TaxTMI 
TaxTMI 
2025 (6) TMI 944
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....0,270/-. 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. The assessee failed to respond to the said letter. Since the asses....
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....ed 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 assessee furnished ledger, copy of ITR and bank account statement in confi....
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....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 Bariya (HUF), it was noticed that on 21.05.2021, an amount of Rs. 7,00,000/....
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....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 Rs. 10,24,75,690/- during the A.Y. 2022-23 and was added as the income ....
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....ite 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 transactions not only in assessment order but also he has established how the loan transactions are rigged and ar....
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....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 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 m....
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....ors 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 Addition on account of difference in turnover as per audit report and GST return Rs. 4,59,890 2 Unexplained cash credits added u/s 68 Rs. 10,24,75,690 Against the order of the Learned Assessing Officer, the asse....
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....ollowing 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 this regard. In the above regard a separate application has been filed for admission of the additional grounds. The Hon'ble Tribunal is humbly requested to admit the additional grounds. The assessee now takes up first the additional grounds for discussion. Additional Ground N....
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....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 joint venture." The Learned CIT(A) perhaps did not go through the facts of the case otherwise he would have avoided confirming the addition on this ground. It is further submitted that during the year under consideration the assessee had entered into an agreement under the name and style "Mandate cum Sourcing Agreement" on 08.03.2021 ....
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.... 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 as under : It is submitted that in the aforesaid para the Learned CIT(A) has discussed the turnover, GP and NP disclosed by the assessee. It is the case of the Learned CIT(A) that The appellant cannot escape from the burden cast upon it and unfortunately in this case the burden is heavy as the facts establish that the transactions which were made by the appellant had pheno....
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....ow 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 creditors/liabilities. The assessee sought adjournment which was granted and the assessee was requested to furnish the details on or before 15.02.2024. The assessee furnished the details of sundry creditors on 15.02.2024." (from assessment order para 3.2.3) 3.3.2 Unexplained cash credit u/s 68 The assessee has furnished the details of unsecured loan for F.Y. 2021-22. The assessee submitted that during the year under....
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....e 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) 396 ITR 580 (Mad) (iv) PCIT Vs. Forum Sales Pvt Ltd. (2024) 468 ITR 392 (Del) It is also relevant to mention that the Learned CIT(A) on the first page of the appellate order has also mentioned that the order appeals was passed u/s 144 of the Income Tax Act, 1961. In the facts and circumstances of the case the order passed u/s 144 deserves to be quashed as the Learned Assessing Officer has not followed the provisions of section 145(3). Ground No. 2 - In the facts and in the circumstanc....
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....ing 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 the assessee submitted a detailed submission regarding the addition made u/s 68 in respect of cash credits of Rs. 10,24,75,690/-. In this submission the assessee emphatically explained that the cash credits were genuine. The assesse furnished evidence of the existence of the cash creditors, their identify was established. The PAN were furnished. The financial capacity was also established by way of furnishing their income tax returns and bank accounts. The genuineness of the transactions of loans were also established as the same were through banking channels. It is submitted that despite this the Learned CIT(A) has summarily rejected the subm....
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....ure 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 that the genuineness of transaction and creditworthiness of the lenders was not established. It is submitted that the above general observations have been made by the Learned Assessing Officer by examining cursorily a few IT returns and bank accounts of the depositors. He has examined only seven IT returns and two bank accounts whereas the number of depositors is 121. The sample size of the Learned Assessing Officer was not adequate enough to make general observations. Over and above this, each cash credit is individually different and cannot be compared with any other cash credit. So the Learned Assessing Officer was not justified to make any general observation without examining all the....
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....s 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. There is no material with the Learned Assessing Officer to hold that there was round-tripping of the amounts. It is not the case of the Learned Assessing Officer that he was in possession of evidence that the assessee paid cash in lieu of the amount received from the respective parties as share application money. The additions have been made by the Learned Assessing Officer more on the basis of suspicion, guess work and conjecture and not on evidence. The Learned Assessing Officer did not appreciate the evidences furnished before him in the shape of confirmations, Income Tax returns and copy of bank account. The action of the Learned Assessing Officer in treating the entire cash credits of Rs. 10,24,75,690/- as unexplained under section 68 is assailed and contested as under :- (a) IT returns and bank statements in respect of al....
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....TGS. 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/- is the lone transaction in the bank account. Further, the loan of Rs. 10,00,000/- has been repaid by the assessee on 13/02/2023 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. In view of this, the Learned Assessing Officer was not justified to hold that the depositor was an accommodation entry provider. The deposit is genuine and deserves to be accepted. 2. Mansukhbhai Dalksukhbhai Parmar :Rs. 16,00,000/- It is submitted that the Learned Assessing Officer has failed to critically examine the bank account of the creditor furnished before him. There is no denying the fact that amount received through banking channel a few days before has been transferred to the assessee. But all these transactions are not in cash. There is no deposit in cash....
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....021 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 Paper Book page number cited supra. Therefore, the loan is genuine and the same deserves to be accepted. 5. Kajal Babulal Prajapati : Rs. 10,50,000/- (S.No.59) The Learned Assessing Officer has not made any detailed comment on the bank account of the depositor. The Learned Assessing Officer has simply observed that examination of the bank account of Kajal Babulal Prajapati disclosed the same pattern. The observation of the Learned Assessing Officer are not correct. The perusal of bank account of the depositor discloses that besides depositing money with the assessee, the depositor has advanced Rs. 2,00,000/- on 8/7/2020 to Rahul Bhai and similarly Rs. 5,00,000/- has been advanced to Piyush Patel on 9/11/2020. All these transactions are through RTGS. The multiplicity of transactions of heavy amounts establish the capacity of the depositor to deposit amount with the assessee. Further, the loan of Rs. 10,50,000/- h....
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....upra. 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 of bank account was not furnished, which now is available on the Paper Book. The perusal of the bank account reveals that the opening balance as on 21/6/2021 is of Rs. 5,42,721/-. It is on 2/7/2021 that Rs. 4,00,000/- has been advanced to the assessee. Earlier to this, the depositor had advanced Rs. 3,00,000/- on 21/6/2021 to Neha Ramanbhai Parmar. Further, amount of Rs. 8,00,000/- has been received in the account of the depositor through RTGS on 1/7/2021. It is out of this amount that Rs. 4 lac has been advanced to the assessee on 2/7/2021. On this very date, i.e. 2/7/2021, the depositor had advanced Rs 4 lac to Vardhaman Jain. Thus, the account of the depositor discloses multiple transactions running into several lakhs. Advances have been made to other parties besides the assessee. The deposit with the assessee is not the lone transaction in the account of the depositor. Further, the loan of Rs. 4,00,000/- has been repaid by the assessee on 31/01/2023 through cheque. Copy of....
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....submitted that the Learned Assessing Officer was wrong in treating all the deposits as unexplained on the basis of wrong analysis of the bank accounts of some of the depositors. In order to support the case that the deposits are genuine, the assessee is further submitting analysis of bank accounts in the case of following depositors :- (1) Aruna Ben Lalit Bhai Soni : Rs. 7,00,000/- Copy of bank account with Karur Vysya Bank for the period 14/9/2020 to 26/5/2021 is available on Paper Book. The examination of the bank account reveals that there is credit of Rs. 5,27,500/- on 9/10/2020 and on 13/10/2020, advance has been made with Arham Wealth Management of Rs. 6,00,000/-. Again, there is credit of Rs. 5,00,000/- on 13/10/2020 which has been advanced to Arham Wealth Management. Again there is credit in the bank account on 14/10/2020 of Rs. 6,90,000/- and on this very date, amount of Rs 7,00,000/- has been advanced to Arham Wealth. The assessee has received Rs. 7,00,000/- on 26/5/2021 through RTGS against amount received on 25/5/2021 in the bank account of the depositor. The perusal of the bank account reveals that there are multiple transactions running into several lacs. Further....
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....sit in the hands of the assessee deserves to be accepted. (4) Bhavnaben Pravin Bhai Vaghani : Rs. 6,00,000/-(S.No.18) Copy of Bank account with Karur Vysya Bank Ltd for the period 19/9/2020 to 26/5/2021 is available on Paper Book. The examination of the bank account reveals that there is credit of Rs. 5,40,000/- on 09/10/2020 and of Rs. 3,96,000/- on 12/10/2020. Out of this, amount of Rs. 6,00,000/- has been advanced on 12/10/2020 to Arham Wealth Management. Further, there is another credit of Rs. 3,00,000/- on 13/10/2020 on account of receipt from Gujrati Textiles through RTGS. The depositor has advanced a sum of Rs. 7,00,000/- on this very date to Arham Wealth. Again on 25/5/2021, there is credit in the account of the depositor of Rs. 6,00,000/- on account of receipt from Vagani Bhavnaben through RTGS. Same has been advanced to the assessee on 26/5/2021. Thus, the source of deposit of Rs. 6,00,000/- stands fully explained. Further, the loan of Rs. 6,00,000/- 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. Therefore, the deposit in the hands of the assessee deserves to be accepted....
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....,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 case of the assessee of Rs. 6,00,000/- deserves to be accepted as explained. (7) Dharmesh Gordhanbhai Raval : Rs. 9,00,000/- Copy of Bank account with Karur Vysya Bank Ltd for the period 31/12/2018 to 27/5/2021 is available on Paper Book. The examination of the bank account reveals that there is deposit of Rs. 4,90,900/- on 2/4/2019 by way of clearing from Green Design. The depositor has advanced Rs. 5,00,000/- on 8/4/2019 to Mukesh Kanhiyalal Shah. Again there is a credit in the bank account on 9/4/2019 of Rs. 4,00,000/- from Ambaram Bhai Devaliya and this amount has been advanced on 10/04/2019 to Mukesh Kanhialal Shah. There is again a credit for Rs. 2,10,500/- on 21/3/2020 which has been advanced to Dipesh Kumar N Adani on 26/3/2020. The account further reveals credits of Rs. 5,00,000/- on 21/9/2020 and the same has been advanced to Mukesh Shah on 24/9/2020. Similarly, there is credit of Rs. 3,46,500/- on 14/10/2020, which has been advanced on 17/10/2020 to Pandav Rs. 1,96,500/-. The account fur....
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....dvanced Rs 3,00,000 on 8/7/2021 to Ranchhod Bhai and Rs. 5,00,000/- to Dharma Impex on 24/9/2021. It is submitted that the bank account establishes the fact that the deposit with the assessee is not the lone transaction in the bank account of the depositor. The multiple transactions running into several lacs also establish beyond doubt the financial capacity of the depositor. Further, the loan of Rs. 5,00,000/- 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. (10) Dinesh Bhai Raman Bhai Bariya : Rs. 9,80,000/- Copy of Bank account with Bank of India for the period 1/4/2021 to 14/8/2021 is available on Paper Book. The examination of the bank account reveals that there is credit of Rs. 15,65,374/- on 23/6/2021 as received through RTGS from Unique Const. The amount has been advanced on 25/6/2021 to various parties. There is again a credit of Rs. 4,91,000/- on 27/6/2021 and Rs. 4,90,000/- has been advanced to the assessee on 29/6/2021. Again there is a deposit of Rs. 4,89,000/- in the account on 30/6/2021 throu....
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....k 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 28/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. In view of this, deposit with the assessee is fully explained and the same deserves to be accepted. (13) Gelabai Krashnbhai Kateshiyta : Rs. 10,50,500/- Copy of Bank account with Associate Co-operative Bank Ltd for the period 23/4/2021 to 03/03/2022 is available on Paper Book. The examination of the bank account reveals that besides the transaction of deposit with the assessee, the depositor has also advanced Rs. 8,00,000/- on 3/3/2022 to FCB Design. Thus, this fact establishes the financial capacity of the depositor. The deposit in the hands of the assessee stands fully explained. Further, the loan of Rs. 10,50,000/- has been repaid by the assessee on 10/1/2023 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 des....
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....loan of Rs. 9,80,000/- has been repaid by the assessee on 09/02/2023 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. (16) Jagruti Ben Dinesh Bhai Bariya : Rs. 9,00,000/- Copy of Bank account with Bank of India for the period 23/4/2021 to 20/06/2021 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. Unique Constructions 18/5/2021 9,36,145 Oliria Foods 20/5/2021 4,50,000 Oliria Foods 21/5/2021 4,50,000 Panchani Ramesh Bhai 17/8/2021 11,98,019 GIT Creations 19/8/2021 1,72,000 Pragati Developers 19/8/2021 4,95,000 Pragati Developers 20/8/2021 4,55,000 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. 9,00,000/- has been repaid by the asses....
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....e, the deposit in the hands of the assessee deserves to be accepted. (19) Kajal Balubhai Prajapati : Rs. 10,50,000/- Copy of Bank account with Karur Vysya for the period 28/3/2020 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. M/s Green Design 2/7/2020 2,00,000 Rahul Bhai 8/7/2020 2,00,000 Gordhan 9/11/2020 3,83,000 Petiga 9/11/2020 1,17,000 Piyush 9/11/2020 5,00,000 Ben Prajapati 1/6/2021 8,00,000 Oliria Foods 1/6/2021 8,00,000 Gordha 1/6/2021 2,00,000 Oliria Goods 1/6/2021 2,50,000 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. 10,50,000/- has been repaid by the assessee on 04/1/2023 through banking channel. Copy of ledger account is available on Paper Book page number cited supra. In view of this, deposit with th....
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.... the hands of the assessee deserves to be accepted. (22) Mitesh Shah HUF : Rs. 13,00,000/- Copy of Bank account with ICICI Bank for the period 15/4/2019 to 1/4/2020 to 13/8/2021 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. Paresh Ramjibhai Patel 31/8/2020 5,10,750 Bhagal 1/9/2020 1,45,000 Kalpesh Gamnilal 2/9/2020 1,85,000 Nitesh Bhai Raman Bhai 2/9/2020 1,80,000 Harsidhu Industries 24/12/2020 5,00,000 Bhagal 28/12/2020 2,50,000 Bhagal 29/12/2020 2,60,000 TU Builders 21/4/2021 6,00,000 T. RTGS 22/4/2021 2,00,000 Oliria Foods 23/4/2021 8,00,000 RTGS SPCBR 25/5/2021 4,99,996 Oliria Foods 26/5/2021 5,00,000 G Mistry Associates 13/8/2021 6,98,420 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 ....
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....as been repaid by the assessee on 06/1/2023 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. (25) Tejabhai Ratanbhai Rajput : Rs. 8,00,000/- Copy of Bank account with Associate Co-operative Bank Ltd for the period 30/09/2019 to 25/5/2021 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. Starworld 5/3/2021 10,17,206 Bandhan FTL 6/3/2021 9,00,000 Th. RTGS 6/5/2021 8,00,000 Oliria Foods 25/5/2021 8,00,000 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. 8,00,000/- 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 deserv....
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....he hands of the assessee deserves to be accepted. (28) Vihabhai Gagabhai Luhar : Rs. 7,00,000/- Copy of Bank account with Associate Co-operative Bank Ltd for the period 4/12/2020 to 25/5/2021 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 23/2/2021 6,00,000 Jalondhara 23/2/2021 6,00,000 RTGS 24/2/2021 8,00,000 Neft Real Stars 24/2/2021 8,00,000 Th. RTGS 1/3/2021 5,00,000 Babu Bhai 5/3/2021 5,00,000 MK Trading 25/5/2021 7,00,000 Oliria 25/5/2021 7,00,000 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. 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. ....
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....f money. It is no the case of the Learned Assessing Officer that cash was paid to these persons in lieu of obtaining deposits. The Learned Assessing Officer has wrongly observed that loans have been advanced to the assessee in an unusual manner. The Learned Assessing Officer has not explained that how the deposits with the assessee were in an unusual manner. It is further submitted that the transactions in the bank account are through RTGS, which is an approved electronic mode of transferring money. There is nothing unusual in transferring money through RTGS. 4. The scrutiny of all these bank accounts discussed above further establishes that before advancing money to the assessee, there was no deposit in cash in the bank account. All major transactions in the 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....
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.... the creditors is not in doubt, they are filing income tax returns regularly, in view of this, the unsecured loan received from them deserves to be accepted as explained, the assessee quotes the following decisions :- (1) COMMISSIONER OF INCOME TAX vs. ORISSA CORPORATION (P) LTD. SUPREME COURT OF INDIA (1986) 52 CTR 0138, (1986) 159 ITR 0078, Held Income-Cash credit-Burden of proof-Assessee had given the names and addresses of the creditors-It was in the knowledge of the Revenue that the said creditors were income-tax assessees-Their index number was in the file of the Revenue-Revenue, apart from issuing 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 th....
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....ipur) Without examination or investigation in the case of the investors or disputing the documents or controverting the facts submitted by the assessee, the addition in the hands of the company cannot be sustained. (7) CIT Vs. H.S. Builders 78 DTR 169 (Raj) Deposit of cash in the account of the creditor just before giving loans to the assessee company would not lead to the conclusion that the money was deposited by the assessee company. Therefore, the ITAT was justified in deleting the addition. (8) Lalitha Jewellery 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 ....
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....ed that all the judicial institutions - the Hon'ble ITAT being one of them - are respected not on account of its power to legalize injustice on technical grounds but because these are capable of removing injustice. The assessee is only furnishing supporting evidences only in support of contention that the capital gain taxes on sale consideration are not chargeable in this case when the same has not been received by the seller. These are not cooked up 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 requi....
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....n 23/12/2024 against order of the Learned CIT(A), NFAC, Delhi passed on 17/12/2024. However, while filing the appeal, due to inadvertence, following grounds could not be taken. These grounds are purely of facts on record and arise out of the order of the learned CIT(A). These additional grounds require some additional evidence for which a 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 withou....
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....e parties but also the duty of the Tribunal to consider the question of limitation notwithstanding the fact that it is not raised before it-Additional ground admitted. (vii) Sunil Kumar Pugalia (HUF) Vs. ITO (2009) 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 a....
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....ld. AR of the assessee submitted that considering all the evidence placed on record including the additional 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/-....
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.... the same was Rs. 19,90,07,490/-. While assessment proceedings, the discrepancy was explained 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 c....
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.... lending of 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 c....
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....he Act 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....
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.... 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 loans of Rs. 40 ....