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TMI Blog2022 (8) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Business Private Limited) and deleted the additions on the ground that the assessee furnished all possible documents evidencing that the loans are not bogus and additions cannot be made by the Department by only placing reliance on the statement of Shri Pravin Kumar Jain without having brought anything to disbelieve and disprove various documents filed by the assessee. We are of the considered view that the CIT(Appeals) erred in facts and in law in confirming the additions of Rs. 50 lakhs in respect of loan taken from M/s Hema Trading Company. Appeal of the assessee is allowed. - ITA No. 379/Ahd/2018 - - - Dated:- 29-8-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri S.N. Soparkar, A.R. For the Revenue : Shri V.K. Singh, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-2, Ahmedabad in Appeal no. CIT(A)-2/369/ITO, Wd. 2(1)(3)/2016-17 vide order dated 27/12/2017 passed for the assessment year 2009-10. 2. The assessee has raised the following grounds of appeal:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness Private Limited (Hema trading company Private Limited), which was one of the companies operated by Shri Praveen Kumar Jain Group. In appeal, Ld. CIT(Appeals) observed that there was only one entry of ₹ 50 lakhs which was appearing in the bank account of the assessee company, and the Department has not been able to produce any evidence that the assessee was in receipt of any sum over and above ₹ 50 lakhs. Accordingly, Ld. CIT(Appeals) restricted the addition under section 68 of the Act to ₹ 50 lakhs in the hands of the assessee. While allowing part relief to the assessee, Ld. CIT(Appeals) observed as under: 3.9. I have carefully considered the facts of the case, assessment order, remand report, rejoinder and submission of the appellant. The AO has made addition of Rs.1,00,00,000/- on the ground that appellant has received the above amount from M/s. Nakshatra Business Pvt. Ltd. (M/s. Hema Trading Co. Pvt. Ltd.) which is a company operated by Shri Praveenkumar Jain who is engaged in providing accommodation entries in form of bogus unsecured loan. Appellant during the course of appellate proceedings has contended that it has received a loan of only Rs.50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illicit monies and evade taxes, that takes it actions beyond what is legally permissible. These entities have every semblance of a genuine business - its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations carried out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or, with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this Specialized Tribunal, cannot be oblivious of these ground realities. 3.11 It is noticed that M/s. Naksnatra Business Pvt. Ltd. has been engaged in providing accommodation entry and have been used to launder unaccounted money. In view of the above,, the unsecured loan of Rs.50,00,000/- in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. Counsel for the assessee submitted proof of repayment of loan of M/s Hema Trading Company and submitted that it now stands duly substantiated that the assessee company had taken loan from M/s Hema Trading Company to return ₹ 50 lakhs which was repaid back in the next financial year through banking channels, which substantiates the genuineness of the transaction, and accordingly in the instant facts no addition is called for under section 68 of the Act. In response, the Ld. DR relied upon the observations made by the Ld. CIT(Appeals) in the appeal order. 5. We have heard the rival contentions and perused the material on record. In our considered view, the assessee has reasonably discharged the onus case upon it in the instant set of facts. We note that the assessee has been able to demonstrate that he has repaid the loan amount back to the lender in the subsequent year through banking channels. The fact that the loan was repaid back, in our view, also lends support to the genuineness of transaction. In the case of Shree Samruddhi OverseasTrading Co. v. DCIT in ITA Number I.T.A. Nos. 909 910/Ahd/2018 , the Ahmedabad ITAT held that repayment of loan points toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e companies in the month of March 2012, which were repaid within a period ranging from two to six months duly corroborated with all necessary evidences such as copies of bank statements, ledger accounts, confirmations from the parties, their PANs etc. Learned AR submitted that vide letter dated 8.2.2017, the assessee informed the Assessing Officer on the date of hearing i.e. 9.2.2017 that the assessee is not in a position to attend hearing as the assessee is preoccupied in High Court on 9.2.2017, which was proved by learned AR by placing before the bench a copy of the order from High Court filed at page No. 34 of the paper book. Learned AR submitted that even notices were issued u/s. 133(6) by the Assessing Officer to these parties were duly responded by the said parties by drawing our attention to page No.38 to 40 of the paper book wherein all details as required by the Assessing Officer were duly filed. Thus, learned AR submitted that the assessee has filed copies of confirmations, ledger accounts, bank statements evidencing transactions through banking channel, ITRs, PAN and annual reports alongwith audited profit and loss accounts and balance sheets of these parties. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), under similar facts the Coordinate Bench has accepted loans given by these three parties, which were also common in the case of the assessee as stated in para 2.15 of the said order, which is as under:- 8. Thus, it is clear from the above that the entities which gave loans to the assessee appeared at serial number 1,2 6 of para 2.15 of the Coordinate Bench decision. The assessee has filed necessary proofs and documents supporting the borrowings of money and repayment thereof. Under these circumstance, we are not in agreement with the conclusion given by learned CIT(A). Accordingly, by respectfully following the decision of the Coordinate Bench, we allow the appeal of the assessee. 9. In the result, appeal filed by the assessee is treated as allowed. 5.3 Accordingly, in our considered view, no addition is called for in the instant facts for the reasons that firstly, the assessee had furnished details of the lenders (name, address, PAN number, confirmation, proof that all transactions were carried through banking channels etc.) and the correctness of details so furnished have not been disputed by the Department. Secondly, the assessee has placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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