9911796707
TMI Blog2020 (12) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... elow that the loans were taken 8 years before and assessee was not in a position to bring the loan creditors before the assessing officer. That loans have also been duly paid back. We note that income tax act contains provision for summoning the concerned person before the assessing officer for examination under section 131(1). However we note that no such summon was issued by the assessing officer. Except for relying upon the income tax investigation wing investigation in the case of Praveen Kumar Jain no other material is there for the assessing officer to make the addition of the impugned loans as unexplained income of the assessee. Assessee having given all the necessary confirmation document has cogently discharged its onus. No attempt whatsoever to dislodge the veracity of these documents is there in the orders of the authorities below. - Decided in favour of assessee. - I.T.A. No. 256/Mum/2019 - - - Dated:- 1-12-2020 - Shri Shamim Yahya (AM) And Shri Amarjit Singh (JM) For the Assessee : Shri Rakesh Joshi For the Department : Shri Vijay Kumar P. Menon ORDER PER SHAMIM YAHYA (AM) :- This is in appeal by the assessee directed against order of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd. (Ostwal Trading (I) Pvt. Ltd.) 1,05,00,000 2 Atharv Business Pvt. Ltd. (Fast Stone Trading (I) Pvt.Ltd. 1,05,00,000 3 Duke Business Pvt. Ltd. (JPK Trading (I) Pvt.Ltd.) 50,00,000 Total 2,60,00,000 AO received information from the office of DGIT (Inv.), Mumbai that those loans were not genuine and they represented accommodation entries taken by the assessee from companies floated by Shri Praveen Kumar Jain his Group. In the course of the assessment proceedings, the AO issued notices u/s. 133(6) of the Act to all the above mentioned parties. 5. However, the notices were returned by the Postal Authorities with the remark not known . Thereafter, the AO deputed an Inspector to locate the parties. The Inspector reported that no such entities were operating from the given addresses. In view of the above, the Assessing Officer asked the assessee to produce the said parties for examination and also show caused the assessee as to why the entire amount of ₹ 2,60,00,000/- should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors have been submitted. He submitted that authorities below have not pointed out anything wrong in the various documents submitted. He further submitted that these loans have subsequently been repaid. He submitted that all the necessary details were submitted to the assessing officer. He submitted that the sole reliance of the Assessing Officer is upon the inspector's report which was never confronted to the assessee. He further submitted that no summon under section 131(1) of the Act was served upon the loan creditors. In this regard he placed reliance upon the following case laws. CIT Vs. Orchid Industries (P) Ltd. (397 ITR 136) ACIT Vs.Samdani Steels Pvt. Ltd. (387 ITR 561) (Bombay High Court) ITO Vs. Smt. Pratima Ashar (177 ITD 481)( Bombay Tribunal) 10. Per contra learned departmental representative relied upon the orders of authorities below, and the detailed investigation by the income tax department done in the case of Praveen Kumar Jain group of companies 11. Upon careful consideration we find that in the present case the assessee has provided the necessary documents in connection with the loan taken. The documents provided are as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an creditors before the assessing officer. That loans have also been duly paid back. We note that income tax act contains provision for summoning the concerned person before the assessing officer for examination under section 131(1). However we note that no such summon was issued by the assessing officer. 14. Only other ground of the assessing officer is that he has deputed an inspector who has reported the nonexistence at the concerned address. In this regard learned counsel of the assessee submits that assessee was never confronted with the inspector's report. 15. We find that except for relying upon the income tax investigation wing investigation in the case of Praveen Kumar Jain no other material is there for the assessing officer to make the addition of the impugned loans as unexplained income of the assessee. In our considered opinion the assessee having given all the necessary confirmation document has cogently discharged its onus. No attempt whatsoever to dislodge the veracity of these documents is there in the orders of the authorities below. We further note that in identical situation this tribunal in the case of income tax officer, Mumbai vs Pratima Ashar (177 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the information received by him from the office of the DDIT(Inv)-II, Mumbai, were controlled by Shri Praveen Kumar Jain, who as per the information shared by the DDIT (Inv.)-II, Mumbai, was found to be involved in providing accommodation entries of bogus unsecured loans to various parties through companies managed and controlled by him. In fact, a perusal of the assessment order reveals that the A.O had not even attempted to dislodge the documentary evidence which was placed on record by the assessee to substantiate the authenticity of the loan transactions and had rejected the explanation of the assessee and characterised the said loans as accommodation entries, observing as under: 1. A perusal of the information reveals that the search action resulted into collection of evidences and other findings which conclusively proved that the Shri Praveen Kumar Jain Group through a web of concerns run and operated by him, is engaged in providing accommodation entries of various nature like bogus unsecured loans, bogus share application and bogus sales (purchases for the beneficiaries), etc. 2. During the course of the search at various premises which were shown by the assessee g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the above said parties. 10. We have given a thoughtful consideration to the facts of the case, and are unable to persuade ourselves to subscribe to the view taken by the A.O. As per Sec. 68 of the I-T Act, the assessee remains under a statutory obligation to substantiate both the Nature and Source of a sum‟ found credited in his books of accounts maintained for any previous year. In case, the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the A.O, satisfactory, then the sum so credited may be charged to income tax as the income of the assessee for that previous year. Accordingly, as per the mandate of the aforesaid statutory provision, the assessee is obligated to substantiate on the basis of a plausible explanation the nature and source of a sum found credited in his books of accounts. In the case before us, we find, that as is discernible from the records, the assessee in discharge of the onus‟ that was cast upon him as regards proving the Nature and Source of the amount aggregating to ₹ 1,05,00,000/- which was claimed by him to have been raised as loans from the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld conclusively prove that no genuine loans were raised by the assessee from the aforesaid companies. On the contrary, the notices which were issued by the A.O under Sec.133(6) to the aforementioned companies, wherein they were called to share certain information viz. nature of activities of the lender companies, source for giving the loans etc., were duly complied with by the said concerns and the requisite documents were placed on the record of the A.O by the aforementioned companies. We find that the A.O who ought to have made necessary verifications as regards the authenticity of the loan transactions by summoning the principal officers of the aforementioned companies under Sec.131 of the I-T Act, and also carrying out field inquiries/investigations as regards the identity and creditworthiness of the investor companies, and also the genuineness of the transactions, had however, not even done the bare minimum. Rather, only on the basis of his observations that the search proceedings conducted on Shri Praveen Kumar Jain group revealed that he was engaged in the business of providing accommodation entries, that the A.O had hushed to the view that the loan raised by the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
