TaxTMI 
TaxTMI 
2025 (6) TMI 944
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....10.2022 and declared its income at Rs. 45,40,270/-. The Assessee, M/s Oliria Foods and Beverages, (PAN- AACCO9015G) is engaged in the business of manufacturing and processing of food items. The return of income filed by the assessee was selected for scrutiny through CASS. Statutory notices as required were issued to the assessee and was served upon. The reason for the selection of the case was to examine the following issue: 1. High Creditors/liabilities 2. Unsecured Loans 3. Expenditure of personal nature 2.1 On selection of case, a notice u/s 143(2) of the I.T. Act, 1961 was issued on 01.06.2023 which was duly served on the assessee and hearing was fixed on 16.06.2023. The assessee did not respond to the said notice. Notice u/s 142(1) of the I.T. Act, 1961 dated 28.09.2023 was issued to the assessee asking it to furnish the details called for in respect of issue flagged with the case. The notice was duly served upon the assessee. The assessee did not respond to the notice. Since the assessee failed to respond to the said notice, a letter dated 19.10.2023 was issued to the assessee requesting it to comply with the notice issued u/s 142(1) of the Act. ....
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....ment and turnover declared by the assessee in its GSTR-3B return filed with GST department. The assessee did not provide any justification as to why there was a difference in turnover declared by it in Income tax return and GST return. Thus, the assessee was asked to reconcile and explain the difference by issue of show cause notice. In reply to the Show Cause Notice dated 21.02.2024, the assessee submitted that the difference was due to sale of fixed assets which was shown in books under the relevant head of 'Fixed Assets' in Balance sheet and thereby reconciled that turnover figure. Ld. AO noted that the assessee did not furnish any supporting documents in support of its claim. In the absence of any conclusive documentary evidence and since the assessee has already claimed the expenditure incurred during the year, the difference in turnover, i.e. Rs. 4,59,890/- was added back to the returned income of the assessee filed for the AY 2022-23. 2.3 Ld. AO noted that during the year under consideration, the assessee company has availed fresh unsecured loan of Rs. 10,24,75,690/- from its directors or shareholders. In response to the notice u/s 142(1) of the I.T. Act, the asse....
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.... and transferring the same to the assessee as an unsecured loan on 20.05.2021 indicates that Mr. Hiralbhai Maheshchandra Rangrej has been acted as an accommodation entry operator / agent. Whereas in the case of bank account statement submitted by Mansukhbhai Dalsukhbhai Parmar also, the same pattern is noticed. On 22.04.2021, an amount of Rs. 5,73,795/- was credited and on 23.04.2021, an amount of Rs. 6,00,000/- was transferred to the assessee. Again on 29.06.2021, an amount of Rs. 10,00,000/- was credited and on 30.06.2021, the same amount was transferred to the assessee. On careful perusal of the statement of bank account of Mr. Mansukhbhai Dalsukhbhai Parmar, it appears that Mr. Mansukhbhai Dalsukhbhai Parmar is an accommodation entry provider of the unsecured loan as the credit worthiness of the party could not be established. Receiving an amount of Rs. 5,73,795/- on 22.04.2021 & Rs. 10,00,000/- on 29.06.2021 and transferring the same to the assessee as an unsecured loan on 23.04.20218 30.06.2021 respectively indicates that Mr. Mansukhbhai Dalsukhbhai Parmar has been acted as an accommodation entry operator/agent. In the bank account submitted by Mr. Natvarbhai Varsanbhai Bariy....
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....al Sanghvi (HUF) was examined and it was noticed that Rs. 14,28,897/- was credited on 27.05.2021 and Rs. 9,00,011/- was transferred to the assessee on 28.05.2021. On 31.05.2021 Rs. 2,21,000/- was credited in his account and on the same day Rs. 7,50,011/- was transferred to the assessee. No other significant transaction is noticed in the said bank account. Ld. AO thus noted that all the lenders have acted as accommodation entry providers as the creditworthiness of the lenders and genuineness of unsecured loans could not be ascertained. The transactions are not normal business transactions. The assessee also did not explain the nature of these unsecured loans nor furnished complete documents. Therefore, it is reasonably concluded that the unsecured loans to the tune of Rs. 10,24,75,690/- are nothing but accommodation entries. Having observed so ld. AO issued a show cause notice dated 21.02.2024 and the assessee furnished the reply on 04.03.2024, ld. AO considered the reply of the assessee and found that the same were not acceptable based on the reasons as discussed herein above. Hence, he holds that the transaction of accommodation entry in the form of unsecured loan to the tune of R....
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.... A.Y 2022-23 vide sl. no. 40 of form 3CD as per below: In view of above report it is observed despite turnover increases from Rs. 4,67,60,488/- in preceding previous year to Rs. 19,64,96,990/- this preceding year, Gross profit to Turnover ratio decreases / reduces from 32.60% to 17.27% this preceding year. Simultaneously Net profit to Turnover ratio decreases / reduces from 6.00% to 1.34% in the year under consideration. The above two ratios again increases in the next financial year i.e in the F.Y 2022-23 i.e in the A.Y 2023-24 from 17.27% to 27.91% and from 1.34% to 2.73% respectively when the purported loan has been repaid though the turnover figure has been changed from Rs. 19,64,96,990/- to 19,84,96,990/- as well as Net profit amount changed from Rs 26,87,244/- to Rs. 38,47,296/- along with change of net profit % from 1.34 to 1.94 as per the reproduction of the relevant portion of the Audit report as under : In view of above after considering the submission of the appellant I find that the appellant have claimed to have established the genuineness of loan transaction undoubtedly. But I find from the assessment order that the AO has doubted genuineness of said....
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....iled by the assessee was decided against the assessee by the ld. CIT(A). Feeling dissatisfied with order, the assessee appellant preferred the present appeal before this tribunal on the following grounds of appeal: "1. In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the action of the 1 Learned Assessing Officer in completing the assessment u/s 144/144B of the Income Tax Act, 1961 inspite of making all the compliances against the notice issued by the learned AO. 2. In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 4,59,890/- made by the Learned Assessing Officer on account of business profit without considering the submission of the assessee that this was sale of assets which was appearing on GST portal and not sales. 3. In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 10,24,75,690/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 inspite of furnishing all evidences regarding identity, creditworthiness and genuineness of the tr....
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....sponse to notice u/s 142(1) issued by the Learned Assessing Officer, the assessee furnished the complete names, addresses, confirmation with PAN, copy of ITRs, copy of bank statement etc. in respect of creditors from whom the assessee had taken unsecured loans to start a new joint venture project. All these unsecured loans were returned to the creditors in subsequent years. During the course of assessment proceedings, the Learned Assessing Officer also conducted independent inquiry from some of the creditors by issuance of notices u/s 133(6). The assessee also furnished detailed reply on 04/03/2024 to the show-cause notice dated 21/02/2024 issued by the Learned Assessing Officer. A copy of this reply dated 04.03.2024 is available on Paper Book Page No. 680 to 687. The confirmation, copy of ITR and copy of bank account of the creditors were also filed before the Learned Assessing Officer. However, the Learned Assessing Officer, without properly appreciating the facts of the case and the written submission and details filed by the assessee, completed the assessment u/s 144 read with Sec. 144B of the Income Tax Act, 1961 on 16/03/2024 by making the following additions :- 1 Addit....
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....en, the learned CIT(A) did not provide any opportunity to the assessee for submitting the reply in this regard. Aggrieved with the order of the learned CIT(A) the assessee is in appeal before the Hon'ble Tribunal. It is submitted that while filing appeal the following grounds could not being taken due to inadvertence. The same is being taken as Additional Grounds. The Additional Grounds arise out of the order of the Learned CIT(A). The admission of the same is imperative for imparting justice in the case. The Additional Grounds are as under:- Additional Ground No. 1 & 2 - (1) In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the additions of Rs. 10,24,75,690/- on a different ground i.e. assessee failed to specify the purpose of loans without affording any opportunity to the assessee in this regard. (2) In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the additions of Rs. 10,24,75,690/- on a different ground that assessee failed to explain the phenomenal fall in Gross Profit and Net Profit without affording any opportunity to the assessee in t....
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....der) In view of the aforesaid observation of the Learned CIT(A) it is submitted that the same is totally irrelevant. For determining the genuineness of cash credits. It is of little avail as for what purpose the same were obtained. Further before confirming the addition on this ground, the Learned CIT(A) never afforded any opportunity in this regard. The Learned CIT(A) never asked the assessee to furnish and divulge the purpose for which the loans were taken. The action of the Learned CIT(A) in confirming the cash credits on this ground is against the principles of equity and justice. Therefore, the action of the Learned CIT(A) deserves to be quashed. It is further submitted that although the Learned CIT(A) did not furnish any opportunity to the assessee to disclose the purpose of loans but while filing the appeal the assessee has disclosed in the column 11 (statement of facts) "Here it is worthwhile to mention that during the year under consideration the assessee has entered in MOU with other corporate entity to start a new joint venture project and the whole money was advanced to M/s Nakshatra Corporate Advisors Limited, Nagpur for setting up of new project in j....
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.... ground which was neither disclosed to the assessee nor such ground was taken by the Learned Assessing Officer. The Learned CIT(A) has observed in the appellate order as under: - In course of appeal proceedings it is observed from the Tax Audit report for the A.Y 2022-23 vide sl. no 40 of form 3CD as per below : In view of above report it is observed despite turnover increases from Rs. 4,67,60,488/- in preceding previous year to Rs. 19,64,96,990/- this preceding year, Gross profit to Turnover ratio decreases / reduces from 32.60 % to 17.27% this preceding year. Simultaneously Net profit to Turnover ratio decreases / reduces from 6.00 % to 1.34% in the year under consideration. The above two ratios again increases in the next financial year i.e in the F.Y 2022-23 i.e in the A.Y 2023 -24 from 17.27% to 27.91% and from 1.34% to 2.73% respectively when the purported loan has been repaid though the turnover figure has been changed from Rs. 19,64,96,990/- to Rs. 19,84,96,990/- as well as Net profit amount changed from Rs. 26,87,244/- to Rs. 38,47,296/- along with change of net profit % from 1.34 to 1.94 as per the reproduction of the relevant portion of the Audit report....
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.... the Learned Assessing Officer and submitted desired information from time to time yet the Learned Assessing Officer has erroneously and unlawfully has completed the assessment u/s 144. This is apparent from the following observation of the Learned Assessing Officer - "3.2.3 For the sake of natural justice, as per provisions of section 144B(1)(ix) of the IT Act, one more opportunity was given to the assessee to show cause as to why the assessment should not be completed to the best of its judgment invoking the provisions under section 144 rws 147 of the IT Act. Accordingly, a Show Cause Notice u/s 144 r.w.s 147 of the IT Act was issued on 21.12.2023 asking to submit response on or before 28.12.2023. The assessee responded and sought adjournment. The assessee filed its reply on 06.01.2024 and furnished copy of ITR alongwith computation of income, Audit Report and details of shareholders etc. A centralized communication was also sent to the assessee on 18.01.2024 to which the assessee replied on 20.01.2024 and furnished details of unsecured loan. Another notice 142(1) of the I.T. Act was issued to assessee on 01.02.2024 requesting the assessee to furnish the details of trade....
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.... completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under sub-section (2), the Assessing Officer may make an assessment in the manner provided in section 144. The perusal of the aforesaid section reveals that it is the mandate of section 145 that before completing assessment u/s 144 the Learned Assessing Officer is required to reject the books of accounts u/s 145(3) on the ground that the Learned Assessing Officer was not satisfied with the correctness and completeness of the same or the method of accounting has not been regularly followed. It is submitted that in the entire assessment order the Learned Assessing Officer has not observed nor has given any such finding. In view of this the completion of assessment u/s 144 is bad in law. The same deserves to be quashed. The following case laws are quoted in support - (i) DCIT vs. Swananda Properties Pvt Ltd (2020) 15 ITR OLD 128 (Bom) (ii) CIT Vs. Anil Kumar & Co. (2016) 386 ITR 702 (Kar) (iii) PCIT Vs. Marg Ltd (2017) 39....
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....h assessee fully explained the discrepancy, yet the Learned CIT(A) in a very causal manner disregarded the submission of the assessee and upheld the addition made by the Learned Assessing Officer. The humble submission of the assessee is that the Hon'ble ITAT may kindly consider the aforesaid submission and grant relief to the assessee. Ground No. 3 & 4- (3) In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 10,24,75,690/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 inspite of furnishing all evidences regarding identity, creditworthiness and genuiness of the transaction. (4) In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making addition of Rs. 10,24,75,690/- without making any enquiry from the loan creditors or without brining any adverse material on record that the transaction is not genuine only on the basis of assumption and presumption inspite of that loan has been repaid in subsequent years. During the course of appellate proceedings....
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.... been treated by the Learned Assessing Officer as unexplained and added to the income of the assessee u/s 68 of the IT Act. The grounds on which additions have been made by the Learned Assessing Officer are as under :- (i) Scrutiny of bank account of few creditors . The Learned Assessing Officer has mentioned on page 6 of the assessment order that examination of the bank account of some of the depositors revealed that in the relevant account, amount of the same value which has been advanced to the assessee has been deposited immediately before transferring to the assessee. The Learned Assessing Officer has entertained doubts and suspicion about such nature of deposits in the bank account before transferring the same to the assessee. Secondly, the Learned Assessing Officer has further observed that besides the amount transferred to the assessee, the other transactions in the bank account are of small monetary value. The Learned Assessing Officer has further observed that the return of income filed by these depositors discloses income ranging from Rs. 3 lac to Rs. 4 lac. In view of these facts, the Learned Assessing Officer was of the view....
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....e Learned Assessing Officer has further discussed on Page 30-35 the bank accounts of certain depositors, a few of them are discussed below, which shows that the Learned Assessing Officer did not examine the bank accounts in proper perspective. After examining the bank accounts of these depositors, the Learned Assessing Officer has made the same observations that amounts in the accounts has been credited only a few days earlier to transferring the same to the assessee. Further, apart from the amount transferred to the assessee, other transactions are of insignificant amount. In some cases, the opening and closing balances were of little amount. On the basis of these facts, the Learned Assessing Officer has given a finding that the depositors are only accommodation entry providers and creditworthiness of the parties could not be established. It is submitted that the Learned Assessing Officer was not justified in making addition by making superficial allegations. The examination of bank account of the depositors is not wholesome. The Learned Assessing Officer was not justified to hold that the depositors were entry providers without bringing any material on record. T....
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....tified. All the deposits are genuine and deserve to be accepted. (b) Examination of bank account of depositors The Learned Assessing Officer has made sweeping generalizations by making superficial observations in respect of the bank account of the depositors. First of all, the assessee takes up for discussion certain cases which the Learned Assessing Officer has made basis and has discussed the same on Page 29 to 35 of the assessment order. These are discussed as under :- 1. Hiralbhai Maheshchandra Rangrej : Rs. 10,00,000/- It is the case of the Learned Assessing Officer that in this case, amount of Rs. 10,00,000/- has come in the account on 19/5/2021 and transferred to the assessee on 20/05/2021. The opening balance are meagre. However, it is submitted that the amount of Rs. 10,00,000/- has come in the bank account on 19/5/2021 through RTGS. There is no cash deposit. Further the copy of account also discloses that the assessee was having balance of Rs. 1,95,665/- on 21/9/2020. There is another transaction of Rs. 1,83,000/- transferred to Shri Ajay D Gajjar on 22/9/2020. Therefore, it cannot be said that deposit with the assessee of Rs. 10,00,000....
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....pted. 4. Shivrambhai Adabhai Choudhari : Rs 9,00,000/- In this case also, the observations of the Learned Assessing Officer are in respect of a part of the bank account. The Learned Assessing Officer has restricted his observation to the deposit on 28/5/2021, which has been transferred on the same date to the assessee. However, on 25/5/2021 also, there is transfer of amount to some other party and on this very date, there is transfer of Rs. 3,70,000/-. These facts show that the multiple transactions of heavy amounts reflect that the assessee was having capacity to deposit money with the assessee. The Learned Assessing Officer has ignored the fact that it is not only on 28/5/2021 that amount of Rs. 9,00,000/- has come in the bank account which has been transferred to the assessee, but on 24/5/2021 also Rs. 12,69,422/- also came to the account through RTGS and the same was transferred on 25/5/2021 to some other parties. These facts establish that the depositor was having capacity to deposit Rs. 9,00,000/- with the assessee. Further, the loan of Rs. 9,00,000/- has been repaid by the assessee on 2/1/2023 through cheque. Copy of ledger account is available on ....
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.... very restricted observation that amount of Rs. 6,00,000/- and Rs. 4,00,000/- was credited in the account of the depositor on 24/5/2021 and transferred to the account of the assessee on the same date. However, the Learned Assessing Officer has ignored the other transactions available in the bank account of the depositor. The opening Balance as on 13/4/2021 is of Rs. 10,02,579/-. Further, amount has come in the account of the depositor of Rs. 1,74,000/- on this very date, i.e. 13/4/2021. Again the depositor has advanced Rs. 10,00,000/- on 13/4/2021 to M/s Shiv Buildingcom. This shows that the assessee was making advances to other parties also. The deposit with the assessee is not a lone transaction. Further, all transactions are through RTGS. There is no cash deposit in the account of the depositor. Further, the loan of Rs. 10,00,000/- has been repaid by the assessee on 10/01/2023 through cheque. Copy of ledger account is available on Paper Book page number cited supra. Thus, the amount advanced to the assessee is well explained and deserves to be accepted. 8. Abhishek Praveenbhai Prajapati : Rs. 4,00,000/- The Learned Assessing Officer has mentioned that the copy ....
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....able on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. Examination of bank account of other depositors Now after discussing the bank accounts of depositors, which have been wrongly and adversely commented by the Learned Assessing Officer, the assessee submits details of bank accounts of other depositors, which establish the source of deposits in a clear-cut way. It is submitted that the bank accounts discussed above in respect of nine depositors also disclose that - (a) The deposit with the assessee was not the only transaction in the bank account of the depositor ; (b) The bank account contain no cash deposit ; (c) All the transactions in the bank account are through RTGS and other electronic modes ; (d) There are multiple transactions of deposits and withdrawals in these accounts The position being so, the deposit made with the assessee by the depositors is well explained and deserves to be accepted. It is further submitted that the Learned Assessing Officer was wrong in treating all the deposits as unexplained on the basis of wrong analysis of the bank....
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....h cheque. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (3) Balubhai Jivanbhai Narigara : Rs. 6,00,000/-(S.No.12) Copy of bank account with Federal Bank for the period 8/1/2019 to 26/5/2021 is available on Paper Book. The perusal of bank account reveals that there are credits in the bank account on 10/2/2019 of Rs. 6,00,000/- Rs. 2,45,000/- and Rs. 3,95,500/-. These amounts have been advanced on 13/2/2019 to Spintex through RTGS Rs. 12,40,000/-. There is again a credit of Rs. 3,46,500/- on 14/10/2020 and out of this Rs. 1,96,500/- has been advanced to Jinal Rahul on 17/10/2020. The assessee has received Rs. 6,00,000/- on 26/5/2021 against credit of Rs. 5,99,900/- on 25/5/2021. The above details of multiple transactions fully explain the capacity of the depositor. Further, the loan of Rs. 6,00,000/- has been repaid by the assessee on 28/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (4) Bhavnaben Pravin Bhai Vaghani :....
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....same deserves to be accepted. (6) Denish Rajendra Kumar Patel (Rs. 6,00,000/-) Copy of Bank account with Karur Vysya Bank Ltd for the period 01/08/2019 to 27/5/2021 is available on Paper Book. The examination of the bank account reveals that there are multiple credits on 09/10/2019 totalling to Rs. 5,00,000/-., which has been advanced on 10/10/2019 to Paresh R Patel. Again there is credit of Rs. 5,00,000/- on 17/10/2019 from Rana N. and Rs. 5,25,000/- has been advanced to Vinov V. Patel on 19/10/2019. The bank account further reveals credit of Rs. 5,25,000/- on 10/08/2020 by way of RTGS from Vinod and the same has been advanced through RTGS to Sai Somnath Deb on 11/8/2020. Again, there are credits on 11/8/2020 of Rs. 5,00,000/- which has again been advanced on 15/9/2020 to Unique Construction through RTGS. The assessee has received Rs. 6,00,000/- on 27/5/2021 against deposit in the bank account of Rs. 6,00,000/- on 26/5/2021 through RTGS from Daimeco Patel. In view of the aforesaid facts and multiple transactions, the financial capacity of the depositor is wellestablished. Further, the loan of Rs. 6,00,000/- has been repaid by the assessee on 30/1/2023 through ban....
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....ons of heavy amount establish the financial capacity of the depositor. Further, the loan of Rs.10,00,000/- has been repaid by the assessee on 16/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Hence, the deposit in the hands of the assessee of Rs. 10,00,000/- is fully explained and the same deserves to be accepted. (9) Dimpleben Chintal Kumar Surati : Rs. 5,00,000/- Copy of Bank account with Surat District Co-operative Bank Ltd for the period 7/4/2021 to 24/09/2021 is available on Paper Book. The examination of the bank account reveals that there is credit of Rs. 5,27,408/- as receipt from Dhami Developers on 7/4/2021 and Rs. 5,00,000/- has been advanced on 8/4/2021 to Shreyans Jain. Further, Shreyans Jain has returned the amount on 17/4/2021 and the same has been advanced to the assessee on 19/4/2021. The trail of amount establishes that the source of deposit with the assessee is fully explained. There are further transactions in the account as credit of Rs. 3,00,000/- on 18/6/2021 and again credit of Rs. 3,38,230/- on 7/7/2021 and Rs. 5,00,000/- on 24/9/2021. The depositor has advanced Rs 3,00,0....
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.... source of amount of Rs. 9,11,500/- is well-established and the same deserves to be accepted. Further, the multiple transactions running into several lacs also establish the financial capacity of the depositor. Further, the loan of Rs.9,11,500/- has been repaid by the assessee on 16/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (12) Divyesh K Kania : Rs. 5,00,000/- Copy of Bank account with Karur Vysya Bank for the period 1/8/2019 to 31/5/2021 is available on Paper Book. The examination of the bank account reveals the following credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. Narayan Impex 22/10/2019 2,65,000 RN Enterprises 22/10/2019 2,30,000 S&L Impex 24/10/2019 5,00,000 Bhoomik 24/10/2019 5,00,000 S&L Impex 25/10/2019 5,00,000 Apex Traders 19/12/2019 5,00,000 Sanol Impex 20/12/2019 5,00,000 Kania Divya 29/5/2021 5,0....
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....here are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. Further, the loan of Rs. 7,50,000/- has been repaid by the assessee on 31/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (15) Harshaben Ghanshyam Bai Patel : Rs. 9,80,000/- Copy of Bank account with Bank of India for the period 11/6/2020 to 07/08/2021 is available on Paper Book. The examination of the bank account reveals the following credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. Sumangal Infra 7/10/2020 5,54,968 Alpha Infra 8/10/2020 5,00,000 Vara 17/6/2021 11,77,916 Arvindbhai Dhirubhai 19/6/2021 2,50,000 Hariya Vinabehan 19/6/2021 3,00,000 Harvind Kr. Nagardas 19/6/2021 3,00,000 Jitendra Mafatlal 19/6/2021 3,00,000 RTGS PNB 28/6/2021 4,95,000 Oliria Foods 29/6/2021  ....
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..../2021 8,41,500 Kavin Kumar Choksi 2/2/2021 8,41,500 Prajapati Jayanti Bhai 29/5/2021 6,00,000 Oliria Foods 31/5/2021 6,00,000 The above transactions in the bank account establish the financial capacity of the depositor. There are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. Further, the loan of Rs. 6,00,000/- has been repaid by the assessee on 28/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (18) Jinal Rahul Rajput : Rs. 7,00,000/- Copy of Bank account with Surat Peoples Co-operative Bank Ltd. for the period 07/11/2019 to 1/6/2021 is available on Paper Book. The examination of the bank account reveals the following major credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. By Clg 30/06/2020 2,50,000 RTGS Paraesh Ramjibhai Patel 16/10/2020 5,15,587 Balubhai Jivanbhai Nariga ....
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.... 3,00,000 Bhara 16/9/2019 4,00,000 Javan 16/9/2019 5,00,000 Bharat 17/9/2019 3,50,000 Bharat 17/9/2019 2,25,000 Bharat 17/9/2019 3,25,000 Neft SPCEN 29/5/2021 5,00,000 Oliria 31/5/2021 5,00,000 The above transactions in the bank account establish the financial capacity of the depositor. There are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. Further, the loan of Rs.5,00,000/- has been repaid by the assessee on 30/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (21) Kalpana S. Rathod : Rs. 5,00,000/- Copy of Bank account with Federal Bank for the period 15/4/2019 to 1/6/2021 is available on Paper Book. The examination of the bank account reveals the following major credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. Ashok Bhai 10/09/2019....
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....ted supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (23) Prakash Bhai Khimjibai Patel : Rs. 9,50,000/- Copy of Bank account with Associate Co-operative Bank Ltd for the period 1/12/2020 to 6/9/2021 is available on Paper Book. The examination of the bank account reveals the following major credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. Th. RTGS 1/3/2021 10,00,000 Monica Fab. 1/3/2021 10,00,000 Blue Moon Textiles 3/4/2021 7,00,000 Haripriya 3/4/2021 7,00,000 Shiv Enterprises 5/5/2021 9,52,070 Oliria Foods 5/5/2021 9,50,000 RTGS 6/9/2021 11,30,654 Haripriya 6/9/2021 11,30,000 The above transactions in the bank account establish the financial capacity of the depositor. There are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. Further, the loan of Rs. 9,50,000/- has been repaid by the assessee on 30/1/2023 through banking channel. Copy....
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....r Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. (26) Upendra Somabhai Paramar : Rs. 8,00,000/- Copy of Bank account with Bank of India for the period 1/4/2021 to 23/8/2021 is available on Paper Book. The examination of the bank account reveals the following major credits and debits :- Name of party Date Deposited in bank account (Cr) Withdrawn from the bank account (Dr. Vara 17/6/2021 9,42,333 S.C. Patel 18/6/2021 1,00,000 HS Parmar 18/6/2021 1,00,000 Amruta Enterprises 19/6/2021 45,000 Hemant Kr. Mafatlal 19/6/2021 2,00,000 Ashwani Nagbhai 19/6/2021 2,00,000 Vinod Sambhai 19/6/2021 2,50,000 S.O.L Limited 28/6/2021 4,94,000 Oliria Foods 29/6/2021 4,90,000 S.O.L. Ltd 29/6/2021 4,06,000 Oliria Foods 1/7/2021 4,10,000 The above transactions in the bank account establish the financial capacity of the depositor. There are no cash deposits in the bank account. The deposit with the ass....
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.... are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. Further, the loan of Rs. 7,00,000/- has been repaid by the assessee on 19/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. Therefore, the deposit in the hands of the assessee deserves to be accepted. The above transactions in the bank account establish the financial capacity of the depositor. There are no cash deposits in the bank account. The deposit with the assessee is not the lone transaction in the bank account. In view of this, deposit with the assessee is fully explained. SCRUTINY OF THE BANK ACCOUNTS ESTABLISHES GENUINENESS OF THE DEPOSITS It is submitted that the examination of the bank accounts both of those which were discussed by the Learned Assessing Officer in the assessment order numbering nine and other bank accounts which have been discussed above numbering 28 disclose the following features, which establish that the depositors were genuine and not entry providers. All the depositors were in a capacity a deposit amount with the assessee. These features are discu....
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....e bank account are through electronic mode of transfer. The mode of transfer is beyond suspicion. 5. It is further submitted that in a large number of cases, the copies of bank accounts submitted are for a year or more. Therefore, it cannot be said that bank account was just opened for advancing money to the assessee. The bank accounts of the depositors are of regular nature and these are in various banks and not in one bank. This also establishes that money received by the assessee was in a normal and regular course and not in arranged manner. 6. It is further submitted that as per copy of ledger accounts, the money received by the assessee has been returned in the subsequent years. Returning money further establishes that the deposits received by the assessee were genuine. 7. In view of these facts, the deposits may kindly be treated as genuine. The additions have been made in a most unusual manner. The Learned Assessing Officer has examined the bank accounts only of few depositors (only eight depositors) and that too faultily. Then addition has been made in the case of 121 depositors more on the basis of suspicion, assumption and presumption. It is set....
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.... notices under s. 131 at the instance of the assessee, did not pursue the matter further-Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the allowed loans-Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence- (2) Aravali Trading Co. V/s ITO (2008) 8 DTR (Raj) 199 Hon'ble Rajasthan High Court The Hon'ble High Court held that once the the existence of the creditors is proved and such person own the credits which are found in the books of the assessee, the assessee's onus stand discharged and the latter is not further required to prove the source from which the creditors could have acquired the money deposited with him either in terms of section 68 or on general principle. (3) CIT Vs. Jai Kumar Bakliwal (2014) 101 DTR 377 (Raj) Once the amount was advanced by the creditors by account payee cheque from their respective bank accounts and the creditors were being assessed to income tax, the capacity of the cred....
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....lery mart (P) Ltd Vs. DCIT (2018) 99 taxmann.co, 408 (Mad) Where the assessee company had completely explained sources of investments received by it by way of share application money, it had also disclosed identity of such investors and all payments had been received through banking channels, amount of share application money could not be treated as assessee's undisclosed income under section 68. (9) DCIT Circle 3(1)(I) vs. Orient News Prints Ltd (2018) 259 Taxman 408 (SC) Where in order to prove the genuineness of share transactions, assessee brought on record all relevant facts, such as, names, address, PAN of share applicants, it was thereupon the duty of the AO to obtain separate confirmation from concerned parties, if required, and where he failed to do so, it could not be a ground to reopen assessment. In the light of discussion made above, it is clear that the Learned Assessing Officer was not justified to hold that the depositors were accommodation entry providers without bringing any material on record. The addition made by the ld. AO is illegal and unjust and based on suspicion, surmises, guesswork and conjectures and the same deserves ....
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....p or manipulated in any way. In view of this the Hon'ble ITAT is requested to admit the additional evidence and consider the same favourably. The following case laws are quoted in support for the admission of the additional evidence. 5. Favourable case laws - (i) National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee, notwithstanding the fact that same was not raised before the lower authorities. (ii) CIT Vs. Raoraja Hanut Singh 117 Taxman 613 / 252 ITR 0528 : (Raj) The position is that the Tribunal can admit the additional evidence if it requires it to enable it to pass orders (iii) Electra (Jaipur) Pvt Ltd. vs. IAC 26 ITD 236 If evidence produced by assessee is genuine, reliable and proves assessee's case than assessee should not be denied opportunity of it being produced even if he first time produces same before appellate authority. (iv) Smt. Prabhavati S. Shah Vs. CIT 231 ITR 1 (Bom.) Production of additional evi....
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.... separate application is being filed along with this application. The admission of the additional grounds is imperative for imparting justice in the case of the assessee. Therefore, the Hon'ble Tribunal may kindly admit the additional grounds, which are as under :- Additional Ground No.1 In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the additions of Rs. 10,24,75,690/- on a different ground i.e. assessee failed to specify the purpose of loans without affording any opportunity to the assessee in this regard. Additional Ground No.2 In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the additions of Rs. 10,24,75,690/- on a different ground that assessee failed to explain the phenomenal fall in Gross Profit and Net Profit without affording any opportunity to the assessee in this regard. The additional grounds arise out of the order of the learned CIT(A), hence, the same deserve to be admitted by the Hon'ble Bench. The following decisions are quoted in support - (i) National Thermal Power Co. Ltd. Vs. CIT (....
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....) 120 TTJ 1001 (Jodh) Appeal (Tribunal)- Additional ground-Admissibility-Ground challenging jurisdiction of AO to initiate reassessment proceedings not raised before AO or CIT(A)-Being a pure question of law can be raised before the Tribunal for the first time. In view of the aforesaid facts, the Hon'ble Tribunal is requested to kindly admit the additional grounds. 9. To support the contention so raised in the written submission reliance was placed on the following evidence / records : Sr. No. Particulars Page No. 1. Copy of acknowledgement of return of income filed on 04/10/2022 with computation of total income 1 2. Copy of audit report along with audited accounts 2-39 3. Chart of 121 creditors, containing their names, complete addresses, PAN, Amount of deposit and source of deposit etc. 40-52 4. Evidences in support of identity of the creditors, their creditworthiness and genuineness of transactions - i.e. (i) Copy of confirmation of all cash-creditors. 53-172 (ii) Copy of Income Tax returns of the cash creditors. 173-286 (iii) Copy of bank account of the cash creditors through wh....
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....tional evidence placed on record the addition made is required to be deleted. Ld. AR of the assessee also submitted that the assessee has repaid all the unsecured loans taken and therefore, considering the decision of the Hon'ble Gujarat High Court the addition made is required to be deleted. 11. The ld. DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). Ld. DR so far as the issue of addition u/s. 68 of the Act vehemently argued that the bank account of all the depositors are maintained in unusual manner and all are not having the capacity to advance the loan and thus ld. DR repeated all those contentions which are recorded in the orders of the lower authority. 12. We have heard the rival contentions and perused the material placed on record. In this appeal the assessee raised technical ground as well as on the merits of the case. On merits the assessee challenges the two-addition made by the ld. AO and sustained by the ld. CIT(A). The first addition is of Rs. 4,59,890/- made by the Learned Assessing Officer on account of business profit without considering the sub....
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....ined by the assessee stating that this was because there were sales of Rs. 5,10,500/- of fixed assets, which was not part of trading account. A chart reconciling the discrepancy was submitted during assessment proceedings, which has been reproduced by the Learned Assessing Officer at page 5 of the assessment order which is reproduced herein below:- Oliria Foods & Beverages Pvt Ltd A-130(H), Road No 9D, VKI Area, Jaipur Turnover as per Balance Sheet in audit report 19,84,96,990.00 Other Income show in Balance sheet 1. Duty Draw Back 810.00 2. Interest income on FDR 44,142.00 3. Interest on Security Dep with JVVNL 5,653.00 50,605.00 Total 19,85,47,595.00 Turnover as per GST Return 19,90,07,490.00 Less Fixed Assets sales trf to relvant head 1. Vibrating Screen, Mixer, Convayer & Pulver 1,10,000.00 2. Electric Transformer 4,00,500.00 5,10,500.00 Net Turnover 19,84,96,990.00 Both the lower authority confirmed that addition on the grounds that the assessee could not support this contention with t....
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....unsecured loan to the assessee is done in an unusual manner and thereby he discussed all that observation in the assessment order that there are transaction of exact value or near to the value is deposited in the lender's bank account and immediately transferred to the bank account of the assessee. He also noted that all the transactions in the bank account of the lender were very small monetary value, and they have filed the ITR in the range of Rs. 3,00,000/- to Rs. 4,00,000/-. ITR and bank account statement of some of the lenders submitted by the assessee were reproduced in the order of the assessment vide page 6 to 28 by the ld. AO. On that test check result ld. AO noted that all the lenders have acted as accommodation entry providers as the creditworthiness of the lenders and genuineness of unsecured loans could not be ascertained. The transactions are not normal business transactions. The assessee also did not explain the nature of these unsecured loans nor furnished complete documents. Therefore, it is reasonably concluded that the unsecured loans to the tune of Rs. 10,24,75,690/- are nothing but accommodation entries. Having observed so ld. AO issued a show cause notice ....
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.... so as to prove the identity, genuineness and creditworthiness were proved by placing on record the confirmation [ paper book page 53- 172], bank statement [ paper book page 287-485] and ITR [ paper book page 173-286] which will prove the primary burden cast upon the assessee. The assessee filed all the document by a paper book and ld. AO through the ld. DR did not object on any of the records and therefore, there is no reason to that the assessee has not filed all the records to prove the burden cast upon them. Even ld. AO issued 133(6) letters asking for the details which were complied by all the 8 parties out of 120 depositors details available with the ld. AO. The assessee further submitted that the use of funds obtained by way of unsecured loans were required to be used for acquiring an unit which was available on stress sale. But since the deal could not be materialized the assessee repaid those amounts so taken and for that ledger accounts were placed on record [ paper book page 486-609]. The assessee has also placed on record copy of bank account from where those loans were repaid [ paper book page 610-679]. Even the assessee placed on record the purpose of the taking huge ....
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....aid all the unsecured loan so taken and therefore, even as held by Hon'ble Bombay High Court in the case of Principal Commissioner of Income-tax v. Bairagra Builders (P.) Ltd [2024] 164 taxmann.com 162 (Bombay) has held that ; 3. It is apparent from a review of the record that at both stages of appeals preceding this Appeal, there were concurrent findings of fact in favour of the assessee, namely, that the genuineness of the unsecured loan transactions cannot be questioned. In a nutshell, the Impugned Order notes that the assessee has submitted all the evidence to substantiate the loans in question, including confirmation from the creditors. That apart, the loans were taken and repaid through banking channels. The ITAT has also ruled that bank statements too substantiate the same. So also, the lender has not deposited any cash into his bank accounts. Both the rounds of appeals prior to this Appeal have held that the assessee has duly discharged the onus of proving the identity of the lenders, credit-worthiness and all supporting evidence as required under Section 68 of the Income Tax Act, 1961 ("the Act"). 4. The record shows that the disallowance of the unsecured....
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....reason to sustain the addition of Rs. 10,24,75,690/-. Thus, ground no. 3 & 4 and additional ground no. 1 & 2 raised by the assessee are allowed. Ground no. 1 being technical becomes academic as we have considered the grounds of appeal on merits. Ground no. 5 being general does not require any finding. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17/04/2025. ============= Document 1 Acknowledgement Number : 615673371041022 Date of filing : 04-OCT-2022 SCHEDULE SH-1 SHAREHOLDING OF UNLISTED COMPANY (other than a company that is registered under section 8 of the Companies Act, 2013 (or section 25 of the Companies Act, 1956) or a company limited by guarantee under section 3(2) of Companies Act, 2013 or a start-up for which Schedule SH-2 is to be filed up) If you are an unlisted company, please fumish the following details: Details of shareholding at the end of the previous year LARA 12:48 1M 124.77.490 - 10 DIMDALIÊN CHINT - 19 AHFAR CHIRAG 2021-06-10 ----- - 19 - -- WAUWWANT MAGA 202-0421 19 & RATHOD 1 NEMA RATESHVA GITAREN RALUY....
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....ion Quantity Ofens Cost of accattion FAN Opening Balance Chuning balance ABHISHEK PRAV EDNEHA PRAJAP € 4.50 000 AJAY ISHATAR EN A DAJERA ALHABEN SANAY BHA RATHOO DANER - 15.30.000 ANL HIRABHAICH ALCHAR AXONPCH - ALHABEN SANAY BHA RATHOO ANL HIRABHAICH ALCHAR Document 6 Acknowledgement Number : 615679971041022 Date of filing : 04-OCT-2022 ALANDA AAND AIMAI TUVAA ARUNADEN LALIT ARVINDOHAI TAO 1000.000 12.20.000 ASSALEN RATHO D - 4,00.000 ER-OHA RAND 9 11.0000 8 00.000 IRAQIYA MAMENG RA BANOHIM SPARÌ' 14.06.000 VEAMEHA PUNC BHARATBỀN MAY UREHA PATEL . BEOPVI BUAL DASHATH 4,000,000 ATYPOS ACRPMQ 1.06. 000 DANCOMEN KALA 14:00 000 14.00.000 DARKHOUDEN 7.06.000 DATABEN PLANAS CONFES 1.52 000 DL COMCRATO . NATAK AX/1-6 7.00.000 7.30.000 DIUPALIEN RALE 7100 12:00.20G 12.26.000 DIVPLETEN CHIN TAUG/MAR 4 1.20.00 DIESHHAI VELA . Document 7 Date of filing : 04-OCT-2022 Acknowledgement Number : 615679971041022 ....
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.... 198496990 Gross profit / Tumover 58056994 208036277 27.91 34278928 199496990 17.27 Net profit / Turnover 5687756 208036277 2.73 3847295 196496990 194 Stock-in-Trade / Tumover 6528318 208036277 3.14 12224703 198496990 5.15 (e) Material consumed / Finished goods produced 0.00 0.00 Document 12 Acknowledgement Number: 341415760 FORM 3CA (See rule 60(1)(%)] Aust moort under section 4438 ofthe income tax Act. 1962 in a case where the accounts of the business or profession of a person have a we report that the siabulury sudk of DURIA POCOS AND BEVERAGES LIMITED Name Assess AACCO10150 PAN was conducted By mis AMIT GGYAL & CO in pursuance of the provisions of the Companies Act, 2013 Nd We sonx hanche a copy of our suất report Ä‘Æ°á»ng 06-Sep 2023 sÆ°Æ¡ng nlh & Giấy tách gt a. the sudore profit and loss account for me peroo beginning tram 08-Apr-2022 1 anding on 31.Ater-2023 D me sudree omance svent 85 52 33-8867-2023 : 800 e. documenis declared ty the stid Act te be part of, or anneund to, the profit and loss account and Dance Bent 2. The statement of percursos neoules ts De furnished under section....