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TMI Blog2023 (6) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to prove the identity and creditworthiness of the creditor but genuineness of the transaction. We do not find any reason to interfere with the decision of learned first appellate authority in deleting the addition made u/s. 68 and the interest paid on the unsecured loan. Grounds are dismissed. Assessment u/s 153A - Addition u/s 68 - whether incriminating material found in search? - HELD THAT:- We do not find that the AO has made reference to any seized/incriminating material while making the additions u/s. 68 - In so far as the documents recovered from i-phone of Chanchal Taneja, Commissioner (Appeals) has recorded a finding that it cannot be considered as incriminating material. Nothing has been brought before us to controvert the factual finding of ld. Commissioner (Appeals) that the additions are not based on any incriminating material found as a result of search. In a recent decision rendered in case of bhisar Buildwell (P.) Ltd. Ors. [ 2023 (4) TMI 1056 - SUPREME COURT ] has affirmed the view expressed by Hon ble jurisdictional High Court in case of CIT vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] Decided in favour of assessee. - ITA No. 3962/Del/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer, Shri Dinesh Jain accepted that he was providing bogus bills to parties on commission basis. Further, he observed, to verify the genuineness of the unsecured loan availed by the assessee, investigation was also carried out with the creditor, M/s. Shashi Foods India Pvt. Ltd. In course of such investigation, statement of Shri Gian Chand Sethi, director of M/s. Shashi Foods India Pvt. Ltd. was recorded, wherein, Shri Gian Chand Sethi confirmed of having advanced unsecured loan of Rs. 10 crores to the assessee with interest rate of 9%. Further, while explaining the source from which, such loan was advanced, Shri Gian Chand Sethi stated that loan was given out of sale proceeds corresponding to certain purchases, payments of which are due. To further verify the genuineness of the loan transaction, in course of assessment proceedings, the Assessing Officer issued notice u/s. 133(6) to M/s. Shashi Foods India Pvt. Ltd. to explain the source of fund, from which loan was advanced. In response to the said notice, the creditor again confirmed the loan transaction. On perusing the balance sheet of M/s. Shashi Foods India Pvt. Ltd., the Assessing Officer found that in the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative submitted that the Assessing Officer has made out a thorough investigation in course of assessment proceedings to ascertain the genuineness of unsecured loan availed by the assessee. She submitted, in course of investigation carried out in post search proceedings as well as in course of assessment proceedings, it was found that the creditor M/s. Shashi Foods India Pvt. Ltd. has availed bogus purchase bills from entities controlled by Shri Dinesh Jain. She submitted, therefore, the source of funds at the hands of the creditor remains unproved. In that event, the genuineness of the unsecured loan given to the assessee also remains doubtful. Drawing our attention to the assessment order, learned Department Representative submitted, the Assessing Officer has discussed the money trail, which clearly establishes that the entire transaction relating to unsecured loan is a cooked up story, as the same amount of fund is rotating in different group entities controlled by certain persons. She submitted, without properly appreciating the facts discussed by the Assessing Officer, learned Commissioner (Appeals) has deleted the addition. 5. Strongly relying upon the observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be treated as genuine. From the facts and materials on record, it is evident that in course of post search enquiries conducted in case of M/s. Shashi Foods India Pvt. Ltd., statement was recorded from the Director of the said concern, specifically, asking about the unsecured loan given to the present assessee. In response to the query raised, the Director of M/s. Shashi Foods India Pvt. Ltd. has clearly and categorically confirmed of having advanced unsecured loan at the interest rate of 9%. 7. Further, in course of assessment proceedings, the Assessing Officer again issued notice u/s. 133(6) of the Act to M/s. Shashi Foods India Pvt. Ltd. seeking confirmation of the loan transaction. In response to the said notice, the creditor again furnished a confirmation accepting the fact that it has advanced loan of Rs. 10 crores to the assessee with interest rate of 9%. It is further evident, in response to specific query raised by the Assessing Officer regarding availability of fund for advancing loan, the Director of M/s. Shashi Foods India Pvt. Ltd. had stated that the loan was advanced from the amount received from sales corresponding to the purchases, payment for which was st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction. In view of the aforesaid, we do not find any reason to interfere with the decision of learned first appellate authority in deleting the addition made u/s. 68 of the Act and the interest paid on the unsecured loan. Grounds are dismissed. ITA No. 3962/Del/2019: 9. Facts in this appeal are slightly different. In case of this assessee, on the date of search, the assessment proceeding for the impugned assessment year was not pending. In other words, assessment on the date of search has not abated. In this case, the assessee had availed two unsecured loans, i.e., Rs. 7.15 crores from M/s. Index Securities and Research Pvt. Ltd. and Rs. 2.45 crores from M/s. Shashi Foods India Pvt. Ltd. in the year under consideration. Based on the very same reasoning, on which the loan transaction relating to other assessee dealt by us in earlier part of the order, the Assessing Officer treated the loan transaction as non-genuine and added back u/s. 68 of the Act. The interest paid on such loan was also disallowed. The assessee contested the aforesaid additions before the ld. Commissioner (Appeals). After considering the submissions of the assessee in the context of facts and mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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