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The Commissioner of Income Tax-15 Versus Haresh D. Mehta

2017 (9) TMI 739 - BOMBAY HIGH COURT

Unexplained unsecured loans - addition u/s 68 - ITAT deleted addition - Held that:- Tribunal, in concurring with the First Appellate Authority, found that the Assessing Officer had made addition under Section 68 without any reasonable basis. FAA has analyzed the transaction with each and every creditor and assigned reasons as to why the loans have to be treated as genuine. The assessee has produced details like copy of PAN card, copy of return of income, balance sheet with all the annexures and .....

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Assessing Officer, but had also admitted of giving loan. There was nothing suspicious or doubtful in the version of these persons. That is why the order of the First Appellate Authority was upheld. It did not suffer from any legal infirmity. Tribunal did not agree with the Assessing Officer but with the First Appellate Authority because there was overwhelming documentary evidence on record to support the conclusion of the First Appellate Authority. - Decided against revenue - Addition toward .....

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ccount payee cheques. If there was further doubt about the transactions, the Assessing Officer was free to make inquiries with the Regional Transport Office. Tribunal agreed with the First Appellate Authority in holding that mere nonattendance or mere non service without anything more could not be reason enough to sustain the addition. It is in these circumstances, that the First Appellate Authority has rightly stepped in according to the Tribunal. No substantial question of law. - Decided again .....

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late Authority [Commissioner of Income Tax(A)26Mumbai]. The Tribunal, in dismissing the Appeal, according to Mr. Malhotra, by it's order dated 7th May, 2014, has not appreciated the factual materials in their proper perspective and consistent with the provisions of law. 3. The two questions proposed, according to Mr. Malhotra, are substantial questions of law. On the first question, he would submit that the assessee disclosed that he is a civil contractor. He is in the business of lifting an .....

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Assessing Officer towards transportation charges. The Assessing Officer found that the assessee paid ₹ 2.82 crores towards such charges. He issued notices under Section 133(6) of the Income Tax Act to 12 parties for further verification about the genuineness of the payment. The notices issued by the Assessing Officer were received back unserved. The parties were not available on the addresses given by the assessee. The Assessing Officer, therefore, proceeded on the basis that there is no .....

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al Corporation of Greater Mumbai. The 12 parties, whose details were set out in the proceedings before the First Appellate Authority, together with other material, therefore, enabled him to conclude that the transportation expenditure had to be allowed. 6. Mr. Malhotra would submit that the Tribunal has rendered a cryptic finding and without application of mind to the fact that the vehicles and the parties who have been engaged on such contract basis have no nexus, nor it could be established. I .....

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was shown but it was brought on record by the Revenue that there was no income which could be said to be generated by the six creditors. The Tribunal erroneously and wrongfully relied on some income and from diamond trading. The First Appellate Authority had, in reversing the order of the Assessing Officer, relied on some figures which have been provided. The addition was made to the extent of ₹ 54,00,000/as unexplained cash credit. The capacity or genuineness of the parties to undertake s .....

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a loan. 8. For all these reasons, Mr. Malhotra would submit that the Appeal raises substantial questions of law. 9. On the other hand, Mr. Jasani appearing on behalf of the assessee supports the findings in the impugned order. He would submit that the concurrent finding of fact is based on the record and there is no perversity established and proved. Similarly, the order of the Tribunal is not vitiated by any error of law apparent on the face of record. Therefore, the Appeal be dismissed. 10. W .....

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ng Officer, except three, there is no justification or explanation for the six remaining persons/creditors. The Assessing Officer held that the assessee has not proved the capacity or genuineness of the parties to undertake such huge loan transactions and due to various discrepancies in the papers produced before him, he has reached the above conclusion. He has reached the conclusion that the parties are not capable of giving such loans. 12. What we find is that such order of the Assessing Offic .....

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ng. The Assessing Officer has simply presumed that the genuineness of the transaction has not been proved. The First Appellate Authority took up for consideration the issue and party-wise. In the first instance, he took up the case of M/s. Mukti Exports. It found that the Assessing Officer's finding is not correct because the loan amount is generated from the business activities and duly reflected in the accounts. Therefore, it was for the Assessing officer to establish beyond doubt that M/s .....

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ity of the party. The party is identified and together with that, there is proof of its financial capacity. 14. Similarly, the First Appellate Authority found that there are sufficient materials even in cases of loans appearing in the name of Samir Jayantilal Shah, Shantiben S. Shah and Charmi A. Mehta. Like Mukti Exports, even these parties are assessed to Income Tax. Their documents together with that of one Vijay D. Shah have been referred in paragraph nos. 17.2, 17.3 and 17.4 of the C.I.T.&# .....

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First Appellate Authority has analyzed the transaction with each and every creditor and assigned reasons as to why the loans have to be treated as genuine. The assessee has produced details like copy of PAN card, copy of return of income, balance sheet with all the annexures and copy of bank accounts before the Assessing Officer. If there was any doubt, the Assessing Officer should have made further investigation. Once the initial burden was discharged, the Assessing officer had then to find ou .....

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ity was upheld. It did not suffer from any legal infirmity. 16. We also agree with the Tribunal, and particularly when it proceeded to analyze the transactions and the issue in an overall manner. It did not agree with the Assessing Officer but with the First Appellate Authority because there was overwhelming documentary evidence on record to support the conclusion of the First Appellate Authority. 17. Hence, the second question proposed by the Revenue cannot be termed as a substantial question o .....

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e First Appellate Authority, therefore, should not have reversed the conclusion of the Assessing Officer, particularly when it did not take note of the fact that the assessee did not produce even the basic information such as vehicle numbers, name of drivers and the route over which these vehicles were utilized. 19. The First Appellate Authority, as also the Tribunal, found that there are decisive factors. The actual performance of transportation work, lifting of waste, proper TDS payment throug .....

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urce, but the addition was made only because there was no service of the notices on the parties or though the parties were attempted to be served, the notices were not accepted. Merely because the parties were not physically present before the Assessing Officer, such an addition could not have been made is the concurrent conclusion. 21. The First Appellate Authority approached the matter from the angle that it was the responsibility of the Assessing Officer to investigate from the bank accounts, .....

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