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TMI Blog2024 (9) TMI 1445X X X X Extracts X X X X X X X X Extracts X X X X ..... We set aside the impugned appeal order and direct the ld. AO to delete the addition amount. Decided in favour of assessee. Addition of loan and interest thereon - AY 2013-14 - We find that the entire addition was made on the basis of the report of the investigation department. The Ld.AO has not made any separate verification about the loan creditors and the interest payment. The assessee has shifted its onus to the revenue by submitting all relevant documents in relation to the loan-creditors. In case of interest, the assessee deducted TDS and paid the amount through banking channel. AO was not able to bring any contrary fact and not even nullified the documents submitted by the assessee. The ld. AO ld. CIT(A) only relied on the report of the investigating authority. CIT(A) only followed the order of the Ld.AO and confirmed the addition. We find that the entire addition was made without proper verification. The assessee had shifted its onus by submitting the evidence before the revenue authority. No further investigation was done. The ld. AO was unjustified for addition the same. Decided in favour of assessee. - Shri Anikesh Banerjee, Judicial Member And Shri Girish Agrawal, Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dify, alter and / or delete any of the above grounds of appeal. ITA 551/Mum/2024 AY 2013-14 1. On the facts and in the circumstances of the case, the learned AO erred in adding an amount of Rs 20,00,000/- being alleged non-genuine loan taken from M/s. Dharm Impex even though all documents to prove the genuineness of the loan and identity and creditworthiness of the lenders were filed during the course of assessment. 2. On the facts and in the circumstances of the case, the learned AO erred in disallowing an amount of Rs 21,42.678/ being interest on alleged non-genuine loan taken from M/s Dharm Impex and M/s, Mani Prabha Impex Private Limited even though all documents to prove the genuineness of the loan and identity and creditworthiness of the lenders were filed during the course of assessment. 3. On the facts and in the circumstances of the case, the learned AO erred in disallowing an amount of Rs. 21,42.678/- being interest on alleged non-genuine loan taken from M/s Dharm Impex and M/s. Mani Prabha Impex Private Limited on the alleged ground that this expenditure is not incurred or laid out for Business of the appellant. 3. The brief facts of the case are that for A.Y. 2011-12, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he loaner and loanee confirmation and all the relevant details are filed which are annexed in APB pages 6 to 28. The assessee has completed its onus by submitting the documents required by the ld. AO. 5. The ld.DR argued and fully relied on the order of the revenue authorities. 6. The ld.AR further argued and relied on the order of the Hon ble High Court of Bombay in the following cases:- 1. Seimens Financial Services P. Ltd vs. DCIT, WP No.4888 of 2022 date of order 25/08/2023. The relevant paragraphs is reproduced as below: - 35. During the course of assessment proceedings, notice had been issued to petitioner. In reply to the notice under Section 143(2), petitioner had by its letter dated 6 December 2018 recorded, discussion during the course of the hearing based upon our The transaction wise summary of the software consumable was made available. This was considered during the assessment proceedings and the assessment order accepting revised return came to be passed. 36 We would agree with the submissions of Mr. Pardiwalla that if change of opinion concept is given a go by, that would result in giving arbitrary powers to the Assessing Officer to reopen the assessments. It would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the principles of 'shifting of onus' under the evidence act. The Supreme Court in Lakhmani Mewal Das has held that: The expression 'reason to believe' does not mean purely subjective satisfaction on the part of the Income tax officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the Court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. It is, therefore, essential that before such action is taken the requirements of the law should be satisfied. The live link or close nexus which should be there between the material before the Income-tax Officer, 11. We find that the 'reasons recorded', do not state the primary fact/s that had not been disclosed as laid down in the case of Gemini Leathers v ITO . It is further evident that the case of Rushabh Enterprises (same group as the Petitioner) in W.P No. 167/2015 (decided on 15th April 2015) where the reopening was quashed on the basis that there is no tangible material for reopening was also not considered. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 January 2016, by Respondent No. 1 for AY 2008-09 are quashed and set aside. ii. Rule made absolute in above terms. No costs. 7. The Ld.AR respectfully relied on the decision of the co-ordinate bench in the case of Allied Engineers Elastomers vs ITO-18(1)(1) in ITA No.1687/Mum/2024, date of pronouncement 01/08/2024. The relevant paragraph is reproduced as below:- 6. We notice that during cross examination by the assessee s partner Mr. Vinod Bhatia, Mr. Harish K Chandak has categorically denied having given hawala bills to the assessee (page 87 to 89 of paper book). From the perusal of the entire facts in assessee s case as explained herein above, it is clear that the AO has completed the reassessment without proper appreciation of the facts and evidence submitted by the assessee in support of the alleged bogus purchases and merely based on the information from DDIT(Inv). Therefore, in our considered view the entire reopening is carried out only on the basis of report of investigation wing without any independent enquiry and without any tangible material in the hands of the AO to show that the assessee was involved in taking accommodation entry towards bogus purchases. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an taken from and repaid to Dharam Impex (Pages 9, 15, 16, 17, 18) Affidavit of the lender, Maniprabha Impex Private Limited confirming the loan and interest thereon (Page 11) Bank statements of Maniprabha Impex Private Limited for interest payment and Dharam Impex reflecting the loan given to the Appellant and receipt of interest from the Appellant (Pages 5 and 6) ITR-V of the lenders, Dharam Impex and Maniprabha Impex Private Limited (Pages 8 and 14) 12. The Ld.AR further drew our attention in appeal order para 6 which is reproduced as below: - 6.0 I have perused the order, grounds of appeal and the submissions of the assessee. The grounds of appeal are similar to the grounds for AY 2011- 12 wherein the AD, treated the loan of Rs 1.85.50.000- availed by the assessee from Mi's Manprabha impex as accommodation entry since the entity was managed and controlled by Shawn and group. In the appellate order for AY 2011-12, have upheld then of the AO in treating the loan as accommodation entry, Siro e facts of the case are similar, following the aforesaid earlier appellate order, the addition of bogus loan Rs. 20.00,000/- from Mis Dharam Impex and interest of Rs. 4.73.178- and Rs. 16, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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