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06-06-2019, Pratima Ashar, Section 68, 147, 132(4), Tribunal Mumbai

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3 months 1 week ago #9700 by amit
Section - 68, 147, 132(4), 131
Order Date - 06-06-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - ITO
Respondent - Pratima Ashar
Justice - Ramit Kochar AM & N.K.Pradhan JM
Citation - 619Taxpundit116
Appeal No. - ITA No.105/Mum/2018
Asstt. Year - 2010-11



The present appeal filed by the revenue is directed against the order passed by the CIT(A)-32, Mumbai, dated 29.09.2017, which in turn arises from the order passed by the A.O under Sec.143(3) r.w.s. 147 of the Income Tax Act, 1961 (for short „I-T Act‟), dated 14.03.2016 for A.Y. 2010-11. The revenue assailing the order of the CIT(A) has raised before us the following grounds of appeal:

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting relief of Rs. 32,44,500/- of the alleged unsecured loan transaction from hawala parties. The information was received from the DIT lnvestigation), Mumbai the one Shri Praveen Kumar Jain involved in providing accommodation entries of bogus unsecured loans to various parties through the companies managed and controlled by him.

2. On the f acts and in the circumstances in l a w, the Ld. C IT (A) f ailed to appreciate the fact that the onus is on the assessee to explain and substantiate the genuineness and true nature of the unsecured loan transaction .

3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has failed to appreciate the fact that the Shri Praveen Kumar Jain has admitted on oath before the DDIT (lnv.)-II, Mumbai that they have not carrying out any genuine business activity and indulge only in providing accommodation entries.

4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in concluding that treated the loans receipt as genuine since they are receive by cheque. Further, though the assessee had established identity of creditors by filling their affidavit, but in those affidavits they had not mentioned any specific source of money which was advance by them, it was to be held that assessee had failed to prove capacity of its creditors to advance money and genuineness of transaction. If such evidence of genuineness of transaction was given the same should have been remanded to the AO for his examination and comments.

5. The appellant prays that the order for the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored.

6. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”

2. Briefly stated, the assessee had filed his return of income for A.Y. 2010-11 on 09.10.2010, declaring total income at Rs.19,52,246/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the I-T Act. Information was received by the A.O from the office of the DDIT (Inv.)-II Mumbai, that the search proceedings conducted under Sec 132 of the I-T Act in the case of Shri Praveen Kumar Jain had revealed that he was engaged in providing accommodation entries through companies managed and controlled by him. As per the information, the A.O was intimated that the assessee had also taken accommodation entries from certain bogus companies which were controlled by Shri. Parveen Kumar Jain viz. (i) M/s Raghunandan Rayons Ltd; (ii) M/s Olive Overseas Pvt. Ltd; (iii) M/s Ryan International ; (iv) M/s Casper Enterprises Pvt. Ltd.; (v) M/s Tanika Commodities Pvt. Ltd.; and (vi) M/s Seven Star Gems. On the basis of the aforesaid information the case of the assessee was reopened u/s 147 of the I-T Act.

3. During the course of the assessment proceedings, it was observed by the A.O, that the assessee company had claimed to have raised loans aggregating to Rs.1,05,00,000/- from the aforementioned companies which were alleged to be involved in providing accommodation entries, as under :

On the basis of the aforesaid details the A.O called upon the assessee to explain as to why the aforesaid loan ransactions, which as per the information received were in the nature of accommodation entries, many not be added to his total income. In reply, the assessee objected to the said proposed action of the A.O on multiple grounds viz. (i) that, in the absence of any specific mention by Mr. Pravin Kumar Jain in his statement recorded uring the course of the search proceedings that he had provided any accommodation entry to the assessee, no adverse inferences were liable to be drawn; (ii) that, even otherwise Mr. Praveen Kumar Jain had retracted from his statement that was recorded during the course of the search proceedings; (iii) that, the confirmations of the lender companies along with their financial statements substantiating the genuineness of the loan transactions were placed on record in order to substantiate the veracity of the loan transactions; (iv) that, the copy of the bank statement evidencing the raising of the loans and the repayment of the same duly substantiated the genuineness of the loan transactions; (v) that, it was neither the case of the department nor a fact borne from the records that unaccounted cash in any manner was paid by the assessee to

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