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2024 (5) TMI 1069
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....170/-. The assessee is a partnership firm and engaged in the business of construction and development of property. Subsequently, the case was selected under CASS and assessment was completed under section 143(3) of Income-tax Act, 1961 (in short "Act") on 29.12.2016 assessing income at Rs.. 4,88,620/-. 4. A survey was conducted under section 133A of the Act on 24.03.2017 in JPV Group involved in building and construction activities. The assessee is one of the entity of JPV group. As per survey reports and various enquiries conducted had revealed that the entities of the JPV group are involved in acceptance of bogus unsecured loans from fictitious companies having no genuine activities. During the survey, statements of key persons were recorded and it was observed that JPV group concerns had accepted unsecured loans and paid interest in their books of account from certain other suspicious parties including M/s Dev Darshan Diamond Pvt. Ltd., M/s Madan Impex Pvt. Ltd., M/s Mangal Murti Impex Pvt. Ltd., M/s. Om Sai Stone Ltd., M/s Frontline Diamond Pvt. Ltd., M/s. Rajat Diamond Exim Pvt. Ltd. and M/s. Nikhil Gems Pvt. Ltd. Summons under section 131 of the Act were issued to the abov....
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....arties. The assessee also produced confirmations from all the above said parties during the course of assessment proceedings. After considering the above submissions, Assessing Officer reproduced the loan amount, interest paid and return of income of the above said parties in the assessment order at Page No.3, for the sake of clarity it is reproduced below: - Name of leaner and PAN Loan amount Interest paid Returned Income of the leaner as per Rol Dev Darshan Diamond Pvt. Ltd. AADCD8917F 54,00,000/- 7,06,475/- 1,72,840/- Frontline Diamond Pvt. Ltd. AABCF5034H 34,00,000/- 1,26,404/- 4,14,680/- Rajat Diamond Exim Pvt. Ltd AAECR0706R 5,05,00,000/- 1,50,444/- 3,84,780/- Madan Impex Pvt. Ltd. AAHCM3262A 9,00,000/- 3,73,060/- Mangal Murti Impex Pvt. Ltd. AAGCM5940C 10,35,000/- 1,91,730/- Om Sai Stone Ltd. AAFCS2403R 10,80,000/- 4,65,380/- Nikhil Gems Pvt. Ltd. AADCN4423G 1,17,370/- 25,130/- Total 5,93,00,000 Rs..41,15,693/- 8. By referring to the above chart, Assessing Officer observed that none of the parties has declared sizeable profit to ma....
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....banking channel by cross account payee cheque and no cash involvement in the either of the books i.e. Appellant and the lender The Appellant submits that loan was received through the banking channels and the source of amount received from the banking channel cannot not be doubted. The Ld AO has not gathered any additional/independent evidence to show that the transaction with the Appellant Firm was sham, fictitious or artificial except believing the statements given by some group members. The Ld AO has failed to give any evidence to show that the unaccounted cash of the appellant had changed hands. The Appellant states that no addition could be made on mere presumption that the Appellant routed its own cash in the form of unsecured loans without any iota of evidence to this effect. 4.2. All the details of the loan were filed during the course of the scrutiny assessment During the course of scrutiny assessment too, the Appellant had filed all the details before the Ld AO. The Appellant had furnished the following details before the ld AO for all the loan creditors 1. Copies of ledger extracts 2. The copies of c....
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....sp; 1,00,00,000 1,00,00,000 Om Sai Stone Ltd., 70,00,000 32,00,000 05.08.2015 20,00,000 31,00,000 06.08.2015 - 27.00,000 07.08.2015 90,00,000 90,00,000 M/s. Nikil Gems Pvt Ltd., 10,00,000 10,00,000 24.03.2014 10,00,000 10,00,000 1. The Ld AO had added amount of Rs. 5,05,00,000/- in case of loan received from M/s Rajat Diamonds Impex Pvt Ltd and Rs. 54,00,000 in case of loan received from M/s Dev Darshan Diamonds Pvt Ltd instead of actual amount received from Rajat Diamonds Impex Pvt Ltd Rs. 31,50,000 and M/s Dev Darshan Diamonds Pvt Ltd Rs.49,50,000/-. 2. From the above, your Honours will observe as under. The above loans were re-paid in the current year itself or in the next year/s as such the parities were in existence at the time of acceptance and repayment of the loan The accommodation entry is one time entry taken by any person which continues to exists in the books whereas in case of the assessee the loan was repaid to the lender in the same year or next year, this does not make the loan as bogus or mere an accommodation ....
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....nce against the Appellant The Appellant submits it had filled all the details and explanation and the Ld AO too obtained the information from the fender Creditors by issue of section 133(6) of the Act. The Ld AO had not brought on record any evidence to prove that said sum was undisclosed income of assessee The Appellant pleads that the ld AO had not b pointing that the are not genuine transactions of brought out any material or live-link Appellant with the aforementioned loan parties The Ld AO had made addition on the basis of suspicion, presumptions and probability of preponderance without any direct evidence to prove the transactions as non-genuine or sham or demonstrating Appellant's involvement and cannot sustain. There was no evidence brought out by the Ld AO of any unaccounted money from the Appellant or that third party received or utilized the unaccounted money received from the Appellant with reference to the loan received and amount paid for the interest expenditure. 4.8. Denied access to any Cross examination or Retraction, if any: 1. The Appellant was not being provided any statement recorded against it, so that....
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....he assessee, the Id AO is duty bound to examine its veracity by making further enquiries in the manner known to law. Without testing such documents by making proper enquiries, no adverse inference could be drawn by the Id AO on those documents. We hold that once all the relevant documents are submitted by the assessee regarding the loan creditors together with the latest addresses available with it supported by confirmations from them, the onus cast on the assessee u/s 68 of the Act stands duly discharged and no addition could be made in its hands. Reliance in this regard is placed on the decision of Hon'ble Jurisdictional High Court in the case of CIT vs Orchid Industries P Ltd reported in 397 ITR 136 (Bom). We further hold that no addition could be made on mere presumption that the assessee routed its own cash in the form of unsecured loans without any concrete evidence to this effect. Reliance in this regard is placed on the decision of Hon'ble Jurisdictional High Court in the case of PCIT vs Aquatic Remedies P Ltd in ITA No. 83 of 2016 affirming the tribunal decision in ITA No. 6356/Mum/2014. We further find that all the loans were duly repaid by the assessee either in ....
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....e conditions prescribed under section 68 of the Act and he distinguished the facts submitted by the assessee in their submissions and relying on the various decisions, he dismissed the appeal filed by the assessee. 11. Aggrieved assessee is in appeal before us raising following grounds in its appeal: - "1.0. The Ex-Parte order passed by Learned Commissioner of Income (Appeals) [CIT(A)] under section 250 of the Income tax Act, 1961 (the Act") without providing reasonable opportunity is opposed to principles of natural justice & needs to be set aside. 2.1. Without Prejudice, the CIT(A) erred in upholding of the re-opening of the assessment after the 4 (four) years in as much as the necessary ingredients under the first Proviso to section 147, for reopening the assessment, are absent 2.2. Without Prejudice, the Notice issued u/s 148 of the Act is invalid and void ab initio as the reason recorded amounts to Reason to Suspect and do not amount to Reason to Believe. 2.3. Without Prejudice, the Notice issued u/s 148 the Act is invalid and void ab initio as the Notice was issued without mentioning the correct limb ie. whether to assess' or 're....
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....k statements of the Appellant, bank statement of the party from whom loan was taken, ledger, loan confirmation, ITR, MCA status, and further, the said loan was also paid back in the immediately next financial year (i.e., short span of time) with interest after deducting TDS thereon. Further, the lender had responded to the notice issued u/s 133(6) by the learned Assessing Officer confirming the transaction with relevant details. Thereby, the Appellant had discharged the onus to establish the identity of the lender, creditworthiness of the lender and the genuineness of the transaction. • The list of details and documents produced by the Appellant has been detailed out in Annexure A for AY 2014-15 and Annexure - B for AY 2015-16. • The learned Assessing Officer issued notice u/s 133(6) to the lenders. The lenders replied to the said notice u/s 133(6). The learned Assessing Officer has not pointed out any discrepancy in the details submitted by the Appellant vis a vis details received in response to notice u/s 133(6) of the Act nor there is whisper in the Assessment Order that complete details as sought for was not provided by the Appellant and lender. Theref....
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.... iv. M/s. Nisarg Lifespace LLP vs. ITO ITA No.629/Mum/2020 - Para 3.7.1. to 3.9 v. M/s. Talisman Securities Pvt. Ltd. vs. DCIT ITA No.2303/Mum/2021- Para 3.1. to 3.3 vi. M/s Shree Laxmi Estate Pvt Ltd vs. ITO ITA No.5954/Mum/2016 Para 5 and 6 vii. Abhijavala Developers (P.) Ltd vs. ITO [2021] 124 taxmann.com 72 (Mumbai Trib.) Para. 5 viii. Shri Naresh Hiran vs. ITO ITA No. 1236/Mum/2017 Para 7 and 8 ix. Mr. Lokesh Devilal Jain vs. ITO ITA No. 4674/Mum/2019 Para 4 and 5 c. As a consequence to the above issues, the learned Assessing Officer erred in making addition with respect to interest paid on loan." 15. On the other hand, Ld. DR heavily relied on the findings of the Ld.CIT(A). He brought to our notice Page No. 32 of the Appellate Order and he is of the view that Ld. CIT(A) has given a reasonable finding in his order. Further he submitted that assessee has not produced any of the parties before the lower authorities. 16. Considered the rival submissions and material placed on record, it was submitted before us that in assessee's own case relating to A.Ys.2011-12, 2012-13 and 2013-14, the Coordinate Bench has dec....
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....arty being, M/s Frontline Diamond Pvt. Ltd., we observe that the assessee has taken loan of Rs.. 34,00,000/- during the current assessment year under consideration from this party and it is submitted before us by filing copy of bank statement that assessee has repaid the above said loan in two installments Rs.. 18,00,000/- on 23.12.2013 i.e., within the same assessment year and Rs.. 16,00,000/- on 10.11.2014 i.e. in the subsequent assessment year. It clearly shows that assessee has taken the loan through banking channels and repaid the same by banking channels. Therefore, when the assessee repays the loan which was taken from this party, this itself shows that assessee has demonstrated the genuineness of the transaction. 20. Second party i.e, M/s. Rajat Diamond Exim Pvt. Ltd., we observe that the assessee has taken loan of Rs.. 31,50,000/- during the current assessment year under consideration from this party and it is submitted before us by filing copy of bank statement that assessee has repaid the above said loan in three installments Rs.. 11,00,000/- on 23.12.2013 i.e., within the same assessment year and Rs.. 4,50,000/- on 15.01.2014 i.e., within the same assessment year and....