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2022 (5) TMI 218 - AT - Income TaxAddition u/s 68 - unexplained cash credit - assessee not satisfied with the genuineness of credit - addition of loan taken from BMPL as non-genuine - HELD THAT - As decided in M/S. VENKTESH SECURITIES LTD 2018 (12) TMI 1684 - ITAT MUMBAI identity is not in dispute and in its books of account sufficient fund has been reflected. The bank statement also established its credit worthiness. CIT(A) has relied upon number of cases mentioned in his order and arrived at this conclusion that the assessee has proved the identity, genuineness and credit worthiness of transaction, therefore, no addition can be raised hence allowed the claim of the assessee. The facts are not distinguishable at this stage also. There is no finding of any authority on record in which it has been held that M/s. Basant Marketing Pvt. Ltd. is not genuine company. The Department nowhere preferred the appeal against the judgment mentioned in the finding nor perverse finding is on record. Taking into account all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee.
Issues Involved:
1. Legality of the addition of Rs. 22,00,000 under Section 68 of the Income Tax Act. 2. Validity of the deletion of the addition by the CIT(A). 3. Consideration of the CBI report by the CIT(A). 4. Reopening of the assessment under Section 147 of the Income Tax Act. Detailed Analysis: 1. Legality of the Addition under Section 68: The primary issue is whether the Assessing Officer (AO) was justified in making an addition of Rs. 22,00,000 to the assessee's income under Section 68 of the Income Tax Act. The AO held that the credit appearing in the books of account in the name of M/s Basant Marketing Pvt Ltd (BMPL) was non-genuine and in the nature of an accommodation entry. The AO's conclusion was based on a report from the CBI, Anti-Corruption Branch, Mumbai, which suggested that the assessee was involved in bogus transactions. 2. Validity of the Deletion of the Addition by the CIT(A): The CIT(A), after considering detailed submissions from the assessee and relying on previous decisions, including the ITAT's decision in the case of Sh. Harsh Dalmia and the CIT(A)-20, Kolkata's decision in the case of BMPL, deleted the addition made by the AO. The CIT(A) held that the assessee had discharged the initial onus to establish the identity, creditworthiness, and genuineness of the transaction. The CIT(A) found no fault in the confirmations filed before the AO and concluded that the addition was merely based on suspicion. 3. Consideration of the CBI Report by the CIT(A): The Revenue argued that the CIT(A) erred by not considering the CBI report, which was a vital document. The CBI report outlined the modus operandi of providing accommodation entries and listed companies/entities involved, including the assessee. The AO based the reassessment on this report, which was also submitted to the CIT(A) during the hearing. The Revenue contended that the CIT(A) allowed the appeal without duly considering the contents of the CBI report. 4. Reopening of the Assessment under Section 147: The assessment was reopened under Section 147 based on specific information from the CBI. The CBI had conducted an investigation and found that the assessee was involved in entering into bogus transactions. The AO issued a notice under Section 148 and, after rejecting the assessee's objections, completed the reassessment by making the addition. The CIT(A) upheld the reopening of the assessment but deleted the addition on merits. Judgment: The ITAT upheld the CIT(A)'s decision to delete the addition, finding that the CIT(A) had correctly relied on the decisions in similar cases, including the case of BMPL and Sh. Harsh Dalmia. The ITAT noted that the CIT(A) had considered all relevant facts and previous judicial decisions, including the genuineness of BMPL as established in other cases. The ITAT also observed that similar additions in other cases involving BMPL had been dismissed by the ITAT, supporting the CIT(A)'s findings. The ITAT concluded that there was no reason to disturb the findings of the CIT(A) and dismissed the appeals filed by the Revenue. The decision in ITA No. 6744/Mum/2018 was applied mutatis mutandis to the other appeals (ITA Nos. 7274 & 7300/Mum/2019), resulting in the dismissal of all three appeals by the Revenue. Order Pronounced: The appeals filed by the Revenue were dismissed, and the order was pronounced in the open court on 22.04.2022.
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