TaxTMI 
TaxTMI 
2025 (10) TMI 1100
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....or any of the grounds before the final hearing." 2. The assessee raised the following additional ground of appeal: "1. The Ld. Comm. of Income Tax (Appeals) has erred confirming the action of the Assessing Officer in issuing notice for reopening the assessment u/s. 148 of the Act which is illegal and bad in law. Hence the same should be quashed and consequential assessment so made requires to be cancelled.. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing officer in reopening the assessment only on doubts and suspicion for making additions in case of appellant on protective basis." 3. The additional grounds raised are pure legal issue, which does not require investigation of new facts. Hence, placing reliance on the judgment of the Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC), we admit the additional grounds. 4. The assessee is an Association of persons registered as Non-banking Financial Company (NBFC) with Reserve Bank of India (RBI). The assessee filed the return of income for AY 2012-13 on 24.07.2012 declaring nil income. The assessment was reopened ....
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....nsferred to M/s. BD Cotton Associates and thereafter to M/s. Agrawal Enterprise. Verification of other two entities i.e. M/s Arrow Corporation and M/s. Patel Jewellers is pending. 7. In view of the above, it is clear that Rs. 65,00,000/- received by M/s. Agrawal Enterprises from M/s. B D Cotton Associates is non-genuine, 8. Addition of Rs. 65,00,000/- received from M/s Jala Ram Finvest Ltd. by M/s Omrim Securities Ltd. and subsequently transferred to M/s B.D. Cotton is also non -genuine and accordingly same is required to be added in the hands of M/s, B.D. Cotton Associated for A.Y.2012-13. 9. In view of the above and by reason of the failure on the part of the assessee to disclose fully & truly all material facts necessary thereto in his return of Income, I have reason to believe that the income to the extent of Rs. 65,00,000/- chargeable to tax in the hands of the assessee has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. A notice u/s 148 r.w.s 147 of the Act, is being proposed to be issued to assess such income and also any other income chargeable to tax which has escaped assessment, which comes to my notice subseque....
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....nt and that in the year when the loan was taken, the revenue has accepted the said loan was genuine. Therefore it was argued that the AO has reopened the assessment based on misunderstood facts and therefore the reopening is not valid. The ld. AR drew our attention to the order of the CIT(A) in the case of M/s Omrim Security Ltd. where the substantive addition made towards the loan taken from M/s Jalaram Finvest Ltd. is deleted by the CIT(A) (page 137 to 160 of PB). On merits the ld. AR submitted that the assessee is an NBFC and has a running A/c with M/s Omrim Security Ltd. and in this regard our attention was drawn to the ledger a/c in page 65 to 67 of PB. The ld. AR submitted that the assessee substantiated the loan taken from M/s Omrim Security Ltd. with all supporting evidences such as loan confirmation, bank statements reflecting the impugned transactions, financial statements of M/s Omrim Security Ltd. etc. and that the lower authorities have not considered any of these documents and have held that M/s Omrim Security Ltd. does not have creditworthiness merely based on the income declared in the return. The ld. AR also submitted that the assessee is not obligated to explain t....
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....e notice from the perusal of the ledger account of M/s Omrim Security Ltd (page 65 to 67 of paper book), we notice that the assessee is having a running account with M/s Omrim Security Ltd and that the amount borrowed by the assessee from M/s Omrim Security Ltd has been repaid. The AO while making addition under section 68 has not considered these facts. As already stated the reason for treating the amount borrowed by the assessee from M/s Omrim Security Ltd as non-genuine is that M/s Omrim Security Ltd has sourced the fund from entry providers. While doing so, the AO has not recorded any findings with regard to various documentary evidences pertaining to M/s Omrim Security Ltd but has merely held that the assessee's submissions are not acceptable. The AO has however has recorded a finding that the credit worthiness of M/s Omrim Security Ltd has not been established since the income returned is not supporting the credit worthiness. In this regard we notice from the perusal of the financial statements of M/s Omrim Security Ltd that advances being a NBFC, the advances from customers have been utilised for lending money and hence the contention regarding credit worthiness is not t....