TaxTMI 
TaxTMI 
2025 (11) TMI 458
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....eting the addition of Rs. 25,00,000/- made u/s 68 of the Income Tax Act towards nongenuine loan shown to have received from M/s Olive Overseas Pvt. Ltd. ignoring that, in consequence to the evidences gathered during the investigation conducted by the investigation wing, Mumbai, the non-genuine nature of these transactions clearly emerged?" 2. "Whether on the facts and circumstances of the case and in law, the Ld CIT(A) has erred in deleting the addition of Rs. 25,00,000/- made u/s 68 of the Income Tax Act towards nongenuine loan shown to have received from M/s Olive Overseas Pvt. Ltd. ignoring the ratio laid down by the Hon'ble Delhi High Court in the case of CIT vs. Nova Promoters & Finlease (P) Ltd [2012] 18 taxmann. com 217(Delhi) wherein it was held that when the assessee happens to be beneficiary of racket carried out by the accommodation entry providers, mere filing of copies of documents like loan confirmation, Bank statement etc. will not suffice and that the evidence has to be judged in depth by applying the test of human probability?" 3. "Whether on the facts and circumstances of the case and in law, the Ld CIT(A) has erred in deleting the addition o....
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....eve that income chargeable to tax had escaped assessment and accordingly issued notice under section 148 of the Act on 09.02.2015. In response, the assessee, vide letter dated 02.03.2015, requested that the return earlier filed on 17.03.2013 be treated as filed in response to the notice. Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act concerning all the observation made during the course of search on the Pravin Kumar Jain establishing the modus operandi of Shri Pravin Kumar Jain proving accommodation entry, the assessee was accordingly asked to justify the identity, creditworthiness and genuineness of the transaction in respect of credit entry of Rs. 25,00,000/- from M/s Olive Overseas Pvt. Ltd. 3.3 In response, the assessee submitted that the impugned loan was received through normal banking channels and, therefore, could not be treated as non-genuine. The Assessing Officer, however, was not satisfied. He observed that mere routing of money through banking channels does not establish the genuineness of the transaction when the surrounding facts point to a contrary conclusion. Based on the investigation material and the assessee's failure to produce cogent ....
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.... was not reflected in any of the official records filed with any of the relevant Government agency by Shri Praveen Kumar Jain. The said place was discrete place of operation of Shri Pravin Kumar Jain where various hard disks, pen drives and documents were found which contained books of accounts of various concerns run and operated by him. It was also noted that Shri Pravin Kumar Jain himself was a director only in 13 concerns and all other concerns were managed and operated by him in the name of various dummy directors / proprietors. The materials found and seized from this premises as per annexure 'A' to Panchnama dated 06.10.2013 was analysed and found to be containing the books of accounts of bogus concerns run and operated by Shri Praveen Kumar Jain. During search a pen drive was seized (as per Annexure 'O' to Panchnama dated 02.10.2013) from the premises located at Mahalaxmi Metal & Paper Mart, Kulupwadi Road, Behind National Park, Near Raheja Estate, Borivali (E), Mumbai-66. On pen drive analyses, it was revealed that the same contained the parallel books of account of Shri Praveen Kumar Jain and ledger of various brokers who were acting as agents between Shri Praveen Kumar J....
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....i Praveen Jain were not carrying out any genuine business activity and were providing accommodation entries only. The AO concluded that the assessee had received bogus unsecured loan which he accepted from the above hawala entity amounting to Rs. 25,00,000/-. Therefore, the AO disallowed and added the sum of Rs. 25,00,000/- u/s.68 of the Act to the total income of the assessee." 3.4 The Assessing Officer further noted that the assessee had claimed interest expenditure of Rs. 4,58,411/-, forming part of the gross interest paid of Rs. 12,13,115/-, on loans allegedly obtained from entities identified as accommodation entry providers, namely, M/s Josh Trading Pvt. Ltd., M/s Nakshatra Business Pvt. Ltd. (earlier Hema Trading Co. Pvt. Ltd.), and M/s Olive Overseas Pvt. Ltd. The assessee contended that the interest paid was wholly and exclusively for earning interest income and therefore deductible under section 57(iii) of the Act. The Assessing Officer, however, rejected this contention. Relying upon the findings of the Investigation Wing that the said loans were not genuine but were in the nature of accommodation entries, he held that the interest claimed thereon was not allowable, a....
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....by way of raising grounds as reproduced above. 4.1 In the grounds, the Revenue is agitated that the Ld. CIT(A) has ignored the evidences gathered during investigation, ignored ratio of the Hon'ble Delhi High court in the case of CIT v. Nova Promoters & Finlease (P) Ltd. (supra), ignored that M/s Olive Overseas Pvt. Ltd. was a paper entity without any financial capacity and the interest also was not in the nature of business expenditure. 5. Before us, the learned counsel for the assessee has filed an application under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963, vide letter dated 07.05.2025, raising certain legal grounds. The substance of the application is that (i) in view of CBDT Circular No. 09 of 2024 dated 17.09.2024, the Department was barred from filing the present appeal as the tax effect is admittedly below Rs. 60 lakhs; (ii) that the issuance of exceptions by the Board beyond the scope of section 268A of the Act is contrary to the legislative mandate; and (iii) that the assessment order itself is vitiated for want of jurisdiction, as in terms of CBDT Instruction No.1/2011 dated 31.01.2011, the case of an assessee with returned income below Rs. 20 lakhs....
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....e assessee under Rule 27 of the Rules is held to be not maintainable and is accordingly rejected. 7. We now turn to the grounds of appeal raised by the Revenue. Broadly, the disputes pertain to two issues: (i) the addition of Rs. 25,00,000/- as unexplained cash credit under section 68 of the Income-tax Act, 1961 (hereinafter 'the Act'), and (ii) the disallowance of interest paid on such purportedly bogus loans under section 57(iii) of the Act. 7.1 Before us, the learned Departmental Representative (DR) drew attention to the decision of this Tribunal in J.K. Global (ITA Nos. 3260, 3259 & 3258/Mum/2023, for AYs 2010-11 to 2012-13), wherein the Tribunal had examined similar claims of accommodation entries and had, in those cases, deleted the addition in respect of the beneficiary of the accommodation entry. The DR, however, also relied on the decisions of the Co-ordinate Bench in Pravin Kumar Jain & Pankaj Jain (ITA Nos. 7191 to 7197/Mum/2018 and ITA Nos. 4977 to 4980/Mum/2018, for AYs 2008-09 to 2014-15), wherein the Tribunal held that Shri Pravin Kumar Jain and Shri Pankaj Jain were indeed providers of accommodation entries. 7.2 In the instant case, it is apparent that the ....