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TMI Blog2024 (7) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in the books of the assessee. In view of this the facts in this case of the assessee for A.Y. 2013-14 are distinguishable and does not apply for this year. In view of this, we restore this appeal back to the file of the AO with a direction to the assessee to produce the directors of Nazar Impex Pvt. Ltd. before the AO. AO may examine the same and after detail enquiry decide the issue about the loan from Nazar Impex Pvt. Ltd. We also clarify that there is no requirement for cross examination of the assessee because the assessee is required to prove the three ingredients of cash credit independently. AO is also directed to not to get swayed by the statement of confession and subsequent retraction of several accommodation entry providers but as to independently examine these transactions according to the parameters of Section 68 of the Act. In view of this, the appeal filed by the assessee is allowed for statistical purposes. - Shri Prashant Maharishi, AM For the Assessee : Shri Jitendra Singh, AR For the Revenue : Shri R.R. Makwana, DR ORDER PER PRASHANT MAHARISHI, AM: 01. ITA No. 280/Mum/2024 in case of Sankpal Developers (assessee / appellant) against the appellate order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnel. Hence, treating the unsecured loan amounting to Rs. 40,75,000/- borrowed from Nazer Impex Pvt. Ltd as unexplained cash credit under section 68 of the Act is unjustified and the same may be deleted. iv. The NFAC further failed to appreciate that the Ld. A.O. has made the addition relying on the statements of certain parties obtained during the search and seizure action carried out under section 132 of the Act on the said parties, without providing the appellant an opportunity to cross examine them. Thus the impugned addition of Rs. 40,75,000/- is made against the gross violations of principals of natural justice and the same may be deleted. 3. The Appellant denies any liability to pay interest under sections 234A, 23418 and 234C of the Act. Hence, the same are not leviable. 4. The Appellant craves leave to add, alter, amend, delete, rescind or withdraw any of the grounds of appeal mentioned hereinabove. 03. The brief fact of the case shows that assessee is engaged in the business of property developers. It filed its return of income on 8th October, 2014, at ₹nil. The return was not picked up for scrutiny. Notice under Section 148 of the Act was issued on 30th March, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that the order of SMC bench stated by the learned Authorized Representative goes against the assessee for the simple reason that in the last year same company has provided loan to the assessee of ₹50 lacs. He submitted that repayment of the accommodation entry by account payee cheque does not absolve the assessee from the rigors of the Section 68 of the Act. He submits that every accommodation entry on loan is always repaid by cheque otherwise, how it can be squared off. He further referred to the provisions of Section 68 of the Act, which provides that the amount of Provisions of Section 68 is required to be decided only at the time of credit of such sum all other subsequent events are irrelevant. He submits that when the language of law of Section 68 of the Act is plain and simple there is no need to look at the subsequent events. He submits that merely the accommodation entry is repaid. Subsequently, how it can be stated that assessee has proved the genuineness and creditworthiness of the transactions at the time of receipt of such sum. He submits that therefore, there is no error in the order of the lower authorities. 07. We have carefully considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmore, it is apparent that Mr. Sanjay Choudhary is the director of the lender. Search was conducted on the same person on 3rd October, 2013, wherein he was found to be on accommodation entry provider through this company. It is not denied by the assessee that M/s Nazar Impex Pvt. Ltd., the lender in this case is not the company operated by Sanjay Chowdhary. In fact the order of the ITAT record specifically that Sanjay Chouwdhary is the director of the company since inception. On plain reading of the Provisions of Section 68 of the Act, nature and source of the credit is required to be explained by the assessee when the same is found to be credited in the books of account. Subsequent repayment of the accommodation entry which is but naturally does not show that the originally credit is genuine and provider of the credit is creditworthy of the same. However, the co-ordinate Bench has referred to this statement recorded in case of survey of Mr. Sanjay Chowdhary and others and Mr. Rajendra Jain. Such statement was stated to be retracted. However, the fact stated that before us clearly shows that it was not statement during the course of survey but search conducted by the Income Tax Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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