TaxTMI 
TaxTMI 
2024 (12) TMI 39
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble to be cancelled. 3. Assessment framed u/s 144 r.w.s. 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, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eport of the DDIT (Inv.), Unit-4, Kolkata, in the year 2018 and, therefore, the addition made at Rs. 50 lakh and Rs. 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 firs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Fresh information to initiate reassessment is general in nature and is not on specific transaction of assessee. Evidence placed on record is not found to be incorrect or false. Conclusion 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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... M/s Abhilasha Shoppers Pvt. Ltd. Confirmation for Asstt. Year 2015-16 being year of repayment is submitted. (P - 46 to 48) The lender is assessed to Income Tax. The PAN of lender is on record. Lender is not related party. Interest paid, TDS deducted and loan amount repaid. Onus to explain receipt of loan u/s 68 or u/s 69A has been satisfactorily 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra 10 & 11 Page 3 & 4 of assessment order. No addition u/s 68 can be made. Reliance on: i) (2014) 42 taxmann.com 251 (Guj.) CIT vs. Ayachi Chandrashekhar Narsangji (251 - 253) ii) (2022) 145 taxmann.com 27 (Guj.) PCIT vs. Ambe Tradecorp (P.) Ltd. iii) (2024) 164 taxmann.com 764 (Guj.) PCIT vs. Merrygold Gems (P.) Ltd. L) A.O. has not allowed opportunity to cross examine the persons. The statement relied upon by A.O. not 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 29/0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....., were also submitted and the same is placed at Page-52 to 57. The amount received and payable by the assessee as on 31/03/2013, is verifiable from the financial statements of the lender which is placed at Page-57. The TDS certificate is placed at Page-58 & 59. The assessee has discharged its onus to explain the credit by adducing proper legal evidence. The amount has been repaid through proper banking channel and same is verifiable from the bank statement of the assessee which is placed in the Paper Book at Page-50 and 51. The statements of various 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 t....