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TMI Blog2023 (8) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... o disallowed the interest expenses. We find that before Ld. CIT(A) the assessee made similar submissions as argued before us. CIT(A) neither verified the repayment of loan nor sought any remand report from Assessing Officer. Such evidence is self-sufficient to prove the facts that the loan amount alongwith interest was repaid. We find that assessee placed on record copy of their bank statements, reflecting the repayment of loans on 22.03.2016. We find that in the case of Ayachi Chandershekhar Narsangi [ 2013 (12) TMI 372 - GUJARAT HIGH COURT] held that when the department has accepted repayment of loan in subsequent year and no addition was to be made on account of loan. We find that such plea of repayment of loan was not raised for the first time before Tribunal, rather categorically contended before ld CIT(A) as well. We find that repayment of loan was made much before passing of assessment order. The assessing officer passed assessment order on 26.12.2016, however, the loan with current year interest was repaid on 22.03.2016. No evidence was brought on record if receipt of loan was circulated transaction. Decided in favour of assessee. - Shri Pawan Singh, Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be deleted. (3) Under ethe facts and circumstances of the case, CIT(A) erred in confirming the addition amounting to Rs. 7,18,581/- on account of interest on unsecured loan and is required to be deleted. (III) Miscellaneous: (1) The appellant craves leave to add, alter or vary any of the grounds of appeal. 2. Brief facts are that assessee is a partnership firm engaged in the business of construction and filed its return of income for assessment year 2014-15 on 27.11.2014 declaring nil income . The case was selected for scrutiny. During the assessment, Assessing Officer noted that assessee has shown unsecured loan from Kangan Jewels Private Ltd of Rs. 70.00 lakh and Maniprabha Impex Private Limited for Rs. 80.00 lakh respectively. The Assessing Officer further recorded that in this case, he was having information from Investigation Wing that during the relevant financial year 2015-16, the assessee has obtained accommodation entry of unsecured loan from entry operators Rajendra Jain Group, Sanjay Chaudhary Group and Dharmichand Jain Group of Mumbai. A search was carried out by Investigation Wing on 03.10.2013, which resulting collecting various evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee filed detailed written submission before ld. CIT(A) and made similar submissions as made before assessing officer. In addition to, the assessee submitted that addition was made on the basis of statement of Rajendra Jain recorded during search action upon him, which later on retracted. The assessee also submitted that loan has been repaid in financial year 2015- 16 i.e., during assessment year 2016-17, copy of confirmation along with required details were also furnished. The assessee also relied on various case law including the decision of Hon'ble jurisdictional High Court in the case of Ranchhod Jivabhai Nakhava Appeal No.50 of 2011, on the ratio of that once the assessee has discharged initial onus by furnishing copy of PAN, confirmation of lenders, it was the duty of Assessing Officer to investigate or verify about the lenders, Rohini Builders [2002] 256 ITR 360 [2003] 127 Taxman 523 (Guj). 5. The ld. CIT(A) after considering the submission of assessee upheld the addition of unsecured loan as well as disallowance of interest expense by holding that to prove the genuineness of unsecured loan it is the duty of assessee as mandated under section 68 to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of which the disallowance of loan could be justified. The learned Senior Counsel for the assessee submits that entire addition was made on suspicious, there was no specific material to prove that loan in question were not genuine. The Assessing Officer made addition on general material that lenders were engaged in the providing of accommodation entry. The suspicious how much strong it may be, can never take place of evidence and cannot be made the basis for making addition. 8. The Ld. Senior Counsel for the assessee further submits that loan in question has been repaid in subsequent years, as evident from the evidences placed on record at page 66 of paper book, filed by assessee. The repayment of loan is not doubted by Department in subsequent assessment year. The Ld. Senior Counsel for the assessee invited our attention on page 66 of the paper book, which is copy of bank statement of assessee, which clearly shows the repayment of loan on 22.03.2016 to both the lenders along with corresponding interest payment. The Ld. senior counsel for the assessee submits that this fact was categorically brought to the notice of Ld. CIT(A), however, he has not given any specific findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authorities and submits that Investigation Wing Mumbai made full-fledged enquiry against Rajendra Jain and his associate and found sufficient evidences that Rajendra Jain group indulging in providing accommodation entries without actual business. The assessee was one of the beneficiary who was availed accommodation entry against the payment of commission. The Assessing Officer as well as CIT(A) considered all the factual and legal objection raised by the assessee while confirming the additions. The Ld. Sr-DR for the Revenue prayed that addition made by Assessing Officer may be affirmed. On the submissions of repayment of loan, the Ld. Sr DR for the Revenue submits that repayment of loan was nothing but chain of event of accommodation entry which cannot accepted as genuine loan transaction. 12. We have considered the rival submission of both the parties and have gone through the order of lower authorities carefully. We have also deliberated on various case law relied by Ld. Senior Counsel for the assessee. We find that assessing officer has made addition of loan transactions as bogus entry from Kangan Jewels Private Limited Maniprabha Impex Private Limited by taking view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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