TaxTMI 
TaxTMI 
2023 (8) TMI 1065
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....,00,000/- on account of unsecured loans, merely on the basis of the statement of Rajendra Jain. (2) The appellant submits that the CIT(A) erred in sustaining addition as there was no justification whatsoever for making the aforementioned addition, for which complete particulars and evidence were furnished by those party and in fact the loan taken was also repaid back and the transaction cannot be considered as bogus loan and the said addition is required to be deleted. (3) The appellant further submits that, the statement based on which the addition was sustained by the CIT(A), was already been retracted by Rajendra Jain, even no cross examination was given, which is denial of natural justice, hence the addition is required to be deleted. (4) Under the facts and circumstances of the case, CIT(A) erred in confirming the addition amounting to Rs. 1,50,00,000/- on account of unsecured loan and is required to be deleted. (II) Addition on account of interest expenditure on loan of Rs. 7,18,581/- (1) The CIT(A) erred in sustaining the addition on account of interest expenses paid to loan parties of Rs. 7,18,281/- (2) The Appellant fur....
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.... loans from both the entities through account payee cheque in regular banking transaction. The assessee furnished copy of PANs of lenders, account confirmation, bank statements, copy of income tax returns and submitted that the lenders have creditworthiness and loan were taken from genuine business purposes. The assessee further submitted that interest was duly paid to the parties through account payee cheque or RTGS complying with the provision by deducted tax at source. 3. The reply of assessee was not accepted by Assessing Officer by taking view that lenders were not creditworthiness and had shown very meagre source of income. The Assessing Officer further recorded that notice under section 133(6) was issued to the lenders and they had filed part detailed. The Assessing Officer recorded that mere filing of confirmation, bank statement and copy of acknowledgment of return are not sufficient to cover the surrounding circumstances as the lenders were part of Rajendra Jain group. The Assessing Officer by referring the modus operandi of Rajendra Jain group, treated the transaction of loan as accommodation entry. The Assessing Officer also disallowed the interest payment as unexpla....
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....AN, their acknowledgement of ITR, confirmation of lender, bank statement of lender as well as balance-sheet of lenders. The Ld. Senior counsel submits that assessee has discharged its initial burden to prove the identity, genuineness and creditworthiness of such lenders. Once the assessee satisfactorily discharged its initial onus, the onus shifted to Revenue. The assessee was not required to prove source of source. To support such submission, Ld. Senior counsel for the assessee relied upon the following case law: • DCIT vs. Rohini Builders 256 ITR 360 (Guj) • Murlidhar Lahorimal vs. CIT 280 ITR 512 (Guj) • CIT vs. Pragati Co.Op. Bank Ltd. 278 ITR 170 (Guj) • CIT vs. Orissa Corporation Pvt. Lt. 159 ITR 78 (SC) 7. The learned Senior Counsel for the assessee further submits that assessing officer issued notice under section 133(6) to the lenders. Such notice was duly served upon lenders and lenders responded and furnished their reply. The Assessing Officer simply brushed aside such reply by holding only part details were furnished by lenders. The assessing officer failed to appreciate that once the factum of loans was confirmed b....
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....at such materials were not admissible evidence against the assessee. To support such view, Ld. senior counsel for the assessee relied in the following case las: • Kishnchand Chellaram 125 IDTR 713 (SC) • Heirs and Legal Representative of Late Laxmanbhai S. Patel vs. CIT (2008) 327 ITR 290 (Guj) • H.R. Mehta vs. ACIT 387 ITR 561 (Bom) 10. The learned Senior Counsel for the assessee submits that neither the statement referred and relied by assessing officer were provided to the assessee nor the assessee was offered any opportunity for cross-examination of such persons, whose statement was made basis for making addition. It is a settled law that in absence of cross-examination, no addition could be made. To support his submission, learned Senior counsel for the assessee relied on the decision of Hon'ble Gujarat High Court in Pr. CIT Vs Chartered Speed Private Limited in Tax Appeal No.126 of 2015 and on the judgment of Hon'ble Apex Court in the case of Andaman Timber Industries vs. CCE (2015) 62 taxmann.com 3 (SC). The Ld. Senior Counsel further submits that once in case of assessee succeeds on merit of the addition, the addition on account....