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TMI Blog2022 (10) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In any case of the matter, when the lender is an income-tax assessee, he can be hauled up in case he is unable to explain the source of fund from which he advanced the loan to assessee. The bona fide of the assessee is further proved from the fact that not only the assessee paid interest on the loan availed and deducted tax at source, but, the entire loan amount was repaid to the lender in the financial year 2013-14, even, prior to the completion of the original assessment and much before initiation of proceedings u/s 147 of the Act. Thus, addition made in the given facts and circumstances of the present case is unsustainable. Assessee appeal is allowed. - ITA No.9087/Del/2019 - - - Dated:- 31-8-2022 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER Appellant by Smt. Rano Jain, Adv. Ms. Mansi, CA Respondent by Shri Om Parkash, Sr. DR ORDER This is an appeal by the assessee against order dated 07.10.2019 of learned Commissioner of Income-Tax (Appeals)-7, New Delhi pertaining to assessment year 2011-12. 2. The assessee has raised various grounds challenging the validity of reopening of assessment under Section 147 of the Income-Tax Act, 1961, as well as on the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan transaction was carried out through banking channel, will not prove the loan to be genuine. Further, he observed, the lender company received the amount of Rs.75,00,000 from another entity, which is controlled and managed by an entry operator. Thus, the Assessing Officer concluded that the loan availed of Rs.40,00,000 is nothing but unexplained cash credit and added back to the income of the assessee. Further, he made an addition of Rs.80,000, being commission paid to avail the accommodation entry of Rs.40,00,000. 5. Against the assessment order so passed, assessee preferred an appeal before learned Commissioner (Appeals), inter alia, on the ground that reopening of assessment under Section 147 of the Act is invalid. 6. Learned Commissioner (Appeals), however, did not find merit in any of the grounds raised by assessee. Accordingly, he dismissed the appeal. 7. Learned counsel appearing for the assessee submitted that in assessee s case, the original assessment was completed under Section 143(3) of the Act. She submitted, the reopening of assessment under Section 147 of the Act was after expiry of four years from the end of assessment year under dispute. Thus, she submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, to prove the identity of the creditor, the assessee furnished PAN details, copy of ITR filed by the lender, copy of ROC master data on the portal of MCA showing the status of the lender as active company and the confirmation of the lender. As regards, the creditworthiness, learned counsel submitted, the assessee furnished the audited financials and bank statement of the lender. She submitted, the genuineness of transaction cannot be doubted, since, the entire transaction was through banking channel. 11. Further, she submitted, the loan taken by assessee was shown as inter corporate deposit in the balance sheet of the assessee and the assessee had paid interest to the lender after deducting tax at source under Section 194A of the Act. She submitted, the entire loan was repaid to the lender through banking channel in financial year 2013- 14, much prior to the assessment was reopened under Section 147 of the Act. Therefore, the bona fide of the transaction cannot be doubted. She submitted, since, assessee has established the identity and creditworthiness of the lender and has proved the genuineness of the transaction, the loan taken cannot be added to the income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Zed Black, Pioneer Supplier and Pragyan Enterprises (Proprietor of all these concern is Shri Radhey Shyam Sharma). 2.2 ITD database analysis of these persons was done and it is found that (a) Amita Joshi (PAN:AEYPJ5051J ) files her return of income showing income of Rs.175660/- only from other sources in the F.Y. 2010-11(A.Y 2011-12). (b) Shri Raj Kumar Bhotika (PAN:AURPS7511D) files his return of income with income from other sources of Rs.1,62,080/-. (c) Shri Ashok Kumar Sharma (PAN:AURPS7511D) file his return of income with income from other sources of Rs.1,62,080/-. (d) Shri Radhey Shyam Sharma (PAN:ANTPS9857) is non filer. Profile of the all Proprietors shows that they were not creditworthy enough to give any fund to sell companies in which they were also the directors. Agricultural land are dummy directors in various companies of the entry operators Shri Anand Sharma and Shri Janardan Chokhani. 2.3 The cash deposit in the above proprietorship concerns were transferred to the account of many intermediaries Shell companies controlled by Shri Anand Sharma and Shri Janardan Chokhani. The fund were routed in another set of Shell Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Officer, Ward 21(1), New Delhi 15. On a careful reading of the reasons recorded, it is evident, the Assessing Officer has formed a belief that assessee has entered into transactions with certain entry provider for availing accommodation entries by way of bogus purchases to the tune of Rs.40,00,000. Nowhere in the reasons recorded, the Assessing Officer has either referred to any loan availed by assessee or mentioned the name of the lender company. Whereas, in the assessment order, the Assessing Officer has given a complete go bye to the facts and issues forming part of the reason to believe and proceeded on a completely different direction of examining the genuineness of loan availed of Rs.40,00,000 from M/s. New Wave Commercial Pvt. Ltd. Thus, it is clearly evident, the facts based on which the Assessing Officer reopened the assessment, as recorded in the reasons to believe, is inconsistent with the subject matter of assessment as per the assessment order. Thus, it is prima facie established that the reopening of assessment was made under complete factual misconception and pure non-application of mind. It is further evident, the income for the escapement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan transaction or to unearth the money trail. In my view, without making any inquiry the Assessing Officer cannot treat the loan transaction as non-genuine on mere conjuncture and surmises. More so, when the lender is an income-tax assessee. The least the Assessing Officer could have done is to obtain necessary information from the Assessing Officer having jurisdiction over the lender. In any case of the matter, when the lender is an income-tax assessee, he can be hauled up in case he is unable to explain the source of fund from which he advanced the loan to assessee. The bona fide of the assessee is further proved from the fact that not only the assessee paid interest on the loan availed and deducted tax at source, but, the entire loan amount was repaid to the lender in the financial year 2013-14, even, prior to the completion of the original assessment and much before initiation of proceedings under Section 147 of the Act. Thus, in my considered opinion, the addition made of Rs.40,80,000 in the given facts and circumstances of the present case is unsustainable. Accordingly, I delete the addition. 18. In the result, the appeal is allowed. Order pronounced in the open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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