiness of the lender and genuineness of the transaction are not established". Thus, despite the fact that there was no doubt about the Identity of the Lender and the availability of funds with the Lender and the fact that the funds were actually given to the Appellant, the Assessing Officer has drawn adverse conclusion merely on the basis that the Lender Company had itself borrowed funds and has got the suspicion that the "Assessee appears to" be bringing in unaccounted money into his books having created layers of intermediaries, and on basis of such suspicion has concluded that the creditworthiness of the lender and genuineness of the transaction are not established. 8.34 The Appellant has mentioned that "That M/s K. R. Chawla Consulting Pvt. Ltd. was incorporated 11/02/2....
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....oan of Rs. 32,88,93,299/- from M/ s K. R. Chawla Infra & Aviation Academy Pvt. Ltd. during the F.Y. 08 -09 (relevant to A.Y. 09-10) and that the Assessee was required to furnish the details of the amount received arid evidence in support of identity and creditworthiness of the Lender and also the genuineness of the transactions. The Assessment Order mentions that in response the Assessee submitted copy of Income Tax Return Acknowledgment, Bank Statement and Balance Sheet of M/s K. R. Chawla Infra & Aviation Academy Pvt. Ltd. It has been observed by the Assessing Officer that the Lender Company has shown a Loss of Rs. 2,27,02,134/- for the A.Y. 09 -10 and that the main source of funds for the Company is Unsecured Loans of Rs. 58,82,13,608/- as on 31.03.09. It has been held by the Assessing Officer that the Loan given to the Appellant has been financed through borrowings and the Company does not have any significant funds of its own. The Assessing Officer has further observed that "The assessee appears to be bringing in unaccounted money into his books after creating layers of intermediaries", and on such basis has concluded in Para 8.1 of the Assessment Order that "the creditworthin....
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....nly be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/ Reports from the Joint/ Addl. Commissioner heading the Range only reiterate the stand of the Assessing Officer and there is nothing to add to the contentions and conclusions of the Assessing Officer. In view of the entire facts of the case, there is no justification to treat the Unsecured Loan amounting to Rs. 32,88,93,299/- from M/s K. R. Chawla Infra & Aviation Academy Pvt. Ltd. as Unexplained, and hence the addition of Rs. 32,88,93,299/- made by the Assessing Officer treating this Loan as Unexplained is hereby deleted. Mansion Hotels Pvt. Ltd. 8.39 The Assessing Officer has stated that the Assessee received Unsecured Loan of Rs. 2, 80,00,000/- from M/s Mansion Hotels Pvt. Ltd. during the F.Y. 08-09 (relevant to A.Y. 09 -10) and that the Assessee was required to furnish the details of the amount received and evidence in support of identity and creditworthiness of the Lender and also the genuineness of the transactions. The Assessment Order mentions that in res....
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....editor had capacity to give the loan to the extent of Rs. 2,80,00,000/-. 8.41 It is seen that merely because the Lender Company had substantial funds through borrowings, the Assessing Officer suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the Unsecured Loan and treated it as Unexplained merely on the basis of such suspicion. In fact, though the Confirmation from that party was filed, the Assessment Order has not acknowledged the same. No doubt, the Assessing Officer can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. The Remand Reports from the Assessing Officer and the comments/Reports from the Joint/ Addl. Commissioner heading the Range only reiterate the stand of the Assessing Officer and there is nothing to add to the contentions and conclusions of the Assessing Officer. In view of the entire facts of the case, there is no justification to treat ....
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....eturn for A.Y. 09 -10 and copy of Balance Sheet as on 31.03.09, but the Assessment Order acknowledges the receipt of the only the Confirmation and is silent about the other documents, particularly the Balance Sheet of the Lender Company as on 31.03.09 and also the ITR for A. Y. 09-10. The Assessment Order mentions that there was absence of Income level and that Bank Account Statement of the Lender was absent, but has failed to explain as to how there was absence of Income level and Bank Account Statement, particularly when the Appellant has clearly stated that all the documents required by the Assessing Officer were filed during assessment proceedings. It is seen that the Assessing Officer has given the cryptic finding in Para 10.1 of the Assessment Order regarding the Unsecured Loans of Rs. 85,02,276/- being Unexplained only on the basis of his observation (without any justification) regarding "absence of the income level and the bank account statement of the lender. " It is noteworthy that the Appellant has stated that as in the case of others Creditors (other than Navya Securities Pvt. Ltd. for which the documents were submitted in preceding year, i. e. AY 08 -09), the documents....
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.... the creditor has advanced the new loan of Rs. 38,00,000/- out of its credit balance brought forward from earlier period." 8.46 It is seen that out of the Credit Balance of Rs. 85,02,276/- as on 31.03.09 from M/s H. T. Recon Constructions Pvt. Ltd., there was an Opening Credit Balance of Rs. 47,02,276/- as on 01.04.08, and that the Creditor advanced a further amount of only Rs. 38,00,000/- during the year. Thus, the Assessing Officer has not properly appreciated the facts of the case at all. It appears as if having added the Credits from other parties, the Assessing Officer was of the view that the Credit from M/ s H. T. Recon Constructions Pvt. Ltd. should also be added, and proceeded to add the Credit from that party, ignoring the documents filed and the full facts of the case. The Remand Reports from the Assessing Officer and the comments/Reports from the Joint/ Addl. Commissioner heading the Range only reiterate the stand of the Assessing Officer and there is nothing to add to the contentions and conclusions of the Assessing Officer. In view of the entire facts of the case, there is no justification to treat the Credit as on 31.03.9 amounting to Rs. 85,02,276/....