TaxTMI 
TaxTMI 
2025 (2) TMI 1921
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....are quite convinced about the sufficiency and genuineness of the reasons for late filing of the appeals. Accordingly, we condone the delay in filing the appeals by admitting these appeals for adjudication. ITA No. 1729/KOL/2024 03. The Revenue has raised following grounds of appeal:- "1. Whether the Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the addition of Rs. 4,49,37,500/- under section 68 of the Act on account of bogus unsecured loans despite the assessee failing to establish the genuineness of the transactions and the identity and creditworthiness of the creditors? 2. Whether the Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the disallowance of Rs. 40,44,375/- under section 69C of the Act on account of interest on bogus unsecured loan despite the assessee failing to establish the genuineness of the transactions and the identity and creditworthiness of the creditors? 3 Whether the Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the disallowance of Rs. 2,24,687/- under section 69C of the Act on account of commi....
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....earing in the list of shell companies as per departmental data base, the details whereof were extracted by the ld. AO in para 8 of the assessment order. According to the ld. AO, these companies are shell companies and operated by the entry operators whose main source of income was from commission for providing accommodation entries in the form of bogus share capital, sale of shares, bogus capital gain, etc. Accordingly, the assessee was called upon to furnish the details which were furnished by the assessee by submitting that the amalgamating company as on the date of merger had investments amounting to Rs. 93,01,00,000/- which was acquired by the assessee company pursuant to merger. In A.Y. 2017-18, the assessee sold the investments amounting to Rs. 18,67,227/-. These shares were sold during the year under consideration to ten parties/ corporates. It was also stated that share proceeds of Rs. 18.27 crores were received in respect of sale of shares sold out of the opening investments. It was further stated that the assessee was vested with this investments from amalgamating company out of which part were sold at a cost of acquisition, thereby earning no profit. It was also submitte....
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.... A.Y. of purchase Sales value (Rs.) Overall Computer Pvt Ltd 250 25,00,000 2011-12 25,00,000 Possible Dealtrade Pvt Ltd 950 95,00,000 2011-12 95,00,000 Pratham Commodeal Pvt Ltd 6,600 66,00,000 2011-12 66,00,000 Prince Vintrade Pvt Ltd 2,830 2,83,00,000 2011-12 2,83,00,000 Rose Valley Investment Consultants Pvt Ltd 16,000 1,60,00,000 2011-12 1,60,00,000 Uttam Dealtrade Pvt Ltd 4,700 4,70,00,000 2011-12 4,70,00,000 Pushpak Commotrade Pvt Ltd 5,550 5,55,00,000 2011-12 5,55,00,000 Topgrain Financial Advisory Pvt Ltd 12,300 1,23,00,000 2011-12 1,23,00,000 Touchpoint Marketing Pvt Ltd 5,000 50,00,000 2011-12 50,00,000 Grand Total 18,27,00,000 18,27,00,000 The above-mentioned shares held by the amalgamating company were sold to the following companies during the F.Y: 2016-17: SL No. Name of the Concern to whom shares sold Consideration value 1. Blueberry Tradelink Pvt Ltd 1,41,00,000 2. Kalyani Vincom Pvt Ltd 2,98,00,000 3. StrongwellCommodeal Pvt Ltd 5,33,00,000 4. Risewel....
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....ry evidences before the AO to establish the identity & creditworthiness of the buyers and also the genuineness of the transactions as the sale proceeds was received through proper banking channels. However the A.O added the entire sales proceeds of Rs. 18,27,00,000/- as unexplained cash credit u/s 68. On perusal of the assessment order it is observed that the AO has made the addition based upon two contentions, first that the names of the buyer companies (to whom such shares were sold during the F.Y: 2016-17) were listed in the Departmental database of Shell companies and second that statement of various alleged entry operators were recorded on various dates, who allegedly managed and controlled such buyer companies. The statements of the entry operators referred to by the AO are given as under: Sl. No Name of alleged entry operator Recorded on 1 Dinesh Kumar Dhandhania 19.11.2014 2 Praveen Agarwal 10.02.2015 3 Akash Agarwal 10.02.2015 4 Dipankar Sarkar 10.02.2015 5 Subrata Banerjee 10.02.2015 The relevant portions of the statements of these entry operators have been reproduced by the AO in his assessm....
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....rior to the transaction which was made during the F.Y: 2016-17. Whether such entry operators who were allegedly controlling the 5 buyer companies during F.Y: 201415, were still managing and looking after these companies' affairs during the F.Y: 2016-17 has not been verified and commented upon by the AO. The statements nevertheless are generalized statements and do not state anything specific about the impugned transaction of sale of shares of M/s Nextgen Commosales Pvt Ltd undertaken 2 years after recording such statements. AO not making any specific comment as to why evidences offered by the assessee as well as the buyer companies not sufficient towards establishing the identity, creditworthiness of the buyer companies and the genuineness of the transaction It has already been tabulated above that during the course of assessment proceedings the appellant submitted requisite documentary evidences towards establishing the identity, creditworthiness of the buyer companies and the genuineness of the transaction. Furthermore all the buyer companies have also responded to notice u/s 133(6) before the AO. Since all the buyer companies have responded to the communication....
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.... was deposited by the assessee company. Moreover, there is no material whatsoever brought on record to demonstrate that the alleged cash deposit made in the bank account of a third party was from the assessee company. No opportunity to cross-examine any these parties was provided to the assessee. The bank statements based on which the cash trail was prepared are part of the disclosed documents and cannot be held as incriminating material." The facts that emerge are that, even in the statements of the entry operators tabulated above, neither has the appellant/ nor Dollar Group, nor indeed any transaction through the aforementioned companies been named or specified. The transactions of sale of shares in any case have also been made much after the date of recording such statements. In these conditions, without the least bit of corroboration, it is not possible to accept such a bland generalised statement which is bringing nothing specific on record. In view of the various objections put forth by the appellant and that the statements being stand alone statements, with no connection having been established by the A.O / persons taking the statement of the entry operator....
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....investment. It would therefore later on not be open to the Assessing Officer to make addition with the aid of Section 68 of the Act when such shares were sold on the premise that the purchasers themselves were bogus. No question of law therefore arise on this issue." The Hon. ITAT, New Delhi in the case of Brij Resources Pvt Ltd vs ITO in ITA No. 8835/Del/2019 dated 07.07.2021 also took the same view where it was held as under:- "I find, the assessee, during the year, has sold the investment and has received the amount by cheque and, therefore, in my opinion, provisions of section 68 of the Act cannot be applied to realization of investment which was duly reflected in the balance sheet of the assessee company in the preceding assessment year. In my opinion, if the sale of share is bogus, then the purchase of the same shares is also bogus. If the case of the Revenue is that assessee's own money has come back to the assessee in shape of accommodation entry, then, the money of the assessee had gone in the preceding year in shape of purchase of the shares which were sold during the year. No action appears to have been taken in the preceding assessment year treating th....
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.... the transaction and whether such transaction has been accepted by the Assessing Officer of the Creditor but instead of adopting such course, the Assessing Officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. The Hon'ble High Court further held that so long as it is not established that the return submitted by the creditor (subscriber shareholder) has been rejected by its Assessing Officer, the Assessing Officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established. The Hon. Jurisdictional High Court in PCIT v. Sreeleathers [2022] 143 taxmann.com 435 (Calcutta)took a similar view: "Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit (Loans and advances) - Assessment year 2015-16 - During scrutiny proceedings, Assessing Officer noted that assessee-company had received certain unsecured loans from various companies out of which 13 were alleged paper companies having no worth and, thus, issued a show cause notice - Subsequently, assessee furnished various documents, ....
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....ord that in the assessment proceedings it was noticed that the assessee company during the year under consideration had brought Rs. 4,00,000/- and Rs. 20,00,000/- towards share capital and share premium respectively amounting to Rs. 24,00,000/- from four shareholders being private limited companies. The Assessing Officer on his part called for the details from the assessee and also from the share applicants and analyzed the facts and ultimately observed certain abnormal features, which were mentioned in the assessment order. The Assessing Officer, therefore, concluded that nature and source of such money was questionable and evidence produced was unsatisfactory. Consequently, the Assessing Officer invoked the provisions under Section 68/69 of the Income Tax Act and made addition of Rs. 24,00,000. On appeal the Learned CIT(A) by following the decision of the Supreme Court in the case of CIT. vs. M/s. Lovely Exports Pvt. Ltd., reported in (2008) 216 CTR 195 allowed the appeal by holding -that share capital/premium of Rs. 24,00,000/- received from the investors was not liable to be treated under Section 68 as unexplained credits and it should not be taxed in the hands of the appellant....
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....n of shares held by the assessee as investments which it undertook in the ordinary course of its business, more importantly, purchases having made in the current year also. Further, as rightly pointed out by the learned Counsel, both opening balance of investment in shares and the purchases made during the year have not been disputed or doubted by the authorities below so as to bring the entire sale consideration to tax. 14. At this stage, the ld. DR has submitted that the assessee has claimed that it has undertaken this sale transaction by selling the shares at the cost at which it had acquired them in AY 2006-07. At the same time, assessee submits that it has undertaken this transaction in the ordinary course of its business. The ld. DR has submitted that the conduct of business is always with a profit motive, more particularly when the assessee had held these shares for past several years and had also made purchases during the year, deploying its funds. There ought to be certain element of profit embedded in the sale transaction executed which must be brought to tax. 15. Considering the above submission of the ld. DR and taking a holistic view of the facts and circumsta....
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....which comes to Rs. 91,35,000/- as the appellant's business profits. The addition made by the AO u/s 68 to the tune of Rs. 18,27,00,000/- stands deleted. In the result the grounds are partly allowed." 06. The ld. CIT(A) partly allowed the appeal of the assessee by following the decision of the co-ordinate bench in case of M/s Swarna Kalash Commercial Pvt. ltd. Vs. ACIT in IT(SS)A No. 53/KOL/2022 for A.Y. 2019-20 vide order dated 01.09.2023, wherein the similar issue has been decided in favour of the assessee by the co-ordinate Bench. 07. After hearing the rival contentions and perusing the materials available on record, we find that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate Bench in the case of M/s Ashtvinayak Sales Pvt. ltd. Vs. ACIT in ITA(SS)A No. 54/KOL/2022 for A.Y. 2019-20 vide order dated 14.09.2023 as well as the decision in the case of M/s Swarna Kalash Commercial Pvt. ltd. Vs. ACIT in IT(SS)A No. 53/KOL/2022 for A.Y. 2019-20 vide order dated 01.09.2023, wherein similar issue has been decided in favour of the assessee. We note that the coordinate bench while passing he above decision has relied on the decision as referr....
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....counts which were audited and audited accounts are placed at page no. 102 to 111 of PB Vol.-1. We also note that the assessment for AY 2011-12 was framed u/s 143(3) of the Act vide order dated 17.03.2014 a copy of which is placed at page no. 276 and 277 of PB Vol.-1 and the neither the share capital/share premium nor the investments out of that source were doubted by the AO. 9.2. We also note that similar issue was involved in the case of M/S Swarna Kalash Commercial Pvt Ltd. Vs ACIT, Central Circle -2(2), Kolkata, a group concern of the Rashmi Group of Companies, which was also subjected to search u/s 132(1) of the Act in the same search proceedings. We note that the coordinate bench has decided the issue in favour of the assessee in ITA No. I.T.(S.S.) A.No.53/Kol/2022 A.Y.2019-20 vide order dated 01.09.2023 involving the same issue of addition of sale of shares/investments by the AO on the ground that identity and credentials of the purchasers of shares/investments were suspicious. The operative part of the order is extracted as under: "6.1. We have considered the rival contentions and gone through the record. First we deal with the issue relating to the undated....
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....17,05,60,000 69,82,13,635 The shares were held by the assessee as investments and were sold at the cost of acquisition by the assessee. Hence, there is no profit/loss on such sale of investment. We also look at the movement of investment held by the assessee, which is tabulated below: FY AY Opening Amount Purchase Amount Sales Amount Closing Balance Addition made by A.O. 201415 201516 63,42,00,000 - - 63,42,00,000 - 201516 201617 63,42,00,000 42,44,960 18,344,960 62,01,00,000 1,83,44,960 201617 201718 62,01,00,000 56,27,44,459 468,499,459 71,43,45,000 46,84,99,459 201718 201819 71,43,45,000 1,55,17,29,538 2,062,064,910 20,40,09,628 2,06,20,64,910 201819 201920 20,40,09,628 66,47,64,007 170,560,000 69,82,13,635 17,05,60,000 Total 2,71,94,69,239 We also refer to the details of opening stock, purchases, sales and closing stock during the year, placed on record by the assessee: Sl No Name of the Script Opening Balance Purchases Sales Closing Balance Amount Amount....
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....0,000 7 Laxhmidhan Business Pvt Ltd 544-546 Rs. 6,00,000 8 MuditVanijya Pvt Ltd 547-597 Rs. 5,50,000 9 Outright Commodities Pvt Ltd 599-846 Rs. 2,44,90,700 10 Over Arching Impex Pvt Ltd 847-1053 Rs. 81,00,000 11 RadhacharanTradevin Pvt Ltd 1055-1158 Rs. 10,00,000 12 S P Udyog Pvt Ltd 1159-1161 Rs. 25,00,000 13 SamundarTradelink Pvt Ltd 1162-1164 Rs. 34,00,000 14 Shatabdi Entertainment Pvt Ltd 1165-1193 Rs. 14,00,000 15 Spur Trading Pvt Ltd 1195-1204 Rs. 7,50,000 16 SwarnmahalVyapaar Pvt Ltd 1205-1252 Rs. 15,00,000 17 Swetang Retails Pvt Ltd 1253-1356 Rs. 50,00,000 18 Viewpoint Advisory Pvt Ltd 1357-1490 Rs. 85,00,000 19 Yuthika Merchandise Pvt Ltd 1492-1603 Rs. 25,00,000 Total (A) 9,31,50,000 SL No. NON- CORPORATE ASSESSE Page No. FY 2018-19 20 Bengal Trade Agency 1604-1613 Rs. 1,64,00,000 21 Bhagwati Trading 1614-1616 Rs. 57,90,000 22 Om Sai Enterprise 1617-1619 Rs. 24,90,000 23 Simplex Xallolloy 1620-1622 Rs. 78,05,000 24 Others-Non-....
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....erial discovered during search and seizure operation, would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation. In the case of "Commissioner of Income Tax vs. Sunil Agarwal" (2015) 64 taxman.com 107 (Delhi-HC), the assessee therein, during the course of search, made a categorical admission under section 132(4) that the cash amount seized belonged to him and it represented undisclosed income not recorded in the books of accounts. The assessee did not immediately retract from the above admission but only during the assessment proceedings at a belated stage. In his retraction, the assessee stated that the surrender was made under a mistaken belief and without looking into books of account and without understanding law and that he had been compelled and perturbed by events of search and that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon'ble Delhi High Court, after considering the fact and circumstances of the case, while dismissing the....
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....ed by reference to the existing facts and circumstances, human conduct and preponderance of possibilities. During the search proceedings, record relating thereto being in exclusive custody of the searching officers, it is their wish and will which prevails during the fateful period. That it is almost impossible for the assessee to adduce demonstrative evidence of exerting such pressure. The co-ordinate bench of the Tribunal (supra) while holding so, apart from relying upon various decisions of the higher courts has also relied upon the decision of the Tribunal in the case of "Dy CIT vs. Pramukh Builders" (2008) 112 ITD 179 (Ahd.) wherein it has been held that even in the absence of proof of coercion or pressure, the statement by itself cannot be taken as conclusive. Therefore, merely in the absence of proof of pressure, threat, coercion or inducement the statement cannot be held as conclusive and additions cannot be made by solely relying on a statement or a letter. 12.3 The case of the assessee, before us, is on better footing as in this case, there is no delay in retraction of the statement which was done on the very next day by filing affidavits before the Metropolitan ....
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....doubt on the sale transaction of shares held by the assessee as investments which it undertook in the ordinary course of its business, more importantly, purchases having made in the current year also. Further, as rightly pointed out by the learned Counsel, both opening balance of investment in shares and the purchases made during the year have not been disputed or doubted by the authorities below so as to bring the entire sale consideration to tax. 14. At this stage, the ld. DR has submitted that the assessee has claimed that it has undertaken this sale transaction by selling the shares at the cost at which it had acquired them in AY 2006-07. At the same time, assessee submits that it has undertaken this transaction in the ordinary course of its business. The ld. DR has submitted that the conduct of business is always with a profit motive, more particularly when the assessee had held these shares for past several years and had also made purchases during the year, deploying its funds. There ought to be certain element of profit embedded in the sale transaction executed which must be brought to tax. 15. Considering the above submission of the ld. DR and taking a hol....
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....of the Act on account of commission paid for accommodation entry despite the assessee failing to establish the genuineness of the transactions and the identity and creditworthiness of the creditors? 4. Whether the Ld. CIT(A) has erred in facts and in law by restricting the disallowance of Rs. 18,67,227/- under section 14A of the Act on account of expenses incurred to earn exempt income to Rs. 86,368/- in contravention of CBDT's Circular No. 5/2014 dated 11/02/2014?" 10. The issue raised in ground no.1 of appeal is against the deletion of addition of Rs. 4,49,37,500 by the ld. CIT(A) as made by the ld. AO u/s 68 of the Act. 11. The facts in brief are that the assessee filed the return of income on 29.09.2015, declaring total income at Rs. 31,62,160/-. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were issued and served on the assessee. The assessee is a Non-Banking Financial Company (NBFC) was engaged in the business of granting loans and advances and making investments in shares and securities. The assessee has taken unsecured loans from various individuals, HUFs and repaid the same as well. The opening and clos....
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....credit u/s 68 of Rs. 4,49,37,500/- received from V.K.Mercantile Pvt.Ltd. On perusal of the assessment order, it is observed that the AO has come to the conclusion based upon the following: 1. Statement of one Neeraj Jain, an alleged entry operator dated 29.12.2014, 2. A cash trail prepared alleging that the assessee has brought its unaccounted money in the guise of unsecured loan. The AO has made the addition of Rs. 4,49,37,500/- by relying on the alleged cash trail. On perusal of the cash trail prepared by the AO it is observed that it has been alleged by the AO that cash was deposited in 4th/5th layers in the name of various parties such as P K Infotech, Jyoti Enterprise, Bharat Traders, Bajrang Realty, Ashika Traders, Narayan Enterprises, Om Enterprises, Vandana Emporium, Bluebell Trading, Astha Traders, Global Enterprises, Mortex Emporium, Kanha Creations, Vasant Agarwal, Ranisati Emporium, Satkar Trading, Prabhat Sultania, Niranjan Trading and Uma Udyog etc. In the submissions filed by the appellant during the course of appeal proceedings, the appellant has stated that the following documents were submitted before the AO to substantiate the identity,....
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.... 8,51,75,810 2014-15 8,51,75,810 9,05,45,000 2,20,00,00 1,44,81,037 14,48,104 16,67,53,743 2015-16 16,67,53,743 - 9,55,75,000 1,39,45,972 13,94,597 8,37,30,118 2016-17 8,37,30,118 12,56,30,118 10,57,00,000 56,66,156 5,66,616 2,50,29,658 2017-18 2,50,29,658 4,00,00,000 13,38,29,658 6,64,817 73,869 6,89,44,326 (Cr.) 2018-19 6,89,44,326 (Cr.) 6,89,44,326 - 10,86,298 1,20,700 - The interest bearing loans received from M/s V. K. Mercantile Pvt Ltd, were ultimately repaid in entirety during the F.Y: 2018-19 and TDS was duly deducted on the same. The appellant has submitted Ledger copies along with relevant pages of bank statement to substantiate its contention. The appellant has also stated the following to prove the three limbs of section 68 i.e., identity, creditworthiness and genuineness, it is pertinent to note the following: Identity The loan creditor is an Income Tax Assessee vide PAN AABCV0257A and is regular in filing ITR. Copy of the ITR Acknowledgement filed for AY 2015-16 and current AY 2023-24 has been enclosed by the appellant. The bo....
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....ised several doubts against such cash trails reproduced by the AO in his order, few of which are being discussed below: Chart 1 in Page No. 22 of the assessment order: The AO has alleged that in the 4th layer there has been cash deposits of Rs. 5,00,000/- each in Jyoti Enterprises as well as in P K Infotech which have collectively remitted 15 lakhs to M/s Niranjani Tradelink Pvt. Ltd, which apparently is the source of funds of the loan creditor. However the AO has completely ignored the fact that there were also NEFT of Rs. 6,40,500/- by Ubique Consultancy and clearing cheque of Rs. 2,40,450/-. But the AO having a biased opinion has only considered the cash deposits. Further, why there were cash deposits in the said bank accounts of Jyoti Enterprises and P K Infotech can only be answered by the respective concerns and merely because some cash deposits were made in accounts of third parties at some point of time, that does not imply that it was the appellant's unaccounted money being deposited there as the AO has not been able to point the respective withdrawals of such amount from the appellant's bank account. Chart 2 in Page 23 of the assessment order: ....
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....ed of the appellant to present the director of the lender concern, but it cannot be expected from the appellant to present directors of some concerns which are not known to him, in the sense as it is not having direct transactions with such parties. I find that one of the directors of the lender concern M/s V K Mercantile Pvt Ltd appeared before the AO and submitted all the requisite documents before the AO besides recording her statement. In her statement the director stated the source of funds of such loans were from sale of her company's investments, refund of loans and advance given to parties earlier as well as from maturity of Fixed Deposits. The AO has not been able to dispute this answer of the Director of the lender company anywhere in his assessment order and has simply relied upon the cash trail. The appellant in its submissions has already demonstrated that the cash trails provided by the AO are very much inconclusive and therefore the answer provided by the Director cannot be disputed merely based upon the said cash trail. In this regard it is pertinent to refer to the decision of Hon'ble High Court of Calcutta in the case of DCIT vs Rashmi Infrastructure in I....
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....e inferences drawn, by relying on such unverified database/statements collected at the back of the appellant, to be legally unsustainable. In this regard, it is apt to refer to the following findings recorded by the Hon'ble Apex Court in the case of Andaman Timber Industries Ltd vs Commissioner of Central Excise in Civil Appeal No. 4228 of 2006 reported in (2015) 62 Taxman 3 (SC), which read as under: "According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected." Besides the above discussion, I find the following facts to be of supreme importance while adjudicating this issue: 1. The appellant has been assessed for the following years during which it was in receipt of such unsecured loans from M/s V K Mercantile Pvt. Ltd : A.Y. Order u/s Date of Order 2011-12 153A/143(3) 31.03.2016 2012-13 153A/143(3) 31.03.2016 2013-14 153A/143(3....
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....milar matter has been dealt with by the Hon. Jurisdictional High Court in a recent judgement in [2022] 143 taxmann.com 435 (Calcutta) HIGH COURT OF CALCUTTA, Principal Commissioner of Income- tax v.Sreeleathers*, wherein the Hon. Court has held: "4. Before we examine the correctness of the order passed by the Tribunal and consider whether a substantial question of law arises for consideration in this appeal we need to take note of section 68 of the Act. This provision deals with cash credits. It states that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. The crucial words in the said provision are "assessee offers no explanation". This would mean where the assessee offers no proper, reasonable and acceptable explanation as regard the amount credited in the books maintained by the assessee. No doubt the Income-tax Act places the burden of proof on the tax payer....
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.... submitted the reply dated 22-12-2017. The documents annexed to the reply were classified under 3 categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The assessing officer has brushed aside these documents and in a very casual manner has stated that mere filing PAN details, balance sheet does not absolve the assessee from his responsibility of proving the nature of transaction. There is no discussion by the assessing officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee has discharged his initial burden and the burden shifts on the assessing officer to enquire further into the matter which he failed to do. In more than one place the assessing officer used the expression "money laundering." We find such usage to be uncalled for as the allegations of money laundering is a very serious allegations and the effect of a case of money laundering under the relevant Act is markedly different. Therefore, the assessing officer should have desisted from using such expression when it was ne....
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....responsibilities of proving the nature of transactions. It is not enough for the assessing officer to say so but he should record reasons in writing as to why the documents which were filed by the assessee along with the reply dated 22-122017 does not go to establish the identity of the lender or prove the genuineness of the transaction or establish the creditworthiness of the lender. In the absence of any such finding, we have to hold that the order passed by the assessing officer was utterly perverse and rightly interfered by the CIT(A). The Tribunal re-appreciated the factual position and agreed with the CIT(A). The tribunal apart from taking into consideration, the legal effect of the statement of Ashish Kumar Agarwal also took note of the fact that the notices which were issued by the assessing officer under section 133(6) of the Act to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the assessing officer and there is no discussion on this aspect. Thus, we find that the tribunal rightly dismissed the ap....
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....essee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. When the revenue preferred appeal before the Appellate Tribunal, the Tribunal confirmed the findings recorded by the Appellate Authority. The Tribunal referred to the decision of CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) and also in Sumati Dayal v. CIT [1995] 80 Taxman 89/214 ITR 801 (SC), to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a business transaction between the assessee and the loan parties and that they could not be doubted for their genuineness. Whil....
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....ured loan from M/s VK Mercantile Ltd and partly repaid the same during the year and balance outstanding was repaid in the subsequent years. In all the earlier assessment years also assessee took loans from the same lender but the ld. AO did not have any objection qua the loans taken from M/s VK Mercantile Ltd. We note that the assessee is a NBFC company and is against the business of taking/ borrowing money and advances and same to the public at large on interest basis. During the year the assessee borrowed from V K Mercantile Pvt. ltd. amounting to Rs. 9,05,45,000/- out of which Rs. 2,20,00,000/- was repaid during the year itself and the remaining of Rs. 6,85,45,000/- was repaid during the subsequent years. We note that the assessee has taken loan regularly from VK Mercantile Ltd. as is apparent from the perusal from the facts that the opening balance of loans from said party was amounting to Rs. 8,51,75,810/-, borrowed during the year was Rs. 9,05,45,000/- and Rs. 2,20,00,000/- was repaid during the year and closing balance amounting of unsecured loan to Rs. 16,67,53,743/-during the subsequent assessment years. We also note that the assessee has taken loan from VK Mercantile Pvt.....