AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1074
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....in upholding the order of the AO making addition to the tune of Rs. 1,05,05,000/- u/s 68 of the Act as unexplained cash credit. 4. The assessee in the present case is a private limited company and engaged in the business of trading of Shares and Securities. The assessee in the year under consideration has received the Loan to the tune of Rs. 4,08,01,000/-from M/s Ken Securities Limited. The assessee has repay the loan to the tune of Rs.3,02,96,000/- and in the books of account has shown the outstanding loans amounting to Rs. 1,05,05,000/- under the head unsecured loans. The assessee has adjusted the repayment of loan by earlier advance amounting to Rs.1,93,50,000/-given to M/s Ken Securities Limited and made payment amounting to Rs. 50,00,000/- on 17-04-2005, Rs. 55,00,000/- on 22-05-2012and Rs. 4,46,000/- on 04-03-2013 respectively. 5. However, the AO observed that the assessee has not furnished the requisite details to substantiate the loan amount as Identity, Creditworthiness, ITR, confirmation of the lender. The AO also noted that the notice u/s 133(6) of the Act was issued to M/s Ken Securities Limited was returned back with the remark as "left". The AO thus in the absence r....
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....case, the Tribunal did not take into account all these ingredients which had to be satisfied by the assessee. Mere furnishing of the particulars was not enough. " From the preceding discussion, we note that amount of loan shown by the assessee in its books of accounts as on 31st of March 2013 from M/s Ken Securities Limited was treated as unexplained on account of 2 reasons. Firstly, there was a notice issued under section 133 6 of the Act to M/s Ken Securities Limited which was returned as unserved. Secondly, the company provided loan to the assessee i.e. M/s Ken Securities Limited has declared loss in the income tax return and thus the creditworthiness of the company was not proved. 11. On perusal of the facts of the case on hand, we note that the assessee has filed the confirmation from the party namely M/s Ken Securities Limited about the loan given to the assessee, copy of the income tax return along which are placed on pages 6 to 9 of the paper book. Likewise, the assessee has also filed the copy of the ledger of M/s Ken Securities Limited in its books of accounts containing the financial transactions which was supported by the bank statement. The details are placed on page....
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....e was not the beneficiary of the loan received by it as alleged by the AO. The majority amount of loan has been repaid by the assessee in the year under consideration itself except a sum of Rs. 1,05,05,000.00. Therefore, it is difficult to hold that the assessee was the ultimate beneficiary of the impugned amount. Thus, we can assume that the impugned transaction was the business transactions between the assessee and the loan parties. We also feel pertinent to refer the judgment of the Hon'ble Gujarat high court in case CIT vs. Ayachi Chandrashekhar Narsangji reported in 42 taxmann.com 251 where it was held as under: It is required to note that as such an amount of Rs. 1,00,00,000 vide cheque No. 102110 and an amount of Rs. 60 lakhs vide cheque No. 102111 was given to the assessee and out of the total loan of Rs. 1.60 crores, Rs. 15 lakhs vide cheque no. 196107 was repaid and therefore, an amount of Rs. 1,45,00,000 remained outstanding to be paid to IA. It has also come on record that the said loan amount has been repaid by the assessee to 'IA' in the immediately next year and the Department had accepted the repayment of loan without probing into it. In the aforesaid fact....
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....ting to Rs.12,66,98,547.00. However, the AO found that such losses are bogus in nature and therefore he disallowed the loss of Rs.12,66,98,547.00and added to the total income of the assessee. 20. Aggrieved assessee preferred an appeal to the learned CIT-A who has confirmed the addition made by the AO by observing as under: "3.3 .........Appellant in the books of account has shown purchase of imrnovable property amounting to Rs.2,00,00,000/- and sale on the same date at Rs. 18,00,00,000/-. Appellant has set off the gain by claiming the loss on sale of security of Rs.12,66,98,547/-. Appellant has contended that ail entries including loss on sale of security are only accommodation entry, however, the AO has disallowed the loss while accepting the paper gain of Rs.16,00,000/- shown in the account. Though it has been established that appellant is a paper company, if appellant has claimed bogus loss, AO was perfectly justified to disallow the same. In view of the above, disallowance made by the AO is confirmed. The related grounds of appeal are accordingly dismissed." 21. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 22. The learned AR befor....