AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1508
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....the bank account. 3. The Ld. Income-tax Officer, International Tax Ward 4(3)(1), Mumbai, had no jurisdiction to passed the impugned order 4. The directions of Ld. DRP vide order dated 28.03.2025 and the final assessment order dated 29.04.2025 are barred by limitation and are therefore, bad in law 5. The Ld. AO has erred in the levying interest u/s. 234A, 234B, 234C and 234D of the Act. 6. The Ld. AO, has erred in initiating penalty proceeding u/s 271(1)(c) of the Act 7. The Ld. AO erred in initiating penalty proceeding u/s 271F of the Act." 3. This is the second round of litigation by the assessee before the Tribunal against the final assessment order passed pursuant to directions of ld. DRP u/s. 144C(5) r.w.s. 254 of the Act. Assessee is a non-resident individual working as a film actress. She filed her return of income on 26.06.2016 reporting total income at Rs. 46,20,340. Based on information received on inside portal of the Department about high value credits and debit transaction carried out by assessee, case was reopened u/s. 147 of the Act. Ld. Assessing officer issued the draft assessment order dated 31.03.2022 proposing varia....
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.... Mr. Danish Merchant. Details of loans given by Mr. Danish Merchant to the assessee from his different entities and their subsequent repayment by the assessee is tabulated below: Name Address and Purpose 31.03.2015 Addition Repayment 31.03.2016 Subsequent repayment Ace Links 3,00,21,733 9,00,62,499 0 12,00,84,232 900,00,000 Ace Links 0 58,60,458 0 58,60,458 50,00,000 Ace Links PZNZ Media (Loan) 1,0.0,00,000 0 0 1,00,00,000 AHCLPEL Danish Merchant (Loan) 51,34,045 0 0 51,34,045 Acelight Hospitality Ventures Private Limited 13, 10,00,000 0 13,10,00,000 0 Danish Merchant 11,00,000 0 0 11,00,000 TOTAL 17,72,55,778 9,59,22,957 13,10,00,000 14,21,78,735 4.1. In addition to the above tabulated details, additional sum of Rs. 5,37,59,800/- was received from Ace Housing and Constructions Ltd. towards consideration for sale of residential flat at Quantum Park which was used to return back old loans Mr. Danish Merchant group entities. In respect of sale of flat at Quantum Park, it was clarified by the assessee that....
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.... 13,10,00,000 Closing Balance 10,300 5.1. Assessee also furnished explanation for each of the entry in Corporation Bank account and demonstrated with documentary evidence, the source as well as source of source in respect of the unsecured loans and in respect of sale of flats copy of registered sale deeds were furnished which are all placed on record. The said detail is tabulated below in respect of entries in Corporation Bank account. Date Particulars Credit Debit Remarks 6-Feb-16 6-Feb-16 Contra-Cash Ace Housing & constructions Limited 500 1,73,27,100 6-Feb-16 6-Feb-16 Acelight Hospitality Private Limited Ace Housing & constructions Limited 1,59,78,500 1,70,00,000 From Sale of flat 6-Feb-16 6-Feb-16 Acelight Hospitality Private Limited Ace Housing & constructions Limited 79,54,200 1,60,00,000 6-Feb-16 8-Feb-16 Acelight Hospitality Private Limited Ace Links 2,00,00,000 82,50,000 8-Feb-16 8-Feb-16 Acelight Hospitality Private Limited Ace Links 2,15,00,000 2,00,00,000 From unsecured loans 8-Feb-16 8-Feb-16 Acelight Hospitality Private Limi....
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....ial on record. We have also gone through the paper book filed by the assessee containing 218 pages. From the perusal of the draft assessment order passed u/s. 144C dated 31.03.2022 placed in the paper book at page 135, we note that ld. Assessing Officer has issued notice u/s. 133(6) to each of the three entities of the Danish Merchant Group, i.e., Ace Links which is a partnership firm and the other two entities, i.e., Ace Light Hospitality Ventures Pvt. Ltd. and Ace Housing Construction Pvt. Ltd which are closely held companies. All the three entities have replied to the notices issued by ld. Assessing Officer and furnished all the required details and documents which ld. Assessing Officer has duly acknowledged in the draft assessment order. The details furnished by these entities include their income tax return forms, their confirmation for the transaction undertaken with the assessee or the other associate entities and their bank statements. Ld. Assessing Officer, after having verified the transactions with all the three entities of Danish Merchant Group noted that there is mere movement of funds without any actual source or generation and thus, took an adverse view. He issued a ....
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....ns of Sections 184 and 185 of the Companies Act, 2013, as these sections of the Companies Act prohibits a company from giving any loans or making investments of certain types. Thus, at the insistence of Mr. Danish Merchant, the loan transactions were routed through a partnership firm on which such stringent provisions do not apply and therefore, the loan standing in the name of Ace Light Hospitality Ventures Pvt. Ltd. was squared off and was moved into the partnership firm with the name Ace Link, as both the entities belonged to Mr. Danish Merchant. 5.3. It is also important to note that nothing has been brought on record to demonstrate that Mr. Danish Merchant and its associate entities are related party with the assessee. The genuineness of the loans taken and repaid have been duly established by the assessee by proving the identity and creditworthiness of the parties as well as the genuineness of transactions for which all the necessary documentary evidences are placed on record. Further, ld. Assessing Officer himself has carried out extensive examination by issuing notices u/s. 133(6) to all the affiliate entities of Mr. Danish Merchant, who have duly complied with by confir....