TaxTMI 
TaxTMI 
2025 (3) TMI 2030
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.... AO on account of unexplained loan creditors, without appreciating the fact that the AO had conducted independent inquiries from the loan creditors and it was established on verification of their return record that the said loan creditors had no worth and were only engaged in providing accommodation entries. 3 The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary" Brief facts of the case are as under: 2. The assessee is a partnership firm and filed its return of income on 06.03.2013 declaring total income of Rs. Nil. Subsequent to an information received from investigation wings during a search and action conducted in case of Shri. Pravin Kumar Jain from the statement recorded, following entities were set to be controlled/operated by him and was involved in providing bogus accommodation entries in the form of unsecured loan, bogus LTCG etc. 2.1 The Ld. AO noted that assessee obtained unsecured loans from following entities which were mentioned by Shri. Pravin Kumar Jain in his statement to be his group concerns. Sr. No. Name of the Party Amount (in Rs. ) 1. Atharv Business Pvt. Ltd 70,00,000/- 2. ....
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....d 2012-13 and 2013-14. ❖ Copy of repayment schedule of loans. ❖ Copy of Balance Sheet, Profit and Loss A/c of Atharv Business Pvt. Ltd, Duke Business Pvt. Ltd, Josh trading Pvt. Ltd, Nakshtra Business Pvt. Ltd." 2.3 The Ld. AO during the assessment proceeding issued notice u/s 133(6) of the Act to the parties from whom assessee had taken unsecured load. It was observed that except for m/s. George Trading Pvt. Ltd. The other 3 parties had furnished copy of the return, financial statement along with the bank statements of the Ld. AO. 3. The assessee submitted that, Shri. Pravin Kumar Jain had retracted the statement by filing retraction affidavit before the Hon'ble High Court and thus the statement recorded by investment wings of the Shri. Pravin Kumar Jain cannot be relied upon. The Ld.AO rejected the submission of the assessee by holding that as per the investigation report Shri. Pravin Kumar Jain group was engaged in providing accommodation entries to various parties and had no genuine business to carried out based on the statement reported on Shri. Pravin Kumar Jain u/s 132(4) of the Act. The Ld.AO concluded that the assessee obtained through....
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....f assessment proceedings . The AO has also not found any cash deposit in any accounts either of the appellant or of the lenders. AO has also not been established any trail of fund initially deposited in cash and finally finding it's way to the appellant's. The appellant has also harped that they need not proved the source of the source. The AO on other side has contended that mere establishment of the identity is not sufficient to proof the genuiness of loan u/s.68 of the I.T.Act. The AO has relied upon the following case laws : 1. In Sumati Dayal V. CIT (1995) 214 itr 801 (SC) 2. Precision Finance P. Ltd.;s case [1994] 208 ITR 465(Cal) 3. M.A. Unneri Kutty Vs. CIT 198 itr 147 (Kerala) 4. R.B.Mittal V/s. CIT 131 taxman 155 (Raj) 5. Nizam Wool Agency V. CIT 193 ITR 318 (All) 6. Riddhi Promoter(P) Ltd. V CI 8.5 The appellant has filed elaborate rebuttal of the above are stating that onus cast upon the appellant was discharged during the course of assessment proceedings. The appellant submits that the AO has failed to establish that these unsecured loans were accommodation entries. The AO has also not spelt out how the cre....
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....me two lenders, i.e. Mohit International and Natasha Enterprises. The reasoning of the Ld.CIT(A) was that all the three ingredients of identity, genuineness and creditworthiness were established. The Hon'ble ITAT completely agreed with the reasoning of the Ld. CIT(A) and held that the AO had gone only by the statement recorded of PKJ, the AO did not make any independent enquiries with the lender companies, the AO did not provide statement of PKJ to the appellant assessee for its rebuttal, AO did not bring anything on record even to indicate/suggest that the information furnished by the appellant in the form of copy of affidavit of PKJ fully establishing the identity of lender, copy of the ledger confirming the loans taken and also the repayment in subsequent years to establish the genuineness, other material fully establishing the creditworthiness of the lenders etc. was false or insufficient. DCIT 12(1)(2), Mumbai Vs Bairanga Builders Private Limited (ITAT, Mumbai). In this case also the Ld. CIT (A) had deleted the addition. The Ld. CIT(A) held that the appellant (Bairanga Builders Private Limited) had filed all relevant documents like IT returns, Bank Statements, details....
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....lly the judgement in the case of ACIT 24(3), Mumbai Vs. Ramesh Ram Swaroop Das Jindal which is squarely applicable in this case the ground 2 is allowed" Aggrieved by the order of Ld.CIT(A) revenue is in appeal before this Tribunal. 5. The Ld.DR submitted that, identical issue arising out of search and survey action in the case of Shri. Pravin Kumar Jain was considered by Hon'ble Ahmadabad Tribunal in case of Shri. Pravinkumar M Sagvi Vs. ITO in ITA no. 2447/AHD/2016 for the assessment year 2007-08, vide order dated 17.05.2017. He submitted that, Hon'ble Ahmadabad Tribunal has tradable analysed genuineness and credit worthiness of the leander and came to the conclusion that leander were basically shell companies without any activities and that, the assessee had not discharged its onus to establish that loan transaction were genuine and bonafide, taken in the normal course of business. 5.1 The Ld.DR submitted that, the said decision of the Hon'ble Ahmadabad Tribunal has been upheld by the Hon'ble Gujarat High Court in ITA No. 1037/2017 vide order dated 12/02/2018. He thus heavily relied on the observation of the Hon'ble Ahmadabad Tribunal in similar circumstance and facts an....
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....acts of the case we note that, the assessee furnished all relevant details as called for by the Ld. AO during assessment proceedings in respect of the lenders. Further it is admitted fact that the lenders responded to the notice issued by the Ld.AO u/s.133(6) of the Act. The Ld. AO did not point out any lacuna in the evidence submitted by the assessee as regard the source in the hands of the lenders. 6.3 In the present facts of the case, we note that the Ld.CIT(A) categorically observed that Ld.AO did not find any cash deposit in any of the accounts, either of the assessee or the lenders. 6.4 All these evidences were rejected by the Ld.AO without carrying out any enquiry and merely on conjectures and surmises. It is submitted that the additions were made out of unsecured Loan of the assessee because, the Creditors were of controlled and managed through concerns of Pravin Jain Group, who were mere name lenders and were involved in providing accommodation entries. In the present facts carefully considering the evidences relied by the assessee it is noted that there was no case deposits made in the accounts of the creditors before lending loan to the assessee. It is further note....
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....uld establish that there were indeed real creditors; that they had indeed the funds available with them and that the transactions were genuine. In the circumstances, the finding of fact by the Commissioner was endorsed by the Tribunal. Instead of endorsing it fully and dismissing the Revenue's appeal in its entirety, the Tribunal, in paragraph 7, deems it fit and proper to send the matter back to the Assessing Officer so as to verify and examine whether indeed there is any repayment. 7 We do not think that the Tribunal committed any error of law nor its finding, as above, is perverse. Once it was satisfied with regard to the essential ingredients of the section and the manner in which the whole case was approached by the Commissioner, then, with regard to the assertion of repayment and styling it as a subsequent development relevant and germane to the case in hand, the Tribunal deemed it fit and proper to send the matter back to the Assessing Officer. That is to make it doubly sure as to whether indeed there was a repayment of the amount borrowed and claimed as advances from these parties. 8 We do not think that we should entertain a further appeal to this Cou....
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....ng effect to the Tribunal's order records that this is not a transaction which can be said to be hit by the principles relied upon. 10 In the above circumstances, the question as proposed by the Revenue is really academic. Still, Mr. Mohanty says it is not so and that is why we examined the matter in its entirety and after having examined it in this manner, we do not see any reason to entertain this appeal. It is dismissed but without any order as to costs." The above ratio is applicable to the present facts of the case, as the assessee repaid all the loans as submitted by the authorities before the authorities below. Further on perusal of lenders account placed at page 199-207, 209-216, 218-228 & 230-240 we do not find cash deposits before lending money to the assessee. The authorities below has also not disproved the affidavits submitted by the directors of the lending company to be false on unreliable. 6.6. We have perused the categorical facts in the decisions relied by the Ld.DR. It is noted that, they are distinguishable with that of the assessee. It is noted that, in the decision of Hon'ble Ahmedabad Tribunal in the case of Pavankumar M Sanghvi Vs ITO (sup....