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TMI Blog2025 (4) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and reassessment u/s 147 of the Act ignoring that the case was reopened as per provisions of clause (c) of explanation 2 to section 147 of the Act and with the approval of Principal Commissioner of Income-tax? Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and reassessment u/s147 of the Act without appreciating the facts and circumstances of the case ignoring that the assessee was involved in organized tax evasion by taking bogus accommodation entry and also has paid commission for taking accommodation entry? 2 Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and reassessment u/s 147 of the Act ignoring that the reason to belief of the AO is founded on information which has been received by the AO after completion of assessment, which is a sound foundation for exercising power u/s 147 r.w.s 148? 2.2 In ITA No. 873/JP/2024 the revenue has raised the following grounds; 1 Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd, in the form of loans and advances during the F.Y. 2015-16 and Bank Account of these companies was used for layering of unaccounted fund in the form of loans and the assessee was one of such beneficiary? Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in deleting the additions made by AO without appreciating the facts and circumstances of the case ignoring that the assessee was involved in organized tax evasion by taking bogus accommodation entry and also has paid commission and for taking accommodation entry? 2 Whether the decision of Ld. CIT(A) is perverse on the facts in holding that this transaction of Rs. 2,82,00,721/-with M/s Giridhan Vintrade Pvt. Ltd. M/s Marubhumi Marcom Pvt. Ltd., M/s Premkunj Commodtrade Pvt. Ltd & M/s Subhvani Niwas Pvt. Ltd, is genuine despite accepting that these companies are engaged in some suspicious activity and indulged in illegal activity and ignoring that the foundation of the addition made by the AO is the admission of Shri Mukesh Banka, an accommodation entry provider of Kolkatta vide his statement recorded u/s 131/132(4) of the Act on 30.05.2018 and 19.07.2018 that these companies are paper/shell co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons to believe that income has escaped assessment. Accordingly, the notice was issued after taking necessary approval from Principal Commissioner of Income Tax [ PCIT ] u/s 151 of the Act. 5. In response thereof, the assessee filed his return of income on 13.09.2019 at total income of Rs.28,100/- Thereafter notices u/s 143(2) & 142(1) was issued which were duly served upon the assessee through ITBA portal. The assessee derives income from construction and sale building. 6. The case was reopened because of information received by the revenue that the assessee has taken bogus share application / premium from shell / dummy / paper companies and introduced his own unaccounted cash by routing it through a web of dubious companies and suspicious transactions. Ld. AO noted that the assessee has received an accommodation entry in the form of bogus share application/ premium from the companies managed and controlled by Shri Mukesh Banka. In replies, the assessee had objected saying that in correspondence from the ld. AO refers a word "unsecured loans" has been mentioned instead of share application/ premium. However, it is worth mentioning that even if it is share application/ premium a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abouts cannot be proved. The inspector deputed by the concerned authority reported that the lenders do not have any existence at the given address. The assessee repeatedly submitting that the transactions were genuine as the same are made through banking channel. The plea taken by assessee was not tenable because merely bank entries do not make the transaction genuine. Therefore, ld. AO further relying on the decision of Hon'ble Delhi High Court in Commissioner Of Income Tax vs Nr Portfolio Pvt Ltd., stated that the assessee has not proved the Identity, creditworthiness or genuineness of the transaction. Merely showing that the transaction was through banking channels or by account payee instrument cannot tantamount to satisfactory discharge of onus. Ld. AO even noted that the assessee could not establish the creditworthiness of the lenders because the return income of the lenders is almost nil or very low as compared to investments made by them. No evidence with respect to source of such investment were either furnished by the assessee or the lender. It has been held that merely proving the identity of the lenders does not discharge the onus of the assessee, if the capacity or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are dummy directors of Shri Mukesh Banka as per the statement of Shri Mukesh Banka recorded u/s 132(4) of the Income Tax Act, 1961 on 19.07.2018. These companies were found to be non-existent as per enquiry made by Inspector of Income Tax. Further, during the course of analysis and examination of the bank statements of paper/shell companies of Banka Group, the entire scheme of arrangement regarding the withdrawal of cash from various bank accounts of paper/shell companies of Shri Mukesh Banka was clearly established and substantiated. These findings got further authenticated from the statements of Shri Mukesh Banka about the pattern of cash withdrawals from his various companies. Huge withdrawal of cash from the bank accounts of above companies of Banka Group clearly establish the fact that withdrawal of unaccounted cash was one of the main features of modus operan di of Banka Group. The assessee company is one of the beneficiaries who has taken accommodation entry in the form of bogus share application/premium or in other forms from the following dummy/shell companies which were controlled & managed by Shri Mukesh Banka. 11. Based on the detailed observation ld. AO added a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the AO were to come to conclusion, that any income chargeable to tax, which, according to his "reason to believe", had escaped assessment for any assessment year, did not escape assessment, then, the mere fact, that the AO entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the AO may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under section 147." 5.20 It is also seen that the Hon'ble jurisdictional High Court in the case of M/s Prime Chem Oil Ltd. Vs. ACIT in DBITA No. 220/2017 vide order dt. 17.4.2018 has also expressed the same view. The Hon'ble Bombay High Court recently in the case of Arvind Sahdeo Gupta Vs ITO in Writ Petition No. 4793 of 2021 Date of Judgement/Order: 08/08/2023 Related Assessment Year: 2013-14 has held that if the reasons for re-opening the assessment are based on incorrect facts or conclusions, the notice issued under section 148 of the income Tax Act for reopening cannot be sustained. The Hon'ble High Court has held as under:- "14] Il is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, if an assessment under Section 143 (3) has been made for the relevant A.Y.. no action shall be taken under Section 147 of the IT Act after the expiry of four years from the end of the relevant A.Y. unless any income chargeable to lax has escaped assessment for such A.Y. by reason of failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment for that assessment year. The Hon'ble High Court observed that, the Respondent had reopened the assessment solely on the basis of "reason to believe" and not on the grounds of failure to disclose material facts fully and truly, which would have required satisfaction on the part of the Respondent, particularly since the re-opening pertained to a period beyond four years, the Hon'ble High Court relied on the judgment in its earlier matter of Hindustan Lever Ltd. v. R.B. Wadkar, Assistant Commissioner of Income-tax [Writ Petition No. 1504 of 2003 dated February 25, 2004], wherein, the Court set aside the notice issued under Section 148 of the IT Act, on the grounds that the Revenue Department had not stated that there was failure on the part of the assessee to disclose fully and trul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure66 on the part of the assessee to make a return under section139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary facts relating to the transactions evidenced by the drafts it was for the officer to make the necessary enquiries and draw proper inference as to whether the amounts represented by the drafts could be treated as part of the total income of the appellant. This the officer did not do. It was plainly a case of oversight and it could not be said that income chargeable to tax had escaped assessment by reason of the omission or failure on the part of the appellant to disclose fully and truly all material facts. He could not, thereafter, take recourse to Section 147(a) to remedy the error resulting from his own oversight." 5.28 In the case of Calcutta Discount co. v. ITO (1961) 41 ITR 191, the Hon'ble Supreme Court held that once the assessee disclosed all primary facts, his duty ends and it is for the AO to draw conclusion from the same: "Does the duty however extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist and in fact all these companies had subscribed to its share capital. The reassessment order was passed wherein the addition was made of the said amount by holding the same as unexplained share application money/share premium when the AO had treated it as unsecured loan in reasons for reopening. Further, I find that the scrutiny assessment was originally completed u/s 143(3) of the Act on 27.03.2014 in the case of the appellant for the A.Y 2012-13 wherein all the information related to the share capital had been provided by the appellant and after due application of mind, the assessment order was passed. In view of the above facts and discussion, and respectfully, following the various judicial decisions including the Hon'ble Supreme Court as discussed above, I am of the considered view that reopening and subsequent reassessment u/s 147 of the Act was not valid and the same is quashed. The appeal on Ground No 1 to 1.3 are thus allowed. 1. In view of the above decision on Ground No 1 to 1.3, appeal on Ground No 2 to 2.4, 3, 4 and 5 have become infructuous and no further adjudication is required on merits. 1. As the result, the appeal is allowed." 13. Feeling dissatisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29 9. 04.09.2019 Darshan Enclave Put 30-31 0. 06.09.2019 Harsharatna Finance and Amp 133(6) Issued 32-33 11 09.09.2019 142(1) To Assessee 34-36 12. 13.09.2019 ITR filed assessee requested for reason reliance placed on GKN 37-39 13. 23.09.2019 143(2) issued 40 14. 26.09.2019 Reasons were provided to assessee electronically 41 Vide ITBA/AST/F/17/2019-20/1018317741(1) (First Page Only) 16. 06.11.2019 131 Director Harshratna 42 17. 06.11.2019 131 Director Darshan Enclave 43 18 07.11.2019 131 Director Shareen Hire Purchase 44 18. 07.11.2019 Assessee filed part reply 45-47 19. Nil Assessee filed objection 48-53 20. 25.11.2019 Objection disposed of vide ITBA/AST/F/17/2019- 20/1021044152(1) 54-56 21. 27.11.2019 Assessee made part submission 57-58 22. 18.12.2019 Show Cause 59-62 23. 19.12.2019 Assessee filed part reply 63-64 24. 20.12.2019 Assessee filed part reply 65 25. 23.12.2019 21.12.19 142(1) ITBA/AST/F/2019-20/1022819106(1) 66-67 27. 25.11.09 A.0 Passed 14. In addition, ld. DR on 23.01.2025 also filed a detailed written submission which reads as under; Respected Members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controlled by Shri Mukesh Banka. 6. Non-Existence: Enquiries conducted by the Income Tax Inspector revealed that these companies were found to be non-existent at their registered addresses. 1.3 Scheme of Cash Withdrawal During the analysis and examination of the bank statements of paper/shell companies of the Banka Group, the entire scheme of cash withdrawal from various bank accounts of these companies was clearly established and substantiated. The pattern of huge cash withdrawals supported the statement of Mukesh Banka that withdrawal of unaccounted cash was a main feature of the modus operandi of the Banka Group. 1.4 Information from DDIT(Inv.), Unit-4(2), Kolkata An additional credible source of information was received from the DDIT(Investigation), Unit-4(2), Kolkata, related to companies such as M/s Sansakar Business Pvt Ltd, M/s Zenstar Business Solutions Pvt Ltd, M/s Subhshree Business Solutions Pvt Ltd, M/s Sunbright Securities Pvt Ltd, M/s S.A Securities Pvt Ltd, and M/s Wipro Suppliers Pvt Ltd. These companies: * Were found to have large movements of rounded amounts within bank accounts without economic rationale. * Shared common addresses but were found non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry operators about bogus transactions. 3) Analysis of financials showing no creditworthiness. 6.CIT (A) Order: The appeal of the appellant is allowed, and the reopening under Section 147 is quashed. Summary of Key Points 1. Background: 1) The case involves reopening of assessment under Section 147 based on information from the Investigation Wing regarding entities managed by Mukesh Banka, alleged to have provided accommodation entries to the appellant company. 2) The appellant claimed that the reopening was based on vague and unverified information without independent inquiry. 2. Appellant's Contentions: 1) No Independent Inquiry: The Assessing Officer (AO) relied solely on external information and statements without conducting any independent verification. 2) Material Disclosure in Original Assessment: The appellant argued that all details related to share application money and its sources were already disclosed during the original scrutiny assessment under Section 143(3). 3) Incorrect Application of Law: The appellant highlighted that reopening after four years requires proof of nondisclosure of material facts, which was absent in this case. 3. Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds for reassessment under Section 148: 1. Reasons for reopening must be communicated to the assessee 2. The assessee has the right to file objections to the reasons. 3. The AO must dispose of the objections by issuing a speaking order before proceeding with reassessment. * In the present case, the AO adhered to these requirements. 2. Principle of Waiver and Acquiescence * By participating in the reassessment proceedings after the objections were disposed of, the assessee acquiesced to the reopening process. * The Hon'ble Delhi High Court in Surendra Kumar Jain v. CIT [2019 SCC OnLine Del 9393] held that once the AO complies with the GKN Driveshafts procedure, the validity of reassessment cannot be contested at a later stage. 3. Impropriety of Challenge Before CIT(A) * The Hon'ble Supreme Court in GKN Driveshafts held that if the assessee is dissatisfied with the AO's decision on objections, the proper remedy is to seek judicial review, not to re-agitate the matter before the appellate authority. * Raising objections before CIT(A) amounts to circumventing established procedures and undermines the reassessment framework. III. Assessee's Failure to Justify Transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 147 of the Act and with the approval of Principal Commissioner of Income-tax? Whether on the facts and circumstances of the case, the Ld. CIT (A) is justified in quashing the reopening and reassessment u/s147 of the Act without appreciating the facts and circumstances of the case ignoring that the assessee was involved in organized tax evasion by taking bogus accommodation entry and also has paid commission for taking accommodation entry? 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and reassessment u/s 147 of the Act ignoring that the reason to belief of the AO is founded on information which has been received by the AO after completion of assessment, which is a sound foundation for exercising power u/s 147 r.w.s 148? Ground No. 1 Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in quashing the reopening and reassessment under Section 147 of the Act ignoring that the case was reopened as per clause (c) of Explanation 2 to Section 147 and with the approval of the Principal Commissioner of Income-tax? Further, whether the Ld. CIT(A) was justified in quashing the reassessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ignoring that the AO's reason to believe was founded on information received after the completion of assessment, which is a sound basis for exercising powers under Section 147 read with Section 148? Submission: 1. "Reason to Believe" - Not "Reason to Suspect" 1.1. The Hon'ble Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [291 ITR 500 (SC)] clarified that at the stage of reopening, the AO only needs "reason to believe," not conclusive evidence of escapement. 1.2. In this case, detailed investigation reports from DDIT (Investigation), Kolkata, revealed the modus operandi of shell companies controlled by Shri Mukesh Banka. This provided a sound basis for reopening. 2. Information Received Post-Assessment 2.1. The Hon'ble Supreme Court in Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 (SC) held that information received post-assessment justifies reopening, especially when new facts highlight escaped income. 2.2. The AO received credible post-assessment information highlighting the lack of creditworthiness and genuineness of entities providing share application money to the assessee. 3. Judicial Precedents 3.1. In Majinder Singh Kang v. CIT [344 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for reopening to the assessee 2. Disposal of objections by the AO through a speaking order * In the present case, the AO adhered to all procedural requirements. * The assessee, upon receipt of the speaking order, did not seek judicial review or contest the matter further but instead proceeded with the reassessment proceedings, thereby waiving any objections. 2. Principle of Waiver and Acquiescence * By participating in the reassessment proceedings without further challenging the validity of the notice, the assessee demonstrated acquiescence to the reopening. * The Hon'ble Delhi High Court in Surendra Kumar Jain v. CIT [2019 SCC OnLine Del 9393] emphasized that procedural compliance under GKN Driveshafts validates the reassessment process, and objections not pursued at the appropriate stage are deemed waived. 3. Impropriety of Challenge Before CIT(A) * The Hon'ble Supreme Court in GKN Driveshafts held that if the assessee is dissatisfied with the AO's decision on objections, the appropriate remedy is to seek judicial review, not to raise the same objections before the appellate authority. * Re-agitating the matter before CIT(A) contravenes procedural discipline a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The following is a counter to the appellant's reliance on various judicial precedents to justify quashing the reopening and reassessment under Section 147 of the Income Tax Act, 1961: 1. Punia Capital Pvt. Ltd. v. ACIT (Bombay High Court) * Appellant's Argument: The appellant relied on this judgment to claim that reopening is invalid if the Assessing Officer (AO) has issued a notice mechanically without proper application of mind. * Revenue's Counter: * The judgment in Punia Capital Pvt. Ltd. pertains to reopening based on incorrect or incomplete facts, which is not the case here. * In the present case, reopening was based on credible and specific information received from the DDIT (Investigation), Kolkata, supported by statements of Shri Mukesh Banka admitting to the modus operandi of accommodation entries. The AO thoroughly applied his mind to the investigation findings and recorded valid reasons to believe. * The AO obtained prior approval from the Principal Commissioner of Income-tax, as mandated by Section 151, which underscores the procedural compliance and validity of reopening. 2. Madan Mohan Tiwari v. ITO (ITAT Delhi) * Appellant's Argument: The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee's failure to disclose material facts fully and truly. * Revenue's Counter: * While the principle laid down in Calcutta Discount Co. Ltd. is acknowledged, it is not applicable here. The notice under Section 148 was issued within four years from the end of the relevant assessment year. * The AO's reasons to believe were based on new information received post-assessment, revealing the escapement of income, which satisfies the jurisdictional requirement for reopening. 6. ITO v. Nawab Mir Barkat Ali Khan Bahadur (Supreme Court) * Appellant's Argument: The appellant contended that reopening is invalid if based * on a mere change of opinion or re-evaluation of the same facts. Revenue's Counter: * In Nawab Mir Barkat Ali Khan Bahadur, reopening was held invalid as it sought to re-evaluate the same facts without new material. However, in the current case, the reopening was based on fresh material gathered during the investigation into accommodation entry providers. * The AO acted on credible evidence that was not available during the original assessment, justifying the reassessment. Summary of Counter Arguments 1. The case laws relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant's receipt of accommodation entries. * The pre-reopening verification under Section 133(6) clearly distinguishes this case from Ambaji Avenues Pvt. Ltd. 2. Keshav Shroff v. ITO (2024 ITAT Kolkata) * Appellant's Argument: The appellant may cite this case to argue that reopening is invalid if it is based on incomplete or incorrect information. * Revenue's Counter: * In Keshav Shroff, reopening was quashed because the AO failed to substantiate the allegation of escapement of income with supporting material. * In the present case, the AO conducted independent verification of transactions and traced the bank account trails of dummy companies involved in accommodation entries. * The AO's findings were supported by tangible evidence, including bank account analysis, making this case factually distinct from Keshav Shroff. 3. ITO v. Aashna Developers Pvt. Ltd. (2024 ITAT Ahmedabad) * Appellant's Argument: The appellant may argue that reopening cannot be sustained if no additions are made for the specific reasons recorded at the time of reopening. * Revenue's Counter: * In Aashna Developers Pvt. Ltd., reopening was invalidated because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid if it is based solely on borrowed satisfaction from the investigation wing. * Revenue's Counter: * In Bhola Ram Papers and Powers Pvt. Ltd., the ITAT quashed reopening because the AO relied exclusively on information from the investigation wing without independent verification. * In the present case, the AO independently verified the information by analyzing bank account details of the shell companies under Section 133(6) and correlating them with the appellant's transactions. This demonstrated independent application of mind, making this case factually distinct. Key Distinctions 1. Pre-Reopening Verification: The AO verified bank account trails under Section 133(6) before issuing the notice under Section 148, demonstrating independent application of mind. 2. Nexus with Escapement of Income: The AO established a direct link between the appellant's transactions and the findings from the investigation wing, corroborated by independent evidence. 3. Credibility of Evidence: Unlike the cases cited by the appellant, the AO relied on substantial evidence, including corroborated statements, financial analysis, and verified bank trails. Conclusion The cases ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka was requisitioned from respective banks and analyzed. On verification of the bank accounts of paper/shell companies of Banka Group, various beneficiaries have been identified who have obtained accommodation entry in the nature of bogus unsecured loan or in other forms, from the paper/shell companies of Banka Group. Further, the financial analysis of such paper/shell companies of Banka Group from which such beneficiaries have been identified, has been carried out to ascertain their financial creditworthiness. The details of such financial analysis carried out company wise are provided in CD-2. This led to revelation of various noticeable points like: (i) No profit accumulation in the company(s) across various financial years (ii) Most of the companies have shown income under the head 'Other Income' which shows that these companies have no actual business activities and only getting interest income under the head 'other income' for providing bogus unsecured loan to different beneficiaries (iv) The admission of Shri Mukesh Banka vide his statement recorded u/s 131/132(4) of the Income Tax Act, 1961 on 30.05.2018 and 19.07.2018 that these companies are paper/shell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he database of the Department maintained for this purpose, it is seen that all the above six companies, are controlled & managed by well-known entry operator of Kolkata Shri Manohar Lal Nangalia and all the transactions carried through bank accounts of the above six companies are interlinked. To investigate the matter, statements of bank accounts & respective KYCS were obtained from the concemed bank and the same were examined &analyzed. On analysis of the bank statements of the above companies and also the bank account statements of 268 intermediary/beneficiary concems maintained with UCO Bank, 30 cash deposit bank accounts were identified. Departmental Inspectors were deputed to serve notice u/s 131 on the address of above companies requesting furnishing of books of accounts, details of bank accounts, copies of ITR and other documents, but the same could not be served due to non-existence of the companies on their respective given addresses. From the Database of the department, it is gathered that all the concerns mentioned in the information are interlinked and existing merely on paper having no real existence & business activities and are controlled & managed by Shri Manohar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment that Shri Prem Kumar Agarwal one of the dummy directors in several paper/shell companies including M/s Sansakar Business Pvt Ltd & M/s Wipro Suppliers Pvt Ltd, all controlled & managed by Shri Manohar Lal Nangalia& Shri Anjani Banka, in response to the notice issued w/s 131 of the I.T Act, submitted a declaration on 29.03.2014 stating that he was one of the directors in 135 companies controlled & managed by Shri Manohar Lal Nangalia. On examination of bank statement of the above-mentioned concerns and the concems mentioned in the information, it is observed that these accounts have frequently been used for depositing of unaccounted cash which were layered through the several bank accounts of jamakharachi/shell concerns including the concerns named in the information and immediately transferred to the interlinked bank accounts and then ultimately to the bank accounts of the beneficiary. In this way the beneficiary companies have brought back their unaccounted income into their regular books of accounts in the guise of bogus share capital/share premium, pre-arranged bogus LTCG/STCL, unsecured loans etc. There was no other financial rationale behind such transactions. Moveme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is engaged in providing accommodation entries in form of share capital, unsecured loan, LTCG etc and to facilitate the same he eams commission. Further, financial analysis of the companies from whom the fund reached into the account of beneficiary companies was analyzed and found that the fund was finally transferred to the account of beneficiaries from the companies which have no actual business activities and showing either nil income or very meager income. These entities appear to be shell entities and existing merely on paper. Fund trail is prepared on illustrative basis which also indicates that the fund was routed through various shell intermediaries companies within day or two day and finally reached in the account of beneficiaries. On analysis of bank statement, M/s Allied Landmark India Pvt Ltd has been identified as one of the beneficiaries which have brought unaccounted money in the books via layering of fund through banking channel and funds during F.Y. 2011-12. Thereafter, the above information have been matched with assessment record and found to be correct as the assessee has taken unsecured loan of (1) Rs. 90,00,385/- from M/s Aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is evident that the ld. Assessing Officer has acted solely on borrowed satisfaction from the investigation wing and failed to exercise independent application of mind, as required under law. 5. The impugned assessment order is fundamentally flawed and unsustainable in law due to two critical and interconnected reasons: (1) deviation from the reason recorded for reopening the assessment, resulting in an impermissible addition and (2) lack of independent application of mind by the AO 6. It is settled law that in case of divergence between the basis on which the assessment was reopened and the actual addition made in the final order, the same is impermissible. The reasons recorded for issuing the notice under section 148 categorically mention alleged escapement of income due to bogus unseured loans. However, the AO's final assessment order shifts the entire focus and makes an addition under section 68 of the Income Tax Act on account of alleged unexplained share capital and premium. Further more the reason recorded alleged bogus unsecured loans taken by the assessee of Rs. 25,00,000/- from M/s Sansakar Business Pvt Ltd, M/s Zenstar Business Solutions Pvt Ltd, M/s Subhshr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the AO's reliance on generalized information from the investigation wing regarding alleged shell companies and accommodation entries does not satisfy the requirements of Section 68. It is well-settled that the identity and creditworthiness of the creditors and the genuineness of the transactions must be evaluated in the context of the evidence provided by the assessee. The AO has failed to conduct any meaningful investigation into the evidence submitted and has instead dismissed it summarily, relying on conjecture and pre-determined conclusions. Such an approach is contrary to the intent and purpose of Section 68, which places the initial burden on the assessee but requires the revenue to substantiate any contrary findings with credible evidence. 9. The failure to adhere to the reasons recorded has rendered the assessment proceedings arbitrary and contrary to the statutory scheme. The procedural safeguards under sections 147 and 148 are not mere formalities but are substantive requirements to ensure fairness and prevent fishing and roving inquiries. In this case, the assessee was never put on notice about any suspicion regarding share capital or premium during the reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs strikes at the very root of the proceedings under sections 147 and 148 of the Act. It is settled law that the assessment must be framed strictly within the scope of the reasons recorded for reopening the assessment. Any deviation from the recorded reasons invalidates the entire proceedings. 13. Moreover, the AO's reliance on the alleged findings of the Investigation Wing and the statement of one Shri Mukesh Banka to justify the addition lacks evidentiary support and credibility. The assessee had provided comprehensive documentary evidence, including PAN details, financial statements, bank statements, and share application forms of the entities from whom share capital and premium were received. These documents sufficiently establish the identity, creditworthiness, and genuineness of the transactions. The AO, however, disregarded these documents and failed to provide any cogent evidence to rebut the evidence provided by the assessee. The AO also failed to provide the assessee an opportunity to cross-examine the persons whose statements were allegedly relied upon, in violation of the principles of natural justice. 14. The AO's failure to independently verify the information, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of Rs 28,100. On the basis of information available on record, notice u/s 148 of the Act was issued on 26.03.2019 after taking prior approval of the competent authority and after recording reasons to believe that income has escaped assessment. In response, the appellant filed the return of Income on 13.09.2019 declaring same total income as declared in Original Return 5.2.1. The case was reopened on the basis of information that the appellant has taken bogus unsecured loans from shell/ dummy/paper concerns and introduced his own unaccounted cash by routing it through a web of dubious companies and suspicious transactions. share application During the year under consideration, the appellant had received unsecured loans from the following companies: S. No Name of party from whom unsecured loan was received Amount 1 M/s Agarani Credit and Finvest Pvt. Ltd. Rs. 25,00,110 2 M/s Darshan Enclave Pvt. Ltd. Rs. 15,00,055 3 M/s Harsharatna Investment Pvt. Ltd. Rs. 25,00,110 4 M/s Shareeen Hire Purchase Pvt. Ltd. Rs. 25,00,110 5.3 It was noticed by the AO that the appellant has received accommodation entries in the form of bogus share application/ premium form the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and managed by Shri Mukesh Banka was requisitioned from respective banks and analyzed. On verification of the bank accounts of paper/shell companies of Banka Group, various beneficiaries have been identified who have obtained accommodation entry in the nature of bogus unsecured loan or in other forms, from the paper/shell companies of Banka Group. Further, the financial analysis of such paper/shell companies of Banka Group from which such beneficiaries have been identified, has been carried out to ascertain their financial creditworthiness. The details of such financial analysis carried out company wise are provided in CD-2. This led to revelation of various noticeable points like: (i) No profit accumulation in the company(s) across various financial years (ii) Most of the companies have shown income under the head 'Other Income' which shows that these companies have no actual business activities and only getting interest income under the head 'other income' for providing bogus unsecured loan to different beneficiaries (iv) The admission of Shri Mukesh Banka vide his statement recorded u/s 131/132(4) of the Income Tax Act, 1961 on 30.05.2018 and 19.07.2018 that these companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olkata-700001. From the database of the Department maintained for this purpose, it is seen that all the above six companies, are controlled & managed by well-known entry operator of Kolkata Shri Manohar Lal Nangalia and all the transactions carried through bank accounts of the above six companies are interlinked. To investigate the matter, statements of bank accounts & respective KYCs were obtained from the concerned bank and the same were examined &analyzed. On analysis of the bank statements of the above companies and also the bank account statements of 268 intermediary/beneficiary concerns maintained with UCO Bank, 30 cash deposit bank accounts were identified. Departmental Inspectors were deputed to serve notice u/s 131 on the address of above companies requesting furnishing of books of accounts, details of bank accounts, copies of ITR and other documents, but the same could not be served due to non-existence of the companies on their respective given addresses. From the Database of the department, it is gathered that all the concerns mentioned in the information are interlinked and existing merely on paper having no real existence & business activities and are controlled & m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Database of the department that Shri Prem Kumar Agarwal one of the dummy directors in several paper/shell companies including M/s Sansakar Business Pvt Ltd & M/s Wipro Suppliers Pvt Ltd, all controlled & managed by Shri Manohar Lal Nangalia& Shri Anjani Banka, in response to the notice issued u/s 131 of the I.T Act, submitted a declaration on 29.03.2014 stating that he was one of the directors in 135 companies controlled & managed by Shri Manohar Lal Nangalia. On examination of bank statement of the above-mentioned concerns and the concerns mentioned in the information, it is observed that these accounts have frequently been used for depositing of unaccounted cash which were layered through the several bank accounts of jamakharachi/shell concerns including the concerns named in the information and immediately transferred to the interlinked bank accounts and then ultimately to the bank accounts of the beneficiary. In this way the beneficiary companies have brought back their unaccounted income into their regular books of accounts in the guise of bogus share capital/share premium, prearranged bogus LTCG/STCL, unsecured loans etc. There was no other financial rationale behind suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he is engaged in providing accommodation entries in form of share capital, unsecured loan, LTCG etc and to facilitate the same he earns commission. Further, financial analysis of the companies from whom the fund reached into the account of beneficiary companies was analyzed and found that the fund was finally transferred to the account of beneficiaries from the companies which have no actual business activities and showing either nil income or very meager income. These entities appear to be shell entities and existing merely on paper. Fund trail is prepared on illustrative basis which also indicates that the fund was routed through various shell intermediaries companies within day or two day and finally reached in the account of beneficiaries. On analysis of bank statement, M/s Allied Landmark India Pvt Ltd has been identified as one of the beneficiaries which have brought unaccounted money in the books via layering of fund through banking channel and funds during F.Y. 2011-12. Thereafter, the above information have been matched with assessment record and found to be correct as the assessee has taken unsecured loan of (i) Rs. 90,00,385/- from M/s Agarani Credit and Finvest P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO cannot mechanically issue notice under section 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation) without proper application of mind and independent analysis and investigation made with the case in hand. In this regard, appellant placed on a number of judicial decisions. 5.7 The Hon'ble Bombay High Court in the case of Akhshar Builders & Developers vs ACIT in Writ petition 14490 of 2018 has held as under: S. 147: Even in a case where return is accepted without scrutiny, the AO cannot proceed mechanically and on erroneous information supplied to him by investigation wing. If AO acts merely upon information submitted by investigation wing and on total lack of application of mind, the reopening is invalid. 5.8 The Hon'ble Jaipur bench of ITAT in the case of Balaji Healthcare Pvt. Ltd. ITO ITA No. 566/567/JP/18 has rendered re assessment proceedings void (gist reproduced) S. 147 Reopening of s. 143(1) Intimation for Bogus share capital: The AO cannot reopen without establishing prima facie that assessee's own money has been routed back in form of share capital. While he can rely on the repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also relied on various judicial decisions that reopening initiated without establishing any failure on the part of the Assessee in fully and truly disclosing all material facts deserves to be quashed. 5.11 The Hon'ble Supreme Court in the case of ACIT vs Marico Ltd. has dismissed SLP filed by the department and confirmed the decision of Bombay High Court. Observations of Hon'ble High Court at para 12 are as under: "Thus we find that the reasons in support of the impugned notice is the very issue in respect of which the Assessing Officer has raised the query dated 25 september2017 during the assessment proceedings and the petitioner had responded to the same by its letters dated 10December 2017 and21 December 2017 justifying its stand. The non rejection of explanation in the Assessment order would amount to the Assessing officer accepting the view of the assessee, thus taking a view/forming an opinion. Therefore, in these circumstances, the reasons in support of the impugned notice proceed on a mere change of opinion and therefore would be completely without jurisdiction in the present facts. Accordingly, the impugned notice dated 27 March 2019 is quashed and set aside." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in the assessment year 1949- 50, there was no non- disclosure of material facts necessary for assessment of the income. The Income-tax Officer was fully aware of the assessment proceedings for the years 1947-48 and 1948-49, and in his order he expressly referred to those proceedings. Being aware of the earlier proceedings and the reasons for passing the previous order, if the Income-tax Officer passed an order in effect holding that there was no income of the assessee chargeable to tax, the Income-tax Officer cannot seek to reassess the income on the ground of failure to disclose fully and truly the facts necessary for assessment. We do not think that any ground is made out for disagreeing with the High Court in respect of the validity of the order of re- assessment for the year 1949-50. 9. The appeals fail and are dismissed with costs." 5.15 The Hon'ble Supreme Court in the case of ITO v. Nawab Mir Barkat Ali Khan Bahadur (1974) 97 ITR 239held: "The High Court was right in holding that the Income Tax officer had no valid reasons to believe that the respondent had omitted or failed to disclose fully and truly all material facts and consequently had no jurisdiction to reop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: '7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147.- A number of representations were received against the omission of the words `reason to believe' from Section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the reasons as made available to the it merely indicates information received from the DIT (Investigation) about a particular entity who had allegedly admitted that it has no business operations and has only other income which is used for giving loans. However, it is submitted that the material is not further linked by any reason to come to the conclusion that the appellant has indulged in any activity which could give rise to reason to believe on the part of the AO that income chargeable to tax has escaped Assessment. The appellant company had furnished details of Share Applicants during the course of original assessment and AO was satisfied in respect of such details furnished. 5.19 I have carefully considered the facts of the case, the submission of the appellant and evidences on record. It is seen that the AO has satisfied himself that appellant had taken accommodation entry in the shape of unsecured loans. The appellant raised objections before AO against such reasons wherein it was categorically contended that appellant had not taken any unsecured loans from any of the party mentioned in the list and in fact some of companies had subscribed to its share capital for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusions, the notice issued under section 148 of the income Tax Act for re-opening cannot be sustained. The Hon'ble High Court has held as under:- "14] It is also to be noted that by issuing subsequent notice, the ITO has sought further information from the petitioner which information does not form the basis of the reasons assigned for re-opening the proceedings. This is clear from the notice dated 24/8/2021. The Division Bench in Nivi Trading Limited (supra) has held that if further details are sought or some verification is proposed by the officer, same cannot be a substitute for the reasons that have led the Assessing Officer to believe that an income chargeable to tax has escaped assessment. 15] From the aforesaid, it is clear that the notice dated 24/3/2020 issued under Section 148 of the Act of 1961 seeking reopening of the assessment is based on incorrect facts. The objections raised by the petitioner pointing out the relevant facts including the proper Assessment Year to which the said transaction pertained being Assessment Year 2012-13 coupled with the fact that the amount of Rs.9,90,314/- that was stated to be the amount being profit from the sale of shares hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the IT Act, on the grounds that the Revenue Department had not stated that there was failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessment, without touching upon any of the other grounds. The Hon'ble High Court held that, the Respondent's manner of proceeding reflects a complete non-application of mind, which does not satisfy the jurisdictional condition required under Section 147 of the IT Act. 5.3. The Hon'ble ITAT Delhi in the case of Madan Mohan Tiwari Vs ITO (ITAT Delhi) Appeal Number : ITA No. 6925/Del/2018 Date of Judgement/Order : 06/10/2021 Related Assessment Year : 2008-09 has held as under:- " ................................ However, in this case, despite, it was brought to the knowledge of the Assessing Officer that the information on the basis of which he has formed belief of escapement of income of the assessee, was wrong, still the Assessing Officer proceeded to frame the assessment on the basis of the aforesaid wrong information which was basis for formation of his belief. Under these circumstances, it cannot be said that the Assessing Officer has proceeded in accordance with law. Framing of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: ..................." 5.25 Therefore, as laid down in the first proviso to section 147, the AO had to establish failure on the part of appellant to disclose fully and truly all material fact necessary for assessment which is a pre-requisite for issue of notice u/s 148 beyond 4 years. In the instant case, I find that the AO had failed to establish any failure on the part of appellant to disclose fully and truly all material fact necessary for assessment. It is seen that this fact was brought to the notice of the AO through objections filed during the reassessment proceedings, the AO vide order dt. 25.11.2019 disposing the objections raised, stating that the assessment u/s 143(3) of the Act is completed on 28.03.2016 and notice issued on 18.03.2019 which is within four years from the end of the relevant year in which assessment is completed. Therefore, the AO wrongly has changed the time limit from 'four years from the relevant assessment year' to 'four years from the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else far less the assessee to tell the assessing authority what inferences-whether of facts or law should be drawn." 5.29 In the case of ITO v. Nawab Mir Barkat Ali Khan Bahadur (1974) 97 ITR 239, the Hon'ble Supreme Court held: "The High Court was right in holding that the Income Tax officer had no valid reasons to believe that the respondent had omitted or failed to disclose fully and truly all material facts and consequently had no jurisdiction to reopen the assessments for the four years in question. Having second thoughts on the same material does not warrant the initiation of a proceeding under sec. 147 of the Income Tax Act, 1961. Mr. Manchanda, learned counsel for the appellant, took us through several sections of Mulla's Principles of Mohammedan Law including sec. 268 and submitted that in the circumstances of the case it must be presumed that the three ladies were the legally wedded wives of the respondent. The la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Compilation submitted earlier: * Jagat Jayantilal Parikh v. DCIT [2013] 32 taxmann.com 161 (Gujarat): The reasons for reopening the assessment are almost identically worded as that of audit report. No material worth the name emerges to indicate any independent application of mind. Facts are quite glaring and they clearly establish absence of subjective satisfaction of Assessing Officer. Thus the ground raised by the assessee that such notice of reopening is invalid for the Assessing Officer having not formed his independent belief requires to be sustained. [Para 7] * Balaji Minesand Minerals (P.) Ltd. v. ACIT [2024] 163 taxmann.com 37 (Bombay): The reason for re-opening given by the revenue only refers to the information received from the Directorate of Revenue Intelligence (DRI), which admittedly referred to the customs duty and the commission paid to overseas agents. The Assessing Officer nowhere disclosed as to how such information is material for the purpose of considering that there is failure to disclose truly and fully about the payment made to the commission agent. Besides, there is absolutely no record on the part of the Assessing Officer that he independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted assessment without indicating the basis for having a reason to believe that the information in the hands of the petitioner had escaped assessment. [Para 12] * Signature Hotels (P.) Ltd. v. ITO [2012] 20 taxmann.com 797 (Delhi): The aforesaid reasons do not satisfy the requirements of section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, except the annexure, which has been quoted above. The annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. The annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechanical manner. The Commissioner also acted on the same basis by mechanically giving his approval. The reasons recorded reflect that the Assessing Officer did not independently apply his mind to the information received from the Director of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons to believe reproduced as Sr. No. 3 & 6 in [2023 (1) TMI 181 - GUJARAT HIGH COURT] when compared to the reasons to believe namely reasons no. 1 & 2 of the present case, except for the figures, the company being SECL in the present case and the intimation letter only being one of a different date i.e. 13.03.2018, the reasons to believe in the present petition are completely identical to the reasons no. 3 & 6 in the aforesaid petition. The court therefore had extensively considered these very reasons held that reopening was not justified due to the lack of independent reasons and the impermissible reliance on borrowed satisfaction. The court made the rule absolute, thereby granting the petition in favour of the petitioner. * PCIT v. Sunlight Tours & Travels Pvt. Ltd. 2024 (11) TMI 1384 (Delhi): Validity of Reopening of assessment u/s 147 - Addition on the ground other than assessment was reopened - Assessee contention that since no addition had been made on account of the reasons on the basis of which the reopening of the assessment was sustained no other addition was permissible accepted by ITAT - HELD THAT:- Section 147 of the Act enables the reopening of concluded assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Partap Steels Pvt. Ltd. v. ITO ITA No. 108/JPR/2024 dated 03.10.2024 (ITAT Jaipur): Apropos to the ground no. 1 & 2 raised by the assessee the relevant facts as emerges from the record is that in this case, information was received related to assessee which was passed on by office of the Director General of Income tax (investigation, 3rd floor, Scindia House, Ballard Pier, Mumbai vide its office letter No DGIT (Inv)/ Information/PJ2014-15 dated 03.07.2014 and received form the Income tax Officer (Inv)(Hqrs) O/s the Director General of Income Tax (Inv), Rajasthan, Jaipur the assessee has taken the accommodation entries as unsecured loans form the following companies which are managed and controlled by Shri Praveen Kumar Jain Group, Mumbai: S.No. Name of the entry provider PAN No. Financial Year Amount 1 M/s Falak Trading Co. Pvt AABCF5837A 2012-13 1,00,00,000/- 2 M/s Pragati Gems Pvt. Ltd AAFCP5566J 2012-13 50,00,000/- As is known from the statement of Shri Praveen Jain that the assessee is one of the beneficiaries for taking the accommodation entries as unsecured loans from the above companies. As these companies were managed and controlled by Shri Praveen Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the revenue cannot be made the basis for any addition." Thus, as is evident that except statement of Shri Praveen Jain there was no corroborative evidence was placed on record and therefore, we do not find any reasons to sustain that addition and direct ld. AO to delete the addition of Rs. 1,50,00,000/- made in the hands of the assessee. * Ambaji Avenues Pvt. Ltd v. ITO 2024 (11) TMI 814 dated 25.10.2024 (ITAT Mumbai): Reopening of assessment after four years - Addition u/s 68 - independent application of mind v/s borrowed satisfaction - HELD THAT:- As undisputed fact that the original assessment in the case of the assessee u/s 147 was already completed on 27.11.2018. The notice u/s 148 for the second time for reopening of the case was issued on 22.03.2019 after the end of the four years period from the end of assessment year 2011-12. The four years period was expired as on 31.03.2017. We have perused the return of income filed by the assessee as referred supra in this order wherein the assessee has disclosed the information and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banka - HELD THAT:- As prima facie the appellant has submitted copies of all those documents including the bank statement of the alleged loan provided/accommodation entry provider in support of transaction related to alleged loan claimed by the appellant. But he discarded the same by mere assumption and surmises thereby saying that these documents are mere masks to hide the real nature of the transaction. It is surprising to note that what was the basis of ld. CIT(A) to discard those documents without verification and genuineness of the documents and he doubted the same. We further notice that the ld. CIT(A) has rejected the above documents by saying that finding of the AO was based on strong surrounding circumstances and preponderance of the probability and human conduct. It is important to mention here that above findings cannot be basis of rejection of a document which was filed by the assessee. The documents clearly go to show that the transaction made being a genuine one and we do not find any transaction made by and with any Mukesh Banka. It is also a fact that all transactions made through banking channels. Loan taken was duly repaid by account payee cheque. No transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied to the assessee for rebuttal nor the opportunity of cross examination of Shri Mukesh Banka has been provided. It is settled position of law that not providing the material used against the assessee for rebuttable and opportunity of cross examination of the statement relied upon by the AO will vitiate the validity of the assessment. See Andaman Timber Industries vs. CCE [2015 (10) TMI 442 - SUPREME COURT] Onus to prove - Assessee in support of genuineness of loan have furnished all the necessary documents such as ledger of parties, contra ledger from the parties and confirmation, ITRs, bank statements and annual reports. However, the AO without pointing out any infirmity and application of mind on those documentary evidence, treated the loan amount as unexplained cash credit by relying upon the statement recorded and material collected during the search at third party premises and that too without providing the opportunity of rebuttal and cross examination. Hon'ble Supreme Court in the case of CIT vs. Odeon Builders Pvt Ltd [2019 (8) TMI 1072 - SUPREME COURT] has confirmed the concurrent finding of learned CIT(A), the ITAT and the High court in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has failed to verify the transaction recorded by the Investigation Wing which are double entries made for the same transactions of Rs. 20,00,056/- and Rs. 30,00,056/-. Though the A.O. records the unsecured loan of Rs. 50,00,000/- received by the assessee from M/s. KCPL, however upheld the double entry addition of Rs. 1,00,00,224/ as the undisclosed income of the assessee. A.O. failed to consider the repayment of above loan by the assessee during the assessment year 2018-19 which was not disputed, while framing the assessment order for the assessment year 2018-19 by the very same AO. Thus in our considered view, A.O. has simply accepted the information given by DGIT which is reproduced in the reasons recorded, he has not formulated "his own reason to belief" that any income chargeable to tax has escaped assessment. A.O. ought to have seen the double entry of the loan transactions with bank entry details and then formulated "his own reason to belief" but simply followed the information given by DGIT, which is nothing but "borrowed satisfaction" and is against the provision of Section 147 of the Act. Therefore the same is liable to be quashed. As decided in Varshaben Sanatb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of Bank Statement 73 d) Copy of Return of Income Acknowledgement for the A.Y. 2012-13 74 e) Copy of Audited Statement of Accounts for the Year ended 31.03.2012 75-88 3. M/s. Harsharatna Finance & Investment Private Limited a) Copy of Form of application for equity shares 89-90 b) Copy of Board Resolution by the company for investing in assessee company 91 c) Copy of Bank Statement 92-93 d) Copy of Return of Income Acknowledgement for the A.Y. 2012-13 94 e) Copy of Audited Statement of Accounts for the Year ended 31.03.2012 95-116 f) Copy of Return of Income Acknowledgement for the A.Y. 2011-12 117 4. M/s. Shareen Hire Purchase Private Limited a) Copy of Form of application for equity shares 118-119 b) Copy of Board Resolution by the company for investing in assessee company 120 c) Copy of Bank Statement 121-122 d) Copy of Return of Income Acknowledgement for the A.Y. 2012-13 123 e) Copy of Audited Statement of Accounts for the Year ended 31.03.2012 124-143 5. M/s. Dhanvantri Trafin Private Limited a) Copy of Form of application for equity shares 144-146 b) Copy of Bank Statement 147-148 c) Copy of Board Resolution by the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-85 10. Madan Mohan Tiwari v. ITO 2021 (11) TMI 496 dated 06.10.2021 (ITAT Delhi) 86-98 11. Amar Partap Steels Pvt. Ltd. v. ITO ITA No. 108/JPR/2024 dated 03.10.2024 (ITAT Jaipur) 99-125 19. The ld. AR of the assessee in addition to the bunch of paper book, decision and written submission vehemently argued that reasons recorded was not correct even though the ld. AO was having the complete information. The statement so relied was retracted and therefore, that retracted statement has no value for making the addition. In the reasons the allegation was that the assessee has taken the unsecured loans whereas the correct fact that it has obtained investment from that companies as share capital. Therefore, there is no leg to stand reasons for making the assessment in the case of the assessee and there is no application of mind by the ld. AO while recording the reasons and it is merely based on the borrowed satisfaction. To drive home to this contention he relied upon the decision of our Rajasthan High Court and Bombay High Court cited in the decision compilation and even the Jaipur bench in the case of Amar Pratap Steel. 20. We have heard the rival contentions and perused the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment which was completed u/s 143(3) on 27.03.2014 in the case of the appellant for the A.Y 2012-13 wherein all the information related to the share capital had been provided by the appellant and after due application of mind, the assessment order was passed. Even though ld. AR of the assessee contended before the ld. CIT(A) that the reasons were recorded for unsecured loans and additions were made for share capital and therefore ld. CIT(A) following our jurisdictional High Court's order in the case of Ram Singh 306 ITR 343 quashed the assessment. While doing so ld. CIT(A) has also followed the other judgments on the same issue. Before us since there was no contrary judgment serviced by the revenue, we do not find infirmity in that finding of the ld. CIT(A). The bench also noted that in the original assessment u/s. 143(3) which was passed vide order dated 27.03.2014 reveals that the AO had made complete verification of details and records furnished including details in respect of share capital. The judicial principal as set out in the judgement of the Hon'ble Supreme Court in the case of Calcutta Discount Co. Ltd. (41 ITR 191) wherein the Apex Court held that "Both the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit. Thus, it is very much clear from the provision of section 68 as prevailing for year under consideration the ld. AO can make addition u/s 68 only under two circumstances, (i) the assessee does not offer any explanation about nature and source of such credit or (ii) Explanation offered by Appellant is not up to the satisfaction of Ld. AO. Therefore, here we note that the assessee provided so as prove the identity, credit worthiness and genuineness of the transaction by placing all the records such as PAN, Application made for Shares, Board Resolution Financial Statement and Bank statement of the investor company which were not at all doubted by ld. AO. But all such vital evidence has been ignored solely on the basis of statements of third party recorded by some other officials during the course of search operation conducted and that too that statement was retracted. Thus, even otherwise the bench not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally similar on set of facts and grounds as that of with 872/JP/2024. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 872/JP/2024 for Assessment Year 2012-13 shall apply mutatis mutandis in the case of Kedia Builders and Colonizers Pvt. Ltd. in ITA No. 873/JP/2024 for the Assessment Year 2013-14. In the result, both appeals of the revenue are stands dismissed. 22. Now, we take up appeals of the revenue in ITA No. 874, 875 & 901/JP/2024 for A.Ys. 2014-15 to 2016-17. 23. Since the issues involved in these appeals in ITA Nos. 874, 875 & 901/JP/2024 for A.Ys 2014-15 to 2016-17 are inter related, identical on facts and are almost common, except the difference in figure disputed in each year, therefore, these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 24. At the outset, the ld. DR has submitted that the matter in ITA No. 901/JP/2024 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s completed u/s 143(3) on 31.12.2016 at income of Rs. 62,69,680/-. Later, on the basis of information available on record notice u/s 148 was issued on 14.03.2019 after recording reasons to believe that income has escaped assessment. Notice was issued after taking the necessary approval from Principal Commissioner of Income Tax [PCIT] u/s 151 of the Act. In response thereof, the assessee e-filed his return of income on 13.09.2019 at total income of Rs.37,64,500/-. Notices u/s 143(2) and notice 142(1) was issued which were duly served upon the assessee through ITBA portal. The assessee is company and its business is construction and sale building. 27. The case was reopened on the basis of information received that the assessee has taken bogus unsecured loan from shell/dummy/paper companies and introduced his own unaccounted cash by routing it through a web of dubious companies and suspicious transactions. During the under consideration the assessee has received unsecured loans from the following parties: Sr. No. Name of person from whom loan was received Amount Rs. 1 M/s Bhagwat Marcom Private Limited 25,00,056/- 2 M/s Coolhut Marketing Private Limited 25,00,028/- 3 M/s G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence of the above mentioned companies have been found at the said address. On asking to the nearby persons they were unaware of the said business premises of those lenders. Thereafter, ld. AO issued summons to the directors of the above companies for their personal appearance but no one appeared in response to that summons. 31. Considering all the facts the assessee was given an a show cause notice dated 01.12.2019 asking the assessee to show cause as to why the amount of such bogus unsecured loans received from paper / shell companies managed by Shri Mukesh Banka should not be considered as unexplained cash credits as per provision of section 68 of the Act. The assessee submit reply on 12.12.2019. 32. Ld. AO noted the reply but found it not acceptable because in the field enquiry conducted, identity of the lenders and their whereabouts was not proved. The inspector deputed reported that the lenders do not have any existence at the given address. Merely the transaction done through banking channel do not make the transaction genuine and therefore, he relied on the decision of Hon'ble Delhi High Court in Commissioner Of Income Tax vs Nr Portfolio Pvt Ltd., wherein the court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross various financial years, (ii) Most of the companies have shown income under the head 'Other Income' which shows that these companies have no actual business activities and only getting interest income under the head 'other income' for providing bogus unsecured loan to different beneficiaries. (iii) The admission of Shri Mukesh Banka vide his statement recorded u/s 131/132(4) of the Income Tax Act, 1961 on 30.05.2018 and 19.07.2018 that these companies are paper/shell companies, controlled and managed by Shri Mukesh Banka. (iv) The directors of these companies are dummy directors of Shri Mukesh Banka as per the statement of Shri Mukesh Banka recorded u/s 132(4) of the Income Tax Act, 1961 on 19.07.2018. (v) These companies were found to be non-existent as per enquiry made by Inspector of Income Tax. 35. Further, while analysis and examination of the bank statements of paper/shell companies of Banka Group, the entire scheme of arrangement regarding the withdrawal of cash from various bank accounts of paper/shell companies of Shri Mukesh Banka was clearly established and substantiated. These findings got further authenticated from the statements of Shri Mukesh B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant and that it had failed to disclose fully and truly all material facts necessary for assessment. The appellant submitted that the reassessment is not sustainable in view of the very basic fact that there was no reason for reopening and as it does not contain any material establishing live-link for the information & the conclusion to enable a reasonable person to form a prima-facie belief for escapement of income except a report of Investigation Wing. I have examined the various case laws relied upon by the appellant. However, I find that they are not applicable in the case of the appellant. I find that the following judicial decisions are relevant. 5.6 In ACIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd, [2007] 291 ITR 500 (SC), the Hon'ble Supreme Court observed as under. "16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to establish that there exists no belief or that the belief is not at all a bona fide one or based on vague, irrelevant and nonspecific information. To that limited extent, the Court may look at the view taken by the Income Tax Officer and can examine whether any material is available on record from which the requisite belief could be formed by the Assessing Officer and whether that material has any rational connection or a live link with the formation of the requisite belief. It is also immaterial that at the time of making original assessment, the Assessing Officer could have found by further inquiry or investigation as to whether the transactions were genuine or not. If on the basis of subsequent valid information, the Assessing Officer forms a reason to believe on satisfying twin conditions prescribed under section 147 of the Act that no full and true disclosure of facts was made by the assessee at the time of original assessment and, therefore, the income chargeable to tax had escaped assessment, his belief and the notice of reassessment based on such belief/opinion needs no interference. In the present case, since both the necessary conditions have been duly fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax. Ahmedabad. Further revelation of investigation as could be noticed from the record examined (file) deserves no reflection in this petition. Insistence on the part of the petitioner to provide any further material forming the part of investigation carried out against Dalmias also needs to meet with negation, as the law requires supply of information on which Assessing Officer recorded her satisfaction, without necessitating supply of any specific documents. The proceedings initiated under section 147 of the Act would not be rendered void on nonsupply of such document for which confidentiality is claimed at this stage, following the decision of the Delhi High Court in case of Acorus Unitech Wireless (P) Ltd. (supra). Assumption of jurisdiction on the part of the Assessing Officer is since based on fresh information, specific and reliable and otherwise sustainable under the law, challenge to reassessment proceedings warrant no interference. Resultantly, the petition is dismissed. Notice is discharged. There shall be. however, no order as to costs." 5.8 The Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd Vs ITO [1999] 236 ITR 34 (SC) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -facie belief for escapement of income. Therefore, I am of the considered view that the AO had formed 'reason to believe that accommodation entry in the form of bogus unsecured loan has been brought in by the appellant and that it had failed to disclose fully and truly all material facts necessary for assessment. 5.12 It was also contended by the appellant that no independent enquiry was done by AO on the information provided by some other source and hence he draws a borrowed satisfaction. The appellant further submitted that reopening is merely a review of AO's own assessment as made u/s 143(3) of the Act. The appellant submitted that the AO failed cross examine the adverse witness before recording the reason but formed a reasoned believe merely on suspicion. I find that various courts have held that reassessment on the basis of information from Investigation Wing is valid.It has also been held by courts that where reassessment proceedings were initiated on basis of information received from Investigation wing, merely because these transactions were scrutinized by Assessing Officer during the original assessment, reassessment could not be held unjustified. 5.13 In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal DFT (Investigation) that was beneficiary of accommodation entries by way of share application provided by a third party, same was justified. 5.19 In the case of Ankit Agrochem (P) Ltd. Vs JCIT [2018] 89 com 45 (Rajasthan), Hon'ble jurisdictional Rajasthan High Court held that where DIT informed that assessee-company had received stars application money from several entities which were only engaged in business of providing bogus accommodation entities to beneficiary concerns, reassessment on basis of said information was justified. 5.20 In the case of ITO vs. Purshottam Dass Bangur (1997) 224 R 382 (0) the Hon'ble Supreme Court has clearly held that letter from Deputy Director (Investigation) constitutes information and masons to believe that income have escaped assessment. In fact herein the Hon'ble Supreme Court has also held that merely because the notice was sent on the next day of the receipt of the information from the DOIT (Inv.) does not mean the ITO has not applied his mind. 5.21 The appellant has argument put forth argument that the issues raised during the reopening of the assessment had already been dealt with in the original assessment. I do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the TDS of Rs 28,333/- on interest of Rs 2,54,992/- paid by the appellant to M/s Neelgagan Suppliers Pvt. Limited. The loan of Rs 25 lakhs was received through RTGS. The appellant has filed copy of the bank statement of M/s Neelgagan Suppliers Pvt. Ltd. For the relevant period. It can be seen from the bank statement that either immediately before or after issue of cheque of Rs 25 lakhs to the appellant by M/s Neelgagan Suppliers Pvt. Ltd. On 25.03.2014, there was no cash deposit in the bank account of M/s Neelgagan Suppliers Pvt. Limited. The appellant has filed confirmatory letter, copy of IT. Return of A.Y 2014-15 of M/s Neelgagan Suppliers Pvt. Ltd., Balance Sheet dated 31.03.2014 & Profit & Loss Account for the period ending 31.03.2014 of M/s Neelgagan Suppliers Pvt. Limited. It can be seen that the net worth of M/s Neelgagan Suppliers Pvt. Ltd. As on 31.03.2014 was Rs. 2,48,19,924/- The appellant has also filed copy of mater date downloaded form site of ROC. The status of M/s Neelgagan Suppliers Pvt. Ltd. has been shown as 'active'. The AO has not brought on record any evidence to show that the appellant had paid cash out of his unaccounted income to M/s Neelgagan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; xx x 6.3 I have carefully considered the facts of the case, the submission of the appellant and evidences on record. The appellant during the course of appeal proceedings has submitted the documents regarding loan taken and repayment from the lender companies as under: M/s. Bhagwat Marcom Pvt. Ltd * Copy of ITR Acknowledgement for the A.Y. 2014-2015 * Bank Statement of M/s. Bhagwat Marcom Pvt. Ltd * Audited Statement of Accounts M/s. Coolhut Marketing Pvt. Ltd. N * Copy of ITR Acknowledgement for the A.Y. 2014-15 * Bank Statement of M/s. Coolhut Marketing Pvt. Ltd- * Audited Statement of Accounts. M/s. Gabarial Tie-up Pvt. Ltd. * Copy of ITR Acknowledgement for the A.Y. 2014-2015. * Bank Statement of M/s. Gabarial Tie-up Pvt. * Audited Statement of Accounts. M/s. Neelgagan Suppliers Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxpayer's income for that year. The burden of proof lies with the taxpayer to prove that the cash credit is genuine and not an undisclosed income. The appellant has provided identify of the Loan Creditors by giving their complete Address, PAN, Loan Confirmation, Copy of Acknowledgement for filing of I.T. Return for the A.Y. 2014-15, copy of Assessment Orders, Bank Statement and Audited Statement of Accounts and that it had also provided evidences of genuineness of transaction as all the transactions are through Banking Channels and the loan creditors has categorically confirmed by furnishing supporting documents and evidences and in both the bank. The appellant contented that the genuineness of the transactions cannot be doubted, relying on mere surmises without any material to prove the same as held in the case of Dhakeshwari Cotton Mills Ltd. 26 ITR 775 (SC). I find that the AO has overlooked the net worth of the lender companies and relied only on profit. It is seen that besides the loan granted to the appellant, these lender companies had also given loans to other bodies corporate as well and granting of loan to the appellant is not a solitary transaction. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors to find out whether they were creditworthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do anything further." 6.10 The Hon'ble Agra Tribunal in the case of S.K. Jain Vs ITO (2004) 2 SOT 579 (Agra) observed as under. "The creditors have confirmed that they have advanced loan to the assessee. In most of the cases, transactions have been routed through bank account. Therefore, asking source of such deposits will amount to asking source of the source which is not permitted under the law as held by the Hon'ble High Court of Patna in the case of Sarogi Credit Corpn. vs. CIT 1975 CTR (Pat) 1: (1976) 103 ITR 344 (Pat) and the decision of the Ahmedabad Bench of the Tribunal in the case of Rohini Builders vs. Dy. CIT (2002) 76 TTJ (Ahd) 521: (2001) 117 Taxman 25 (Ahd)(Mag). Once it is established that the amount has been invested by a particular person, be he is a family member or close relative then the responsibility of the assessee is over. The assessee cannot ask that person, who advanced the loan, whether money advanced is properly taxed or not." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of Nemi Chand Kothari Vs CIT [136 Taxman 213) observed that the assessee had obtained loans though account payee cheques and ha had also furnished the name & address of the creditor. In light of the aforesaid observations, they further held as follows: "Once the assessed had established that he had received the said amounts from 'N' and 'P' by way of cheques, the assessee must be taken to have proved that the creditors had the creditworthiness to advance the loans. Thereafter, the burden had shifted to the Assessing Officer to prove the contrary. On failure on the part of the creditors to show that their sub creditors had creditworthiness' to advance the said amounts to the assessee, these amounts as a corollary, could not have been and ought not to have been, under the law, treated as the assessee's income mom the undisclosed sources, when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or ware owned by, the assessee." 6.14 I find that the AO has stated that third party enquiries were made by issuing notices u/s 133(6) and by making field inquiries (by sending Inspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f D-mat account etc, the fact of transaction entered into cannot be denied simply on the ground that in his statements appellant denied having made any transactions. Further as payments and receipts were made through account payee cheques and transactions were routed through Kolkata Stock Exchange and there was no evidence that the cash has gone back in appellant's account, it was held by the Court that simply mentioning that findings were on the basis of appraisal report prepared by Investigation wing after considering all the material facts available on record is not sufficient. The Hon'ble Court confirmed the finding of the Tribunal that "The AO has failed to prove through any independent enquiry or relying on some material that the transactions made by the appellant through share P.K. Agrawal were non genuine or there was any adverse mention about the transaction in question in statement of Sh. Pawan Purohit." 6.17 The Hon'ble Jaipur bench of ITAT vide order dated 31.08.2022 in Manohar Lal Chug vs. ITO in ITA No. 312/JP/2021 has held that: the case of "6.3. The issue of penny stock and consequent additions made has elaborately dealt with by ITAT Jaipur Bench i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investment in the name of that person. The burden then shifts on to the revenue to establish that such investment has thas come from the assessee itself [Para 16]" 6.19 The Hon'ble ITAT, Ahmedabad in the case of DCIT Circle-1(1)(1). Ahmedabad Vs. J. P. Fincorp Services Pvt. Ltd. [ITA No.2517/Ahd/2016] has held as follows: 29. In view of the above, we are of the opinion that, though the transactions of the loan received by the assessee are not free from any doubt but in either of the case, once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, we hold that there is no infirmity in the order of the Ld. CIT-A. Hence, the ground of appeal of the revenue is hereby dismissed. [Para- 29] 6.20 Further, the Hon'ble ITTA, Kolkata in the case of Bataji Solutions Limited Vs. Assistant Commissioner of Income Tax Circle-2(1), Kolkata (ITA. No. 572/KOL/2022] pronounced on February 20, 2023 has held as follows: "9. Apropos to Ground No. 2 regarding the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, I find that in the present case where the name, address, PAN, copy of IT Returns, balance sheet, profit and loss account of all creditors/ lenders as well as their confirmation had been furnished, AO was not justified in making addition on account of unsecured loan. 6.23 I find that the foundation of the addition made by the AO is the admission of Shri Mukesh Banka vide his statement recorded u/s. 131/132(4) of the Act on 30.05.2018 and 19.07.2018 that these companies are paper/shell companies. controlled and managed by Shri Mukesh Banka. However, it is also seen that Shri Mukesh Banka has retracted his statement vide Two Separate Affidavit dated 01/06/2018 and 23/07/2018. Therefore, the statement by itself cannot be solely relied as a fool proof evidence. The Hon'ble jurisdictional ITAT Jaipur in the case of DCIT V/s Saurabh Mittal, ITA No. 16/JP/2018 has noted as under: "We further note that the assessee produced copy of affidavit of Shri. Anil Agrawal who has retracted his statement before the Investigation Wing, Kolkata however, without going into controversy of the retraction of the statement we find that the statement cannot be used by the AO without giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an introduced un the name of M/s Neelgagan Suppliers Pvt. Ltd., then just because the AO could not enforce compliance of the notice issued u/s 133(6) to M/s Neelgagan Suppliers Pvt. Ltd., no addition u/s 68 could have been made by the AO in respect of unsecured loan of Rs 25 lac received from M/s Neelgagan Suppliers Pvt. Ltd. And interest of Rs 5,178/- debited in respect of interest accrued on such unsecured loan. Therefore, in view of the facts discussed by the AO and the various decisions relied upon by the appellant, the addition of Rs 25,05,178/- (Rs 25,00,000 + Rs 5,178) made by the AO u/s 68 is hereby deleted." 6.25 The same amount of Rs 25 lakhs from M/s Neelgagan Suppliers Pvt. Ltd. has been again added by the AO in the assessment u/s 147/148 dated 13.12.2019. This amounts to double addition of an amount which has already been deleted by the Ld CIT(A) in appeal. In the earlier grounds, the addition made of Rs 25,00,056 on account of unsecured loan from M/s Neelgagan Suppliers Pvt. Ltd. has been held not valid as the further addition made in the re-assessment order tantamount to double addition and therefore has been directed to be deleted. 6.26 The Hon'ble Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing penalty proceedings u/s 271(1)(c) of the Act. Since an appeal lies against an order levying penalty and not against initiation of penalty, the appeal on this ground is premature and is treated as dismissed. 10. Ground No. 7 is general in nature and needs no adjudication. 11. As the result, the appeal is partly allowed." 38. Feeling dissatisfied with the finding so recorded in the order of the ld. CIT(A), revenue preferred the present appeal. While dealing with the grounds of appeal ld. DR vehemently argued that the ld. CIT(A) has not appreciated the enquiries conducted by ld. AO to established that the criteria as prescribed under section 68 of the Act has not been fulfilled for unsecured loan accounted by the assessee in his books of account whereas the ld. CIT(A) without appreciating that finding of the ld. AO directed to delete the addition and has not appreciated the merits of the case of the revenue. Going further she argued that this is the second round of litigation though in the first round Rs. 25,05,178/- was added by the ld. AO which the ld. CIT(A) has deleted, and the revenue did not challenge that finding because of the low tax effect and the case was selected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low tax effect, which was below the prescribed monetary threshold. (Refer: PBP No. 3) 1.4. Subsequently, a search proceeding was conducted on 21/5/2018 on Shri Mukesh Banka, an identified entry operator. Post-search investigations revealed a list of beneficiaries who had availed accommodation entries, and the assessee was identified as one of the beneficiaries. 1.5. Based on this newly discovered information, action under Section 148 of the Income Tax Act was initiated. The assessment was reopened, resulting in the following additions: a. An addition under Section 68 for unsecured loans. b. A disallowance under Section 14A. 1.6. Upon appeal, the Ld. CIT(A) upheld the validity of the reopening under Section 148 .( page no 98 para no 5.21) but deleted the additions made under Section 68 and on account of unsecured loan. 1.6 Aggrieved by the deletion of these additions, the Department has preferred the present appeal before the Hon'ble ITAT, Jaipur. 2. The Respondent's Written Submission Dated 02/11/2023: The respondent has raised the following submissions: 2.1 Validity of Reopening of Assessment Under Section 148: a. The validity of the reopening of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Loan confirmations for all lender companies, including confirmation of loan repayments. g. The Master Data from the MCA Website shows that the lender companies are active and have filed their Balance Sheets with the MCA. They are compliant with the legal requirements under the Companies Act. h. Copies of the Assessment Orders of all loan creditors were also submitted, showing that the Department has accepted their accounts. i. The lender companies have sufficient financial capacity to provide the loans. The appellant has discharged the onus of proving the identity, creditworthiness, and genuineness of the loan creditors. j. The appellant has paid interest to each loan creditor, and TDS was deducted under Section 194A on such interest payments. The loan creditors have disclosed the interest income in their respective tax returns. 4. Rejoinder: 1. Points 1 and 2 are factually correct, and hence no counter is submitted on the same. 2. The Department, while disagreeing with the findings of the Ld. CIT(A) in first round did not file an appeal due to the low tax effect, which was below the prescribed monetary threshold (Refer: Paper Book, Page Nos. 1 to 3). 3. The additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopening but erroneously deleted the addition. The reassessment was based on clear evidence and validly recorded reasons. * Justification for Addition: Since the assessee relied on old replies and failed to counter the reasons for reopening, the addition of Rs.1,75,00,364/-is valid and justified. 6. Counterarguments on Identity, Creditworthiness, and Genuineness 1. Banking Channels Are Not Evidence of Genuineness: a. The appellant claims that transactions routed through banking channels establish genuineness. However, the Hon'ble Supreme Court in CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)] and Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)] held that merely routing money through banks does not establish the genuineness of a transaction. b. In Sumati Dayal, the Court stressed that explanations deemed improbable must be rejected, and human probabilities and surrounding circumstances must be considered. c. The case ITO vs. Mahadev Dairy Pvt. Ltd. (ITAT Delhi, ITA No. 4380/Del/2018, dated 07.07.2023) further observed that routing funds through banking channels, in the absence of evidence of creditworthiness and genuineness, cannot shield the assessee from additions u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices under Section 133(6) to verify the genuineness of the loan creditors, the creditors remained non-responsive. b. As held in CIT v. Orissa Corporation Pvt. Ltd. [(1986) 159 ITR 78 (SC)], when notices are issued but creditors fail to respond, the burden shifts back to the assessee to establish the genuineness of the transaction. c. The CIT(A) failed to appreciate that the creditors' non-compliance raises serious doubts about their existence and the genuineness of the loans. 2. Non-Compliance with Summons Under Section 131: a. Summons were issued under Section 131 to the directors and key personnel of the loan-providing entities, but they failed to comply. b. As emphasized in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], such non-compliance strengthens the inference that the transactions are not genuine. c. The CIT(A) ignored the significance of this non-compliance, which corroborates the AO's findings. 3. Assessee Was Confronted with Reasons for Reopening and Show Cause: a. The assessee was confronted with the reasons for reopening the assessment, and a show cause notice was issued, providing ample opportunity to furnish rebuttal evidence. b. As per CIT v. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contradiction in the assessee's submissions highlights its attempt to provide piecemeal and inconsistent evidence, which should not have been accepted by the CIT(A). c. In Swati Bajaj v. CIT [(2022) 447 ITR 361 (SC)], the Court emphasized that contradictory submissions weaken the credibility of the assessee's claims. 8. Non-Submission of Post-Banka Search Status of Loan Providers: a. The assessee failed to submit the post-Banka search status of the loan providers, including details of subsequent assessments or investigations. b. As per CIT v. Nova Promoters and Finlease Pvt. Ltd. [(2012) 342 ITR 169 (Del.)], the failure to provide updated and relevant information justifies the AO's conclusions and additions. c. The CIT(A) overlooked this crucial lapse by the assessee. 9. Non-Submission of Banka's Assessment Order: a. The assessee failed to provide the assessment order of the Banka Group, which could have clarified the nature of the transactions. b. This omission further erodes the credibility of the assessee's claims and supports the AO's findings. c. As per CIT v. Dataware Pvt. Ltd. [GA No. 2856 of 2011], the onus lies on the assessee to furnish all relevant evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 251 (Gujarat High Court)]: * Focused on the general burden of proof without specific linkage to creditor non-compliance. 2. KMG International Ltd. v. ACIT [ITA No. 5591/Del/2010 (ITAT Delhi)]: * Discusses the general onus to prove genuineness without specific reference to creditors' non-response. 3. PCIT-4 v. Hi-Tech Residency Pvt. Ltd. [(96 Taxmann.com 403) (Supreme Court)]: * Primarily deals with verification failures broadly without specific creditorrelated focus. 4. CIT v. Apex Therm Packaging Pvt. Ltd. [(42 Taxmann.com 473) (Gujarat High Court)]: * Discusses reopening of assessments in general without addressing creditor non-compliance. Revenue-Favorable Case Laws Applicable to Current Facts Under Section 68: 1. CIT v. Orissa Corporation Pvt. Ltd. [(1986) 159 ITR 78 (SC)]: * Key Finding: The Supreme Court held that the burden of proof lies on the assessee to explain the nature and source of credit entries. When creditors fail to respond to notices, the AO is justified in making an addition under Section 68. 2. Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)]: * Key Finding: The Supreme Court ruled that improbable explanations from the assessee and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-responsive. The documents submitted are not signed by any authorized person or director of the companies post-search proceedings on the Banka Group. The last signature date is 31/07/2014, while the search occurred on 31/07/2018. Furthermore, during the assessment proceedings, the respondent failed to submit certified copies from these 07 companies, despite their details being mentioned in the reasons recorded and communicated to the assessee. 2 238-251 Confirmation of unsecured loan -Same as above 3 252-260 Retraction of Mukesh Banka The respondent filed a copy of Mukesh Banka's retraction, but the assessment status and admission of the retraction were not provided. Hence, this partial submission does not constitute conclusive evidence, especially since Mukesh Banka possessed details of the companies from which the respondent claimed to have taken loans. 4 261-325 Assessment order of all 07 loan providers These are mere intimations under Section 143(1)(a). The respondent misrepresented the facts before the Hon'ble Bench to mislead and gain undue advantage. 5 326-339 MCA data of all 07 Companies A detailed analysis of the financial data of all seven companies wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validated by the Ld. CIT(A) based on the Department's detailed analysis and new material gathered post-search. This acknowledgment further supports the Department's findings and the validity of the addition. Prayer In light of the above, the Revenue respectfully submits that: 1. The deletion of additions made by the Ld. CIT(A) under Section 68, amounting to Rs.1,75,00364/- should be reversed. 2. The addition made by the AO, based on credible evidence, including noncompliance of loan providers, their linkage to the Banka Group, and the respondent's failure to discharge the onus of proving the identity, creditworthiness, and genuineness of transactions, should be restored. 3. Any other relief deemed appropriate in the interest of justice may kindly be granted. This submission addresses the addition made under Section 68 of the Income Tax Act, 1961, involving loans received by the assessee from entities that were later found to be non-responsive, despite being marked as "active" on the MCA portal. The Department argues that the mere "active" status of a company on the MCA portal does not prove the identity, creditworthiness, or genuineness of transactions. This is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company it has no relation with Mukesh Banka, but, how, why, when the company received the document i.e retraction is not submitted. d) Assessee company failed to establish that when it had copy of retraction, why no one to one correspondence has been called by the company from Mukesh Banka. e) Assessee company failed to established that the statement of Mukesh Banka leads re-opening of Kedia's company and Mukesh Banka made false declaration resulted in any suit or legal action against him as company may have engaged professionals for all assessment proceedings including appeal, that burden cost also. f) Assessee company failed to prove that they had contacted to the loan providers to appear before the department, though in the reasons itself mentioned that the loan provider were shell company controlled by Mukesh Banka. g) Assessee has not objected that: i. Name of companies identified on the basis of statement of Mukesh Banka are not in assessee books. ii. Bank accounts identified is not objected by assessee. iii. Company name identified on the basis of statement given by Mr Banka not objected by appellant before any authority. iv. In statement Mukesh Banka provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, as the statements were made in the presence of competent officers and corroborated with documentary evidence. 4. 1. 3. Disclosure of Controlled Companies and Circumstantial Evidence The assessee admitted to controlling shell companies and disclosed their details. The circumstantial evidence revealed in the statement-details of companies, bank accounts, and transactions-were known exclusively to the assessee. Such voluntary admissions, supported by independent evidence, hold greater value as per the maxim nemo moriturus praesumitur mentire (a person is not presumed to lie on their deathbed or when under oath). 4. 1. 4. No Objection Raised by Companies or Directors Against Control by Mukesh Banka The companies and their directors, allegedly controlled by Mr. Mukesh Banka, have not raised any objections before any authority regarding the claim of being controlled by him. The absence of any objection corroborates the Department's findings and the credibility of the assessee's statement. 4. 1. 5. Silence of Companies During and After Search Proceedings The companies alleged to be shell entities remained silent during the search proceedings and have not objected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Banka, made after a significant delay, raises serious doubts about its credibility and integrity. The original statements were made under oath during a lawful search operation and in the presence of incriminating evidence. The delay in retracting such statements appears to be an afterthought and lacks substantive justification. 4. 1. 11. Contradictions in Respondent's Stand and Retraction The deletion of the addition based solely on a self-serving retraction, when the companies were non-responsive, lacks merit. As per Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], surrounding circumstances and human probabilities must be considered when evaluating evidence. The fact that these companies did not respond to statutory notices and the lack of rebuttal to the Banka statement reinforce the genuineness of the original findings. 4. 1. 12. Latin Maxims Supporting Revenue's Case: a) Verba volant, scripta manent (spoken words fly away, written words remain): The original statement under oath, corroborated by written evidence, holds more weight than a subsequent verbal retraction. b) Actori incumbit onus probandi (the burden of proof lies on the claimant): The burden of disproving t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al validity. 5.5 Prayer The Revenue respectfully prays that: a) The addition made by the AO under Section 68 be upheld as it is supported by substantial evidence and judicial precedents. b) The deletion of the addition by the CIT(A), based on superficial compliance and unsupported retraction, be set aside. c) Any other relief deemed appropriate in the interest of justice may also be granted. 6. Introduction on affidavit: The present submission addresses the validity and implications of the affidavit filed by Mukesh Banka, which attempts to retract his earlier statement recorded under oath during search proceedings. This submission also examines the legal principles governing affidavits, their evidentiary value, and their application in the context of this case. 6.2. Legal Position on Affidavits: a) Affidavit as a Statement under Oath: a) An affidavit is governed by Order XIX of the Code of Civil Procedure, 1908, and is considered a written statement confirmed under oath or affirmation before an authorized officer. b) As per Section 139 of the Code of Civil Procedure, 1908, affidavits are valid only when made voluntarily and before an authorized officer. 6.3. Evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. Key Observations and Issues: 7.1. Circumstantial Evidence and Non-Responsiveness: * The circumstantial evidence obtained during the search clearly demonstrated that the companies involved were shell entities controlled by Mukesh Banka. * The directors of the shell companies failed to respond to statutory notices issued under Sections 131 and 133(6). Their non-responsiveness corroborates the Department's findings that these companies were not genuine. 7.2. Contradiction in CIT(A)'s Findings: * The CIT(A) has held that a statement alone cannot form the basis for an addition. However, by relying solely on the affidavit retracting the statement, the CIT(A) has contradicted their own reasoning. * If a statement cannot be the sole basis for an addition, a self-serving affidavit without corroborative evidence cannot be the sole basis for deletion of the addition. 7.3. Silence of the Shell Companies: * The shell companies identified during the search have not filed any objections or initiated legal proceedings against the allegations of being controlled by Mukesh Banka. * Their silence, both during and after the search proceedings, supports the Department's cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd regulatory perspectives have provided clarity on its connotation. * In the case of Assam Company India Ltd. and Anr. vs. Union of India and Ors. [2019 SCC OnLine Gau 912], the Gauhati High Court observed that the term "shell company" is not explicitly defined in Indian law. The court noted that in popular parlance, a "shell company" refers to an entity without active business operations or significant assets, often perceived as being tainted. The court emphasized that labeling a company as a "shell company" without substantial evidence can have serious implications, and such categorization must be approached with caution. * Furthermore, the Securities and Exchange Board of India (SEBI) has described shell companies as entities that serve as mediums for business transactions without themselves having significant assets or operations. These companies are often used for financial maneuvers, including tax evasion and money laundering 8.2 Active Status on MCA Does Not Prove Genuineness * The assessee claims that the loan-providing companies are "active" as per the MCA records. However, the mere active status: * Indicates only that these companies have filed their basic stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir operational credibility. 10.2 Shell Companies: Regulatory and Judicial Stance * While "shell companies" are not defined statutorily, their characteristics have been elaborated in judicial pronouncements and regulatory guidelines. Shell companies are often: * Lacking genuine business operations. * Merely existing to provide accommodation entries for tax evasion. * Reliance is placed on Assam Company India Ltd. and Anr. v. Union of India and Ors. [2019 SCC OnLine Gau 912], where the Gauhati High Court observed that labeling an entity as a shell company requires substantial evidence but also emphasized that "active status" alone cannot negate the suspicion. In light of the above submissions, the Revenue respectfully prays that the Hon'ble Tribunal: * Uphold the Original Statement Recorded Under Oath: * Recognize the evidentiary value of the statements made by Mr. Mukesh Banka during the search proceedings, as they were recorded under oath and corroborated by documentary and circumstantial evidence. * Reject the subsequent self-retraction by Mr. Banka as baseless, selfserving, delayed, and unsupported, especially in the absence of corroborative evidence or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue submits that the addition made under Section 68 by the AO is based on credible and corroborative evidence, while the deletion by the CIT(A) is erroneous and unsupported. The Hon'ble Tribunal is respectfully requested to: 1. Restore the addition made by the AO. 2. Clarify that the statements of Mr. Mukesh Banka are part of the evidentiary framework but are not being relied upon as sole evidence due to jurisdictional limitations. 3. Disregard the affidavit/retraction and uphold the Department's findings. 4. Grant any other relief deemed just and equitable. Grounds of Appeal: 1. Whether, on the facts and circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs.1,75,00,364/- despite the clear evidence of layering of unaccounted income through accommodation entries by various companies such as M/s Bhagwat Marcom Pvt. Ltd., M/s Coolhut Marketing Pvt. Ltd., and others? Deletion of Addition by Ld. CIT(A): 1. The Ld. CIT(A) deleted the addition of Rs.1,75,00,364/- relying on: * Transactions routed through banking channels. * Documents such as loan confirmations, bank statements, and balance sheets of loan-providing entities submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Builders Pvt. Ltd. (Civil Appeal No. 9604-9605/2018): Evidence linking an assessee to accommodation entries justifies additions under Section 68. Prayer: In light of the above, the Revenue respectfully prays: 1. To set aside the deletion of the addition of Rs.1,75,00,364/- by the Ld. CIT(A). 2. To restore the addition made by the AO under Section 68 for unaccounted income routed through layering. 2. Whether the Ld. CIT(A) is justified in deleting additions without considering evidence of organized tax evasion through bogus accommodation entries and commission payments. Deletion of Additions by the Ld. CIT(A): 1. The Ld. CIT(A) deleted the additions made by the AO based on: * Banking channel evidence submitted by the assessee. * Loan confirmations and financial documents submitted by the entities. * The active status of the loan-providing entities on the MCA portal. Revenue's Counterarguments: a. Accommodation Entries Established Through Investigation: * The loan-providing entities were found to be paper companies, controlled by entry operators, to facilitate bogus transactions. * Evidence linked the assessee to these accommodation entries, including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following entities as paper/shell companies: * M/s Bhagwat Marcom Pvt. Ltd. * M/s Coolhut Marketing Pvt. Ltd. * M/s Gabarial Tieup Pvt. Ltd. * M/s Neelgagan Suppliers Pvt. Ltd. * M/s Outlook Vintrade Pvt. Ltd. * M/s Subhrashi Enclave Pvt. Ltd. * M/s Viewmore Developers Pvt. Ltd. 2. Key Findings from the Statement: * These companies were incorporated solely for providing bogus accommodation entries. * Their bank accounts were used for layering unaccounted funds and routing them back to beneficiaries in the guise of loans or advances. * Commissions were charged for facilitating these activities. Relevant Judicial Precedents: * CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)]: Courts must analyze the substance of transactions, and mere paperwork cannot establish genuineness. * Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)]: Improbable or inconsistent explanations should be rejected based on human probabilities. b. Shell Companies Engaged in Suspicious Activities 1. The Ld. CIT(A) acknowledged the suspicious activities of these companies but failed to examine the substance of the transactions. Relevant Judicial Precedents: * CIT v. Nova Promoters an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO, based on the credible statement of Shri Mukesh Banka and corroborative evidence, be restored. 3. Any other relief that the Hon'ble Tribunal deems fit may also be granted. Ld CIT(A) adopted two stands Counter-Argument on CIT(A)'s Stand in the Case of Kedia 1. Introduction The Ld. CIT(A) upheld the reopening of the assessment under Section 148, stating that the Assessing Officer (AO) had new tangible material to justify the reopening. However, the Ld. CIT(A) simultaneously deleted the addition made by the AO on the grounds that the addition related to unsecured loans was already deleted in the original assessment proceedings and could not be re-added. This contradictory stand of the Ld. CIT(A) highlights a lack of consistency in applying legal principles, which the Department seeks to challenge. 2. Inconsistent Stance of the Ld. CIT(A) 2.1 Confirmation of Reopening Based on New Material * The Ld. CIT(A) confirmed the reopening under Section 148 on the grounds that the AO had new material post-search proceedings (i.e., statements and findings linking the assessee to accommodation entries). This suggests the Ld. CIT(A) acknowledged the new tangible mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation entries. 4. Contradiction in CIT(A)'s Approach 4.1 Acknowledging New Material but Disallowing Addition * By confirming the validity of the reopening, the Ld. CIT(A) accepted that new evidence existed. However, deleting the addition based on the argument that the issue was previously adjudicated undermines the rationale for reopening. 4.2 Failure to Address Fresh Findings * The CIT(A) overlooked the substantive findings from post-search investigations, such as: * Statements of entry operators confirming the fictitious nature of loanproviding entities. * Non-compliance of creditors with statutory notices issued under Sections 133(6) and 131. * Evidence of layering through banking channels. 4.3 Judicial Precedent on Reassessment * The Supreme Court in CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)] and Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)] held that reassessment based on new material is valid, especially when original findings were based on superficial evidence. 5. Supporting Judicial Precedents 5.1 Reassessment Valid Even If Original Addition Was Deleted * Rajesh Jhaveri Stock Brokers Pvt. Ltd. [(2007) 291 ITR 500 (SC)]: New tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nference that the transactions are not genuine and were merely accommodation entries, as emphasized in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)]. 2.3 Banking Channels Alone Do Not Establish Genuineness * Merely routing transactions through banking channels is insufficient to prove the genuineness of the loans, as held in: * CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)]. * NRA Iron & Steel Pvt. Ltd. v. PCIT [(2019) 416 ITR 135 (SC)]. * Without corroborative evidence to prove identity, creditworthiness, and genuineness, such transactions cannot be considered legitimate. 2.4 Post-Search Investigations * Findings during the search and subsequent investigation revealed that the entities were either shell companies or lacked substantial business operations. * Statements recorded under oath (e.g., from entry operators) confirm that these entities were engaged in providing accommodation entries for a commission. 3. Argument for Sustaining the Balance Addition 3.1 Burden of Proof on the Assessee * Under Section 68, the burden lies on the assessee to prove the: * Identity of the creditors. * Creditworthiness of the creditors. * Genuineness of the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itworthiness, and genuineness remain unsubstantiated. 4. Further Relief as Deemed Fit: * The Hon'ble Tribunal may grant any other relief in the interest of justice. Conclusion The Ld. CIT(A), while acknowledging the suspicious activities of the loan-providing entities, erred in deleting the additions without appreciating: The substantive evidence gathered by the AO, including the bank trails and findings from the Banka Group search. Established judicial precedents emphasizing the importance of substance over form in determining the genuineness of transactions. Judicial principles laid down in landmark rulings such as NRA Iron & Steel Pvt. Ltd. v. PCIT [(2019) 416 ITR 135 (SC)], Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], and CIT v. Nova Promoters and Finlease Pvt. Ltd. [(2012) 342 ITR 169 (Del.)] uniformly support the additions made by the AO in cases involving shell companies, accommodation entries, and tax evasion. Common Prayer In view of the above submissions, facts, and supporting judicial precedents, the Revenue respectfully prays that: The order of the Ld. CIT(A) deleting the additions made under Section 68 and on account of commission payments be set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. Rs. 25,00,056/- 3. It is submitted that Mr. Mukesh Banka has the Income Tax Department at Kolkata and hence, no reliance can be placed upon the same. 4. The assertion that the unsecured loans received by the assessee are bogus and constitute unexplained cash credits under Section 68 o Act, 1961, is unfounded and lacks merit. This conclusion appears to be based on conjecture rather than a thorough examination of the evidence and explanations furnished by the assessee during the assessment proceedings. A detailed analysis of the facts and legal principles involved reveals significant flaws in the assessment order's findings, which warrant a reversal of the conclusions drawn by the revenue authorities. 5. Identity of the Lenders: The identity of the lender entities has bee unequivocally established through substantial documentary evidence. The assessee provided Permanent Account Numbers (PANs), certificates of incorporation, and other statutory documents for each lending entity. These 21.10.2014 declaring total income of Rs. 36,32,264/ has passed the order in Appeal re-opened by the Ld. AO by issuing n 1,75,00,364/- u/s. 68 of the Act towards receipts of retracted hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the lending entities at the addresses provided in the statutory documents has been cited as evidence of their fraudulent nature. However, this conclusion is both speculative and unfounded. It is not uncommon for companies to operate through multiple locations or to shift their registered offices. Such logistical changes often take time to reflect in statutory records. Moreover, the mere absence of directors at a given address does not, in itself, establish that the entities are non-existent or that the transactions are fraudulent. Concrete evidence, rather than assumptions, is required to substantiate such serious allegations. 9. Speculative Allegations of Accommodation Entries: The revenue authorities have further contended that the loans represent the assessee's unaccounted income laundered through a network of shell companies. This assertion is speculative and devoid of factual support. Under Section 68, the onus placed on the assessee is to prove the identity of the lender, the genuineness of the transaction, and the creditworthiness of the lender. The assessee has discharged this onus by providing substantial documentary evidence, including PAN details, bank state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly validates the existence of the original loan transactions. It would be contrary to principles of logic and natural justice to simultaneously accept the repayments as genuine while alleging that the initial loan receipts were bogus accommodation entries. 13. Compliance with Section 68: The fundamental principle underlying Section 68 is to address unexplained credits in the books of the assessee. In the present case, the assessee has not only substantiated the receipt of loans with credible evidence but has also corroborated the genuineness of the transactions through the repayment of these loans. Any claim that the loan amounts represent the assessee's unaccounted money routed through dubious means collapses when viewed in light of the subsequent repayments. If the lenders were truly nonexistent or merely shell entities, as alleged, there would be no verifiable record of repayments, nor would such repayments occur through recognized banking channels. 14. Traceability and Transparency of Transactions: The transactions were conducted entirely through banking channels, ensuring complete traceability and transparency. This eliminates any ambiguity regarding the financial flow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The AO stated that summons u/s 131(1) of the Act was issued to the Directors of the lender companies but no one appeared. The AO arrived at a conclusion that the transaction under consideration entered into by the appellant in taking unsecured loans form the companies managed and controlled by Mukesh Banka was not genuine. Therefore, the AO added Rs 1,75,00,364 shown as unsecured loan and treated it as unexplained income u/s 68 of the Act. 6.3 I have carefully considered the facts of the case, the submission of the appellant and evidences on record. The appellant during the course of appeal proceedings has submitted the documents regarding loan taken and repayment from the lender companies as under: M/s. Bhagwat Marcom Pvt. Ltd. Copy of ITR Acknowledgement for the A.Y. 2014-2015. Bank Statement of M/s. Bhagwat Marcom Pvt. Ltd Audited Statement of Accounts M/s. Coolhut Marketing Pvt. Ltd. Copy of ITR Acknowledgement for the A.Y. 2014-2015. Bank Statement of M/s. Coolhut Marketing Pvt. Ltd.- Audited Statement of Accounts. M/s. Gabarial Tie-up Pvt. Ltd. Copy of ITR Acknowledgement for the A.Y. 2014-2015. Bank Statement of M/s. Gabarial Tie-up Pvt. Audited Statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the taxpayer's income for that year. The burden of proof lies with the taxpayer to prove that the cash credit is genuine and not an undisclosed income. The appellant has provided identify of the Loan Creditors by giving their complete Address, PAN, Loan Confirmation, Copy of Acknowledgement for filing of I.T. Return for the A.Y. 2014-15, copy of Assessment Orders, Bank Statement and Audited Statement of Accounts and that it had also provided evidences of genuineness of transaction as all the transactions are through Banking Channels and the loan creditors has categorically confirmed by furnishing supporting documents and evidences and in both the bank. The appellant contented that the genuineness of the transactions cannot be doubted, relying on mere surmises without any material to prove the same as held in the case of Dhakeshwari Cotton Mills Ltd. 26 ITR 775 (SC). I find that the AO has overlooked the net worth of the lender companies and relied only on profit. It is seen that besides the loan granted to the appellant, these lender companies had also given loans to other bodies corporate as well and granting of loan to the appellant is not a solitary transaction. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditworthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do anything further." 6.10 The Hon'ble Agra Tribunal in the case of S.K. Jain Vs ITO (2004) 2 SOT 579 (Agra) observed as under: "The creditors have confirmed that they have advanced loan to the assessee. In most of the cases, transactions have been routed through bank account. Therefore, asking source of such deposits will amount to asking source of the source which is not permitted under the law as held by the Hon'ble High Court of Patna in the case of Sarogi Credit Corpn. vs. CIT 1975 CTR (Pat) 1: (1976) 103 ITR 344 (Pat) and the decision of the Ahmedabad Bench of the Tribunal in the case of Rohini Builders vs. Dy. CIT (2002) 76 TTJ (Ahd) 521: (2001) 117 Taxman 25 (Ahd)(Mag). Once it is established that the amount has been invested by a particular person, be he is a family member or close relative then the responsibility of the assessee is over. The assessee cannot ask that person, who advanced the loan, whether money advanced is properly taxed or not." 6.11 The Hon'ble Calcutta High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Vs CIT [136 Taxman 2I3) observed that the assessee had obtained loans though account payee cheques and ha had also furnished the name & address of the creditor. In light of the aforesaid observations, they further held as follows: "Once the assessed had established that he had received the said amounts from 'N' and 'P' by way of cheques, the assessee must be taken to have proved that the creditors had the creditworthiness to advance the loans. Thereafter, the burden had shifted to the Assessing Officer to prove the contrary. On failure on the part of the creditors to show that their sub creditors had creditworthiness' to advance the said amounts to the assessee, these amounts as a corollary, could not have been and ought not to have been, under the law, treated as the assessee's income mom the undisclosed sources, when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or ware owned by, the assessee." 6.14 I find that the AO has stated that third party enquiries were made by issuing notices u/s 133(6) and by making field inquiries (by sending Inspector) in the name of such companies, however as no reply was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imply on the ground that in his statements appellant denied having made any transactions. Further as payments and receipts were made through account payee cheques and transactions were routed through Kolkata Stock Exchange and there was no evidence that the cash has gone back in appellant's account, it was held by the Court that simply mentioning that findings were on the basis of appraisal report prepared by Investigation wing after considering all the material facts available on record is not sufficient. The Hon'ble Court confirmed the finding of the Tribunal that "The AO has failed to prove through any independent enquiry or relying on some material that the transactions made by the appellant through share P.K. Agrawal were non genuine or there was any adverse mention about the transaction in question in statement of Sh. Pawan Purohit." 6.17 The Hon'ble Jaipur bench of ITAT vide order dated 31.08.2022 in the case of Manohar Lal Chug vs. ITO in ITA No. 312/JP/2021 has held that: "6.3. The issue of penny stock and consequent additions made has elaborately dealt with by ITAT Jaipur Bench in the case of Pramod Jain & Others (supra) and relying on the decision of Hon'ble Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at such investment has come from the assessee itself. [Para 16] 6.19 The Hon'ble ITAT, Ahmedabad in the case of DCIT Circle-1(1)(1), Ahmedabad Vs. J. P. Fincorp Services Pvt. Ltd. [ITA No.2517/Ahd/2016] has held as follows: 29. In view of the above, we are of the opinion that, though the transactions of the loan received by the assessee are not free from any doubt but in either of the case, once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, we hold that there is no infirmity in the order of the Ld. CIT-A. Hence, the ground of appeal of the revenue is hereby dismissed. [Para- 29] 6.20 Further, the Hon'ble ITTA, Kolkata in the case of Balaji Solutions Limited Vs. Assistant Commissioner of Income Tax Circle-2(1), Kolkata [I.T.A. No. 572/KOL/2022] pronounced on February 20, 2023 has held as follows: "9. Apropos to Ground No. 2 regarding the issue of unexplained cash credit amounting to Rs.25,00,000/- under section 68 of the Act is concerned, we find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss account of all creditors/ lenders as well as their confirmation had been furnished, AO was not justified in making addition on account of unsecured loan. 6.23 I find that the foundation of the addition made by the AO is the admission of Shri Mukesh Banka vide his statement recorded u/s. 131/132(4) of the Act on 30.05.2018 and 19.07.2018 that these companies are paper/shell companies controlled and managed by Shri Mukesh Banka. However, it is also seen that Shri Mukesh Banka has retracted his statement vide Two Separate Affidavit dated 01/06/2018 and 23/07/2018. Therefore, the statement by itself cannot be solely relied as a fool proof evidence. The Hon'ble jurisdictional ITAT Jaipur in the case of DCIT V/s Saurabh Mittal, ITA No. 16/JP/2018 has noted as under: "We further note that the assessee produced copy of affidavit of Shri. Anil Agrawal who has retracted his statement before the Investigation Wing, Kolkata however, without going into controversy of the retraction of the statement we find that the statement cannot be used by the AO without giving an opportunity to cross examination of Shri Ani1 Agrawal." 6.24 It may be noted that the assessment in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause the AO could not enforce compliance of the notice issued u/s 133(6) to M/s Neelgagan Suppliers Pvt. Ltd., no addition u/s 68 could have been made by the AO in respect of unsecured loan of Rs 25 lac received from M/s Neelgagan Suppliers Pvt. Ltd. And interest of Rs 5,178/- debited in respect of interest accrued on such unsecured loan. Therefore, in view of the facts discussed by the AO and the various decisions relied upon by the appellant, the addition of Rs 25,05,178/- (Rs 25,00,000 + Rs 5,178) made by the AO u/s 68 is hereby deleted." 6.25 The same amount of Rs 25 lakhs from M/s Neelgagan Suppliers Pvt. Ltd. has been again added by the AO in the assessment u/s 147/148 dated 13.12.2019. This amounts to double addition of an amount which has already been deleted by the Ld CIT(A) in appeal. In the earlier grounds, the addition made of Rs 25,00,056 on account of unsecured loan from M/s Neelgagan Suppliers Pvt. Ltd. has been held not valid as the further addition made in the re-assessment order tantamount to double addition and therefore has been directed to be deleted. 6.26 The Hon'ble Jurisdictional ITAT in the case of CIT Vs N. M. Agrofood Products Pvt. Ltd (ITAT Jaipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee itself. In the present case while existence of Sri Devendra Sankhla the creditor is not in doubt, and he has admitted to have advanced the loan to the assessee. The fact that the explanation furnished by Sri DevendraSankhla about his source of such advancement has not been accepted by the Revenue authority cannot lead to any presumption that the source of such advancement by Sri DevendraSankhla emanated from the assessee. Therefore, addition of Rs. 16,000 in the income of assessee as cash credit in the name of Sri DevendraSankhla cannot be sustained. Such addition of income of assessee has to be deleted from the income of assessee..." CIT vs. Kamlaben Suresh Chandra Bhatti [2014] 44 taxmann.com 459 (Gujarat): "...Head Notes - Section 68 of the Income-tax Act, 1961 - Cash credits (Bank deposits) - During assessment proceedings, Assessing Officer made addition to assessee's income in respect of amount deposited in bank account - In appellate proceedings, Commissioner (Appeals) noted that assessee had explained source of a part of amount deposited coming from bank loan and sale of agricultural land - He thus deleted substantial portion of addition made by Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee merely on suspicion. This ratio is laid down by the Hon'ble Jurisdictional High Court of Rajasthan in the case of Shubh Mines Private Limited (Income Tax Appeal No. 96/15), vide its order dated 03.05.2016, in which it was held that "In absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the ITAT, which remains a finding of fact, cannot be said to be capricious or perverse..." In the case of Ashwani Gupta [2010] 322 ITR 396 (Delhi), addition was made on the basis of the statement of a third party and seized documents. Neither the seized documents were provided to the assessee nor was any opportunity of cross-examination of the adverse party given. Hon'ble Delhi High Court, following its own judgment in the case of SMC Share Brokers Ltd. [2007] 288 ITR 345 (Delhi) deleted the addition on the premise that there was violation of the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of Hon'ble Gujarat High Court in case of Rohini Builders [2002] 256 ITR 360 (Gujarat), in which it was held was under:- "The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques." Hon'ble ITAT Ahmedabad in the case of RAS Concepts Pvt. Ltd. vs. Income Tax Officer [2022] 95 ITR 46 (Ahmedabad), held as under: - "9.4 In view of the above, we are of the opinion that, though the trans- actions of the loan received by the assessee are not free from any doubt but in either of the case, once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into in isolation after ignoring the debit entries. Thus in view of the above and after considering the facts in totality, we are not inclined to uphold the finding of the learned Commissioner of Income-tax (Appeals). Accordingly, we set aside the finding of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals of the revenue deserves to be dismissed. 41. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: ITA No. 901/JP/2024 Paper Book S. No. Particulars Page No. A. Written submissions dated 02.11.2023 filed before the Hon'ble CIT(A) A1-A96 1. Assessment order dated 29.12.2016 passed u/s 143(3) of the Act 01-16 2. Order dated 15/02/2019 passed by ld. CIT(A) Ajmer in appeal no. 601/2016- 17/JPR 17-27 3. Re-assessment Order dated 13.12.2019 Passed u/s. 147/148 of the I. T. Act, 1961 28-50 4. Reasons recorded for reopening the assessment u/s 147 of the Income Tax Act. 51-53 5. Objection against reason recorded filed by the assessee 54-58 6. Order disposing objections passed by the Assessing Officer dated 14.03.2019 59-61 7. Bank Statement of assessee company for the A. Y. 2014-15 & A.Y. 2015-16 62-91 8. Audited Statement of Accounts of the assessee for the year ended 31st March, 2014 92-104 9. Tax Audit Report for the year ended 31st March, 2014. 105-116 10. Documents of loan creditors Companies 1. M/s. Bhagwat Marcom Pvt. Ltd &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 261-268 * M/s. Coolhut Marketing Pvt. Ltd. 269-276 * M/s. Gabarial Tieup Pvt. Ltd. 277-284 * M/s. Neelgagan Suppliers Pvt. Ltd. 285-296 * M/s. Outlook Vintrade Pvt. Ltd. 297-308 * M/s. Subhrashi Enclave Pvt. Ltd. 309-316 * M/s. Viewmore Developers Pvt. Ltd 317-325 15. Master data of all aforesaid loan creditors downloaded from MCA website * M/s. Bhagwat Marcom Pvt. Ltd. 326-327 * M/s. Coolhut Marketing Pvt. Ltd. 328-329 * M/s. Gabarial Tieup Pvt. Ltd. 330-331 * M/s. Neelgagan Suppliers Pvt. Ltd. 332-333 * M/s. Outlook Vintrade Pvt. Ltd. 334-335 * M/s. Subhrashi Enclave Pvt. Ltd. 336-337 * M/s. Viewmore Developers Pvt. Ltd. 338-339 COMPILATION S.No Particulars Page No 1. Ambaji Avenues Pvt. Ltd v. ITO 2024 (11) TMI 814 dated 25.10.2024 (ITAT Mumbai) 1-6 2. Keshav Shroff v. ITO 2024 (7) TMI 1014 dated 28.06.2024 (ITAT Kolkata) 7-10 3. TO v. Aashna Developers Pvt. Ltd. 2024 (2) TMI 274 dated 10.01.2024 (ITAT Ahmedabad) 11-16 4. Narmada Concast Pvt. Ltd. v. DCIT 2024 (5) TMI 950 dated 03.01.2024 (ITAT Ahmedabad) 17-21 5. Bidit Financial Management Pvt. Ltd. v. DCIT 2019 (3) TMI 1701 dated 15.03.2019 (ITAT Kolkata) 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.2517/Ahd/2016 dated 28.01.2022 (ITAT Ahmedabad) 226-237 26. Balaji Solutions Ltd. v. ACIT ITA No. 572/KOL/2022 dated 20.02.2023 (ITAT Kolkata) 238-244 27. Rajhans Construction Pvt. Ltd. v. ACIT 2022 (3) TMI 672 dated 14.03.2022 (ITAT Surat) 245-252 28. ITO v. Amar Pratap Steels Pvt. Ltd. ITA No. 173/JPR/2024 dated 18.12.2024 (ITAT Jaipur) 253-305 42. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that it was the revenues case to establish that based on the documents placed on record the loan were not genuine. Merely someone made a general statement which in fact has been retracted cannot make loan transaction as non-genuine. Even the assessee has repaid those loan to those concerns then how the loan taken be considered as non-genuine. He also submitted that since the whole basis of making the addition was statement of Mr. Mukesh Banka which in fact has been retracted and those retracted statement cannot be made basis to make the addition. To support the contention ld. AR of the assessee relied upon the decision of Asna Developers and Rohini Builder cited by him in their case law compilation. 43. We have heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation entry in the form of bogus unsecured loan has been brought in by the appellant and that it had failed to disclose fully and truly all material facts necessary for assessment. On the other hands assesseeappellant submitted that the reassessment is not sustainable in view of the very basic fact that there was no reason for reopening and as it does not contain any material establishing live-link for the information & the conclusion to enable a reasonable person to form a prima-facie belief for escapement of income except a report of Investigation Wing. Ld. CIT(A) did not agree with the contention of the assessee challenging the re-opening of the case and thereby that ground of appeal was dismissed by him. But while dealing with the merits of the case ld. CIT(A) has allowed the appeal of the assessee which is challenged by the revenue. 46. So far as to the merits of the case the bench noted that revenue challenges directing the ld. AO to delete the addition of Rs. 1,75,00,364/- being the amount of unsecured loan accounted by the assessee in the name of the following parties ; Sr. No. Name of person from whom loan was received Amount Rs. 1 M/s Bhagwat Marcom Private Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he identity of those payees were not questioned. On this aspect of the matter the Hon'ble High Court of Gujrat in case of Commissioner of Income Tax, Rajkot-1 vs Ayachi Chandrashekhar Narsangji [2014] 42 Taxmann.com 251 (Gujarat) has held that where department had accepted repayment of Loan in the subsequent year, no addition was to be made in current year on account of cash credit. It is evident that each transactions were made through banking channels and the appellant has submitted audited Balance Sheets, profit and loss accounts, Acknowledgement of ITR, Bank Statement and furnishing of sources of the amount in the hands of loan creditor as well as loan Confirmation of all lender companies including Loan Confirmation for repayment of Loan. we also find from the Master data in record of MCA Website, the lender companies are active and it have been filed its Balance Sheet in MCA Website and complying with legal requirements under the companies Act. The appellant has also enclosed copy of Assessment orders of all loan creditors whereby the department has accepted the accounts of those companies and there also no adverse view of the loan given were taken by the revenue. Thus, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which could be required of the assessee to be established, as that would amount to calling upon him to establish source of the source. In that view of the matter, since this part of the judgment runs contrary to the judgment of the Hon'ble Supreme Court, in Daulat Ram's case (supra), while this Court in a subsequent judgment in Mangilal's case (supra) relying upon Daulat Ram's case (supra), has taken a contrary view, we stand better advised to follow the view, which has been taken in Mangilal's case (supra)." 49. Here it is also a matter of fact that the assessee - appellant has repaid back within a very short duration all the questioned loan. When loan stands repaid no addition under Section 68 can be made and is held by the judgment of Hon'ble Gujarat High Court in case of Rohini Builders [2002] 256 ITR 360 (Gujarat), wherein the court held that "The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques." 50. Importantly we note that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precedent is reproduced herein below: 11. Now it is a matter of record that Shirish Chandrakant Shah had retracted his statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'ble Supreme Court; one such decision was rendered in "M/s Pullangode Rubber Produce Co. Ltd. v. State of Kerala And Another" (1973) 19ITR18. 12. Therefore, we hold that no substantial question of law arises between the parties and while so, the present Income Tax Appeal is not maintainable. 13. For the foregoing reasons, D.B. Income Tax Appeal No.25/2024 is dismissed. 53. Based on the discussion so recorded herein above we do not find any infirmity in the order of the ld. CIT(A) while deleting the addition of unsecured loan which is under challenge by the revenue. With this discussion the appeal of revenue stands dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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