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TMI Blog2018 (7) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... the first effective ground of appeal against the AO and the interest issue is directly linked with the loan transactions. So, we hold that there is need to interfere with the order of the FAA. Second effective ground of appeal is decided against the AO. Validity of reassessment proceedings - validity of reasons to believe - Held that:- A perusal of the reasons reveal that the AO has no where alleged that there was failure on part of the assessee to disclose fully and truly the material facts necessary for completing the assessment. In our humble opinion, the allegation of not disclosing the material facts fully and truly has to be proved i. e. as to how the assessee did not disclose the material facts. Mere repetition of the language of the section is not sufficient. It has to be proved as to how and which material facts were not disclosed. AO has not whispered anything about the failure of the assessee. - Decided in favour of assessee - I.T.A./5973/Mum/2016 And C.O. No.70/Mum/2018 - - - Dated:- 4-7-2018 - Sh. Rajendra, Accountant Member And C. N. Prasad,Judicial Member For The Revenue : Shri Ram Tiwari-CIT-DR For The Assessee : Shri Shailesh Parmar-AR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided accommodation entries to the assessee, that the conclusion drawn by the AO was a mere presumption, that he had not substantiated his stand with any documentary evidence, that BLJ had never accepted that he was providing accommodation entries for unsecured loans, that he had admitted of issuing some paper entries for purchases, that all the entries for purchases were not accommodation entries, that he had not admitted anywhere that accommodation entries for secured loans were given by him, that RS had also not admitted that he was in the business of providing accommo -dation entries for unsecured loans, that the name of the assessee was not figuring anywhere. He further observed that both the lenders were regular income tax assessees, that the loans were received through account payee cheques, that loan confirmation and affidavits from RS and GV were submitted during the assessment proceedings, that the assessee had filed the bank account details of the lenders, that it had received a loan of ₹ 25 lakhs on 12/05/2006 from RS of A 2 Jewels, that same was repaid through account payee cheque on 11/05/2007, that the loan taken from GV was also paid through banking channels in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d report from the AO, that after considering the documentary evidences filed by the assessee he held that it was not a case of accommodation entry. It is also a fact that the lenders had never admitted that the transactions entered into with the assessee were bogus. In our opinion, the statement of a person has to be read in entiretygeneral observation of an assessee, made during the statements recorded under section 131 of section 132 of the Act, cannot be made a base for making addition in the hands of other entity. In the case before us, positive evidences were submitted by the assessee in form of balance sheets, bank details, income tax returns during the assessment proceedings. It was the duty of the AO to make further enquiries instead of just making additions on the basis of report of the investigation wing. We are of the opinion that the assessee had discharged its onus and that burden of proof was on the AO to negate the claim made by the assessee about the genuineness of the loan transactions. The assessee had during the reassessment proceedings informed the AO that it was willing to produce the lenders before him for cross examination. But, surprisingly he did not ask th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble cause. Hence, we condon the delay. 8. In its CO, the assessee has challenged the validity of reassessment proceedings. Before us, the AR argued that the FAA had erred in upholding the reassessment proceedings, that there was no failure on part of the assessee to disclose true and full facts about the transaction. He relied upon the cases of Arceli Reality Ltd. (ITA No. 6492/Mum/2016, AY 2007-08 dtd. 21/04/2017); Shri Sunil Prakash (ITA No. 6494/Mum/2014, AY 2005-06 dated 08/03/2017; Metro Decorative Pvt. Ltd. (ITA No. 450/Del/2014 AY 2004-05, dtd. 24/10/2017; Oracle India (P. ) Ltd. (83 taxmann. com 368); Crescent Construction Co. (82 taxmann. com 468); Meta Plast Engineering Pvt. Ltd. (ITA No. 5780/Del/2014 AY 2004-05 dtd. 06/04/2018; Virat Credit Holdings Pvt. Ltd. (ITA No. 89/Del/2012 and C. O. No. 57/Del/2012 AY 2005- 06, dtd. 09/02/2018) . The DR supported the order of the FAA. It is found that the notice under 148 was issued after four years. The original assessment u/s. 143(3) of the Act was completed on 14. 12. 2009 and the notice for reassessment was issued on 26/03/2014. Therefore, the proviso to section 147 would be applicable in the matter under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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