TaxTMI 
TaxTMI 
2025 (2) TMI 816
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....usible view in respect of the same 3. On the facts and in the circumstances of the case and in law the Order u/s 263 is invalid and bad in law in as much as the Pr. CIT has failed to give a finding and has set aside the issue of unsecured loans for the verification of the Assessing Officer 4. On the facts and in the circumstances of the case and in law the order of Pr. CIT u/s 263 of Income Tax Act 1961 is invalid and bad in law in as much as the same has been passed without taking cognizance of the fact that the unsecured loans are duly explained in the assessment proceedings and proceedings u/s 133(6) of the Income Tax Act, 1961 5. The above ground may be allowed to be altered, amended, modified, deleted etc in the interest of natural justice." Submission of ld.AR : 2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book. The first argument of Ld.AR was that after the assessment order was passed the Assessing Officer had issued notice under section 133(6) of the Act, and the Assessee filed required details regarding the Loan. Hence at the time of the 263, the Pr.CIT had all details hence 263 is not maintainable. Ld.AR also submi....
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.... not filed a return of income could lend an amount of Rs. 2,78,00,000/- to the appellant, making the source of the source highly doubtful. It is pertinent to mention here that Mr. Prakash Loharkar is a non-filer for the Assessment Year 2018-19, and a substantial amount of Rs. 11.19 crores has been found as an opening balance, which raises serious doubts about the nature, source, and genuineness of the transactions. Even if the transactions are considered genuine, the capacity of such a nonfiler to lend such an amount has not been established. 3. Ms. Mayura Mirajkar has a total income of only Rs. 3,44,000/-, which is meager, yet she has advanced 15 times her total income as an unsecured loan to the assessee. She has also frequently deposited cash amounting to Rs. 5,12,000/- 4. The FAO has allowed cash credit entries in the books of the assessee in the form of unsecured loans amounting to Rs. 1,42,45,797/- without conducting proper enquiries. A lack of proper enquiry does not satisfy the mandatory conditions of establishing the creditworthiness and genuineness of the transaction. Submission of bank statements and copies of ledgers is insufficient to establi....
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.... No other details have been filed by the assessee during the assessment proceedings. 4.1 It is also a fact that assessee have maintained a running account of its directors. During the year the assessee has received Loan of Rs. 1,42,45,797/- from its Directors Mr. Prakash Loharkar and Ms.Mayura Mirajkar. As per the Ledger Account (page 30,31 of Paper book) of Prakash Loharkar the opening balance of Loan is Rs. 11,19,95,229/- and closing balance as on 31/03/2018 is Rs. 12,37,90,826/-. Similarly Opening Balance of Loan from Mayura Mirajkar is Rs. 24,81,949/- and closing balance as on 31/3/2018 is Rs. 49,32,149/-. 4.2 The ledger submitted by assessee is as under : 4.3 Ld.Pr.CIT on examination of records noted that during the assessment proceedings the Assessee had not proved Genuineness of Loans and Creditworthiness of the Lenders. Though the AO had asked assessee to file the details assessee failed to comply during the assessment proceedings. Hence, Ld.Pr.CIT initiated the proceedings u/s 263 of the Act. During the proceedings u/s 263 of the Act the assessee submitted that Mr.Prakash Loharkar had obtained loan from Nilesh Kanade Group, who intern had obtained Loan from financ....
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....kash had received money from Nilesh Kanade group, Ld.AR explained some entries but could not explain all entries pertaining to the year. 4.7 We have studied the Loan Sanction letter issued by LIC in the joint name of Nilesh Kanade and Ms.Rupa Kanade which is at page 86 of the paper book. The said letter is in Principle Sanction of Home Loan at Interest Rate of 8.5%. It is fact that LIC never disburses Home Loan directly to the Account of the borrower but it disburses Loan to the seller directly. Therefore, the claim made by ld.AR is not acceptable. Also no trail of money has been shown by Ld.AR though we specifically asked. 4.8 The another Director Ms.Mayura Mirajkar has deposited cash on previous day and then given that amount as Loan to assessee, the scan of details submitted by assessee is as under : 4.9 It can be observed from above that on 12/01/2018 Ms.Mayura Mirajkar has deposited cash in her bank account and then immediately gave Loan to assessee. Similarly, on 18/01/2018 she deposited cash and then immediately gave loan to assessee. This shows that Creditworthiness and Genuineness of transaction is not proved. The most important is that these details were not file....
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....on shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. 4.12 Thus, as per Explanation-2 to Section 263 of the Act, any order passed without making inquiries which should have been made is an order erroneous and prejudicial to the interest of the revenue. The Pr.CIT can initiate proce....
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....discussed above at length how assessee has failed to prove genuineness of the transactions. 4.15 Hence, for all the reasons discussed we uphold the order under section 263 of the Act. 4.16 Ld.AR has raised a legal ground that the ld.Pr.CIT has not given findings and has set aside the issue of unsecured loan to the Assessing Officer for verification. We do not agree with the ld.AR. As per section 263 the ld.Pr.CIT shall pass an order as the circumstances of the case justifies including setting aside the issue to the Assessing Officer for verification and appropriate order. Therefore, there is no illegality in the order under section 263 passed by the ld.Pr.CIT. In interpretation of statute, when there is no ambiguity in the section, plain meaning of the section shall be adopted. In the fiscal statute no words should be added. There is no specific provision in Section 263 that ld.Pr.CIT has to record specific findings qua the impugned issue. Hence we cannot add those words to the statute. Therefore, there is no merit in said submission of Ld.AR. Accordingly, dismissed. 4.17 Ld.AR has relied on the decision of Hon'ble Supreme Court in the case of Pr.CIT Vs. Shreeji Prints Pvt....