TaxTMI 
TaxTMI 
2025 (2) TMI 1534
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....t received during F.Y Benefit Received through accommodation entries from the concern Amount of benefit received (in Lakhs) 1 Pooja Equiresearch Pvt Ltd 2010-11 M/s Brotex Vanijya Pvt Ltd 50.00 2.1 Thus on the basis of such information, case of the Assessee was reopened by recording the reasons for reopening of the assessment proceedings and issuing the notice dated 14th March, 2018 u/s. 148 of the Act to the Assessee, who in response filed its return of income on 12.05.2018 declaring total income at 'Rs. Nil' and also objected to the reopening proceedings vide letter dated 10.04.2018, which was disposed off by the AO vide dated 19.07.2018. Thereafter various statutory notices were issued to the assessee, however, the Assessee made no compliance and therefore the AO while considering the data available in the CD provided by the Investigation Wing, observed that the Assessee has received loan from three parties, which have no creditworthiness and are without any economic rationale, details of the same are as under: - Sr no Name of the party Amount A/c no Bank name Transaction date 1 Brotex Vanijya Pvt Ltd 27, Brabourne Road, 2n....
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....ed with the action of the assessee in establishing the identity of the creditors by submitting loan confirmation, copy of the acknowledgement of the ITRs etc., however, still doubted the creditworthiness of the creditors on the various factors and thus ultimately held the amount of Rs. 1,26,00,000/- as unexplained cash credit and consequently added the same in the income of the Assessee u/s. 68 of the Act by observing and holding as under: 9. In response to the same, assessee filed reply vide letter dated 19.12.2018 in which the assessee submitted copy of confirmation of accounts, Banks statement of relevant entry, Audited Balance Sheets, ledger copy of the above three entities and claimed to prove the identity, genuineness and creditworthiness of the above three parties On 24th Dec 2018 replies to the notice issued u/s. 133(6) was received in Tapal from M/s Spring Enclave (P) Ltd and M/s Harsharatna Finance & Inv (P) Ltd. On 18th Dec 2018 reply from M/s Brotex Vanijya (P) Ltd was received. As per the speed post tracking portal notice issued u/s. 133(6) to Spring Enclave (P) Ltd is not served. In the back drop of above mentioned things; the following facts are emerged from....
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....in Spring Enclave (P) Ltd by purchasing 500 shares of Rs. 1 each (Rs. 399/-). (x) As per the information received from the Investigation wing, the Inspector deputed to locate M/s Brotex Vanijya (P) Ltd, at 14C, M.D. Road, Kolkata, 700007 also could not find the company at given address. (xi) Following chart is prepared on the basis of Bank statement, acknowledgement of ITR and financial statement. Sr. No. Name of the Assessee Amount of Loan In Rs. Profit as per ITR In Rs. NBFC Yes/No Fixed assets In Rs. Balance after transfer In Rs. BANK BALANCE In Balance sheet In Rs. 1 Brotex Vanijya Pvt Ltd 27, Brabourne Road, 2nd floor, Kolkata 50,00,000 3182 NIL 158459 10300 2 Spring enclave Pvt Ltd. 2nd, Lal Bazaar street, 2nd floor, Kolkata 40,00,000 3235 No NIL 11280 74507 Harsharatna Finance and Investment Pvt Ltd 2nd, Lal Bazaar street, 2nd floor, Kolkata 36,00,000 7848 No 479342 19282 841145 The analysis of the Balance sheet shows that there is merely any income from that loan advance and investment activities. There is no fixed asset. On perusal of the....
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....0 No business loss is set off against the addition made u/s. 68 of the Act being deemed income which was not recorded in books of accounts. Reliance is placed on decision of Hon'ble Gujarat High Court "Fakir Mohmed Haji Hasan Vs. CIT [2001] 247 ITR 290/[2002] 120 Taxman 11 and decision on Hon'ble ITAT Chennai (ITA No 325/Mds./2015 dated 06.04.2016 DCIT Vs M/s Shree Karthik Papers Ltd.). Tax has to be calculated as per the provision of section of 115BBE of the Act. Penalty u/s. 271(1)(c) of the Act is initiated for concealment of income. 11. Assessed u/s. 143(3) r.w.s. 147 of the Act, Charge interest u/s. 234A, 234B, 234C and 234D of the Income Tax Act, 1961 as applicable. Give credit for prepaid taxes after verification. The computation of tax payable is annexed as per separate sheet and forms the part of assessment order. Issue demand notice and challan and penalty notice u/s. 274 r.w.s 271(1)(c) of the Act accordingly. 3. The assessee being aggrieved challenged the said addition before the ld. Commissioner on legal grounds as well as on merits, however could not succeed, as the Ld. Commissioner vide impugned order affirmed the aforesaid addition on th....
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....ear. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore, it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness ....
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....sh receipt of credit in cash, as per requirement of section 68, the assessee has to explain or satisfy three conditions, namely: (i) identity of the creditor; (ii) genuineness of the transaction; and (iii) credit-worthiness of the creditor. 14. In Pr. CIT v. Veedhata Towers (P.) Ltd. [2018] 403 ITR 415 (Bom), this court has held that assessee is only required to explain the source of the credit. There is no requirement under the law to explain the source of the source. In the instant case, there is no dispute as to the identity of the creditor. There is also no dispute about the genuineness of the transaction. That apart, the creditor has explained as to how the credit was given to the assessee. Thus assessee had discharged the onus which was on him as per the requirement of section 68 of the Act. What the Assessing Officer held was that sources of the source were suspected; he suspected the two sources Shri Rajendra Bahadur Singh and Smt. Sarojini Thakur of the source Smt. Savitri Thakur 15. In view of discharge of burden by the assessee, burden shifted to the revenue; but revenue could not prove or bring any material to impeach the source of the credit.....