TaxTMI 
TaxTMI 
2026 (1) TMI 229
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.... issued from time to time which were responded to by the assessee through online submissions and by filing bank statements, ledger accounts and other documentary evidence. 3. During the course of assessment, the Assessing Officer noted from the bank account of the assessee that the assessee had made short term interest bearing advances in favour of three persons, namely, Mr. Asif Taherbhai, Piyush Tamboli HUF and Ms. Vishakha Piyush Tamboli, aggregating to Rs. 1,70,00,000/-. The Assessing Officer required the assessee to explain the source of the said advances. The assessee submitted details of bank statements, fund flow and ledger accounts to substantiate the explanation that the loans were given out of explained sources. 4. The Assessing Officer undertook an analysis of the bank account of the assessee. From the narration of various sweep-in and sweep-out entries and the corresponding debits and credits, the Assessing Officer formed a categorical finding that the impugned loans advanced to the three parties were funded out of amounts received from entities named M/s Sumeru Buildcon and Lucky Steel through an intermediary sweep account. The Assessing Officer observed that th....
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.... and upheld the addition. The appeal of the assessee was accordingly dismissed by the learned CIT(A). 7. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds: 1. In law and in the facts and circumstances of the appellant's case, the order of the AO is void ab initio and without jurisdiction. 2. In law and in the facts and circumstances of the appellant's case, the CIT(A) has erred in upholding the addition made by the AO u/s 69 of the act amounting to Rs. 1,70,00,000/- although the appellant adequately explained the source of the amount from which the loan has been given. 3. The appellant craves leave to add to, alter, amend and or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 8. During the course of hearing, the learned Authorised Representative(AR) reiterated the factual matrix and the documentary evidence which had been placed before the Assessing Officer as well as before the Commissioner of Income-tax (Appeals). The AR invited attention to the Paper Book filed before us and explained the contains. The paper book contained - i. Documents r....
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....e matter be restored to the file of the Assessing Officer for verification of the complete documentary trail, including the Auto-sweep statement produced for the first time. 14. We have carefully considered the rival submissions and have perused the assessment order, the order of the Commissioner of Income Tax (Appeals), as well as the material placed on record. The Assessing Officer has proceeded to make the impugned addition on the premise that the unsecured loans advanced by the assessee during the relevant financial year were sourced from funds that, according to him, were either not recorded in the books of account or were falsely explained as being out of loan repayments received from identified parties. 15. The Assessing Officer first rejected the assessee's explanation that loan repayment of Rs. 1,50,50,000/- received from M/s Leela Buildcom and Infrastructure Pvt. Ltd. constituted the source for the unsecured loans advanced to Mr. Asif Taherbhai Khanbhai and to Ms. Vishakha Piyush Tamboli. The Assessing Officer has concluded in categorical terms that "it is concluded that assessee's claim regarding loan repayment received of Rs. 1,50,50,000/- from M/s Leela Buildcom ....
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.... M/s Sumeru Buildcon and Lucky Steel, routed through the bank and sweep accounts, were not recorded in the books of account and therefore represented unexplained money or unexplained cash credit in the hands of the assessee. 18. On a careful consideration of the material placed before us, it emerges from the record that the assessee had, during the course of assessment proceedings, furnished the ledger accounts of all parties from whom loan repayments were stated to have been received. It is therefore not a case where the Assessing Officer was deprived of the primary ledger records. The only component that was not available before the Assessing Officer was the complete Bank of India Auto-Sweep Account through which certain internal transfers and sweep-in/sweep-out movements had occurred. It is this Auto- Sweep Account which explains the routing of the funds forming the basis of the Assessing Officer's allegation that the receipts from M/s Sumeru Buildcon and Lucky Steel were not recorded in the books of the assessee. 19. The learned AR has now placed on record the complete Auto-Sweep Account along with corresponding ledger entries from the regular books of account to demonstr....