TaxTMI 
TaxTMI 
2022 (3) TMI 672
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....ing unsecured loan of Rs. 1, 50, 00, 000/- received and returned with interest during the year as unexplained cash credit u/s 68 of the Act. Ld. CIT (A) ought to have deleted addition as appellant discharged primary onus filing complete details of Name/Address/PAN/Balance Sheet/ ROI of depositor. 3. Ld. CIT (A) erred in law and on facts confirming addition made by AO of loan simplicitor as an accommodation entry to facilitate money laundering. Ld. CIT (A) ought to have held transaction as genuine when the loan was repaid with interest deducting tax at source during the year itself. 4. Ld. CIT (A) erred in law and on facts in concurring with AO that retraction statements being after thoughts impugned loan transaction be treated as an accommodation entity only. Ld. CIT (A) failed to appreciate that identical loan transaction in the hands of the sister concerns were treated as genuine on the basis of retraction statement. 5. Ld. CIT (A) erred in law and on facts not following ratio laid down by the jurisdictional High Court that appellant is not obliged to explain source of the source once primary onus cast u/s 68 of the Act is discharged. Further actions if....
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....essment was completed under section 143(3) on 17.12.2009 accepting the return of income. 4. Subsequently, the case was reopened on the basis of information that a search and seizure action under section 132 of the Act was carried out in case of Rajendra Jain Group, Sanjay Chaudhary Group and Dharmi Chand Jain by Investigation Wing, Mumbai on 03.10.2013. In the said search and seizure action various incriminating documentary evidences collected and seized. The statement of various people of this group was recorded. In the search, it was found that this group was indulging in providing accommodation entries pertaining to bogus sales, purchases and bogus unsecured loans to various parties. The list of beneficiaries, who availed such accommodation entry was forwarded to the Assessing Officer. As per list of person who availed bogus unsecured loan, it was found that the assessee is one of beneficiary of bogus unsecured loan of Rs. 1.50 Crores. On the basis of such information, the Assessing Officer after recording reasons of reopening issued notice under section 148 dated 28.03.2014 to the assessee. In response to notice under section 148, the assessee filed its reply dated 06.12.201....
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....d by the assessee. The investigation Wing find unambiguous and corroborative evidence which clearly established that the whole façade was created and facilitated money laundering by giving entries by showing as genuine transaction. The Assessing Officer held that all three parameters i.e. establishing the identity of the creditors, genuine of transaction and creditworthiness of the lender is not proved. Mere filing of financial statement and confirmation letter do not serve the purpose of onus cast on the assessee in discharging the same. On the basis of his observation, the Assessing Officer made addition of Rs. 1.50 Crores to the income of assessee. In the assessment order passed under section 143(3) r.w.s 147 dated 21.03.52015. 6. Aggrieved by the addition in the assessment order, the assessee filed appeal before ld. CIT(A). Before learned CIT(A), the assessee challenged the validity of the addition under section 68 only. The assessee filed its detailed written submission. The submission of assessee is recorded in para 5 of order of ld. CIT(A). The assessee in sum and substance submitted that during the period under consideration, the assessee received Rs. 1.50 Crores ....
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....ing Officer in his remand report stated that Investigation Wing, Mumbai passed the information about Rajendra Jain about providing entries of bogus sales and unsecured loan. Search was carried out on Rajendra Jain Group, Sanjay Chaudhary and Dharmi Chand Jain Group on 03.10.2013. The Assessing Officer referred the post search investigation and the modus-operandi of Rajendra Jain Group and stated that Shri Rajendra Jain Group filed retraction before Assessing Officer only on 31.10.2014 after more than one year, no retraction was filed before Investigation Wing. The retraction statement of Rajendra Jain Group is invalid and he has failed to prove by any legally acceptable evidence that statement given during search was not voluntary or under coercion or duress under misconception of fact. 9. The copy of remand report was provided to the assessee. The assessee filed its reply dated 26.02.2016 to the remand report. The assessee stated that the assessing officer has neither provided the statement of Rajendra Jain no his cross examination of any party on which he relied and presumed that the transaction is not genuine. The said statement has no evidentiary value in the eyes of law. Th....
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....t year, is bad in law. The notice under section 148 is issued after the expiry of four years from the end of the relevant assessment year by the assessing officer merely acting mechanically on the information supplied by the Investigation wing about the accommodation entries provided to the assessee by certain entities without applying his own mind was in not justified. To support his submissions the ld AR for the assessee relied on the following decisions, • CIT v. Kamdhenu Steel & Alloys Ltd. (2012) 248 CTR 33 (Del)(HC), • CIT v. Multiplex Trading & Industrial Co Ltd (2015) 128 DTR 217 (Del)(HC), • Pr. CIT v G. Pharma India Ltd.[2017] 384 ITR 147 (Del) (HC), • CIT vs. Insecticides (India) Ltd. (2013) 357 ITR 300 (Del.)(HC), • CIT Vs Meenakshi Oversea's Pvt Ltd (2017) 395 ITR 677(Del) (HC), • CIT vs. Fair Invest Ltd. (2013) 357 ITR 146 (Del.)(HC), • Sarthak Securities Co. (P.) Ltd. vs. ITO (2010) 329 ITR 110(Del.)(HC), • Pr. CIT vs. SNG Developers Ltd. [2018] 404 ITR 312 (Del.)(HC), • PCIT vs. Shodiman Investments Pvt. Ltd, (2018) 93 taxmann.com 153/ 167 DTR 290 (Bo....
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.... the opinion that the departmental authorities were not justified in making the addition. 16. The ld AR for the assessee further submits that the unsecured loan availed by the assessee was repaid during the same financial year that is within very short span of time. The assessee received Rs. 1.50 Crores from Avi Exports, a proprietorship concern of Rajendra Jain. The loan was received on 16.10.2006 and was repaid on 06. 02. 2007. The loan transaction was availed through banking channel. During assessment, the assessee filed copy of PAN, confirmation and bank statement of lender, reflecting the unsecured loan received and paid during the year to prove identity, genuineness and creditworthiness. All such evidences were again before ld. CIT(A). The ld AR submits that statement of Rajendra Jain was recorded by assessing officer in case of sister concern of assessee on 11.03.2015, in cases of Rajhans Enterprises and Rajhans Developers, wherein Rajendra Jain not only filed confirmation about the transaction but also explain source of loan given to loan of Rs. 50 lakhs to Rajhans Developer and Rs. 70 lacks to Rajhans enterprises, sister concern of the assessee through his proprietary f....
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....s only. The assessments of Rajendra Jain Group in the assessment of Rajendra Jain Group were assessed as entry provider. The Rajendra Jain in his statement recorded on 03.10.2014 clearly admitted that he was indulging in providing accommodation entry, so called retraction letter dated 21.10.2013 was for the first time was filed in October, 2014 before Assessing Officer. The assessee has not challenge the validity of reopening in his grounds of appeal before the ld. CIT(A). Thus such reopening attend finality. The grounds of appeal, which were raised before Assessing Officer before ld. CIT(A) which is mistake question, the assessee has raised ground which is best on mistake question of fact and law cannot be raised at this stage. Even, otherwise Hon'ble jurisdictional High Court in Peas Industrial Engineering vs. DCIT (73 taxmann.com 185 Guj) and in Pushpak Bullion Vs DCIT (84 taxmann.com 84 Guj), held that mere information about the entry provided by the bogus entry provider is sufficient to make reopening. On the objection of the assessee that cross examination of Rajendra Jain Group was not provided. The ld. Sr. DR submits copy of statement was provided to the assessee. Even othe....
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....e sister concern including of assessee return/refunded the unsecured loan within the same financial year. It has come on record that addition in case of sister concern of assessee was deleted by ld. CIT(A). However, in case of assessee the addition was upheld at this stage on first appellate. The ld. AR of the assessee invited our attention on the bank statement of the assessee wherein the assessee and its sister concern refunded/repaid (at page 44 of the paper book), the entire loan amount through banking channel. The ld AR for the assessee at the time of making his submission took us through the statement of Rajendra Jain recorded during the assessment proceeding of sister concern of assessee, where said Rajendra Jain explained the source of credit, before lending money to the assessee and its sister concern. 16. We also find that assessee made the payment of interest after deducting the tax at source. This fact was also accepted by Rajendra Jain while making statement during assessment of sister concern namely Rajhans Enterprises and Rajhans Developer. These facts were brought to the notice of assessing officer as well as to ld CIT(A). The ld CIT(A) sought remand report of as....