TaxTMI 
TaxTMI 
2025 (6) TMI 57
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....9,08,670/- The case was selected for limited scrutiny assessment under the E-assessment Scheme, 2019 on the following issues: "S. No. Issues i. Share Capital/Other Capital" 4. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 19.04.2021 accepting the returned income. 5. Subsequently the Ld. PCIT examined the record and noted certain discrepancies with regard to the issues on which the case was selected for scrutiny. He noted that the assessee during the impugned assessment year has introduced fresh capital to the tune of Rs. 19,60,06,676/- which was claimed to have been borrowed from the following persons who are said to be the friends and relatives of the assessee: Sr. No. Name of loan creditor Amount of loan (Rs.) 1 Krishant Eknath Chavan 97,61,000/- 2 Amrut Kakaso Kumbhar 98,39,955/- 3 Vijay Raghunath Patil 3,00,00,000/- 4 Dadaraje Anandrao Desai 5,21,96,958/- 5 Sambhaji Shamrao Patil 3,00,00,000/- 6 Hanmant Bajirao Desai 5,16,30,000/- 7 Pratap Ramdas Janugade 1,25,78,763/- Total 19,60,....
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....7,070/- Confirmation, extract of statement of account no. 31090200000216 No document in support of identity proof is available, declaration is deficient, name of the bank & branch not income mentioned in the bank statement, further the debit on 15.03.2018, 19.03.2018 and 20.03.2018 corresponding to the loan given to the assessee, are bank preceded by immediate credits in 13 tranches of between 14.03.2018 to 20.03.2018 totalling to loan no. amount. He has filed return on income for AY 2018-19 on23.07.2018 disclosing a meagre income of Rs. 2,77,070/- does not commensurate with the quantum of loan advanced to the assessee. No balance sheet has been filed reflecting the transactions. The sources of income have also not been explained. Further on perusal of the bank statement, it is noted that there is a debit entry of Rs. 25,00,000/- on 15.03.2018 indicating that the lender has paid this amount to the assessee, for which there is no explanation/ supporting document on records. The documents available on records and the short comings/deficiencies pointed out do not substantiate the identity of the creditor, the genuineness of the transaction and the creditworthiness in terms of....
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....ansaction and the creditworthiness in terms of section 68. 5 Sambhaji Shamrao Patil 3,00,00,000/- Unsigned copy of ITR-V for AY 2018-19 showing returned income at Rs 2,08,110 Confirmation, extract of statement of account no. 31090200000436 No document in support of identity proof is available. ITR-V and declaration are deficient, name of the bank & branch not mentioned in the bank statement, the date of opening of the bank account is 12.03.2018, further the debits on 2.03.2018, 22.03.2018, 23.03.2018 & 27.03.2018 corresponding to the loan bank given to the assessee are preceded by immediate of credits in 04 tranches between 21.03.2018 to no. 27.03.2018 totalling to loan amount. He has filed return on income for A.Y. 2018-19 on 25.08.2018 disclosing a meagre income of Rs. 2,08,110/- does not commensurate with the quantum of loan advanced to the assessee. No balance sheet has been filed reflecting the transactions. The sources of income have also not been explained. The documents available on records and the short comings deficiencies pointed out do not substantiate the identity of the creditor, the genuineness of the transaction and the creditworthiness in terms of se....
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....iled to examine the huge loans shown to have been advanced by the lenders, namely, Sh. Krishant Eknath Chavan of Rs. 97,61,000/-, Sh Amrut Kakaso Kumbhar of Rs. 98,39,955/, Sh. Vijay Raghunath Patil of Rs. 3,00,00,000/-, Sh. Dadaraje Anandrao Desal of Rs. 5,21,96,958/-, Sh. Sambhaji Shamrao Patil of Rs. 3,00,00,000/-, Sh. Hanmant Bajirao Desai of Rs. 5,16,30,000/- & Sh. Pratap Ramdas Junagade of Rs. 1,25,78,763/-. While the aggregate amount of Loan received by the assessee comes to Rs 19,60,06,676/-, not a single lenders is found to have disclosed income of more than Rs. 5 Lakhs in their respective ITR for the AY 2018-19. This put the creditworthiness of those lenders and their capability to advance such a huge sum to the assessee in question. The FAO was thus, found to have accepted assessee's claim without examining the above aspects and testing the claims to the rigors of Sec.68 of the Income Tax Act. 4.4. Apart from the above, it was further seen that the FAO also had failed to examine that similar transactions of receipt and payment of credits carried out by the assessee with various persons, namely, with Sh. Amrut Kakaso Kumbhar at Rs. 25,00,000/- (received by the as....
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....Bajirao Desai 5,16,30,000/- Rs.2,15,670/- 23947% 7 Pratap Ramdas Janugade 1,25,78,763/- Rs.4,59,040/- 2740% 9. He accordingly noted that the unsecured loans given by the loan creditors are grossly disproportionate to the annual income disclosed by them. Further, a perusal of the bank accounts of the respective creditors reveals that there were unusual activities involving huge credits in the said bank accounts before the impugned loan transactions. He noted that there are no adequate documents to establish the correct identity, genuineness of the transactions and creditworthiness of the creditors. In view of the above and relying on various decisions, the Ld. PCIT held that the assessment order dated 19.04.2021 passed by the Assessing Officer u/s 143(3) r.w.s. 144B of the Act is erroneous in so far as it is prejudicial to the interest of Revenue. He, therefore, partly set aside the order of the Assessing Officer for the limited purpose of examining the transaction involving unsecured loans and other financial transactions. He further directed the Assessing Officer to specifically examine the following aspects: i) The AO shall conduct detailed inq....
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....hat inquiries or verification should have been made but had not been made by Assessing Officer so as to make present case fall within Explanation 2(a) to section 263, Tribunal rightly set aside order passed by Principal Commissioner. 14. Referring to the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax v. Pramod Kumar Tekriwal [2023] 154 taxmann.com 142 (SC), he submitted that the Hon'ble Supreme Court in the said decision has dismissed the SLP filed against the order of High Court in holding that where Assessing Officer made addition of 3 per cent in respect of bogus purchases over and above rate of gross profit of 4.63 per cent declared by assessee and passed assessment order, since assessee had produced all necessary details of purchase, sales, audited books of account, quantity details and there was no discrepancy between purchase and sales declined, Assessing Officer had taken one possible view out of two assumption and thus to assumption of jurisdiction by Principal Commissioner under section 263 was erroneous. 15. Referring to the decision of Hon'ble Allahabad High Court in the case of M.L. Chains v. Principal Commissioner of In....
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....It is an admitted fact that the case of the assessee was selected for limited scrutiny on the issue of Share capital/other capital. It is also an admitted fact that the assessee during the year has received an amount of Rs. 19,60,06,676/- from the 7 parties who are said to be the friends and relatives of the assessee. A perusal of the assessment order shows that the Assessing Officer has passed the order as under: 20. A perusal of the record shows that the parties who have extended the loan to the assessee have declared very meager income as compared to the huge loans and advances given to the assessee the details of which are as below: Sr. No. Name of the creditors Amount of Loan given Income returned for the A.Y. 2018-19 Proportion to annual income 1 Krishnat Eknath Chavan 97,61,000/- Rs.3,89,700/- 2570% 2 Amrut Kakaso Kumbhar 98,39,955/- Rs.2,77,070/- 3552% 3 Vijay Raghunath Patil 3,00,00,000/- Rs.2,37,770/- 12620% 4 Dadaraje Anandrao Desai 5,21,96,958/- Rs.2,74,410/- 19022% 5 Sambhaji Shamrao Patil 3,00,00,000/- Rs.2,08,110/- 14416% 6 Hanmant Bajirao Desai 5,16,30,000/- Rs.2....
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....2CA by the Transfer Pricing Officer;] (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal [Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section 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 [or the Transfer Pricing Officer, as the case may be,] 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 [Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner,- (a) the order is passe....
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.... to him especially when the assessment order has been passed by the Assessing Officer by closing his eyes and accepting the huge loans and advances despite meager income declared by those lenders. Under these circumstances and in view of the detailed reasoning given by the Ld. PCIT on this issue, we do not find any infirmity in his order invoking the jurisdiction u/s 263 of the Act. We accordingly uphold the same and the grounds raised by the assessee are dismissed. 24. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open Court on 28th May, 2025. ============= Document 1 tecome Tax Department GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT National e-Assessment Centre Delhi 1. PAN AHLPD3766G 2. Name of the assessee DATTATRAYA HANAMANTRAO DESAI 3. Address of the assessee G8 PANDURANG BHAVAN, NEAR DOMINOSE PIZZA MALKAPUR, KARAD 415110, Maharashtra, India 4. Assessment Year 2018-19 5. Status INDIVIDUAL 6. Residential Status Resident 7. Date of filing of Return of Income 31/10/2018 8. Acknowledgement Number of Return of Income 368203781311018 9. Date of processing u/s 143(1)(a) of the Income-ta....