TaxTMI 
TaxTMI 
2025 (9) TMI 607
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....010-11, assessee filed his Return of Income on 28-03-2010 declaring total income of Rs. 1,69,973/-. The return was processed u/s. 143(1) of the Act. Thereafter assessment was reopened by issuing a notice u/s. 148 of the Act dated 28-03- 2015, on the ground that the unsecured loans received from M/s. Prraneta Industries Ltd. of Rs. 1,85,00,000/- is in the nature of accommodation entry through one Shri Shirish C. Shah (hereinafter referred to as SCS). The assessee filed his Return of Income in response to the 148 notice. After detailed discussions, the assessment was completed by making addition u/s. 68 of Rs. 1,85,00,000/- received from M/s. Prraneta Industries Ltd. as bogus, paper/shell company and demanded tax thereon. 3. Aggrieved against the same, assessee filed an appeal before Ld. CIT(A). During the appellate proceedings, the assessee explained that the sum of Rs. 1,85,00,000/- received from M/s. Prraneta Industries Ltd. was a temporary loan which was repaid in the same financial year itself. The assessee filed the following details: (i) Ledger account of PIL for A. Y.2010-11 (ii) Ack. of IT Return of PIL for A.Y.2010-11 & 2011-12- (iii) Copy of A....
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....54 ITR 275 (Statute)]. ii) CIT Vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC). iii) Pr. CIT v. Adamine Construction (P.) Ltd. (2018) 99 taxmann.com 44 (Delhi). iv) PrCIT v. Hi Tech Residency (P.) Ltd. [2018] 96 taxmann.com 402(Delhi). [SLP of Revenue dismissed by the Hon'ble Supreme Court as reported [2018] 96 taxmann.com 403]. v) PCIT v. Best Infrastructure (India) (P.) Ltd. [2017] 84 taxmann.com 287 (Delhi). vi) ACIT v. Shyam Indus Power Solutions (P.) Ltd. [2018] 90 taxmann.com 424 (Delhi - Trib). vii) CIT v. Haresh D. Mehta [2017] 86 taxmann.com 22 (Bom). viii) CIT v. Dharamdev Finance (P.) Ltd. [2014] 43 taxmann.com 395 (Guj). ix) CIT v. Apex Therm Packaging (P.) Ltd. (2014) 42 taxmann.com 473 (Guj). x) CIT v. Ayachi Chandrashekhar Narsangji [2014] 42 taxmann.com 251 (Gu)). xi) Dimco Silk Mills Vs. ITO (1999) 107 Taxman 41 (Ahd). ........................................ Further. I differ with the view of the AO that the company viz PIL [now known as Aadhar Ventures (India) Ltd) in question from whom temporary loan of Rs. 1,85,00,000/- has been received by th....
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....s of providing alleged accommodation entries as referred to and relied upon by the AO is neither maintained by the appellant nor is in the handwriting of the appellant This being the case, the presumption under section 132(4A) of the Act is available only in respect of the person from whose possession the same is found and seized, which in the instant case is SCS and not the appellant and it could not be applied against a third party. No addition is warranted on the basis of material seized from the third party and the statement of such third party not corroborated by specific independent evidence and in absence of any cross examination of such persons granted to the appellant in whose case the same are relied upon. The said view is supported by the following judgments relied upon by the appellant. (i) Common Cause (A Registered Society) v. Union of India (2017) 77 taxmann.com 245 (SC) (ii) CIT v. Radico Khaitan Ltd (2017) 83 taxmann.com 375 (Delhi) (iii) Pavitra Realcon (P.) Ltd. vs. ACIT, (2017) 87 Taxmann.com 142 (Delhi-Trib.) (iv) Anil Jaggi v. ACIT (2018) 168 ITD 612 (Mumbai - Trib.) (v) CIT-II v. Kantibhal Revidas Patel [2014] 42 t....
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....from the survey proceedings u/s 133A of the Act carried out by the department in Rajesh Jhaveri Group and his statements recorded u/s. 131(1A) of the Act. Further, the creditor company PIL cannot be treated as a paper/shell company based on facts and figures of its financials as discussed hereinabove. The AO is also not justified in relying upon the statements of SCS, directors of PIL and others for making the addition in absence of granting an opportunity of cross examination of such persons to the appellant Thus, considering my findings and observations discussed at length hereinabove, the addition of Rs 1,85,00,000/- made by the AO u/s 68 of the Act is deleted. This ground of appeal is allowed. 4. Aggrieved against the appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal: 1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,85,00,000/- made by the A.O. on account of unexplained unsecured loan u/s 68 of the Act. 2. The Ld. CIT(A) has erred in not taking cognizance of the fact that the company M/s Prraneta Industries Ltd. (PIL) in wh....
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....red by Low Tax Effect Circular are hereby rejected. 6. Heard rival submission at length and perused the materials available on record including the Paper Book filed by the assessee. It is undisputed fact that the assessee received 1,85,00,000/- by five cheque payments on 19-05-2009, the same was repaid as follows: Dates Bank Amount 19-Jun-2009 Ch No. 20520 HDFC Bank 25,00,000 16-Sep-2009 Ch. No. SCB 1,00,00,000 18-Sep-2009 Ch. No. 20631 SCB 50,00,000 16-Jan-2010 Ch. No. 20536 HDFC Bank 10,00,000 6.1. Copies of the relevant bank statements are placed at Page Nos. 161 to 166 of the Paper Book. Further the Income Tax Returns filed by M/s. Prraneta Industries Ltd. for the Asst. Year 2010-11 and 2011-12 are against total income of Rs. 1,73,55,274/- and Rs. 1,93,48,498/- respectively. The Revenue could not dispute the repayment of loans by the assessee through banking channels. 7. In similar circumstances, the Hon'ble Jurisdictional High Court in the case of PCIT Vs. Ojas Tarmake (P.) Ltd. reported in [2023] 156 taxmann.com 75 held as follows: "Where assessee showed unsecured loans received during relevant assessment year and....
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....ds raised by the Revenue. Further the order passed by the Ld. CIT(A) is a well-reasoned and detailed order which does not require any interference. 9. In the result, the appeal filed by the Revenue in ITA No. 1380/Ahd/2019 is devoid of merit and the same is hereby dismissed. ITA No. 1381/Ahd/2019 for Asst. Year 2010-11 10. This appeal is filed by the Revenue as against the appellate order dated 10.06.2019 passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad arising out of the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2010-11. 11. The Grounds of Appeal raised by the Revenue reads as under: 1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,70,00,000/- made by the A.O. on account of unexplained unsecured loan u/s 68 of the Act. 2. The Ld. CIT(A) has erred in not taking cognizance of the fact that the company M/s Prraneta Industries Ltd. (PIL) in whose shares the assessee has claimed LTCG is one of the companies controlled by Shri Shirish Cha....