TaxTMI 
TaxTMI 
2025 (7) TMI 1492
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....and the AO was correct in the treatment of the unsecured loans considering the preponderance of probability.." 3. The assessee has raised the following ground of cross objections: "1. (a) The Id. CIT(A) erred in facts and law in dismissing the jurisdictional validity of assessment u/s. 143(3) r.w.s. 153A of the Act. (b) The Id. CIT(A) erred in facts and law in not appreciating the fact that assessment had attained finality and no incriminating material was found during the course of search." 4. Brief facts of the case are that the assessee had filed its return declaring nil income for AY 2012-13 on 28.09.2012. The assessee firm is a part of the 'Lotus Group', on which a search action was carried out u/s 132 on 09.10.2014 by the Investigation Wing, Mumbai. On the basis of information found during the course of the search, a notice u/s 153A was issued on 08.02.2016 requiring the assessee to furnish its return of income. The assessee again filed the return declaring nil income on 18.04.2016. The assessment was completed vide order dated 23.12.2016 u/s 153A r.w.s. 143(3) of the Act at an income of Rs. 7,44,28,290/- after making an addition on account of unsecure....
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....d having aggregate net worth of Rs. 9.53 crores merged with Satyam Projects Ltd on 26.06.2008. Later, other six companies namely Goldmoon Merchandise Pvt Ltd, Jaldham Suppliers Pvt Ltd, Impression Distributors Pvt Ltd, Deesha Dealer Pvt Ltd and Aashiana Tie-up Pvt Ltd having aggregate net worth of Rs. 91.06 crores merged with Satyam Projects Ltd on 15.12.2010. The aforesaid companies had huge capital and reserves appearing in the balance sheet prior to the merger. Consequent to the merger, the AR submits that total net worth of the lender company was increased by Rs. 100.59 cores which was then utilised by it for the purpose of its business. The AR has further pointed out that the assessment in the case of these aforesaid six merged companies was carried out wherein the share capital issued by these companies have been verified by the concerned AO. Accordingly, the net worth of the lender company stood at Rs. 1,01,30,88,008/- which was infact substantially examined by the revenue. Further, the turnover of the lender for the year under consideration was Rs. 8.27 crores and its returned income was Rs. 21,32,680/- The AO has relied on the statements of Shri. Hitesh Thakkar, S....
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....ties. I find that the assessee group was covered under search action and no document or other assets were found in the course of search which could indicate that the assessee had obtained accommodation entry. It is stated by the AR that a search is a strict measure under the Act which invades the privacy of the assessee and even in these proceedings no concrete evidence was found except for mere oral confirmation of certain parties which also stand retracted later. My attention in this regard was invited to the CBDT Instruction F.No.286/98/2013-IT (INV.II) dated 18/12/2014 and letter dated 10/03/2003 issued by the Ministry of Finance & Company Affairs wherein it is stated that the search party must focus on collection of evidences and not merely admission/ confession of additional income The Hon'ble Gujarat High Court has relying on the aforesaid instructions upheld the view that addition should not be made based on oral confession in the case of CIT v. Ramanbhai Patel (TA no. 207 of 2008) and Chetnaben J Shah v. ITO [TA no. 1437 of 2007]. Thus, respectfully following the CBDT circular as well as the decision cited by the assessee (supra), I find that the addition cannot be sus....
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....80,862/- Accordingly, the assessee has discharged its onus u/s 68 of the Act by substantiating even the source of source of alleged lender company. On the contrary, the Assessing Officer has solely placed reliance on the statement of Hitesh Thakkar, Jignesh Mavadia and Uday Shankar Mahawar which has been retracted by all of them. Further, the AO has made allegation that M/s, Satyam Projects Ltd is a company run by various entry operators but have failed to bring anything concrete on record. In fact, during the course of assessment proceedings, enquiries were made by the AO in form of issue of notice u/s. 133(6) which was duly complied by the lender. Even the evidences referred above were not disputed by the Assessing Officer. It is informed that Uday Shankar Mahawar was appointed as a director in M/s. Satyam Projects Ltd on 30.10.2010 and Hitesh Thakkar and Jignesh Mavadia had been appointed as a director on 04.03.2014. Also, Shri. Uday Shankar Mahawar was produced before the Assessing Officer who had affirmed his retraction thereby confirming that the transaction of Satyam Projects Ltd were genuine and that it is not a paper company. 7.7. The decision of....
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....t form the directors of subscriber companies, wherein thy have explained the reasons for not receiving communication sent by the AO u/s 133(6) of the Act. They further stated in the affidavit that they have subscribed to the share capital of the company and also furnished supporting evidences to justify investment in share capital of the company. We further notice that the assessee has furnished bank statement of subscribers wherein we do not find any instance of cash deposits or transfer from other companies prior to the date of transfer to the assessee company. Therefore, we are of the view that the AO was incorrect in treating share capital alongwith share application money as unexplained cash credit u/s 68 of the Income-tax Act, 1961." Further, Ld. AR has pointed out that M/s. Satyam Projects Ltd. is a Non-Banking Financial Company (NBFC), and no adverse inference has been drawn by the department while finalising the assessments of the company. Moreover, in the other group cases, on loan received by these entities from M/s. Satyam Projects Ltd, relief has been granted by the coordinate benches under similar facts and circumstances. Specifically, Ld. AR has placed before us a....