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TMI Blog2022 (3) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... oner's case was selected for scrutiny assessment. Notices were issued to the petitioner under section 142(1) of the Act. The petitioner was, inter-alia, directed to submit details of unsecured loans in the prescribed format. The petitioner furnished requisite details and gave the information as solicited. The petitioner furnished the documents disclosing the identity, credit worthiness of the creditors as well as genuineness of the loan transactions, including acknowledgment of income tax returns and account statements evidencing the transactions through banking channel. Upon due satisfaction, the Assessing Officer passed an assessment order under section 143(3) of the Act on 26th February 2016. 3. On 23rd January 2018, a search action under section 132 of the Act was carried out qua petitioner and its group concerns. Post search proceedings, again the petitioner was called upon to furnish information/explanation by notices dated 16th February 2018 and 8th March 2018, to which the petitioner gave suitable reply. On 10th September 2018, a notice under section 153A of the Act followed. Eventually, in the proceedings under section 153 of the Act, after consideration of the replie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 9. An affidavit-in-reply is filed on behalf of the respondents. The respondents have made an endeavour to support the impugned action on the ground that the income escaped assessment solely on account of the failure of the petitioner to make a full and true disclosure of the material facts. It was incumbent upon the assessee to disclose the identity and creditworthiness of the lender and the genuineness of the transaction. In the case at hand, the lack of creditworthiness, and non-genuine nature of the loan transaction could be ascertained only post search action under section 132 of the Act. Therefore, since under section 153A of the Act the assessment which was completed could not be reopened, in the absence of incriminating material found during the search, the respondent No. 1 was justified in recording a belief that income escaped assessment within the meaning of section 147 of the Act due to the failure on the part of the assessee to make a true and full disclosure. Thus, no fault can be found with the impugned action. 10. We have heard Mr. Mistri, the learned Senior Counsel for the petitioner and Mr.Suresh Kumar, the learned counsel for the respondents-revenue, at some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional loans taken for want of verification of genuineness and creditworthiness of loan parties. Also submit utilization of loan funds along with supporting documents. 14. In the reply dated 3rd December 2015 (Exh. D to the petition), the petitioner furnished following information . 1. CONFIRMATION OF UNSECURED LOANS : (also at Sr.No.33 of 1st questionnaire. dt.17-7-15) The Total Unsecured Loans outstanding as on 31-03-2013 are These are mainly additional loans from existing loans creditors and few additional loans from new creditors. We are enclosing herewith the Confirmation Letters of all the creditors alongwith supporting evidence like their ITR/Bank statement for relevant period. 2. EVIDENCE IN SUPPORT OF NEW AND ADDITIONAL LOAN TAEN FROM EXISTING LOAN CREDITORS (also at Sr.No.33 of 1st questionnaire. dt.17- 7-15) As stated above, we are enclosing herewith Confirmation Letters with supporting evidences as per Annexure attached hereto. These evidences are in respect of New Loans taken during the year i.e., (IT Acknowledgment, and Bank Statement) and in respect of additional loan taken from existing creditors only IT acknowledgment of creditor is enclosed). 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only the information was furnished by the petitioner but all the supporting documents were submitted. It can hardly be gainsaid that all the primary facts were placed before the Assessing Officer by the petitioner. 19. Mr.Suresh Kumar, the learned counsel for the respondents made an endeavour to draw home the point that though the information and documents were furnished, yet the petitioner did not disclose all the relevant information. The genuineness of the transaction and the creditworthiness of the creditor could not be ascertained at that point of time, on account of non-disclosure of the relevant facts. 20. We are afraid to accede to the submission of Mr.Suresh Kumar. In the questionnaire annexed to the letter dated 27th October 2015, under item (1), copies of the loan confirmation were sought and, under item (2), the petitioner was asked to submit evidence in support of genuineness and creditworthiness of the loan parties (extracted above). These questions imply that the Assessing Officer was fully alive to the issues of genuineness of the loan transaction and creditworthiness of the creditors of the assessee. Thus, the assessee was called upon to submit requisite inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed reopening of the assessment suffers from the vice of 'change of opinion' also appears well founded. Evidently, the search action under section 132 of the Act, did not reveal any tangible material qua the transaction of unsecured loan from JMPL. In fact, the petitioner was called upon to explain the very transaction, in respect of which, during the course of scrutiny assessment, the then Assessing Officer had already solicited information and documents. Eventually, during the course of scrutiny assessment, the Assessing Officer having been satisfied with the explanation furnished by the petitioner, did not make any addition. In the course of the proceedings under section 153A also, the revenue did not claim that any incriminating material was found qua the transaction with JMPL. In this view of the matter, the reopening of the assessment on the premise that the creditor lacked the creditworthiness and thus the loan transaction was sham, is nothing but a change of opinion. 25. It would suffice to make reference to a Division Bench judgment of this Court in the case of Ananta Landmark Pvt Ltd. Vs. Deputy Commissioner of Income Tax, Central Circle 5(3) and 2 Ors.(2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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