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TMI Blog2017 (11) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 arising out of the Assessment orders passed u/s. 143(3) r.w.s. 147 of the Act for the Assessment Years 2008-09 to 2011-12 and Assessment Order passed u/s.143(3) for the Assessment Years 2012-13 2013-14. 2. The common grounds of appeal in all these Revenue appeals relates to deletion of addition made by the Assessing Officer towards unexplained unsecured loans. ITA.NO.3091/MUM/2017 FOR ASSESSMENT YEAR 2008-09 3. First we take up the appeal for the Assessment Year 2008-09. Briefly stated the facts are that, the assessment for the Assessment Year 2008-09 was reopened based on the search proceedings carried out in the case of Pravin Kumar Jain Group wherein Shri Pravin Kumar Jain is said to have deposed before the authorities that he is indulged in providing accommodation entries in the nature of the bogus bills/sales bills and unsecured loans. As per the information the assessee is one of the beneficiaries of such accommodation entries. In the course of Assessment Proceedings assessee was required to explain unsecured loans and prove genuineness of transactions, identity and creditworthiness of the unsecured loans, records and supporting documentary evidences. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summoning them. Further observing that the assessee has transacted through proper banking channels, interest was also paid by deducting TDS, the Ld.CIT(A) concluded that the Assessing Officer made addition disregarding the evidence on record and without discharging his onus and without establishing anything contrary to the submissions of the assessee and without verifying the bank account, existences of entities who have extended loans to the assessee and without making any fruitful investigation he directed the Assessing Officer to deleted the addition made towards unsecured loans. 5. The Ld.DR strongly supported the orders of the Assessing Officer. Further taking us through the Assessment Order, Ld.DR submits that Shri Pravin Kumar Jain has categorically said in his statement that he is providing only accommodation entries and no genuine business was carried on and as per the information assessee is one of the beneficiary to such transactions and therefore the Assessing Officer rightly concluded that assessee has obtained only accommodation entries in the name of unsecured loans and the entities were not carrying out any business. 6. On the other hand, Learned Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts and ITR-V of the lenders, the assessee has discharged his primary onus by submitting all the documents establishing the genuineness of the transactions, identity of lender and its creditworthiness. It is submitted that all the transactions are carried out through proper banking channels, the assessee has provided substantial evidence of the loans received from parties, subsequent repayment of loans proves the genuineness of the loans. It is submitted that the Assessing Officer has not rebutted any of the evidences submitted by the assessee. Further the address as available with the assessee was provided to the Assessing Officer. It is submitted that the alleged statement given by said Shri Pravin Kumar Jain is retracted by himself subsequently. It is submitted that the alleged statement given by Shri Pravin Kumar Jain is not yet confirmed in his assessments and thus it cannot be considered as evidence. Therefore, it is submitted that the Assessing Officer has made additions merely relying on the report and no evidence was placed on record to make the additions. 8. Learned Counsel for the assessee further referring to Page Nos. 24 to 28 of the Paper Book submits that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of reassessment. Assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents. Despite the request dated 15th February, 1996 seeking an opportunity to cross examine the deponent and furnish the assessee with copies of statements and disclose material, these were denied to him. CIT v. Ashwani Gupta [322 ITR 0396 (DEL)] Once there is a violation of the principles of natural justice in as much as seized material is not provided to an assessee nor cross-examination of the person on granted, then, such deficiencies would amount to a denial of opportunity and therefore, Tribunal was right in confirming the CIT(A) s order in deleting additions made by the AO as he had neither provided copies of the seized material to the assessee nor had he allowed the assessee to cross-examine concerned party CIT v. K. Bhuvanendran Ors. [303 ITR 0235 (Mad) Revenue having brought no material on record to establish that consideration shown in the sale deed was understated and no material having been found during search to show that assessee paid a sum over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he information regarding the unsecured loans as mentioned above. The Ld.CIT(A) considering the submissions and the findings furnished by the assessee deleted the additions observing as under: - 6.2 HELD : - I have carefully perused the Assessment Order, written arguments of the appellant, counter arguments of the ld. AR and have considered the evidences on record and assessment record called for during the appellate proceedings. I find that eh Ld. Assessing Officer has merely doubted the loans taken by the appellant from (1) Mohit International amount to ₹.10,00,000/- and (2) Natsha Enterprises amounting to ₹ 10,00,000/- aggregating at ₹ 20,00,000/-. I find force in the argument of the Ld. AR. It is very important to mention here that the appellant has discharged his onus and the Ld. Assessing offices has not proved otherwise than doubting the loans. Apparently, Ld. Assessing officer has not substantiated his presumption, his doubt with any verifiable documents. He has merely described the statement of Shri. Pravin Kumar Jain and as communicated by the investigation wing. Thus, it is very evident that the Ld. Assessing officer has not made any independen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. This leads to the inescapable conclusion that the Assessing Officer could not think of any further material to ask for and proceeded to reject the appellant s claims, relying upon the information/ material, which he never even brought to the notice of the appellant for any rebuttal. The unequivocal conclusion is that all the three ingredients having been satisfied. 6.5. The AO did not consider the evidences provided by the appellant as satisfactory. According to him, submissions and statements given by Sh. Pravin Kumar Jain confirmed that they had issued only bogus bills/accommodation entries to the interested parties. However, he did not bring out the relevant extract from the statement where they have admitted that they have given accommodation entries to the appellant. Moreover, he had just referred to the statement of Shri Pravin Kumar Jain Group without giving specific details as to who is the person who is giving the statement and what exactly did he admit. Instead of stating that the party did not exist, he should have summoned the party and recorded the statement. As the AO, has not brought anything in record to show that the evidences filed by the appellant are fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has not provided the statements of Shri Pravin Kumar Jain to the assessee for its rebuttal. Nothing is placed on record to suggest that the information furnished by the assessee in the form of copy of affidavit, establishing identify of the lender, copy of the ledger giving details of loans confirmation taken and also repayment in subsequent years, copy of bank statement highlighting the natures of loan taken and repayment in subsequent years to establish the genuineness of the transactions copy of ITR V filed establishing creditworthiness of the lender are non-genuine. It was also noted by the Ld.CIT(A) that the assessee has provided the identity creditworthiness as well as the genuineness of the transactions. The Ld.CIT(A) also elaborately considered the submissions and the averments made by the Assessing Officer in the Assessment Order and the evidence furnished by the assessee and concluded that the assessee has discharged its primary onus on providing complete details in respect of the loan transactions and the Assessing Officer failed to carry out any fruitful investigation. Therefore, no addition can be made towards unexplained unsecured loans, this finding in our vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the CIT(A) and has also pointed out that the loan received by the assessee has been returned to the respective parties through cheques and in none of the case the respective party has deposited any cash. He relied on the following Tribunal decisions: Arceli Realty Ltd vs. ITO [ITA No.6492/Mum/2016 dated 21.04.2017 (Mumbai)] M/s Komal Agrotech Pvt. Ltd. vs. ITO [ITA No.437/Hyd/2016 dated 25.11.2016 (Hyderabad)] Sudhanshu Suresh Pandhare vs. ITO [ITA No.5185/Mum/2012 dated 05.10.2016 (Mumbai)] Dilsa Distributors Combines vs. ITO [ITA No.5849/Mum/2011 dated 06.09.2013 (Mumbai)] Aim Properties Investments Pvt. Ltd vs. ITO [ITA No.7426/Mum/2012 dated 04.12.2013 (Mumbai] He further placed reliance on the following judgments: Nemi Chand Kothari vs. CIT [2004] 136 Taxman 213 (Gau) Vijay Kumar Talwar vs. CIT [2011]330 ITR 1 (SC) 8. The learned DR, on the other hand, relied on the decisions of the Hon'ble Delhi High Court in the case of Principal CIT vs. Bikram Singh ITA.No. 55/2017 CIT vs. Jansampark Advertising Marketing Pvt. Ltd. in ITA.No.525/2014. 9. We have gone through the orders relied upon by the learned DR. We noted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transaction. The addition is made merely on surmises and conjectures. In view of the above, we hold that the addition made under section 68 of the Act is bad in law. We noted that in the said case also loan had been received from Javda India Impex Ltd. 12. Being consistent with the view taken by this co-ordinate Bench in the case of Komal Agrotech Pvt. Ltd. (supra), and in view of the facts and circumstances, we do not find any illegality or infirmity in the orders of the CIT(A). It is accordingly, confirmed for both the years under appeal. 13. In the result, the appeals filed by the Revenue are dismissed. 12. In view of the above discussion we do not find any illegality and infirmity in the order passed by the Ld.CIT(A) in deleting the addition made towards unproved unsecured loans and therefore we affirm the order of the Ld.CIT(A). ITA.NOs.3902 TO 3096/MUM/2017 FOR ASSESSMENT YEARS 2009-10 TO 2013-14:- 13. The facts being identical in the appeals for the Assessment Years 2009-10 to 2013-14, the decision taken by us in the appeal for the Assessment Year 2008-09 shall apply mutatis-mutandis to the appeals for the Assessment Years 2009-10 to 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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