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2021 (10) TMI 1151 - AT - Income TaxReopening of assessment u/s 147 - Bogus loan transactions - assessee failed to establish the identity and genuineness of the entities - assessee failed to reply to the show cause notices - summon u/s 131 issued to the principal officers of both these entities were not accepted which were confronted to the director o the assessee - HELD THAT:- AO was clinched with specific information which indicated possible escapement of income in the hands of the assessee. The assessment u/s 143(3) was completed on 22/03/2013 whereas tangible information was received by Ld. AO vide letter dated 29/03/2017 wherein it transpired that the loans taken by the assessee during the year were from those entities which were involved in penny stock manipulation and provided exit to beneficiaries of Long Term Capital Gains. These two entities were allegedly dummy paper entities with no real business and involved in sham transactions. These facts, in our opinion, were quite sufficient to reopen the case of the assessee The arguments made by Ld. AR do not convince us. At the time of reopening, the only requirement is that Ld.AO should have specific tangible information which indicate possible escapement of income in the hands of the assessee. Nothing more is required at this stage to reopen the case of the assessee. The information so received, in our considered opinion, was sufficient tangible material. Therefore, legal grounds raised by Ld. AR stand rejected. Upon perusal of rectification order u/s 154, it could be gathered that the director of M/s Gateway Leasing Private Limited appeared before Ld. AO and his statement was recorded on oath u/s 131. In the recorded statement, the fact of advancing loan to the assessee as well as repayment was duly accepted. Upon perusal of paper-book as placed before us, it could be gathered that the assessee has duly filed ledger account of the party along with name, address, PAN of the lender, details of brokers who arranged loan, securities offered, term sheet / sanction letter, Board Resolution, Inter-corporate deposit receipt, pledge agreement and various other similar documents in support of the genuineness of the loan transaction. The loan was fully paid on 21/05/2010 along with interest. The transactions were confirmed by M/s Gateway Leasing Private Limited in response to notice u/s 133(6). Thus, the assessee had duly discharged the onus of proving the identity of the lender, their creditworthiness and the genuineness of the loan transaction. This being so, the impugned additions are not sustainable in law. Estimation of income - bogus purchases - CIT-A estimated profit element @12.5% - HELD THAT:- As it could be gathered that the purchases were supported by primary purchase documents and the payments to the suppliers was through banking channels. The whole of purchases have been disallowed while accepting the sales which could not be held to be justified. Therefore, the estimation made by Ld. CIT(A), for all the three years, is quite fair and reasonable. Finding no reason to deviate from the same, we dismiss the appeals for all the three years.
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