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TMI Blog2024 (6) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Thus we hold that once the ld. AO has accepted cash loans, which is not been considered as income, there can be escapement of income. Accordingly, the reasons recorded by the ld. AO are quashed. Consequently, the entire addition made by the ld. AO is also quashed. Decided in favour of assessee. - : SHRI AMIT SHUKLA, JUDICIAL MEMBER And SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER i For the Assessee Shri. Anuj Kisnadwala For the Revenue Shri. H.M. Bhatt (Sr. D.R.) ORDER PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by assessee against order dated 28.7.2021, passed by the National Faceless Appeal Centre (NFAC), Delhi for the quantum of assessment passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( the Act ) for Assessment Year (AY) 2012-13. In various grounds of appeal the assessee has challenged the validity of re-opening u/s. 147/148; and addition of Rs. 37,18,314/- u/s. 69C on account of interest on alleged cash loan of Rs. 2,45,00,000/- even when no addition on account of cash loan has been made. At the outset, appeal of the assessee is delayed by 437 days. In the petition for condonation of delay, the assessee has stated as under: Sub: Request for Condo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, the learned Assessing Officer (the ld. AO) has recorded the reasons in the following manner: 1. Brief details of assessee- For the year under consideration assessee has filed return of income on 28.09.2012 declaring total income at Rs. 14,60,787/-. During the year under, assessee has shown salary income under the head Income from Business and Other Sources. 2. Brief details of information received by the AO-Information in the case of the assessee was received from 0/0 DDIT (Investigation), Unit-5(4), Mumbai on 26.03.2019 that during F.Y. 2011-12, assessee has borrowed cash loan from / through Nilesh Bharani / Evergreen Enterprises is mentioned below: Sr. No Code Name Coded amount as per ledger (in '000) Actual amount (in Rs.) Contact Person Contact Number F.Y. 1 Anupam ST PAW Anupam ST PAW 24,500 2,45,00,000 Premnibhai 9821657722 2011- 12 In this case information was received from Dy. Director of Income-tax (Investigation), Unit- 5(4) Mumbai, stating that a Search Survey action u / s * 0.132 was carried out in the case of M / s Evergreen Enterprises. Mr. Nilesh Bharani is one of the partners in M/s. Evergreen Enterprises. The documentary evidences found in the search as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration but no assessment as stipulated u/s. 2(40) of the Act was made and return of income was only processed u/s 143(1) of the Act. In view of the above, provisions of clause(b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 7. In this case more than four years have lapsed from the end of the assessment year under consideration. Hence the approval of the Ld. Pr. Commissioner of Income tax -24, Mumbai is hereby sought for re-opening the case of the assessee for A .Y 2012-2013 as per provisions of section 151(1) r.w.s.149(1)(b) of the Income Tax Act 1961. 5. Accordingly notice u/s. 148 was issued through digital mode on 31.3.2019. In response assessee filed the return of income of Rs.14,60,790/-. The ld. AO taking note of statement of Shri Nilesh Bharani recorded during search and survey in his group, that he used to charge commission at the rate of 0.6% per annum and interest was charged at the rate of 1% and also based on the impounded material gathered from Shri Nilesh Bharani, he inferred that assessee has received cash loan durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash loans for which reasons were recorded. 9. We have heard the rival submissions and also perused the relevant findings given in the impugned orders in so far as validity of re-opening u/s. 147 is concerned. On the perusal of the reasons (supra), it is seen that the same is based on the information that assessee has borrowed cash loan from / through Shri Nilesh Bharani / M/s. Evergreen Enterprises for sums aggregating to Rs. 2,45,00,000/-. Accordingly, the basis of such information the reason to believe has been entertained by the AO that the income to the extent of Rs. 2,45,00,000/- is chargeable to tax in the hands of assessee has escaped assessment within the meaning of section 147. First of all, it is not a case of deemed income taxable u/s. 68 that it has some kind of unexplained loan credit in the books of the assessee. The information is based on the fact that the assessee has received cash loans which in turn is based on certain documents seized in search and survey action u/s. 132 carried out at M/s. Evergreen Enterprises. If it is a cash loan, ostensibly it cannot be treated as income of the assessee unless conditions specified in Section 68 are satisfied. Also it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded it is a fit case for issuance of notice under Section 140 of the Act and the Principal Commissioner has also expressed he is satisfied about issuance of notice under Section 148 of the Act. If these two gentlemen had only read the reasons as recorded for re-opening, certainly they would have realised that there is no income which has escaped assessment because the problem according to the JAO was that petitioner has borrowed cash loan of Rs. 16,30,000/-. In fact in paragraph no. 9 of the reasons recorded it reads as under: 9. In the light of the above discussion and in consequence of information in the possession of the undersigned, I have reason to believe that by accepting cash loan of Rs. 16,30,000/., the assessee has violated the provision of section 269SS of I.T. Act, 1961 in the Assessment Year 2012 - 13 Hence, there is escapement of assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary within the meaning of section 147 of Income Tax Act, 1961. He says 'there is escapement of assessment' by reason of the failure on the part of the assessee to disclose fully and truly all material facts but does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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