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06-09-2019, Eastern Trade Centre, Section 68, 131, Tribunal Kolkata

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4 months 2 weeks ago #10761 by amit
Section - 68, 131
Order Date - 06-09-2019
Favouring - Assessee
Court - Tribunal Kolkata
Appellant - Eastern Trade Centre
Respondent - ACIT
Justice - A. T. VARKEY, JM & DR. A.L.SAINI, AM
Citation - 919Taxpundit82
Appeal No. - ITA No.2427/Kol /2017
Asstt. Year - 2014-15


PER : Dr. A. L. Saini

The captioned appeal filed by the assessee, pertaining to assessment year 2014-15, is directed against an order passed by the learned Commissioner of Income Tax (Appeals)-10, Kolkata (in short the ld. ‘CIT(A)’], which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’) dated 22/12/2016.

2. However, in this appeal, the assessee has raised multiple grounds of appeal, but at the time of hearing, the main grievance of the assessee has been confined to the issue of addition to the tune of Rs. 88,59,987/-, ( Rs.50,00,000 +Rs.38,59,987) which included the loan taken amounting to Rs.50,00,000/- from the following loan creditors, namely:(i).Paritosh Electricals Pvt Ltd.Rs. 10,00,000/-, (ii). Ranbhumi Marketing Pvt Ltd,Rs.20,00,000/- and (iii). Vivek Tracom Pvt Ltd, Rs.20,00,000/- and interest paid on loan amounting to Rs. 38,59,987/- during the A.Y.2014-15. Since both the issues are interlinked therefore, we adjudicate them together.

3. Brief facts qua the issue are that the assessee is a partnership firm engaged in the business of wholesale dealing in electrical goods. The assessee had e-filed its return of income on 27.09.2014 declaring a total income of Rs. 42,95,100/-. Thereafter, the assessee’s case was selected for scrutiny through CASS and notices u/s 143(2) and 142(1) of the Act were issued. During the course of assessment proceedings, for verification of the loans taken by the assessee, summons u/s 131 of the Act, 1961 dated 07.11.2016 were issued to the following parties: The Ld AO then informed the assessee that information was received from DDlT (Inv), Unit -3( I), Investigation Wing, Kolkata which revealed that the companies mentioned at Serial Nos.1 to 7 of the table given above were run by an alleged entry operator Shri Rajkumar Kothari and those companies were allegedly involved in providing accommodation entries in the form of unsecured loan/share capital to various parties. The statement of Shri Rajkumar Kothari was recorded on 02.03.2016 wherein he had mentioned that he was the director of several companies and used to give accommodation entries to different beneficiaries through jamakharchi / shell companies in lieu of commission. A copy of Statement of Shri Rajkumar Kothari given under oath was provided to the assessee (a copy is being enclosed at pages 1 to 8 of the p/b). It was further mentioned that companies named in Serial no. 8 to 10 and 12 of the table were run by another entry operator named Shri Bhagwan Das Agarwal. On 14.11.2016 summons were issued to the Directors of the Companies mentioned in the above table for verification. Shri Rajkumar Kothari and Biswanath Basak, the directors of these companies appeared before the Assessing Officer, and retracted of the statement given by them.

4. As regards the alleged statement of the said Shri Rajkumar Kothari it was submitted that the said Shri Rajkumar Kothari had filed an affidavit before the 1st class Magistrate retracting of the statement given by him on 02.03.2016 before the DDIT(Inv), Unit - 3(1), Kolkata (a copy is enclosed at pages 9 to 12 of the p/b) and had also informed the Department about the same. In his retraction he stated that two officers of the Income Tax Department had entered his office along with two police personnel on 02.03.2016 and caused him to appear before the DDIT (2)(2) after threatening him with dire consequences of survey being conducted at his office if he does not appear. When he appeared before the DDlT, he was told that his statements would be recorded. In the retraction he submitted that few questions which he replied to were not recorded in the statement as per his version and he was pressurized and forced to admit that he was involved in providing accommodation entries to Banktesh Group in spite of the fact that he specifically opposed the same. He also submitted that the persons sitting around him at the time of recording the statement continuously created pressure on him by passing various comments that search would be conducted against him, his professional career would be ruined, his family would be brought on the road. After all this he was forced to sign the statement without even reading the contents. He stated that he was also forced to write certain sentences in his own handwriting as dictated by the officer and he was also threatened with the fact that he would have to face dire consequences if he retracted his statements. Therefore he submitted that in this situation being mentally upset and confused about what to do he had filed the retraction of his statement after 10 days. Thereafter, it was brought to our notice that in compliance to the summons issued by Assessing Officer u/s 131 of the Act, 1961, Shri Rajkumar Kothari appeared before him on 25.11.2016 and explained that the source of loans given to the asessee were mainly refunds of loan from different persons to whom loans were given earlier. However, it was brought to our notice that a copy of the said statement recorded on 25.11.2016 was not

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