TaxTMI 
TaxTMI 
2023 (3) TMI 460
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....e hands of the companies controlled and managed by the Gautuam Jain Group, wherein the Mr. Gautam Jain admitted that he and his group of companies are providing accommodation entries like bogus purchases and sales, unsecured loans etc. It was admitted that the accommodation entries of unsecured loans were provided through M/s. Karishma Diamond Pvt. Limited, M/s. Maniratnam Exim Pvt. and M/s. Marine Gems Pvt. Limited. It was noticed that the assessee herein has received funds from the above said three concerns as stated below :- M/s. Karishma Diamond Pvt. Limited Rs. 1,00,00,000/- M/s. Maniratnam Exim Pvt. Rs. 3,85,00,000/- M/s. Marine Gems Pvt. Limited Rs. 2,35,00,000/- Total Rs. 7,20,00,000/- Hence, the Assessing Officer reopened the assessment of the year under consideration by issuing notice under section 148 of the Act dated 8.12.2016. Copy of the reasons recorded for reopening the assessment was furnished to the assessee. In response thereto, the assessee vide letter dated 6.10.2016 objected to the reopening of the assessment. The Assessing Officer disposed of the same, vide his order passed on 21.10.2016. 4. The assessee company is engaged in the....
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....ng documents, vide its submission dated 09-12-2016:- i) receipts given against the amounts of advances/loans received from the parties in question. ii) Copies of bank statements reflecting payments and receipts. iii) Copies of letter given by these parties for cancellation of bookings from the above said three parties. iv) Copy of floor plan of P wing on plot no.32, Sector-5 at Kharghar. v) Copy of sample sale agreement of flat no.101 at 2A, Rohinjan, Panvel vi) Schedule of payments given to the above stated parties in question. vii) Copy of project approval letter (incomplete) which appears to be relating to residential project at Rohinjan, Raigad dated 23-04- 2015. The AO has further observed that the assessee has not submitted details of project approval letter of "Adhiraj Business Centre, Kharghar and complete document of "Samyama Project' at Rohinjan, Panvel, Copy of approved floor plan of 2nd Floor of building 2A, Samyama, Rohinjan, Panvel etc. 7. The AO also examined financial statements of the assessee and noticed that the projects of 'Samyama' at Panvel and Adhiraj Business Centre at Kharghar node was not....
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.... fact. The assessee also relied upon host of decisions including the decision rendered by Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation P Ltd (159 ITR 78)(SC), wherein it was held that the Tribunal was justified in deleting the addition made u/s 68 of the Act if the assessee has discharged the initial burden and the revenue did not take any action on the information furnished by the assessee. 9. It was also submitted that it was common prevalent practice in those days to collect booking advances against flats even before starting of construction. With regard to discrepancies in the advance amounts, the assessee submitted before Ld CIT(A) that the AO has compared the booking advances received from the above said three parties with the amount repaid to them. It was submitted that there was no difference in the amount of booking advances received. 10. The Ld CIT(A), upon consideration of facts of the issue, evidences furnished by the assessee, case laws relied upon by the assessee, took the view that the addition of Rs.7.20 crores is not justified. Accordingly, he directed the AO to delete this addition. The revenue is aggrieved. 11. The Ld D.R submitted tha....
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....re statement was not given to the assessee, though the AO has relied upon those statements to make the impugned addition. Further, Shri Gautam Jain has given statement on provision of accommodation entries for bogus purchases and loans. He has not stated anything with regard to "booking advances" given by his group of companies. Further, he has not referred to the name of the assessee company as one of the beneficiaries of accommodation entries. Accordingly, he submitted the AO could not have placed reliance on the Statement given by Shri Gautam Jain as the same was not confronted with the assessee. With regard to non-receipt of reply in response to the notices issued u/s 133(6) of the Act, the ld A.R submitted that the AO could have issued summons to them, instead of stopping at that stage. He submitted that the assessee has however, furnished confirmation letters and also their financial statements. 13. The Ld A.R further submitted that the assessee, as a seller of flats, is not expected to collect the financial details of the person who books the flats, since it is a case of normal trading transaction. Hence the assessee has furnished all the correspondences, the details of p....
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....ature and source of cash credits. "Nature of cash credit" would mean that the assessee is required to show that it is not of revenue nature. In order to prove the sources, the assessee should discharge initial burden to prove the cash credits placed upon his shoulders of the assessee u/s 68 of the Act, the assessee is required to prove three main ingredients, viz., the identity of the creditor, the genuineness of the transactions and the credit worthiness of the creditor. If the assessee discharges the initial burden, then the burden would shift to the shoulders of the assessing officer, i.e., it is the responsibility of the AO to disprove the claim of the assessee by bringing evidences on record. 17. We shall now examine the facts prevailing in the instant case. It is noticed that it is not the case of the AO that the assessee did not discharge the initial burden placed upon it with regard to the advances received from three parties. There is no dispute that the assessee has furnished all the details relating to the three parties in order to discharge the burden placed upon it u/s 68 of the Act. However, it is the submission of the assessee that it has received only booking adv....
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....es only. Accordingly, addition of Rs. 7,20,00,000/- was made to the total income of the assessee on account of unexplained cash credit u/s 68 of the Act. 7.2 During the course of assessment proceedings, the appellant had explained that it did not received any loans but had received the amount in form of 'advance against the booking of the residential units in the under construction building namely "Adhiraj Business Centre" at Kharghar and "Project Samyama" at Panvel. In order to justify the same, the assessee placed on record, the copy of allotment letters issued to the parties. However it was informed that in the subsequent year i.e AY 2013-14, the respective parties requested the assessee company to cancel their booking and refund the advance given by them at the time of booking. 7.2 The appellant has submitted before me that the following were produced before the AO. 1. Details of confirmation, assessment details and copies of Copy of bank account reflecting the payments and receipts as advance from the parties and Schedule of repayment given to the above stated parties in question 2. Copies of letter of provisional allotment of residentia....
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....nk statement and ledger confirmations. Thus, it can be seen that the entire amount is repaid back to the respective parties in the subsequent year. 7.4 On the other hand the AO has made no inquiry in respect of each person to show that the evidence submitted by the appellant was not correct. The AO has not made any inquiry in respect of the amounts which have been added to the income of the appellant. It was the duty of the AO to utilize the information to prove that the investment made by the persons was not genuine. Once the appellant had discharged its responsibility it was the duty of the AO to make inquires. Nowhere has AO stated that the documents produced by the appellant were not genuine. The has not brought any material on record to show that this money was the appellant's own undisclosed income. On perusal of the assessment order, it is seen that the entire focus of the AO was on the modus operands adopted by Gautam Jain Group of cases to provide bogus accommodation entry of loan. The main reason for making addition u/s 68 was on the basis of information provided by the Investigation Wing. While the information provided by the Investigation Wing can be a star....