TaxTMI 
TaxTMI 
2026 (8) TMI 1257
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....ax Act, 1961 (hereinafter referred to as 'the Act' in short) for Assessment Year 2017-18. 2. The assessee has raised following grounds of appeal:- "1. Ld. CIT(A) erred in upholding the validity of initiation of proceeding u/s 148 of the Act which was entirely based on the information received from third party without any independent verification on part of the AO. 2. Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 4,00,00,536/- made by the AO u/s 68 of the Act on account of unsecured loan taken from M/s Gurumukh Mercantile Pvt Ltd. 3. Ld. CIT(A) erred in law and on facts in confirming the addition made in respect of unsecured loan obtained from M/s Gurumukh Mercantile Pvt Ltd. of Rs. 4,00....
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....at source and the entire loan stood repaid prior to the date of search in the case of Banka Group. The Assessing Officer, however, treated the impugned amount as unexplained cash credit u/s 68 of the Act and added to the income of the assessee. 4. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the Ld. CIT(A), who upheld the reopening as well as the addition made u/s 68 of the Act. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. Before us, the Ld. AR submitted that the reassessment proceedings were initiated merely on the basis of information received from the Investigation Wing without any independent enquiry or application of mind by the Asse....
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....ses of PCIT vs. Ojas Tarmake Pvt. Ltd., 156 taxmann.com 75 (Guj.), PCIT vs. Ganesh Plantation Ltd., 326 CTR 751 (Guj.), DCIT Vs. Rohini Builders, 127 taxman 523 (Guj.) and ITO Vs. Shanti Enterprise, 42 taxmann.com 251 (Guj.). 7. The Ld. DR, on the other hand, relied upon the orders of the Assessing Officer and the Ld. CIT(A). The Ld. DR submitted that M/s Gurumukh Mercantile Pvt. Ltd. was identified by the Investigation Wing as an accommodation entry provider belonging to Banka Group. The Ld. DR submitted that the lender had negligible income and insignificant business activity and therefore lacked the financial capacity to advance loans of Rs. 4 crores. It was also argued that the bank statements clearly showed that funds were received ....
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....s of the addition of Rs. 4,00,00,536/- made under section 68 of the Act in respect of the unsecured loan received by the assessee from M/s Gurumukh Mercantile Pvt. Ltd. 10.1 It is an undisputed position that the assessee furnished confirmation, PAN, ITR, audited financial statements and bank statements of the lender company, namely M/s Gurumukh Mercantile Pvt. Ltd. The loan was duly received, interest was paid after deduction of TDS and the entire loan was repaid prior to the search conducted in the case of Banka Group. No material has been brought on record by the Revenue to establish that the assessee had paid cash in lieu of the impugned loan or that the funds advanced by the lender belonged to the assessee. The addition has been made....
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.... above facts and the findings arrived by Ld. CIT(A). Similar is the case for M/s. Aashta Commtrade Pvt. Ltd. and M/s. Gainwell Mercantiles Pvt. Ltd. wherein the loans have been repaid with interest and appropriate TDS. 7. In similar circumstances, the Hon'ble Jurisdictional High Court in the case of PCIT Vs. Ojas Tarmake (P.) Ltd. reported in [2023] 156 taxmann.com 75 held as follows: "Where assessee showed unsecured loans received during relevant assessment year and AO made addition on ground that assessee failed to discharge onus of liability as laid down under section 68, since amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels....