TaxTMI 
TaxTMI 
2024 (10) TMI 849
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....wing grounds of appeal:- "1. On the facts and in the circumstance of the case and in law, the Ld.CIT(A) is justified in admitting the additional evidence furnished by the assessee under rule 46A, without appreciating the fact that none of the exception mentioned in rule 46A(1) is satisfied." 2. On the facts and in the circumstance of the case and in law, the Id. CIT(A) is justified in deleting the addition of Rs. 24,99,99,000/- made by AO under section 68 of the IT. Act, without appreciating the fact that the assessee failed to prove the genuineness and creditworthiness of Creditor in light of the glaring fact that source of fund were borrowed from other parties by the Creditor and same was invested in the form of share capital. 3. On the facts and in the circumstance of the case and in law, the Ld. CIT (A) is justified in deleting the addition of Rs. 198, 10,59,501/- made by AO under section 68 of the I.T. Act without appreciating the fact that the assessee failed to prove the genuineness and creditworthiness of Creditor in light of the fact that the source of fund was borrowed from various parties by the Creditor and the same was given to the assessee c....
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....lied to. Therefore the learned assessing officer invoked provisions of section 68 of the income tax act and held that assessee company has shown a receipt by way of share capital from Ms Aksha Khamboj, director of the company amounting to Rs. 249,999,000/- but failed to provide the genuineness and creditworthiness. The analysis of the returns of income of the investor or reveals that the investment is not in consonance with the income of the directors/shareholder. Therefore, the said amount was added to the total income of the assessee under section 68 of the income tax act to be charged at rates specified under section 115 BBE of the act. 07. Assessee has also made short term borrowing from one company M/s Nisiddh Vision Pvt. Ltd. of Rs. 198,10,59,501/-. The assessee furnished the date and mode of receipt of the above sum from the company. However, the assessee did not file further reply to the queries such as furnishing the annual accounts, income tax return et cetera and the bank statement, The learned Assessing Officer further issued notice under Section 133(6) of the Act but same was not replied and therefore, the learned Assessing Officer made an addition under section 115....
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....ormation and details in response to notice issued by the learned assessing officer. Further Assessee applied for adjournment when details were asked within four days, such adjournment request was neither rejected nor acceded to. Therefore, he was of the view that assessee was prevented because of sufficient cause in not furnishing the information. Thus, he asked the learned assessing officer to furnish the remand report on the admissible of additional evidence furnished and on the merits of those additional evidences. 13. The learned Assessing Officer submitted remand report on 21//2/2023, He objected the admission of additional evidence stating that assessee was given enough opportunities [ para 2 of Remand Report] However, the learned CIT (A) applying the provisions of Rule 46A of Income Tax Rules, admitted the evidence. 14. The learned Assessing Officer also commented on the merits of the additions by that remand report on both the additions u/s 68 of the Act. 15. On the issue of addition under section 68 of Rs. 25 crores with respect to the share capital introduced by the director of the company, the learned Assessing Officer on the evidences submitted by the assessee ....
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....unt of the lender to the investor. Thus, assessee has explained the source as well as source of the source of the investment. 17. The ld AO also issued notice u/s 133 (6) of the Act to Nisiddh Vision Private Limited and Mr Nimish Chokcshi who also replied by submitting the details of ITR, bank Statement, Annual Reports and Accounts and confirmation. 18. With respect to another addition of Rs. 198,10,59,501/-, of loan availed from Nisiddh Vision Pvt. Ltd., Assessee submitted PAN, Confirmations, Annual Accounts, ITR copies and bank statements of the lender. The learned Assessing Officer issued notices under Section 133(6) of the Act to that company; a reply was received on 4th January, 2023. It was submitted that Nisiddh Vision Pvt. Ltd. is now known as Golden Wealth Advisory Pvt. Ltd. To substantiate the source of investment the lender submitted the ledger account along with address, permanent account number, the income tax return, the bank statements, ledger copy of account of assessee in its books. For source of the fund received by the lender, it was stated to be from eight different entities. For All these entities, that company furnished the necessary bank account, bank s....
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....ct to the loan received from the Golden Advisors Pvt. Ltd, the learned Assessing Officer was of the view that the return of income for A.Y. 2018- 19 and 2019-20 showed a loan of Rs.82 crores and Rs. 29 crores respectively. The learned Assessing Officer further verified that entire loan amount has been repaid by the assessee through account payee cheque in the subsequent years for which bank statement were also produced. Therefore, the learned Assessing Officer stated that though the assessee could not produce the details during the course of assessment proceedings and therefore, it was not verified during the course of assessment proceedings and now in the remand proceedings, the evidences were produced which were verified and based on such verification, remand report is submitted. He referred to the annual accounts of various companies noted that two of those companies have given loan to Nisiddh Vision private limited in initial year FY 2012 - 13. With respect to the other 7 depositors who gave money to Nisiddh Visions Private Limited he noted that that those parties have enclosed the bank statement reflecting the payment and the Ledger confirmation of the amount deposited with Ni....
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....ve all the necessary evidences to the learned Assessing Officer independently. Thus, not only the source of the fund available with the directors but where the directors has got the money from and the source of funds of those persons was also produced before the learned Assessing Officer. Therefore, the assessee has proved the identity, creditworthiness and genuineness of not only the sources of the funds but also the sources of the source of the funds invested. He submitted that ld AO in remand report has also made inquiry with the ao of one of the lender to MS Alkksha Khamboj, but no response is received. Such no response cannot go against the assessee. 25. With respect to the loan received from Nisiddh Vision Private Limited assessee submitted that in the remand report the learned assessing officer has categorically noted that assessee has obtained a loan from Nisiddh vision private limited of Rs. 1,981,059,500/- for which the assessee has submitted the copy of the Ledger account of the parties, bank statement, confirmation, income tax return of the lender. Further assessee has also given complete details of sources of funds available with the issue in the vision private limi....
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....does not so that they do not have creditworthiness, their balance sheets produced before the assessing officer prove that they have the enough sources of funds available with them. Assessee further relied upon several judicial precedents. Therefore, the addition deserves to be deleted. 26. The learned CIT - A on the above basis decided both the issues in favour of assessee. 27. with respect to the deletion of addition of Rs. 24,99,99,000/- of share capital received from one of the director Mrs. Akhsa Kamboj the learned CIT - A held that:- i. Appellant during the appellate proceedings has submitted complete details i.e. a) copy of the appellant PAN including name address and jurisdiction b) copy of ITR acknowledgement deposited, c) copy of the composite application form in relation to share application, d) copy of the board resolution. ii. In remand proceedings director of the company Ms Aksha khamboj has submitted complete details in response to notice under section 133 (6) of the act i.e. a) Ledger account of the amount invested in KBJ venture private limited along with bank statement highlighting transactions of amount invested, e) Ledger account of partie....
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....mation of giving loan. The lender also proved the source by giving the name of nine entities from whom initiate the reason private limited has received the loan. It also provided the confirmation that the loan has been repaid by the assessee. v. The learned that assessing officer issued notice under section 133 (6) of the act to all those nine entities to submit the necessary details. Out of the nine entities, eight entities responded to the notice under section 133 (6) of the act by submitting their income tax return, confirmation, the account copy, Ledger's, the annual reports, bank statements et cetera. vi. One more entity which did not responded to notice under section 133 (6) of the act initially, on confronting the same to the assessee, assessee intimating that party, that party and then submitted the complete details of the confirmation, income tax return, the copy of account, annual reports and bank statement to show the loan provided by it to the lender. vii. In the remand report the learned AO held that assessing officer has examined all these details and did not furnish any adverse comment with respect to creditworthiness of the parties or ....
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....ditional evidences but has stated admission of fresh evidence was objected to. We find that when the assessee was prevented by sufficient cause to produce necessary details before the assessing officer, the appellate authorities are empowered to admit such additional evidence in the proper administration of justice. In the present case, the claim of the assessee is not disputed that office of the assessee was situated in containment zone declared by the government of Maharashtra. Therefore we do not find any infirmity in the order of the learned CIT - A in admitting the additional evidences. It is also not the case of the revenue that after admitting the additional evidence the assessing officer was not given any opportunity to rebut the same. In fact, he has given a direction to the assessing Officer to carry out all the enquiries on those additional evidences. The learned assessing officer has carried out inquiries from the assessee, from the lenders, from the parties who have lent money to those lenders by issuing notices under section 133 (6) of the act. In view of this, we do not find any infirmity in the order of the learned CIT - A in admitting the additional evidences and n....
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....s provided along with confirmation, bank statement, income tax return, annual balance sheet. He further submitted that Nissidh Vision private limited has annual turnover of approximately Rs 500 crores for the year ended on 31st of March 2018 which was Rs. 300 crores in the earlier year. He further referred to the bank accounts of the lender to the director. He further referred to the copy of confirmation of the Nissidh Vision private limited and Nimish Chokshi issued to KBJ venture private limited placed at page number 49 of the paper book to show that there are transaction with that company of Rs. 347,97,46,677 which are accepted by the AO is undisputed. Therefore, he submitted that the identity, creditworthiness of the amount of share application money of Rs. 249,999,000/- deposited by one of the director of the assessee company with the assessee is completely proved. The shares have been allotted to the director and therefore the genuineness of the transaction cannot be doubted. He further relied upon the order of the learned CIT - A. It was further claimed that when all such details are submitted during the course of remand proceedings by the assessee and the director which hav....
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....eceived by the director from NVPL and subsequent deposited with the assessee company is also shown by producing the bank account. To prove the source of source in accordance with the provisions of section 68 of the act as the amount in question is share capital, assessee also produced the confirmation of NVPL, its return of income, bank statement and balance sheets and profit and loss account along with the annual report. As per the annual report for assessment year 2018 - 19, the assessee has turnover of approximately Rs. 500 crores in gold and diamond. It has also the loans and advances of Rs. 498 crores. The learned assessing officer on submission of this information by the assessee, in turn issued notice under section 133 (6) of the act to the director/depositor/shareholder. She submitted all such details which was submitted by the assesee i.e. confirmation, bank account, balance sheets and profit and loss account, Ledger account and source of funds from NVPL. The assessing officer further issued a notice under section 133 (6) of the act to NVPL which also in turn submitted all those details to the assessing officer directly. It was also submitted that a small loan was also tak....
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....d. 37. With respect to ground number 3 of the appeal the learned CIT DR stated that the learned CIT - A is not justified in deleting the addition of Rs. 1,981,059,501 without appreciating the fact that the assessee has failed to prove the genuineness and creditworthiness of the creditors. He submitted that the amount is received by the assessee from Nissidh Vision private limited, initial provision private limited income received the above amount from nine different entities. Also those nine entities, some of them have incurred the losses and some of them have low income and therefore the creditworthiness of those parties who deposited income the money with initial provision private limited which the Internet been deposited by that company with the assessee company lacks creditworthiness of the transaction. The learned CIT - A has not considered this aspect and therefore the order of the learned CIT - A is not sustainable. 38. The learned authorized representative vehemently submitted that assessee has submitted confirmation, bank statement, return of income, annual accounts, and annual return of the lender. The assessee has also submitted the source of funds received by the ....
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.... have been established by the assessee that that entity has granted advances to the tune of Rs. 441 crores whereas the assessee has received out of that only Rs. 198.10 crores, merely looking at the profitability does not lead to conclusion that lender is not credit the advancing the sum. He further referred to paragraph number 8 of the remand report, which clearly shows that the assessee has entirely repaid the above loan amount in subsequent year to the lender by producing the Ledger copies in the bank statement, which has been verified by the learned assessing officer. 39. We have carefully considered the rival contentions and perused the orders of the lower authorities. We have also considered the remand report furnished by the assessing officer before the learned CIT - A. We have also considered the paper book submitted before the learned CIT - A and also the several judicial precedents relied upon by the parties. 40. The fact clearly shows that the learned assessing officer has made an addition under section 68 of the income tax act with respect to the loan received by the assessee company from another company Nisidh vision Private Limited as during the course of assess....
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....e capital. Amendment including loan also for such transaction is with effect from 1/4/2023. Nevertheless, in the remand report the assessing officer has accepted the above fact. The AO has raised doubt with respect to the one entity which did not furnish information under section 133 (6) of the act. Even the assessment order of that entity is furnished before the AO. Therefore, such doubt also does not have any basis. Further, with respect to declared losses of some of the entity, it is evident that in the balance sheets filed by NVPL, which is trader in gold and diamond has turnover of approximately Rs. 500 crores. It is a loan and advances also of RS 500 crores. Now it is interesting to note that as per the confirmation placed at page number 49 of the paper book for a period from 1 April 2017 to 31 of March 2018, NVPL has placed money with the assessee of Rs. 3,479,746,677. Out of this the assessee has repaid to the assessee are sum of Rs. 1,498,687,176. Thus an outstanding closing balance of Rs. 1,981,059,501 is outstanding payable by the assessee to the above company. All these transactions are of the loan transaction. The assessing officer has made the addition of closing bala....