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08-02-2019, Jainam Investments, Section 68, 69C, 132(4), Tribunal Mumbai

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2 months 1 week ago #8622 by amit
Section - 68, 69C, 132(4), 131
Order Date - 08-02-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - DCIT
Respondent - Jainam Investments
Justice - B. R. BASKARAN, AM & B. R. BASKARAN, AM
Citation - 219Taxpundit112
Appeal No. - I.T.A. No. 618/Mum/2018
Asstt. Year - 2014-15

Order

PER : Sandeep Gosain

The present Appeal filed by the revenue is against the order of Ld. CIT (Appeal) – 47, Mumbai dated 06.11.17 for AY 2014-15 on the grounds mentioned herein below:-

1. "Whether on the facts and circumstances of the case and in law, the Ld. C1T(A) was justified in deleting the addition of Rs. 8.75 Crore made under section 68 of the Income Tax Act on account of unproved loans shown by the assessee in the light of the lender's admission made u/s. 132(4) that the
lending entity was only involved in providing accommodation entries."

2. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs.19,05,042/- claimed as interest payment on these loans when the loans itself are unproved "

3. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs.7,15,000/- made under section 69C of the Income Tax Act towards the commission payment for obtaining the loan entries at the rate of 0.2% of such amount, which being the prevalent business practice."

4. The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the AO be restored.

5. The appellant craves leave to amend or alter any ground or to submit additional new ground which may be necessary.

2. The brief facts of the case are that the assessee is a firm engaged in the business of share trading. For the assessment year under consideration, the assessee had e-filed Return of Income on 27.09.2014 declaring Rs. Nil Taxable income. The case was selected under CASS for scrutiny. Dur ng the year in due course of business assessee had received unsecured loans from different parties, which included parties belonging to Bhanwarlal Jain Group. It was reported by DDI(Inv.), Mumbai that a Search action was carried out on the Bhanwarlal Jam Group on 3-10- 2013, and it was admitted by Shri Bhanwarlal Jain that all the loans given by his group are accommodation entries. A survey action was also carried out on the assessee on 16-10-2014 to 18- 10-2014 and the statement of Shri Hemal Jhaveri was recorded on oath. The AO had completed the assessment by making an addition of Rs. 8.75 crores u/s. 68 of the Act treating the loans received by the Assessee, as bogus and he has further made additions of interest paid on such loan and estimated commission payment on such loans, thereby assessing the total income of the appellant at Rs. 9,01,20,042/-.

Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, partly allowed the appeal of the assessee. Now before us, the revenue has preferred the present appeal by raising the above grounds.

Ground No. 1 to 3.

3. These grounds raised by he revenue are inter connected and inter related and relates to challenging the order of Ld. CIT(A) in deleting the additions made by AO u/s 68, 69C, etc of the I.T. Act as well as deleting the additions claimed by the assessee as interest payments on the loans, therefore we thought it fit to dispose of the same by this common order.

4. At the very outset, Ld. AR appearing on behalf of the assessee submitted before us that these grounds are covered by the order of Hon’ble ITAT in ITA No. 6099/Mum/16 for AY 2012-13 & ITA No. 5637/Mum/2017 for AY 2013-14 in

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