TaxTMI 
TaxTMI 
2024 (8) TMI 1177
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....ded by way of this consolidated order. 3. In its appeal, being ITA No. 660/Mum./2024 arising from the order dated 28/12/2017 passed under section 143(3) as modified by order dated 25/01/2018 passed under section 154 of the Act, the Revenue has raised the following grounds:- "1. Whether on the facts and in the circumstances of the instant case and in law, the Ld. CIT(A) was justified in allowing the appeal of the assessee on the issue of unsecured loan and interest paid thereon, without clearly establishing the source of lenders as per proviso to section 68 of Act and subsequent application of section 69C of the Act. 2. Whether on the facts and in the circumstances of the instant case and in law, the Ld. CIT(A) was justified in allowing the appeal of the assessee on the issue of I14A disallowance, by holding that if no exempt income is included in the total income, then no disallowance can be made ignoring the fact that an Explanation is added to section 14A with retrospective effect stating that disallowance u/s. 14A has to be made even if there is no exempt income. 3. Whether on the facts and in the circumstances of the instant case and m law, the Ld.....
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.... details of the persons who have provided unsecured loans to the assessee, but have not filed their return of income. In response thereto, the assessee only filed the list of persons who had provided the unsecured loans to the assessee without any supporting documents/details. After multiple opportunities, the assessee on 20/12/2017 filed a part-submission providing copies of loan confirmation along with copies of return of income for the assessment year 2015-16 in respect of 15 persons, who had provided unsecured loans to the assessee during the year. Subsequently, on 27/12/2017 the assessee furnished copies of loan confirmation along with copies of return of income for the assessment year 2015-16 in respect of the 11 persons who had provided the unsecured loans to the assessee during the year, via Inward Tapal Register (Dak). 7. The Assessing Officer ("AO") vide order dated 28/12/2017 passed under section 143(3) of the Act held that since the details were filed by the assessee at the fag end of the limitation period for completion of scrutiny assessment, no time is left to carry out an independent enquiry by way of issuing notices under section 133(6)/131 of the Act, to the pe....
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.... by the rectification order dated 25/01/2018 passed under section 154 of the Act. The assessee filed another appeal challenging the rectification order dated 07/01/2019 passed under section 154 of the Act. Thus, resulting in separate impugned orders and two appeals before us. 10. During the appellate proceedings before the learned CIT(A), the assessee made the following submissions and filed the documentary evidence of each loan lender separately: - "In case of Appellant Company, the Appellant has fulfilled onus by submitting explanations and documentary evidence including PAN and address details of the parties to prove the genuineness of each loan party separately, as under: a) Loan taken from Mr. Rakesh Chaumal amounting to Rs. 74,00,000/-: In relation to the loan taken from Mr. Rakesh Chaumal, we would like to state that Mr. Rakesh Chaumal is one of the promoters of the Appellant Company. He is a director as well as shareholder of the Appellant Company and there is a running account of Mr. Chaumal in the books of the Appellant Company, whereby many transactions are affected as per the need of the Company. During the course of assessment, we have fur....
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....f Pazel International Ltd. In view of the above, we have fulfilled onus to prove genuineness of the loan. The Ld. DCIT did not consider the above facts. The Ld. DCIT has not given the sufficient time to the Appellant to submit the documents and give the explanations at the time of framing the assessment order. The Ld. DCIT has not conducted any further independent enquiry to cross examine the party and also not called for information u/s. 133(6) of the Act from the party to verify the genuineness of the loan transaction during the proceedings. However, Ld. course of assessment made short disallowance of Rs. 76,97,304/- (Rs. 80,00,000/- Less Rs. 3,02,696/-) in unsecured loan u/s 68 of the Act and Interest Rs. 5,50,339/- (Rs. 5,73,041/- Less Rs. 22,702/-) for which Rectification application has been filed and Order also passed. The Appellant Company being aggrieved by Rectification order passed u/s. 154 by the Ld. DCIT on 07.01.2019 preferred an appeal separately on this ground. d) Loan taken from Syncom Formulations India Limited amounting to Rs. 55,00,000/-: The Ld. DCIT had erred in making an addition on account of loan taken from Syncom Formulations Ind....
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....ow: Name of Party Amount of Loan taken during the years (Rs.) Interest Copy Acknowledgement of ITR and Financial Statement of Loan party Loan Confirmation Copy of Party's Bank Statement Rakesh Chaumal 74,00,000/- 5,41,088/- Attached Attached Attached Etsinta Advisory Private Limited 23,50,000/- 2,46,750/- Attached Attached Attached Pazel International Ltd. (Rutron International Ltd) 80,00,000/- 5,73,041/- Attached Attached* Attached* Syncom Formulations India Limited 55,00,000/- 3,93,534/- Attached Attached Attached Manmade Fibers Pvt Ltd. 50,00,000/- 2,52,756/- Attached Attached Attached Miraj Commercial & Trading Pvt Ltd 80,00,000/- 6,75,879/- Attached Attached Attached Total 2,85,52,696/- 21,32,708/- For Pazel International Ltd., The Ld. DCIT has made short disallowance of Rs. 76,97,304/- (Rs. 80,00,000/- Less Rs. 3,02,696/-) in unsecured loan u/s 68 of the Act and Interest Rs. 5,50,339/- (Rs. 5,73,041/- Less Rs. 22,702/-). The same was again rectified by the Ld. DCIT in the Order passed u/s 154 of the Act d....
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....sed the material available on record. During the assessment proceedings, it was observed from the computation of income that the assessee has received Rs. 25,60,370 exempt income on investments held in shares/mutual funds against which the assessee has not suo moto disallowed any expenditure under section 14A read with Rule 8D of the Income Tax Rules, 1962. The AO further observed that the assessee has made a huge investment of Rs. 11.91 crores at the end of the year including a fresh investment of HDFC mutual funds of Rs. 2 crores. Accordingly, the assessee was asked to show cause as to why the disallowance under section 14A read with Rule 8D should not be made. In response thereto, the assessee submitted that it has not received any income which is exempt under section 10 of the Act. However, the AO did not agree with the submissions of the assessee and computed the disallowance of Rs. 69,26,663 and added the same to the total income of the assessee. 15. In its application dated 09/01/2018 filed under section 154 of the Act, the assessee submitted that it has earned capital gain/profit from the sale of mutual funds/investments (non-STT) of Rs. 25,60,370, which has wrongly been....