TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1455
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....r scrutiny assessment and notices u/s 143(2)/142(1) were issued. Finally, the AO completed assessment vide order dated 07.12.2019 u/s 143(3) after making twin additions, namely (i) addition of Rs. 40,00,000/- u/s 68 on account of cash deposited in Bank A/c during demonetization period, and (ii) addition of Rs. 2,50,37,941/- u/s 68 on account of unexplained unsecured loans. Aggrieved, the assessee carried matter in first-appeal before CIT(A) but did not get any success. Now, the assessee has come in next appeal before us. 3. Although the assessee has raised as many as four grounds with several sub-grounds in Form No. 36 (Appeal Memo), the Ld. AR for assessee made pleadings challenging the twin additions made by AO, narrated above, on merit and the Ld. DR for revenue made submissions in reply to same. We accordingly proceed to adjudicate the issued pleaded before us. Addition of Rs. 40,00,000/- u/s 68 on account of cash deposited in Bank A/c during demonetization period: 4. Ld. AR for assessee carried us to Para 6 of assessment-order to show that the AO has made impugned addition with the reasoning that the assessee explained made cash-deposit of Rs. 40,00,000/- in bank acco....
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....ource of deposit of Rs. 40,00,000/- is concerned, the assessee has declared a cash holding of Rs. 40,00,000/- in IDS and the department has issued a certificate in Form No. 4 which is placed in Paper-Book. The Column No. 5 of From No. 4 issued by department gives details of declaration and certifies description of asset as "CASH IN HAND". Thus, the assessee's cash holding is very much accepted by department. We note that the CIT(A) has rejected assessee's documents of IDS terming the same as additional evidence but those documents are statutory documents forming part of record of Income-tax Department itself and the CIT(A) is neither justified in rejecting the same in Para 4.3 of order nor making a wrong/invalid conclusion in Para 4.3.1 of his order as discussed above when the assessee has declared cash of Rs. 40,00,000/- under IDS and paid tax thereon and the same has been accepted by department. Ld. DR for revenue, though dutifully relied upon orders of lower-authorities, is not able to controvert the submission of Ld. AR. Being so, we agree that the source of cash deposit of Rs. 40,00,000/- stands explained by assessee from cash declared in IDS and hence the addition mad....
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....om 48) held as follows :- * Identity, Creditworthiness and Genuineness have to be proved by the appellant to the satisfaction of the Assessing Officer. * The mere mention of the income tax file number of an investor was not sufficient to discharge the onus u/s 68 of the Income Tax Act. * The investor companies which had filed income tax returns with meager or nil income had to explain how they had invested huge sums of money in the appellant company. Hence, the onus to establish the creditworthiness of the investor companies was not discharged and the entire transaction seem bogus and lacked credibility. * The practice of conversion of unaccounted money though the cloak of share capital / premium must be subjected to careful scrutiny. This would be particularly so in the case of private placement of shares where a higher onus is required to be placed on the assessee since the information is within the personal knowledge of the assessee. The assessee is under a legal obligation to prove the receipt of share capital / premium to the satisfaction of the Assessing Officer, failure of which, would justify addition of the said amount to the income of t....
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....lain loans, the assessee filed a reply-letter dated 23.11.2019 (Copy at Pages 15-16 of Paper-Book-I) to AO informing that the assessee and accountant were out of station for a week and that they were trying to prepare all required details. Thereafter, on 25.11.2019, the assessee filed another reply-letter and vide point no. 3 of same (Copy filed at Pages 17-19 of Paper-Book-I), the assessee filed part of the evidences; supplied addresses of all lenders and requested the AO to get the loans confirmed from respective lenders as they were taking time to confirm their dues to their own reasons. The assessee also submitted that all loans were raised through a/c payee cheques and were genuine. The reply so filed by assessee is re-produced below for an immediate reference: "3. The assessee has raised fresh loans during the year plus their old loans existing as on 01/04/2016. Copy of accounts are attached. The assessee has raised fresh loans during the year from outsiders whose statements showing their name, PAN, address and amount are enclosed with their copy of accounts. We request to Your Honour to get these loans confirm from the respective creditors whose address has been giv....
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.... loans taken during the year. This reply-letter to AO was submitted by assessee's regular counsels CA Vijay Bansal and CA Nisha Lahoti., the same is placed at Pages 107-113 of Paper-Book-I which is scanned and re-produced below for an immediate reference: 10.05.2024 To The Assistant Commissioner of Income Tax Ward 4(1) Aayakar Bhawan Indore Reg .: Rakesh Bhojani PAN AEMPB0553K AY 2017-18 Ref .: Remand report proceedings letter dated 07.05.2024 vide DIN No & letter no. ITBA/COM/F/17/2024-25/1064701273(1) Sir, Following submission is being made in reference to the above mentioned notice- 1. Assessee is an individual engaged in the business of trading of PVC, CPVC, CI, cement pipe and all fittings and valves. This business is being run under the name and style of M/s. Suhag Syndicate. Return for the impugned year was filed on 27.10.2017 reporting a total income off Rs. 37,75,400. 2. Case of the assessee was selected under CASS for complete scrutiny. Notice u/s 143(2) was issued on 10.08.2018. Various notices were issued u/s 142(1) of the Act. Assessee complied ....
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....ent in asset' mentions as 'Cash in Hand'. Thus, the said undisclosed cash income as declared on 29.09.2016 was available for deposit in the bank account during the demonetization period. 7. Further, during the course of assessment proceedings Ld. AO required assessee to submit details for the unsecured loan acquired by the assessee. In response to this assessee submitted the ledger accounts, PAN, name, address, confirmation letters of the parties from whom unsecured loans were obtained. Despite continuous efforts, ledger confirmations could not be obtained from a few parties. Hence, a specific request was made to the Ld. AO to get the confirmations from these parties. Ld. AO chose not to exercise his powers. Ld. AO completed the assessment proceedings by making addition of Rs. 2,50,37,941 u/s 68 rws 115BBE. 8. These ledger confirmations along with ITR acknowledgment and bank statements are now being submitted through a separate application under Rule 46A. 9. In the assessment order, Ld. AO has merely taken the details as reported in the tax audit report for the loan availed during the impugned year and accordingly, made addition of Rs. 2,50,37....
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....00,000 57,000 30,000 3,900 4,69,100 4,39,100 20 Sanjay Kalra AKGPK3218C 0 5,00,000 0 0 0 5,00,000 4,55,000 21 Asha w/o Bhagwandas Kalra AJMPK2616D 0 5,00,000 0 O 0 5,00,000 4,70,000 22 Bajaj Finance 14,21,045 23 Riya Kaira DBPPK3562N 0 5,00,000 0 0 0 5,00,000 5,00,000 24 Manisha B Kalra ADNPK7355E 0 5,00,000 0 0 0 5,00,000 5,00,000 25 Manisha B Kalra ADUPK6419J 0 5,00,000 0 0 0 5,00,000 5,00,000 26 Manisha Kalra HUF AANHM7955F 4,95,500 5,00,000 0 0 0 9,95,500 5,00,000 sr. no. 16, the correct name should be Vinodkumar Bhojani HUF. 10. For the parties at sr. no. 3, 7 and 22 these are namely, Bajaj Finance Limited, Magma Fincorp and Bajaj Finance Limited. It is submitted that Bajaj Finance Limited is Non- Banking Financial Company (NBFC) with the amount of Rs. 4,71,855 and Rs. 14,21,045. However, during the impugned year assessee has availed new loans of Rs. 11,00,000 and Rs. 15,65,500 from Bajaj F....
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....ng with the details of the addition made by the Ld. AO are tabulated as under - Sr No. Name PAN Opening Balance Amount received during the year Amount repaid during the year Interest TDS deducted Closing Balance Amount as per per Ld. AO 2 Ashadevi Bhojani AEMPBO55R 20,41,256 14,00,000 0 3,73,340 37,334 37,77,262 37,39,929 4 Bhagwandas Karla HUF AAEHBO705M 15,00,000 5,00,000 0 0 0 20,00,000 17,22,500 8 Manisha Kalra (HUF) AANHM7955F 4,95,500 5,00,000 0 0 0 9,95,500 8,60,500 9 Parul Bhojani ALXPB6530G 27,44,740 9,00,000 2,50,000 4,79,314 47,932 38,26,122 33,46,808 13 Rakesh Bhojnai HUF AARHR9366K 3,75,607 15,00,000 0 1,05,040 10,504 19,70,143 18,65,103 19 Bhagwandas Namdevji Kalra AIEPK7724P 0 5,00,000 57,000 30,000 3,900 4,69,100 4,39,100 20 Sanjay Kalra AKGPK3218C 0 5,00,000 0 0 0 5,00,000 4,55,000 21 Asha w/o Bhagwandas Kalra AJMPK2616D 0 5,00,000 0 0 0 5,00,000 4,70,000 23 Riya Kalra DBPPK3562N 0 5,0....
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....ITR, bank statement and ledger confirmation 23. Riya Kalra DBPPK3562N Ledger account ITR, bank statement and ledger confirmation 24. Manisha B Kalra ADNPK7355E Ledger account ITR, bank statement and ledger confirmation 25 Manisha B Kalra* Manish Kalra ADUPK6419J Ledger account ITR, bank statement and ledger confirmation 26. Manisha Kalra HUF (same as sr. no. 8) AANHM7955F Ledger account ITR, bank statement and ledger confirmation 15. The documents mentioned under the column 'Documents submitted as additional evidences under rule 46A' are being submitted as Annexs D1 and D2. It is most humbly submitted to accept the above mentioned documents for the respective lenders as additional evidences under rule 46A. 16. It has been informed by the assessee that two persons as mentioned in table at point no. 14, sr. no. 2 and 20 i.e. Asha Bhojani (mother of the assessee) and Sanjay Kalra expired on 17.01.2023 and 13.12.2022 respectively. Copies of the death certificates of both Asha Bhojani and Sanjay Kalra are enclosed as Annex E. Submitted Thanking You Yours Truly For Ra....
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....0,000/- 295-296 23.7 Challan Deposited under Income Declaration Scheme Rules, 2016 "Declaration of Rs 7,00,000/- 297-299 23.8 Declaration FORM -4 issued under Income Declaration Scheme Rules, 2016 "Declaration of Rs 7,00,000/- 299 A 23.9 Copy of FORM No. 16A 300-301 23.10 Copy of PAN 302 23.11 Copy of Aadhar Card 303-304 24 Documents of M/s Bajaj Finance (New) 24.1 Ledger Account of Bajaj Finance (New) 305 24.2 No Dues Certificate issued by M/s Bajaj Finance (New) 306 24.3 Loan Summary statement 307-310 24.4 Copy of FORM 16A 312-319 25 Documents of M/s Bhagwandas Kalra 25.1 Copy of Income Tax Return for A.Y 2017-18 320-323 25.2 Copy of Confirmation of Loan by Shri Bhagwandas Kalra 324-330 25.3 Copy of Bank Passbook of Shri Bhagwandas Kalra 331-332 25.4 Copy of Cheque issued by Shri Bhagwandas Kalra 333 25.5 Copy of FORM No. 16A 334-335 25.6 Copy of PAN Card of Shri Shri Bhagwandas Kalra 336 25.7 Copy of Aadhar Card of Shri Bhagwandas Kalra 337-338 26 Documents of Magma Fincorn Ltd 26.1 Copy of Statement of M/s Mag....
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....0.2 Copy of Ledger Account & Confirmation 435 1 30.3 Copy of Bank account statement 436-437 30.4 Copy of Cheque issued by Sanjay Kalra 438 30.4 Copy of FORM 16 439-440 30.5 Copy of Pan Card 441 30.6 Copy of Aadhar Card 442 31 Documents of Asha Kalra 31.1 Income Tax Return for A.Y 2017-18 443-447 31.2 Ledger & Confirmation 448 31.3 Copy of Bank account statement 449-451 31.4 Copy of Cheque 452 31.5 Copy of FORM 16A 453-454 31.6 Copy of Pan Card 455 31.7 Copy of Aadhar Card 456-457 32 Documents of M/s Bajaj Finance Ltd 32.1 Ledger Account of M/s Bajaj Finance 458 32.2 Copy of Loan Agreement 459-470 33 Documents of Riya Kalra 33.1 Income Tax Return 471-473 33.2 Ledger & Confirmation 474 33.3 Copy of Bank account 475-476 33.4 Copy of Cheque 477 33.5 Copy of FORM No. 16A 478-479 33.6 Copy of PAN 480 33.7 Copy of Aadhar Card 481 34 Documents of Manish B. Kalra (HUF) 34.1 Income Tax Return of Manish B. Kalra 482-484 34.2 Copy of Confirmation & Ledger 485 ....
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....verse feature. Ld. DR, however, submitted that he has no clue from the order of CIT(A) to make submission regarding remand-proceeding. 15. We have considered submissions of both sides and carefully perused the documents held in Paper-Books and the orders of lower-authorities. The assessee is aggrieved by an addition of Rs. 2,50,37,941/- made by AO u/s 68 on account of unexplained loans. In the assessment-order, the AO has made a list of 26 lenders with the amounts of loans alleged to have been taken by assessee during the year. The AO has made impugned addition by stating that the assessee did not file documents of those 26 lenders. Before us, the assessee has filed copies of letters submitted by him to AO according to which the assessee filed part-evidences of loans while filing addresses and PAN data of all lenders. It is also on record that the assessee requested the AO to get confirmations directly from the lenders because the lenders were taking time. Thereafter, during first appellate proceeding, the assessee filed an application to CIT(A) under Rule 46A of Income-tax Rules, 1962 with required evidences. Then, the AO conducted remand-proceeding at the behest of CIT(A) and ....
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.... proved by documents that it has taken new loans of Rs. 1,04,31,897/- from 13 lenders only and the rest were opening balances brought forward from earlier year. In so far such opening balances are concerned, it is an accepted view that no addition can be made u/s 68 in current year and this view is also asserted by Ld. DR for revenue. Hence, we straightaway reach to a conclusion that no addition can be made in respect of opening balances. Now, turning to the new loans of Rs. 1,04,31,897/- taken during the year, there are loans of Rs. 26,31,897/- taken from Bajaj Finance Company, a renowned NBFC, for which there can hardly be any dispute qua the identity, creditworthiness and genuineness. Thus, there remains a net loan of Rs. 78,00,000/- taken from other lenders [Rs. 1,04,31,897 (-) Rs. 26,31,897]. The assessee has filed enough documents qua all new loans and as stated earlier, the AO has conducted remand-proceeding and has not made any adverse reporting to CIT(A) by way of filing remand-report. This shows that the AO was very much satisfied with the documents submitted by assessee and did not find any fallacy therein worth reporting to CIT(A). Even before us, Ld. AR for assessee ha....