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TMI Blog2019 (10) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... tails filed by the assessee as per paper book that the money was given by Raffle Mercantile Private Limited towards share application money whereas the addition has been made on account of unsecured loan. Further as stated by the Ld. Counsel for the assessee the amount has been refunded in the assessment year 2014-15. The facts are not coming out clearly from the submission made by the assessee vis-a-vis the order of the AO and the CIT(A) as to whether the same is towards share application money or unsecured loan. A perusal of the page-18 of the paper book shows that Land Craft Developers P. Ltd. has issued 14,80,000/- equity share of ₹ 10/- each. Therefore, if the shares have been allotted, how this could be refunded in A. Y. 2014-15 needs verification. If the same is unsecured loan and if the same has been refunded to the lender during A.Y.2014-15 i.e. much prior the completion of the assessment, the same also needs verification at the level of the AO and in that case it cannot be added in the light of various decisions cited by the Ld. AR. The decisions of the Hon ble Supreme Court in the case of NRA Ispat (supra) and NDR Promoters (supra) cited in the preceding paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- received from M/s. Raffle Mercantile Pvt. Ltd. That the following amount has been received in A. Y.2011-12 ₹ 95 lacs on 28.08.2010 ₹ 85 lacs on 30.08.2010 ₹ 20 lacs on 30.08.2010 ₹ 2.00 crores ₹ 2.00 crore recd. In A. Y. 2011-12 have been returned back in A.Y.2014-15. Documents attached. Certified Ledger Account of Raffle in the books of assessee for A. y.2014-15. That the source of ₹ 2 crore in A. Y.2011-12 in 3 cheques ₹ 1.25 crore 55 lacs 25 lacs being immediate proceeding credits in the bank St. of Raffle. ₹ 1.25 crores on 28.08.2010- source of this credit being receipt of repayment of loans given to Smt. Kala devi Educational Society in earlier years. ₹ 55 lacs 25 lacs on 30.08.2010 source of these credits being receipt of repayment of loans given to Shankar enterprises given in earlier years. 6.1 For ₹ 20,00,000/- received from M/s Purshottam Vinimay Pvt Ltd. It is submitted by the assesee- . ..That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd. to invest such huge amount in the assessee company. Further the amount which was received out of repayment of its loan given to Kala Devi Education Society and Shankar Enterprises is beyond economic logic since the company has not earned a single paise as interest although such huge amounts were given as advance for a considerable time. Rejecting the various explanation given by the assessee the Assessing Officer held that the unsecured loan / share application money received by the assessee in its books of account is clearly the income of the assessee which has been introduced in the garb of share application money/ unsecured loan. He, therefore, invoking the provision of section 68 of the IT Act made addition of ₹ 2 crores to the total income of the assessee. 5. So far as the amount of ₹ 20 lacs received as share application money from M/s. Purushottam Vinimay P. Ltd. is concerned here also the Assessing Officer observed from the balance sheet of the said company that it is not doing any business and there are no fixed assets. According to the Assessing Officer the various information supplied by the assessee do not inspire any confidence, so f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile P. Ltd. through cheques and source of the funds in the hands of Kala Devi Educational Society is also duly explained as shown in its bank account details. Further funds received by Raffle Mercantile P. Ltd. is through M/s Shankar Enterprises, (₹ 80 lacs) for which the bank account has been provided alongwith the copy of return filed for the AY 2011- 12 and confirmation from the party. 11.5 In the case of M/s Purushottam Vinimay P. Ltd., it is observed that ₹ 7 lacs and ₹ 9 lacs has been received by it as loan on 24.12.2010 from M/s Nine News Ltd. and ₹ 4 lacs has also been received as loan on 28.12.10 from M/s Nine News Ltd. The confirmation and ITR acknowledgment of M/s Nine News Ltd. is also submitted. In fact during assessment proceedings the appellant has produced the confirmation letter from M/s Purushottam Vinimay P. Ltd., providing further confirmation from M/s Nine New Ltd. and its bank account. However, nothing contrary has been brought on record by the AO to substantiate that these are sham transactions and not genuine. The AO was of the view that the creditworthiness and genuineness of the transaction has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to hold that the appellant had routed its own money. 11.9 This is also noted that the representative of the lending entities were presented before the AO. It is also observed that the loan amount was subsequently repaid. 11.10 It has been stated by the appellant that in paragraph 5.4 and 6.6 of the assessment order, AO has mentioned about the unqualified admission of the assessee company regarding the addition, which is incorrect. No such admission has been made by anybody on behalf of the company and they are vigorously contesting the addition. 11.11 The AO in his report has stated that this expression in the assessment order is with respect to the introduction of share capital of ₹ 2.20 crores, not found satisfactory by the AO and used in that context which is otherwise not connected with any type of admission by the appellant. Therefore, the said expression of AO in the assessment order is not considered as any such admission of undisclosed income by the appellant. 11.12 In view of the totality of the facts and circumstances as well as judicial precedents as discussed, the addition of ₹ 2.20 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee within a few days of the receipt of the same from other companies/concerns which clearly prove that these are all entry providing companies. Therefore, it is nothing but assessee s own money which has been introduced by it in the garb of unsecured loan or share application money. 9. Further the address of Kaladevi Educational Society and M/s. Raffle Mercantile Private Limited are same. Therefore, this substantial evidences have to be considered and merely by relying on the excellent power work done by the assessee the addition cannot be deleted. Relying on various decision including the decision of Hon ble Delhi High Court in the case of NDR Promoters vide ITA No.49/2018 order dated 17.01.2019 and the decision of Hon ble Supreme court in the case of NRA Ispat vide ITA No.1731/Del/2016 order dated 30.04.2019, she submitted that the order of Ld. CIT(A) be set aside and the addition made by the AO be upheld. 10. The Ld. AR for the assessee on the other hand heavily relied on the order of the CIT(A). So far as the admission of additional evidences by the CIT(A) is concerned he submitted that the Assessing Officer has not objected to the adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Copy of letter dated 26.03.2015 alongwith explanation 2. Letter to AO dated 20.03.2015 by Raffle confirming the transaction alongwith source thereof. 3. Share certificate issued by assessee to Raffle 4. Audited Balance Sheet of A.Y.2011-12 5. Schedule -4 of Audited Balance Sheet of A.Y.2011-12 6. Bank Statement of Raffle of PNB Bank for the period 01.04.2010 to 05.05.2011. 7. Confirmed copy of account of Raffle Mercantile Pvt. Ltd. for A. Y.2011-12 in books of Assessee 8. Summons u/s. 131 dated 27.05.2013 issued by DDIT Kanpur 9. Summons u/. 131 dated 21.01.2013 issued by DDIT Delhi 10. Reply dated 29.01.2013 in response to summons u/. 131 dated 21.01.2013 to DDIT Delhi 11. Abstract of order sheet of AO. 12. Certified ledger a/c of Raffle in the books of assessee for A.Y.2014-15 13. Affidavit of Raghvinder Garg (directed to Raffle) 14. Confirmed ledger a/c. of Raffle in the books of Smt. Kala devi Educational Society of A.Y.2009-10 15. Confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the various decisions cited before us. We find the AO in the instant case has made addition of ₹ 2 crores being the amount received from M/s. Raffle Mercantile Private Limited as unsecured loan and another ₹ 20 lacs being the amount of share application money from M/s. Purushotam Vinnimay P. Ltd. While doing so the Assessing Officer noted that M/s. Raffle Mercantile Private Limited has invested in Land Craft Developers P. Ltd. from money obtained from Kaladevi Education Society and Shankar Enterprises through sham transactions. Further the assessee failed to substantiate the credit worthiness of the said company. So far as the share application money received from M/s. Purushotam Vinnimay P. Ltd. is concerned, the AO noted that the assessee failed to discharge the onus of establishing beyond doubt, the genuineness and the creditworthiness of M/s. Purushotam Vinnimay P. Ltd. We find the Ld. CIT(A) deleted both the additions, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Dr that the Ld. CIT(A) without considering the circumstantial evidences has deleted the addition which is not justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft Developers P. Ltd. has issued 14,80,000/- equity share of ₹ 10/- each. Therefore, if the shares have been allotted, how this could be refunded in A. Y. 2014-15 needs verification. If the same is unsecured loan and if the same has been refunded to the lender during A.Y.2014-15 i.e. much prior the completion of the assessment, the same also needs verification at the level of the AO and in that case it cannot be added in the light of various decisions cited by the Ld. AR. The decisions of the Hon ble Supreme Court in the case of NRA Ispat (supra) and NDR Promoters (supra) cited in the preceding paragraphs will also be equally applicable to the facts of the present issue. Considering the totality of the facts of the present case and in the interest of justice we deem it proper to restore the issue of unsecured loan received from Raffle Mercantile Private Limited to the file of the AO for deciding the issue afresh and as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the revenue are accordingly allowed for statistical purpose. 20. In the result, the appeal filed by the revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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