TaxTMI 
TaxTMI 
2026 (7) TMI 210
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....Assessment Year (A.Y) 2009-10, ITA No. 1254/Ahd/2018 for A.Y.2009-10 and ITA No. 457/Ahd/2020 for A.Y. 2010-11 respectively. 3. The proposed substantial questions of law raised by the appellant-revenue for each of the appeal are as under: TAX APPEAL NO. 153 OF 2024: "(a) Whether in the facts and circumstances of the case and in law, the order of the learned ITAT is erroneous, illegal and ex facie perverse, because the learned ITAT has not appreciated the facts that Smt. Hansaben M. Patel was not having income to substantiate the huge amount of loan advanced to the assessee, and that Assessing Officer has amply discussed as to how the transactions in bank account of the lender clearly show the pattern of accommodation entries? (b) Whether in the facts and circumstances of the case and in law, the order of the learned ITAT is erroneous, illegal and ex facie perverse, because the learned ITAT has deleted the addition of Rs 10. Crore made u/s.68 of the Income Tax Act, 1961 without appreciating the entire gamut of facts brought on the record by Assessing Officer.?" TAX APPEAL NO. 155 OF 2024: "(a) Whether in the facts and circumstances of ....
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....he Act. Thereafter, the assessment was reopened by issuance of notice under Section 148 of the Act on 31.03.2016 on the premise that the unsecured loan of Rs. 10,00,00,000/- received by the assessee from Smt. Hansaben Manilal Patel was not genuine. Subsequent to the issuance of notice under Section 148 of the Act, the assessee vide its communication dated 17.11.2016 requested the department-revenue to treat the original return in compliance of notice issued under Section 148 of the Act. 5.2 During the course of reassessment proceedings, the Assessing Officer observed that the assessee has failed to prove the identity, genuineness and creditworthiness of the unsecured loan of Rs.10 Crore and, therefore, addition was made to the total income of assessee to the tune of Rs.10 crore under Section 68 of the Act. 6. Being aggrieved by the addition, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [for short 'the CIT(A)']. The CIT(A), after considering the submissions made by the assessee, deleted the entire addition made under Section 68 of the Act by observing as under: "....6.2 Facts of the case as mentioned in assessment order, submissions....
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....e creditor, there is no doubt about the fact that Smt. Hansaben M. Patel sold plots of land worth Rs. 149 crores during the year and she has been assessed at Rs. 103.02 crores by her Assessing Officer. These facts prove her creditworthiness Further, the loan amount was received through bank accounts, hence creditworthiness cannot be doubted in absence of adverse finding like immediate deposits of cash etc. These facts prove that the appellant satisfactorily established the identity of the creditor, genuineness of the transactions and creditworthiness of the creditor with documentary evidences. Hence, the additions made by the AO are not found justified. Regarding the financial relations of the appellant with JP Iscon group, the appellant did not deny and admitted that he had financial relations with Kotak family since his father's days but all these transactions have been found entered into regular books of accounts. Therefore, any adverse inference without any substantial documentary evidence is not legally sustainable. The appellant's case has been further found covered by the following judgments:- i) In the case of Meenaben Lakhani TA No.104 of 2011, the Hon'....
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....r that they had not disclosed the aforesaid amount, the Assessing Officer could call for further explanation from the assessee to prove the genuineness of the transaction or creditworthiness of the same. However, without verifying such fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by the Commissioner of Income Tax (Appeals) and in such circumstances, we find that both the Commissioner of Income Tax (Appeals) and the Tribunal were justified in setting aside the deletion as the Assessing Officer, without taking step for verification of the Income Tax Return of the creditors, took unnecessary step of further examining those creditors. If the Assessing Officers of those creditors are satisfied with the explanation given by the creditors as regards those transactions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessmen....
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....the loan transactions between the assessee M/s. Savitaben Mangaldas Trust and Shri Mukesh J. Shah. Therefore the addition on this account is also liable to be deleted and the grounds raised by the Revenue is devoid of merits. 15. In the combined result, the appeals filed by the Revenue in ITA Nos. 945/Ahd/2018, 1249/Ahd/2018, 1252/Ahd/2018, 1253/Ahd /2018 1254/Ahd/2018 (for A.Y. 2009-10), ITA No. 457/Ahd/2020, 477/Ahd/2020 and IT(SS)A No. 54/Ahd/2021 (for A.Y.2010-11) are hereby dismissed." 8. Being aggrieved by the order passed by the Tribunal, these three Tax Appeals are preferred by the revenue, which involve common issues regarding unsecured loans received from Smt. Hansaben Manilal Patel, Shri Kamal Gohil and Shri Mukesh Jayantilal Shah and with regard to the addition made by the Assessing Officer under Section 68 of the Act. The details of each appeal are as under: Sr.No. Tax Appeal No. ITA No./A.Y. Name of the Assessee Amount Received From Repayment details. 1. 153 of 2024 945/A/2018 A.Y.2009-10 Shri Asit Surendrabhai Shah Hansaben M. Patel Rs. 10,00,00,000/- Ledger a/c of Hansaben with confirmation in Paper Book @Page 22....
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....ssing Officer also in paragraph No. 6.1.3 of its order, which reads as under, 5.1 "On verification of the bank book of Rachna Finelease Pvt. Ltd. it is found that the fund have travelled within minutes of being credited from the bank account of Hansaben H. Patel and Rameshbhai Thakor and immediately the funds have landed in the bank account of JP Fincorp Services Pvt. Ltd. (Renamed as Ambe Tradecorp Pvt. Ltd.)." 5.2 It could be said that the finding of the Assessing Officer that the identity and creditworthiness of said party was not proved, was devoid of any basis, on the contrary, the facts established by the assessee suggested otherwise. The genuineness of transaction was shown by producing bank statements and also by explaining the source of fund at the hands of the party. 5.3 The Appellate Tribunal dismissed the Appeal of the Revenue on the said count holding and observing as under, "It was alleged by the Assessing Officer that the amount received by the assessee represents the accommodation entries from M/s. Rachna Finlease Pvt. Ltd. for the reason that such company was not filling its income tax return. In this connection, we find that the....