TaxTMI 
TaxTMI 
2023 (3) TMI 354
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....nfirmed the balance amount of addition of Rs.30,00,000/-. The Ld CIT(A) also granted proportionate relief in respect of interest expenditure disallowed in both the years. Aggrieved, both the parties are in appeal in AY 2013-14. The assessee has filed appeal in AY 2014-15. 3. The facts relating to the addition of Rs.5.35 crores made by the AO in AY 2013-14 have been narrated as under by Ld CIT(A) in the order passed by him for assessment year 2013-14:- "5.2 During the assessment proceedings from the perusal of the balance sheet, the AO noticed that the appellant has taken from various parties detailed below; SN PARTICULARS DIRECTOR LOCATION UNSECURED LOANS (RS) INTEREST 1. AnunayComrnosales Pvt Ltd Rahul Kolkata 1,55,00,000 1 1,22,017 2. Devesh Commosales Pvt Manish Kolkata 1,05,00,000 6,27,141 3. Kingfisher Properties Pvt Ltd Vishal Kolkata 20,00,000 9,469 4. Lity Star Constructions Ltd Umesh Kolkata 20,00,000 14,795 5. Pushpanjali Commo Trade Pvt Umeah Kolkata 10,00,000 7,101 6. Smart Pay Card Pvt. Ltd Tu-shar Kolkata 19, 00,000 7,309 7. Frank Mercantile Pvt Ltd Avinash Mumbai 31,00,....
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.... on the above loans amounting to Rs.25,25,841/-. 4. The AO has also summarized his conclusions with regard to the above said loans as under:- Sr. No. Name of company Paragraph for reference Finding in brief 01 Lona Mercantile Pvt. Ltd. 09 to 09.4 and 13 These companies do not have any business, operated from a very small room with only one employee, source of funds is from share premium and there is no capacity to raise huge share premium. The Director Shri Avinash Jajoo admitted that these are paper concerns. Shri Tushar Sharma, a director of M/s Smart Pay Card Pvt. Ltd. was an employee of Shri Jajoo and is a director in numerous companies and this company does not have creditworthiness to lend huge unsecured loans to assessee. 02 Frank Mercantile Pvt. Ltd. 03 Virgo Mercantile Pvt. Ltd. 04 Smart Pay Card Pvt. Ltd. 05 Kingfisher Properties Pvt. Ltd. Para 10 to 10.8 The Director, Shri Umesh Singh who has signed the confirmation letters has admitted that he is a mere peon of Shri Parveen Agarwal who has floated numerous jama Kharchi companies to give accommodation entries. Shri Parveen Agarwal has also accepted that these are his companies and he has used these com....
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....ng channels as reflected-in the bank-account of the appellant. Further, it is observed that there is no direct evidence, which has been brought on record by the AO to point out that the said transactions arc accommodation entries. No nexus is established that the funds have been circulated or that cash was paid by the appellant company to the aforesaid lender-companies to obtain the cheques for unsecured loans. 7.4.2 Further, from the perusal of the ledger accounts and bank account statements of bank account of the appellant maintained with Bank of India, Mahalaxmi, Mumbai, I find that the aforesaid loan amounts along with interest has been repaid to the said companies in the financial years, 2013-14 and 2014-15 relevant to assessment year 2014-15 and 2015-16 respectively. The appellant has deducted tax on interest payments as apparent from Form 16A. 7.4.3 In the light of the above facts, I am of the opinion, the appellant has discharged the primary onus to prove the identity and credentials of the aforesaid seven lender companies and genuineness of the loan transactions. 7.4.4 In the assessment order, the AO has stressed upon the statement of Shri Avinash Jajoo in respect of....
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....-genuine. 7.4.6 Coming to the other two companies namely, M/s. Arm nay Commosale Pvt. Ltd. and M/s. Devesh Commosale Pvt. Ltd., I find that the AO formed the opinion that the aforesaid two lender companies are no I creditworthy and proceeded to make the addition u/s.68 solely on the basis of low income earned during the concerned year. In this respect, the fact remains that these lender companies had sufficient funds of their own to lend the loans to the appellant as can be observed from the balance sheet which is brought out in the above table. Further, the assessment order in these companies show that the AO of these lender companies has accepted the financial statements declared by the aforesaid lender companies in their Returns filed as genuine. Therefore, contention of the AO is not tenable. 7.4.7 With respect to M/s. Smart Pay Card Pvt. Ltd., it is found that there is no evidence on record to show that Shri Tushar Shanna was engaged in providing accommodation entries as mentioned by the AO in the assessment order, Therefore, contention of AO cannot be accepted, in this case too. 7.4.8 Further, with regard to non-service of notices issued by the ADI, it is observed that ....
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....Creative World Telefilms Ltd 333 1TR 100 (Bombay HC): "In the case in hand, it was not disputed that the assessee had given the details of name and address of the shareholder, their PAN/GIR number and had also given the cheque number, name of the bank. It was expected on the part of the Assessing Officer to make proper investigation and rea.ch the shareholders. The Assessing Officer did nothing except issuing summons which were ultimately returned back with an endorsement 'not traceable'. The Assessing Officer ought to have found out their details through PAN cards, bank account details or from their' bankers so as to reach the shareholders since all the relevant material details and particulars were given by the assessee to the Assessing Officer. In the above circumstances, the view taken by the Tribunal could not be faulted. No substantial question of law was involved in the appeal. In the result, the revenue's appeal was to be dismissed in limine. (para 2.)" 7.4.10 Accordingly, 1 hold that the unsecured loans from the seven aforesaid lender companies aggregating to Rs.5,05,00,000/-, as discussed above, cannot, be termed as unexplained. The AO is directed to d....
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.... CIT(A) in respect of addition of Rs.5.05 crores. 7. With regard to the addition of Rs.30 lakhs made by Ld CIT(A), the Ld A.R submitted that the assessee has taken above said amount as loans from M/s Lity Star Constructions Ltd (Rs.20.00 lakhs) and M/s Pushpanjali Commo Trade P Ltd (Rs.10.00 lakhs) and it has discharged initial burden placed upon it in respect of above said loan of Rs.30.00 lakhs by furnishing all the details relating thereto. He submitted that both the above said companies have duly responded to the notice issued by the AO u/s 133(6) of the Act. Both the companies have supplied necessary information in response to the summon issued u/s 131 of the Act also. Accordingly, he submitted that there is no reason to disbelieve the financial statements and other particulars furnished by these two companies. He further submitted that the Ld CIT(A) has confirmed the addition on the basis of some statement given by its directors in some other proceedings, which are not related to the assessee. He submitted that those statements could not have been relied upon, since the assessee was never implicated in those statements. Accordingly, he contended that the Ld CIT(A) was not ju....