TMI Blog2019 (5) TMI 1693X X X X Extracts X X X X X X X X Extracts X X X X ..... hifted to the department to disprove the stand of the assessee, which department has failed to do so in the present case. AO has merely proceeded and relied on the information received from the DGIT(Inv), Mumbai that the assessee is one of the beneficiary of the accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings - Decided in favour of assessee - ITA No. 193/Mum/2018 And ITA No. 232/Mum/2018 - - - Dated:- 15-5-2019 - SRI MAHAVIR SINGH, JM AND SRI NK PRADHAN, AM For The Appellant : Shri RA Dhyani, DR For The Respondent : Shri Bhupendra Shah, AR ORDER PER MAHAVIR SINGH, JM: These two appeals filed by Revenue are arising out of the orders of Commissioner of Income Tax (Appeals)-36, Mumbai [in short CIT(A)], in appeal No. CIT(A)-36/IT-280 222/24(1)/2016-17 vide dated 27.09.2017. The Assessments were framed by the Asst. Commissioner of Income Tax, Circle-24(1), Mumbai (in short ACIT/ITO/ AO) for the A.Ys. 2010-11 2012-13 vide dated 21.03.2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -11. The AO has noted that the information was received from the office of Director General of Income Tax (Investigation), Mumbai, whereby it was informed that a search under section 132 of the Act was carried out in the case of Shri Praveen Jain group of cases, wherein it is revealed that the assessee has taken these accommodation entries from the bogus companies. All these companies, as per DGIT, Mumbai are controlled by Shri Praveen Kumar Jain. The assessee has obtained the accommodation entries from the following parties and the details are mentioned below (including interest). FY 2009-10 relevant to AY 2010-11 Sl No. Name of the party Amount 1 Tanika Commodities P. Ltd. 10,03,205 2. Ansh Merchandise P Ltd 40,58,192 3. Duke Business P. Ltd. 30,57,699 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PAN Date of filing the affidavit Relation with Praveen Kumar Jain 1. Praveen Kumar Jain AADPJ5102D 15/05.2014 Self 2. Nilesh Parmar AIXPP8680Q 15/05/2014 Accountant 3. Manish Jai AGTPJ806F 15/05/2014 Cousin and accountant 4. Dinesh Chaudhary KFPC3048P 15/05/2014 Associate Broker 5. Ramesh Soni AAKPS3473K 15/05/2014 Neighbour and associate Broker 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and normal course of human conduct. The Hon'ble ITAT, Mumbai Bench, Mumbai in the case of ITO v. Anant Shelters Pvt. Ltd 51 SOT 234 (Mum) has enumerated certain legal principles regarding cash credits u/s 68 as under: 1. Section 68 can be invoked when there is a credit of sum of money in the books maintained by the assessee during the previous year and either the assesse offers no explanation about the nature and source of such credits or the explanation furnished by the assesse in the opinion of the AO is not satisfactory. The opinion of the AO for no accepting the explanation offered by the assessee as not satisfactory is required to be formed objectively with reference to the material on record. III. Courts are of the firm view that that the evidence produced by assessee cannot be brushed aside in a casual manner IV. The onus of proof is not static. The initial burden lies on the assesse to establish the identity and the creditworthiness of the creditor as well as the genuineness of transaction. V. The identity of creditors can be established by either furnishing their PANs or assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h could not be disproved by the AO. The Appellant brought to my notice that on this issue of bogus loans (from concerns of Shri Bhanwarlal Jam, facts are similar to shri Praveen kumar jam's case) decision of Reliance Corporation v. ACIT (ITAT, Mumbai) ITA No.1069 to 1071/Mum12017 it support the case of appellant wherein it is held that: 8. We have heard the rival contentions perused the material placed before us including the orders of authorities below and orders retied upon by the parties. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid three parties i.e. MIs Laxmi Trading Company, MIs Rose Impex and Megha Gems from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to ₹ 1,29.04,2311-. The case of the assessee was re-opened upon receiving the information from DGIT(lnv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Mr. Bhanwarlal Jain and group. We find from the record that the assessee filed during the course of assessment proceedings all the details like loan confirmation letters from the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been filed before the AO, the lender has confirmed the loan transaction and submitted complete particulars like copy of the bank account, bank statement and confirmation. Nothing contrary has been brought on record by the Assessing Officer. Hence, the grounds No. 4 challenging the addition u/s 68 of the act found to be with merits hence, the same is allowed. Aggrieved, now Revenue came in appeal before us in both the years. 7. We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the learned Counsel for the assessee filed paper book consisting of pages 1 to 242 and particularly the details filed in respect of four parties from whom accommodation entries of 90 lacs was taken in respect to AY 2010-11 are as under: - Loan confirmation of Tanika commodities Pvt. Ltd, along with their financials Proof of return filed ITR (V) their bank statement showing receipt and re-payment of loan Loan confirmation of Ansh Merchandise Pvt. Ltd, along with their financials Proof of return filed ITR (V) their bank statement showing receipt and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries of bogus loan The AO received an information that the assessee has also taken loan from concerns found in the list of entry providers related with Praveen Kumar Jain group of cases. The AO asked the Assessee to show cause as to why loan taken from Tanika Commodities P. Ltd, Ansh Merchandise P. Ltd., Duke Business P. Ltd and Olive Overseas Pvt. Ltd. should not be added to the total income as unexplained and bogus entries. The AO added the amount of fresh loans and interests on existing doubtful loans paid during the AY 2010-11 to the total income of the assessee. In this way, addition of ₹ 91,33,644/- was made to the total income of the assessee. Before us, the learned Counsel for the assessee argued that in order to make addition under section 68 of the Act when the following three things are not established. (i) identity of the creditors (ii) genuineness of the transactions and (iii) creditworthiness of the creditors. He explained that the onus is cast upon the assessee to explain the sources from which he has received the cash credit and the creditworthiness of the creditors is to be gauged vis a-vis the transactions which occurred between the assessee and the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entries during the search and seizure action his group and the assessee was found to be the one of the beneficiaries of the said accommodation entries. The learned DR submitted that in the present case though the assessee has filed all the necessary information but since the assessee borrowing monies from the tainted parties who were provided accommodation entries, it is beyond doubt that money borrowed by the assessee was nothing but accommodation entries. Lastly, the learned DR prayed that in view of the facts and the order of the AO should be upheld by allowing the appeals of Revenue. 11. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid four parties i.e. Tanika Commodities P. Ltd, Ansh Merchandise P. Ltd., Duke Business P. Ltd and Olive overseas Pvt. Ltd. from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to ₹ 91,33,644/-. The case of the assessee was re-opened upon receiving the information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Praveen Kumar Jain and group. We find from ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
