9911796707
TMI Blog2022 (10) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... de payables of Rs. 1,83,68,844 in comparison to trade receivables of Rs. 5,79,22,610. Therefore, in view of the aforesaid financial position of Shreeji Aluminium Pvt Ltd., we do not agree with the submissions of the Revenue. As a result, we find no infirmity in the aforesaid findings of the learned CIT(A). In respect of all the other entities, the AO in its remand report gave similar reply that unsecured loan lender have advanced the fund on the same day or within 10 to 12 days on which they have received the same. In its latest submission dated 12/07/2022, the Revenue has made submission only regarding loan from Parul Mittal, and submitted that the response under section 133(6) is self-serving and is not corroborated with balance sheet and profit and loss account. In respect of addition on account of Sheelaben Thummar, Kirti Thummar HUF and Krushy Metal, we find from the details available in the paper book that these are appearing as loans / deposits by the assessee s proprietary concern viz. Krushy trading company. Thus, we find no infirmity in the findings of the learned CIT(A) that same cannot be added under section 68 of the Act. Loan from Ram Avtar Paper Ltd., we find from au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) for necessary adjudication. Needless to mention that no order shall be passed without affording opportunity of being heard to both the parties. Grounds raised in assessee s cross objection are allowed for statistical purpose. X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into by the assessee are genuine in nature. The Assessing Officer ('AO') vide order dated 31/03/2015 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that in respect of loan taken from Shri Ashok Kumar Jain (proprietor M/s.Varsha Gems), Little Diam and Meridien Jewellery, during the course of search, Shri Bhanwarlal Jain and group company have on oath accepted the fact that they are only giving accommodation entries in view of cash. Further, the AO held that the payment of interest or TDS cannot be sole criteria for genuineness. The AO also held that the aforesaid 3 entities have not made any compliance to notice issued under section 133(6) of the Act, which again confirms the fact that the assessee has taken benefit of accommodation entries. During the course of assessment proceedings, notices dated 20/03/2015 under section 133(6) were also issued to all the entities from whom the assessee has taken loan during the year under consideration. However, as noted in the assessment order, no compliance has been received pursuant thereto. Accordingly, the AO made an addition of entire amount of Rs. 10,12,91,595, to the total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 8. Sanjay Mittal & Sons 5,24,000 9. Shivkumar & Sons HUF 9,00,000 10. Suyash Mittal Family 10,60,000 11. Ashokkumar Jain 1,10,00,000 12. Vikas Mittal & Sons 3,87,000 13. Kirit K. Thummar HUF 6,00,000 14. Krushy Metal 7,80,000 15. Shetlaben K. Thummar 65,00,000 TOTAL 10,12,91,595 7. As per the information available on record, notices under section 133(6) were issued to all the aforementioned entities, however, no compliance were received by the AO. During the continuation of the scrutiny assessment proceedings, notice under section 148 of the Act was also issued in the case of the assessee on the basis of information received during the course of search conducted in the case of Shri Bhanwarlal Jain group, wherein statement of Shri Bhanwarlal Jain, and various other persons, who assisted him in providing bogus loans and advances, was recorded in which they admitted and revealed the modus operandi of accommodation entries. The fact was brought to the notice of the assessee and reply has sought. As per the assessee, the loan confirmation of the parties along with the bank statement and return of income was submitted to justify the genuineness of the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to note that in respect of all the loan transactions, identity of the lender is not in dispute. 8. In the present case, it has not been disputed that summons under section 131 of the Act were issued and statements were recorded in respect of loan lenders viz. Little Diam, Meredian Jewelry Private Limited, Ashok Kumar Jain, Shri Paresh Babulal Patel and Shree Aluminium Pvt Ltd. in addition to information sought pursuant to notice issued under section 133(6) of the Act. Therefore, loan transaction with these entities is examined first in this order. (i) Little Diam 9. During the course of assessment proceedings, it was noticed that assessee has received loan of Rs. 8,00,000, from this entity. The assessee filed confirmation and bank statement as well as return of income of this entity to prove the genuineness of the transaction. The AO on the basis of search conducted in the case of Shri Bhanwarlal Jain group came to the conclusion that this entity is engaged in providing accommodation entries in lieu of cash. The AO further noted that this entity has filed return of income at Rs. 2,47,508, for assessment year 2012-13 and before the issuance of cheque to the assessee funds were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan extended to the appellant, appellant had sundry creditor of Rs.59,33,97,087/- from which this concern ws extending loans to various persons and which had also earned interest of Rs.41,50,542/- which was shown in P & L A/C. When alongwith this balance sheet and nature of banking transaction were same, appellant is receiving various amounts from his business receipt as appellant has a sales of Rs. 127 Crs and also from sundry creditors appellant had extended the loans. By the nature of the balance sheet and the way loans were extended to others, it shows creditworthiness of Little Diam. So according to me, the evidence presented shows that in the case of Little Diam, appellant has proved the identity, genuineness and creditworthiness of the transaction." 12. From the submission dated 06/08/2019 filed by the AO, through office of learned DR, we find that though the AO accepted the fact that pursuant to summons issued under section 131 statement of Shri Rohit Birawat, proprietor of this entity, was recorded, however, the AO again placed reliance on the search conducted under section 132 on 03/10/2013, in the case of Shri Bhanwarlal Jain group to justify the addition under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Here loan was paid of Rs.40 lakhs through banking channel and amount was also received back through banking channel. In this loan. interest was paid and also TDS was deducted, this proves the genuineness of transaction. Further, when we examine lender's balance sheet, lender has networth Rs. 2,64,37,176/- and turnover of Rs.159 Crs. Alongwith this bank statement of the lender is examined. It shows that lender is receiving payments from various business receipts which are credited to his bank account and there was also payments from the same account. Considering the networth and also turnover and nature of transaction in the bank statement, so creditworthiness of the lender is also satisfied. Here it is pertinent to mention that loan was repaid within this year. It is clear from the above details that appellant had proved his identity, genuineness and creditworthiness from the above details." 15. Similar to the aforesaid loan transaction, even in this case also, from the submission dated 06/08/2019 filed by the AO, through office of learned DR, we find that though the AO accepted the fact that pursuant to summons issued under section 131 statement of Director of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 131, it is clear that appellant's identity was proved as Income tax return copy was submitted. All the transactions were carried through banking channels and loan was given through cheques and also repaid through cheques, so genuineness of transaction was satisfactorily explained. When we examine the balance sheet turnover and creditors and net worth of lender, lender is having turnover of Rs.39,89,69,378/-, net worth of Rs.1,43,85,552/- and creditors of Rs.33,07,74,886/. Lender in his statement in Q.10 stated that from this sundry creditors he was extending loans and receiving interest on it. So here it is clear that from the sundry creditors, lender had extended the loan to the appellant. When we examine the lender's bank account, various transactions are there where lender had received money for business and also payments were made. Here on examining Balance Sheet and Bank statement it is seen that lender had enough fund to extend the loan. So here as lender had enough fund to extend the loans, lender's creditworthiness cannot be doubted. Appellant had paid the interest and also TDS was deducted." 18. Similar to the aforesaid loan transaction, even in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been advanced by the lender on the same day on which he had received the money from other person. In reply, assessee submitted that the AO in the remand proceedings issued notice under section 133(6) as well as summons under section 131 of the Act. Further statement of the loan lender was also recorded, which is not dealt with by the AO in its remand report. 20. The learned CIT(A) vide impugned order after taking note of the statement recorded under section 131 of the Act, agreed with the submissions of the assessee, by observing as under: "Here when we examine the evidence and statements filed by the lender as lender has filed Income tax return copy and attended summons, identity is proved. Lender had also filed his bank statement, loan confirmation and also stated that loans were repaid through banking channels, so genuineness of transaction is also established. With respect to creditworthiness, lender's balance sheet is examined and lender has net worth of Rs.5,54,12.269/- and bank statement of the lender has various transaction which shows debit and credit entries, receipts received from business during the year. From these business receipts lender had lended the mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also submitted that during the year it had business transaction with this lender and made purchases of Rs. 59,30,055 and balance amount was received as cash credit for Rs. 1,99,75,000. 23. The learned CIT(A) vide impugned order noted that statement under section 131 was recorded on 21/01/2017, wherein the aforesaid facts was confirmed by the lender. Further, the learned CIT(A) accepted the contention of the assessee in regard to the loan transaction with Shreeji Aluminium Pvt Ltd., by observing as under: "On examination of the above details it is clear that out of the credit of Rs.6,31,00,595, Rs.3,71,95,5407 is a trade advance which is closing balance of previous year which was the advance received in the earlier year. As per section 68 of the I.T. Act, additions can be made under this section for the cash credit credited in the books of account of the appellant maintained for any previous year and offers no explanation for the nature and source of the credit. The sum so credited may be charged to income tax of the assessee of that previous year. It is clear from the section that sum credited in the previous year can be added u/s 68 if the assessee's explanation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A). 25. In respect of all the other entities, the AO in its remand report gave similar reply that unsecured loan lender have advanced the fund on the same day or within 10 to 12 days on which they have received the same. In its latest submission dated 12/07/2022, the Revenue has made submission only regarding loan from Parul Mittal, and submitted that the response under section 133(6) is self-serving and is not corroborated with balance sheet and profit and loss account. 26. In respect of addition on account of Sheelaben Thummar, Kirti Thummar HUF and Krushy Metal, we find from the details available in the paper book that these are appearing as loans / deposits by the assessee's proprietary concern viz. Krushy trading company. Thus, we find no infirmity in the findings of the learned CIT(A) that same cannot be added under section 68 of the Act. 27. As regards, the other loan transactions, the learned CIT(A) vide impugned order observed as under: "All the above mentioned lenders are from Delhi. They all have submitted confirmation under section 133(6), Income tax return copy, bank statements, ledger statements, source of funds and all the loan interest was paid and TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 22,94,715. However, we find that the details of capital account of aforesaid loan lenders were not examined by the learned CIT(A) and these details are also not placed in the paper book. Further, other aspects of the financial statement of the loan lenders have also not been examined by the learned CIT(A). Therefore, we deem it appropriate to remand the addition pertaining to loan transactions of the assessee with Parul Mittal, Sanjay Mittal & Sons, Shivakumar & Sons HUF, Vikas Mittal & Sons, and Ram Mittal HUF to the file of learned CIT(A) for de novo adjudication. The assessee is also directed to file all the details of the loan lenders in support of its claim for necessary examination by the learned CIT(A). The learned CIT(A) shall be at liberty to seek any other information / document for complete adjudication of this issue. Needless to mention that no order shall be passed without affording opportunity of being heard to both the sides. 31. In the result, appeal by the Revenue is partly allowed for statistical purpose in view of our aforesaid findings. C.O. no.115/Mum./2019 (Arising out of Revenue's Appeal being ITA no…697/Mum./2018) 32. While, assessee, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that this issue was not raised by the assessee in its appeal before the learned CIT(A) and has been raised for the first time in the present cross objection against the Revenue's appeal. Though, this fresh issue should have been raised by way of an application seeking admission of additional ground, however, the assessee has raised the same in the present cross objection. It is settled that being a legal issue, same can be raised at any stage of proceedings. However, since, this legal issue was not raised and therefore was not considered by the learned CIT(A), thus, we deem it appropriate to remand the issue arising in grounds no.2 and 3, raised in assessee's cross objection, to the learned CIT(A) for necessary adjudication. Needless to mention that no order shall be passed without affording opportunity of being heard to both the parties. Further, the learned CIT(A) shall have the liberty to call for any details/documents from either parties for adjudication. As a result, grounds No. 2 and 3 raised in assessee's cross objection are allowed for statistical purpose. 36. In the result, assessee's cross objection is allowed for statistical purpose. 37. To sum up, appeal by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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