TaxTMI 
TaxTMI 
2022 (3) TMI 1137
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....e Assessing officer. 3. It is therefore, prayed that the order of the Ld.CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 4. The appellant craves leave to amend or later any ground or add a new ground, which may be necessary. 3. The only issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition of Rs. 8.71 crores made under section 68 of the Act. 4. The assessee is an individual engaged in the business of trading in shares and securities. In this case, the AO reopened the case on the basis of information received from DCIT, CC, XXVII, Kolkata that assessee company has obtained accommodation entry in the form of loans and advances for Rs. 8,71,00,000/- from M/s Basant Marketing P. Ltd. The assessee during the re-assessment proceedings submitted that it has provided all the detail of loan transaction with M/s Basant Marketing Pvt. Ltd. during assessment proceeding under section 143(3) of the Act where genuineness of the loan was also accepted. The assessee further furnished the copy of affidavit from the director of M/s Basant Marketing Pvt. Ltd and claimed that the director of the creditor company before....
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....ed the identity of the creditor and the genuineness of the transactions, which has been further strengthened by filing confirmation from the creditor. ii) On going through the bank amount of M/s Basant Marketing P. Ltd. with ABN amro Bank from which amount was transferred to appellants account, it is found that there is no cash deposit in the said bank account of the creditor immediate before^ transferring money to the appellants bank account. In the said account, there are hardly few cash entries of small amount throughout the year. All the transactions in the said bank account are through regular modes of transfer of money. This proves the credit worthiness of the creditor. iii) M/s Basant Marketing P. Ltd. is assessed to Income-tax at Kolkata and the appellant filed its PAN before the AO. In the case of M/s Basant Marketing P. Ltd., for AY 2010- 11, the CIT{A)-20, Kolkata has given the findings as mentioned below vide order dated 30-01-2015. Para-15 of the CIT(A) order is reproduced below : "I have considered the rival submissions and perused the material placed on record, I have :"already discussed at length the various aspects of the factual arid legal position in the pr....
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....nt contended that the loan amount has been repaid in F.Y. 2014-through normal banking channels. vii) Apart from the factual position as mentioned in para i) to vi) above, the appellant's case is supported by the following case laws of Hon'ble jurisdictional High Court of Gujarat, Ahmedabad. a) S. 68 : DCIT vs. Rohini Builders (2003) 127 Taxman 523 (Guj) where the asses; submitted the ledger account duly confirmed showing PAN, Ward and Address of the assessee and the payment was through account payee cheque. It was held that the assessee has discharged onus U/s 68 and hence, addition could not be made. b) S. 68 : Chankya Developers vs. CIT (2014) 43 Taxmann.com 91(Guj) where in the Honorable Gujarat High Court has categorically held that once name, address, PAN, confirmation and bank statement of party are provided, the primary onus which was to be discharged by the assessee has been discharged and no addition U/s 68 should be made. c) S. 68 : CIT, A'bad IV vs. Sachitel Communications (P.) Ltd. [2014] 51 taxmann.com 205 (Gujarat) where in the Honorable Gujarat High Court has held that assessee proved identity of creditor and capacity to pay and that payment was m....
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.... Act with respect to the loan party such as identity, creditworthiness and genuineness of the transaction. It was established that the loan party being M/s Basant Marketing P. Ltd. was engaged in the accommodation entries in the search conducted by the CBI. The company which provided loan to the assessee was based in Kolkata and engaged in money laundering activities. There was no agreement furnished by the assessee in support of such loan transactions. Furthermore, there was no interest charged by the loan provider which is very unusual that someone will provide such a huge fund without any charge. Likewise, the repayment of the loan commenced only after the case of the assessee was selected under income escaping assessment, therefore no credence to the assessee can be given on account of repayment of the loan. The learned DR vehemently supported the order of the AO. 9. On the other hand the learned AR before us filed paper book running from pages 1 to 185 and contended that the learned CIT-A of M/s Basant Marketing P. Ltd. has accepted the genuineness of the activities of such company i.e. M/s Basant Marketing P. Ltd. Likewise, the ITAT in series of the cases has also accepted t....
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.... is not sufficient. As such the same should also be proven by circumstantial surrounding evidences as held by the Hon'ble supreme court in case of Durga Prasad More reported in 82 ITR 540 and in case of Smt. Sumati Dayal reported in 214 ITR 801. 10.3 The last stage comes to verify the creditworthiness of the parties. The term creditworthiness as per Black Law Dictionary refers as: "creditworthy, adj. (1924) (Of a borrower) financially sound enough that a lender will extend credit in the belief default is unlikely; fiscally healthy-creditworthiness." 10.4 Similarly in The New Lexicon Webster's Dictionary, the word "creditworthy" has been defined as under:- "creditworthy, adj. of one who is a good risk as a borrower." 10.5 It the duty of the assessee to establish that the party has capacity to make such advances and having requisite fund in its books of account and banks. The capacity to make advance can be established by showing sufficient income, capital and reserve or other fund in the hands of investor. It is required by the AO to find out the financial strength of the investor to make investment with judicious approach and in accordance with material available on reco....
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....f assessee company is only Rs. 1,93,00,000/- which has been repaid during F.Y. 2014- 15. And so far remaining amount 50,00,000/- is concerned, assessee filed separate proof of payment to the A.O. and again filed before the Ld. CIT(A) and it was at Calcutta conducted detailed enquiry of Basant Marketing P. Ltd. wherein it is mentioned that Basant Marketing is not a fake company and its activities are genuine. 7. Assessee has filed an order of ITAT Mumbai Benches in ITA No. 7460/Mum/2016 and ITA 6807/Mum/2018 wherein one person namely Shri Harsh Dalmia was the beneficiary to the tune of Rs. 1,14,85,500/- from the group companies namely Basant Marketing P. Ltd. who was assessed to tax with them who provided accommodation entry and Department issued notice and Ld. A.O. made addition in the case of Harsh Dalmia 8. Thereafter in appeal before the Ld. CIT(A) relief was granted to the assessee and thereafter Department appeal was dismissed by the ITAT holding that activities of Basant Marketing are found to be genuine. And thereafter no appeal was filed by the Department against the order of the ITAT Mumbai Benches. So considering above all these facts, we are of the opinion that order....