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TMI Blog2024 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... rder are not with reference to the verification of loan transaction of the assessee. They are general statements recorded by Investigation Wing of Kolkata, which are reproduced in the assessment order and are not in respect to any enquiry of loan in the case of the assessee. Confirmed copy of ledger evidencing repayment to lender is furnished. The legal evidence placed on record to explain loan credit does not get discredited by general statements. Addition u/s 68 - In the present case also, the loan amount has been repaid through proper banking channel along with interest. On the above factual position, there remains no scope to make addition under section 68. Consequently, respectfully following the decision of M/s. Vibrant Global Capital Ltd [ 2024 (11) TMI 312 - ITAT NAGPUR] and detailed legal position discussed therein, we are of the considered opinion that the addition made in the present case of the assessee u/s 68 of the Act is unjustified and unsustainable on facts and in law. In assessee s case, the confirmation and financial statement of lender have been placed on record. The assessee has reasonably discharged his onus to explain the credit by adducing legal evidence on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asha Shoppers Pvt. Ltd. 6. The addition made by A.O. and upheld by CIT(A) at Rs. 1,99,520/- u/s 36(1)(iii) of I.T. Act 1961 being interest paid to M/s Abhilasha Shoppers Pvt. Ltd. is unjustified, unwarranted and bad in law. 7. The learned CIT(A) ought to have deleted the addition of Rs. 1,99,520/- assessed under section 36(1)(iii) of I.T. Act 1961 in respect to interest paid to M/s Abhilasha Shoppers Pvt. Ltd. 8. The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive. 9. The order passed by CIT(A) is without providing reasonable opportunity of being head and is therefore illegal, invalid and bad in law. 10. Any other ground that shall be prayed at the time of hearing. 3. Facts in brief:- In the case of assessee regular assessment was framed under section 143(3) of the Income Tax Act, 1961 ( the Act ), on 10/08/2015 determining total income at ₹ 54,51,280. Notice under section 148 of the Act was issued on 26/03/2018, in pursuance to fresh information received from the DDIT (Inv.), Unit-4, Kolkata, dated 08/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled on 23/10/2018. 7. In grounds no.4 5, the assessee has challenged the addition of ₹ 50 lakh in respect to loan obtained from M/s. Abhilasha Shoppers Pvt. Ltd., under section 68 or under section 69A of the Act being illegal, invalid and bad in law. 8. In grounds no.6 7, the assessee has challenged disallowance of interest at ₹ 1,99,520. 9. Before us the learned Counsel, Shri Kishore P. Dewani, Advocate, appearing for the assessee submitted that in the first appellate order, the learned CIT(A) did not considered and/or given one single reason as to why the submissions of the assessee have not been accepted. The learned Counsel submitted that the confirmation indicating details of PAN and address were furnished and the onus to explain the credit was discharged. The learned Counsel further submitted that the identity of the company is not in dispute and corporate entity was assessed to tax. The loan transaction was through proper banking channel and the assessee has repaid the loan along with interest. The observation of the Assessing Officer indicates that he is suspecting source of source. The learned Counsel submitted that the assessee is not required to provide sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67) (67) ii) (1976) 103 ITR 0437 (SC) ITO Ors. Vs. Lakhmani Mewal Das (68 78) (76, 77) iii) (2003) 259 ITR 0019 (SC) GKN Driveshafts (India) Ltd. vs. ITO Ors. ( 79 81) (81) F) W/s before CIT(A) (P- 1 to 9). In appellate order CIT(A) has not considered/given one single reason as to why submission of assessee are not being accepted. Dismissing of appeal is arbitrary. Ground No.3: Assessment framed u/s 144 r.w.s. 147 of I.T. Act 1961 without issue of notice u/s 143(2) is bad in law. CIT(A) Para 6 Page 6 7 A) A.O. at para 8 concluded that return filed by assessee is not valid return. Without issue of notice u/s 143(2) A.O. cannot assume valid jurisdiction to pass order u/s 143(3)/144 of I.T. Act 1961. Filling of return on 06/06/2018 and again by uploading on 23/10/2018 is sufficient compliance of notice u/s 148 of I.T. Act 1961. Provisions of section 143(2) are mandatory. Without issue of notice u/s 143(2) no valid assessment is framed. Reliance on: i) (2010) 321 ITR 362 (SC) ACIT Anr. Vs. Hotel Blue Moon (P- 103 112) (105) ii) (2019) 108 taxmann.com 183 (SC) CIT vs. Laxman Das Khandelwal (P- 113 118) (114) iii) ITAT order in ITA No.1744/Mum/2016 in the case of Shri Sudhir Menon vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to loan transaction and repayment thereof. Evidence submitted by assessee has not been found faulted. A.O. has brought no evidence to rebut the legal evidence submitted by assessee for explaining the transaction of loan. Addition made by A.O. is unjustified. D) At para 17 A.O. observed that unaccounted cash generated from real estate business and allied activities and same is routed with the help of entry operators. Allegation made by A.O. is without support of any shred of evidence brought on record. No deemed income can be assessed on mere presumption. A.O. has failed to bring evidence on record to show that assessee was in possession of money and same remains unexplained. Addition made by A.O. on assumption and presumption under deeming provisions of section 68 or 69A is highly arbitrary and unjustified. E) The A.O. himself is not clear as to which of the provisions is applicable in respect to loan transaction. This is demonstrative of the fact that no evidence on record to either invoke provisions of section 68 or 69A of I.T. Act 1961. Addition made by A.O. is unjustified. F) Observation of A.O. at para 40 41 is factually incorrect. During regular assessment proceedings loan t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 P- 203 218) I) Statement of thirty party unless same has stood the test of cross examination does not carry any evidentiary value for making addition. Statement of third person without any corroborative evidence does not make the loan transaction liable to be assessed u/s 68/69A of I.T. Act 1961. 4. Ground No.6: Addition made by A.O. at Rs. 1.99 lacs u/s 36(1)(iii) of I.T. Act 1961. A.O. Para 34 - 35 Page 24 CIT(A) Para 8 Page 8 A) Interest paid by assessee is through proper banking channel. TDS paid to the account of Government. Genuineness of loan transaction is beyond doubt. Assessee had satisfactorily discharged the onus to explain the cash credit. Loan obtained has been utilized for the purpose of business. Interest paid to very same party during subsequent assessment year has been allowed in the regular assessment framed. Addition made by A.O. by disallowing interest paid is unjustified. 10. Per contra, the learned Departmental Representative ( the learned D.R. ) strongly relying upon the order passed by the Assessing Officer and the learned CIT(A), submitted that the dismissal of assessee s appeal by the learned CIT(A) was after indicating detailed reasons, which do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25/10/2024. On a careful analysis of the judgments of the Hon ble Gujarat High Court in PCIT (C) v/s Ambe Tradecorp Pvt. Ltd., [2023] 290 Taxman 471 (Guj.) and in PCIT v/s Merrygold Gems Pvt. Ltd. [2024] 164 taxmann.com 764 (Guj.), wherein we find that the Hon ble Gujarat High Court has concluded that when the repayment of loan is accepted by the Department in assessee s case, the addition made under section 68 of the Act is unjustified and unsustainable. In the present case also, the loan amount has been repaid through proper banking channel along with interest. On the above factual position, there remains no scope to make addition under section 68 of the Act. Consequently, respectfully following the decision in the case of M/s. Vibrant Global Capital Ltd. (supra) and detailed legal position discussed therein, we are of the considered opinion that the addition made in the present case of the assessee under section 68 of the Act is unjustified and unsustainable on facts and in law. In assessee s case, the confirmation and financial statement of lender have been placed on record. The assessee has reasonably discharged his onus to explain the credit by adducing legal evidence on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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