TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 39
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..... 147 of I.T. Act 1961 is bad in law in view of no notice u/s 143(2) of I.T. Act 1961 having been issued before framing assessment even though assessee has submitted return of income on 23/10/2018 in respect to notice u/s 148 of I.T. Act 1961. 4. The addition made by A.O. and upheld by CIT(A) at Rs. 50,00,000/- in respect to loan obtained from M/s Abhilasha Shoppers Pvt. Ltd. u/s 68 or u/s 69A of I.T. Act 1961 is illegal, invalid and bad in law. 5. The learned CIT(A) ought to have deleted the addition at Rs. 50 lacs u/s68 or u/s 69A of I.T. Act 1961 in respect to unsecured loan received from M/s Abhilasha Shoppers Pvt. Ltd. 6. The addition made by A.O. and upheld by CIT(A) at Rs. 1,99,520/- u/s 36(1)(iii) of I.T. Act 1961 being interest paid to M/s Abhilasha Shoppers Pvt. Ltd. is unjustified, unwarranted and bad in law. 7. The learned CIT(A) ought to have deleted the addition of Rs. 1,99,520/- assessed under section 36(1)(iii) of I.T. Act 1961 in respect to interest paid to M/s Abhilasha Shoppers Pvt. Ltd. 8. The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 23....
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....1,99,520, was required to be upheld in the re-assessment framed. The learned CIT(A), National Faceless Appeal Centre, vide its order dated 16/10/2023, has not accepted the grounds of appeal of the assessee by upholding the addition made at Rs. 50 lakh under section 68/69A of the Act and interest at Rs. 1,99,520. 5. In grounds no.1 & 2, the assessee has challenged the validity of notice under section 148 of the Act. 6. In ground no.3, the assessee has challenged the validity of assessment framed without issuance of notice under section 143(2) of the Act even though the return of income was filed on 23/10/2018. 7. In grounds no.4 & 5, the assessee has challenged the addition of Rs. 50 lakh in respect to loan obtained from M/s. Abhilasha Shoppers Pvt. Ltd., under section 68 or under section 69A of the Act being illegal, invalid and bad in law. 8. In grounds no.6 & 7, the assessee has challenged disallowance of interest at Rs. 1,99,520. 9. Before us the learned Counsel, Shri Kishore P. Dewani, Advocate, appearing for the assessee submitted that in the first appellate order, the learned CIT(A) did not considered and/or given one single reason as to why the submissions of the assess....
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....sion of escapement of income tantamount to mere change of opinion. Belief of escapement of income could not be derived on the basis of report of Investigation Wing being not specific to transaction of loan. Reliance on: (2010) 320 ITR 561 (SC) CIT vs. Kelvinator of India Ltd. (P- 98 - 102) (99) D) Reasons recorded indicate that A.O. has no new intangible material on record. Report of Investigation Wing as well as approval from Joint Commissioner of Income Tax was not provided to assessee. Notice issued u/s 148 is not in accordance with law. E) Reliance on: i) (2020) 422 ITR 0337 (Bom.) CIT vs. Shodiman Investments Pvt. Ltd. (60 - 67) (67) ii) (1976) 103 ITR 0437 (SC) ITO & Ors. Vs. Lakhmani Mewal Das (68 - 78) (76, 77) iii) (2003) 259 ITR 0019 (SC) GKN Driveshafts (India) Ltd. vs. ITO & Ors. ( 79 - 81) (81) F) W/s before CIT(A) (P- 1 to 9). In appellate order CIT(A) has not considered/given one single reason as to why submission of assessee are not being accepted. Dismissing of appeal is arbitrary. Ground No.3: Assessment framed u/s 144 r.w.s. 147 of I.T. Act 1961 without issue of notice u/s 143(2) is bad in law. CIT(A) Para 6 Page 6 & 7 A) A.O. at para 8 c....
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....tisfactorily discharged. No enquiry made by A.O. before making addition. Reliance on : i) (1963) 49 ITR 723 (Bom) Orient Trading Co. Ltd. vs. CIT (P- 154 - 163) (54) ii) (2014) 366 ITR 232 (P&H) CIT vs. Varinder Rawlley (P- 164 - 168) (167, 168) iii) (1986) 159 ITR 0078 (SC) CIT vs. Orissa Corporation Pvt. Ltd. (P- 169 - 175) (171, 175) iv) (2017) 397 ITR 0136 (Bom.) CIT vs. Orchid Industries Pvt. Ltd. (P- 176 - 178) (177, 178) C) The A.O. has discussed the modus operandi of accommodation entries on the basis of Investigation Wing report. Statements of various persons are reproduced in assessment order. No specific adverse observation is indicated in the statement of various persons reproduced in assessment order as regard to loan transaction and repayment thereof. Evidence submitted by assessee has not been found faulted. A.O. has brought no evidence to rebut the legal evidence submitted by assessee for explaining the transaction of loan. Addition made by A.O. is unjustified. D) At para 17 A.O. observed that unaccounted cash generated from real estate business and allied activities and same is routed with the help of entry operators. Allegation made by A.O. is withou....
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....having stood to the test of cross examination are liable to be excluded. Reliance on: i) (2015) 127 DTR 0241 (SC) Andaman Timber Industries vs. Commissioner of Central Excise (P- 179 - 183) 181 G) The identity of company is not in dispute and corporate entity is assessed to tax. Loan transaction is through proper banking channel. Observation of A.O. indicates that he is suspecting source of source. Assessee is not required to prove source of source. Reliance on: i) (2020) 423 ITR 0531 (Bom.) Gaurav Triyugi Singh vs. ITO (P- 184 - 187) ii) Hon'ble High Court of Bombay order in ITA No. 1231 of 2017 in the case of M/s Ami Industries (India) Pvt. Ltd. vide order dated 29/01/2020. (P- 188 - 202) iii) ITAT order in ITA No.3514/DEL/25014 in the case of Smt. Prem Anand vide order dated 13/04/2017 P- 203 - 218) I) Statement of thirty party unless same has stood the test of cross examination does not carry any evidentiary value for making addition. Statement of third person without any corroborative evidence does not make the loan transaction liable to be assessed u/s 68/69A of I.T. Act 1961. 4. Ground No.6: Addition made by A.O. at Rs. 1.99 lacs u/s 36(1)(iii) of I.T. Act ....
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....rious persons reproduced in assessment order are not with reference to the verification of loan transaction of the assessee. They are general statements recorded by Investigation Wing of Kolkata, which are reproduced in the assessment order and are not in respect to any enquiry of loan in the case of the assessee. Confirmed copy of ledger evidencing repayment to lender is furnished. The legal evidence placed on record to explain loan credit does not get discredited by general statements. 12. The issue of making the addition under section 68 of the Act, when the loan credit has been repaid through proper banking channel, is considered by the Co-ordinate Bench of the Tribunal, Nagpur Bench, wherein the same Bench is a party to that order, in DCIT v/s M/s. Vibrant Global Capital Ltd., ITA no.229/Nag./2022, vide order dated 25/10/2024. On a careful analysis of the judgments of the Hon'ble Gujarat High Court in PCIT (C) v/s Ambe Tradecorp Pvt. Ltd., [2023] 290 Taxman 471 (Guj.) and in PCIT v/s Merrygold Gems Pvt. Ltd. [2024] 164 taxmann.com 764 (Guj.), wherein we find that the Hon'ble Gujarat High Court has concluded that when the repayment of loan is accepted by the Department in asse....