TMI Blog2019 (12) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies had been struck off from the register of companies. She also had information in her possession that the ITAT has held in case of one depositor company that it was engaged in providing accommodation entry only. Reading all the aforesaid information together, the Ld.CIT(A) held that the loans received by the assessee were not genuine. Undeniably, the aforesaid information was not confronted to the assessee. Even the Ld. DR has admitted to the said fact and we have not been able to find anything in the order of the CIT(A) showing that the said information was confronted to the assessee. Clearly, the impugned order has been passed in gross violation of the principles of natural justice, that none should be condemned unheard. Restore the matter back to the CIT(A) for adjudication afresh. The additional evidences filed by the assessee, being imperative to establish the claim of the assessee that the transaction was genuine , are directed to be admitted for adjudication. Appeal filed by the assessee is allowed for statistical purposes. The Ld.CIT(A) is further directed to obtain report from the AO on the evidences as per the provisions of Rule 46A of the Income Tax Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e its onus with regard to identity, genuineness and creditworthiness of loan depositors of loan amounting to ₹ 50,00,0007- , the Assessing officer made addition by invoking the provisions under 68 of the Act. The Action of the Assessing Officer in making the addition of ₹ 50,00,000/- to the returned income of the appellant by invoking the provisions under section 68 of the Act has been challenged by the appellant by way of filling the instant appeal. 3. Thereafter it was pointed out that the assessee carried the matter in appeal to the Ld.CIT(A), wherein submissions were filed in writing which are reproduced at paras 4 and 4.2 of the order of CIT(A). It was pointed out that the first submission was relating to the pleadings of the assessee vis -vis the incorrectness of the order passed on merits. In the second submission, it was pointed out, the assessee filed additional evidences of the loan creditors which he stated was unable to file during the assessment proceedings and had sought time to procure and file the same but had not been given time. The Ld.Counsel for the assessee pointed out that bank statements of the loan depositor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement's of unsecured loan depositors companies namely M/s Freak Buildcon private limited and M/s Strum infra development private limited. The appellant has stated that due to unavoidable reasons assessee could not file these details at the time of assessment proceedings and has agitated that the Assessing Officer did not provide ample opportunity to the appellant at the time of assessment proceedings. The assessee has further relied on certain judicial pronouncements in support of his contention that the assessee has discharged its onus and has proved the identity creditworthiness and genuineness of transaction by providing bank statements of these loan depositors company. A perusal of the application of the assessee shows, that the assessee has failed to state any reasonable cause for not submitting the above bank statements at the time of assessment proceedings as mentioned in above paragraphs that the first questionnaires are with regard to prove identity genuineness and creditworthiness of unsecured loans was sent to assessee on 20/04/2015. Hence it is not understandable as how the assessee was prevented to furnish this vital information before the Assessing Officer. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om two companies namely. M/s Freak Buildcon private limited and M/s Strum Infra Development Private Limited from Whom the assessee has taken ₹ 50,00,000/- ₹ 25,00,000 each from both of above mentioned companies. It is also undoubted that the assessee has knowingly dragged the assessment proceedings till the fag end of the assessment year and the month of March on 28/03/2016, the assessee finally stated that due to unavoidable circumstances the assessee could not furnish bank statement, and income tax return of depositors companies. During appellate proceedings the assessee has furnished bank statement of the companies mentioned (supra) support his contention in order to prove genuineness and creditworthiness of the aforesaid companies. While going through the bank statement of these companies regular transactions has been noticed by the undersigned that each entry of debit has been transfer entry in the bank account of depositing same amount in the bank account on the same date or one or two days prior M/s Freak Buildcon private limited has given ₹ 25,00,000/- to the assessee on 09/03/2013 , by cheque number 31165 whereas, on the same day there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ened on 30 Sep, 2014. The company last updated its fmancials on 31 Mar, v 2014 as per Ministry of Corporate Affairs (MCA). Strum Infra Development Private Limited is majorly in Real Estate and Renting business from last 8 years and currently, company operations are strike off. Current board members directors are NITIN KUMAR JAIN and VINOD KUMAR. Company is registered in Delhi (Delhi) Registrar Office. Strum Infra Development Private Limited registered address is C-17, GROUND FLOOR, GURU NANAK P URA, LAXMINAGAR DELHI East Delhi DL 110092 IN. Strum Infra Development Private Limited Details CIN U7010IDL2010PTC205141 Date of Incorporation 5th Jul, 2010 Status Strike Off Company Category company limited by Shares Company Sub-category Non-govt company Company Class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are being consolidated and disposed of by this common order. Similar grounds are taken in other six appeals, except the difference in figure. Therefore, for the sake of reference and facility, facts in case of M/s Zoom Heritage Properties Pvt. Ltd. vs. ACIT CC-28, New Delhi in ITA 2774/Del/2017 (AY 2013-14) are being discussed and the grounds of appeal raised in this Appeal are reproduced hereunder:- 1. That the assessment order passed u/s. 143(3) of the IT. Act, 1961 on 31.3.2016 as upheld by the Ld. CIT(A) are perverse to the law and to the facts of the case because of not following proper law and procedure while completing the assessment proceedings. \ 2. That the AO has grossly erred in law and to the facts of the case in making lump sum addition of ₹ 25,12,5'97V- being commission income in the hands of the appellant at the rate of 0.60% merely on the basis of his presumption and guess work, without the support of any material either collected or placed upon records, which the Id. CIT(A) has not appreciated while adjudicating the appeal. 3. The brief facts of the case are that the assessee filed its ereturn of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conduit company operated by Sh. Vivek Jain and is engaged in providing accommodation entries to various beneficiaries. In these circumstances, I am inclined to approve the finding ofLd. CIT(A) and AO to the effect that assessee company is an entry provider. However, the next question to be answered is regarding estimation of commission income taxable in the hands of assessee company which is engaged in the business of providing accommodation entry. The Assessing Officer and Ld. CIT(A) have applied 0.60% (60 paise to ₹ 1 per ₹ 100) on total credit entries appearing in the bank account whereas the Ld. AR is relying upon the assessment order for AY 2012-13 and affidavit of the Director wherein, it has been stated that appellant was charging 0.10% (10 paise to ₹ 1 per ₹ 100). However, on specific query from the Bench, neither of the sides could substantiate the basis for arriving at rate of 0.60% or 0.10%. I am also aware of the fact that in case of business of providing accommodation entry, there cannot be a single rate of commission and same vary from case to case and largely depends upon the quantum of entry. 7.Keeping in view of the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has taken accommodation entry from these two companies, hence the assessee has completely failed to discharge his onus to prove genuineness of the loan taken from these concerns. There are several decisions with regard to the appellant's duty to discharge its onus to prove the identity, genuineness and creditworthiness of unsecured loan depositors at the time of assessment proceedings. In my considered opinion the appellant has failed badly to prove all three limbs of section 68 that this identity genuineness and creditworthiness. I have also perused and considered, various case laws relied upon by the appellant. After careful consideration of the facts of the case and the various submission filed by the appellant and the case laws relied upon the appellant, I am not in agreement with the contention of appellant as it has failed to discharge its basic onus to prove the unsecured loans at the time of assessment proceedings. Merely furnishing of PAN and confirmation and producing financial statement is not enough. It is equally important to prove credit worthiness of these loan depositors. Various courts have also upheld this view of Id AO that there are thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of one of the depositor companies had been struck off from the register of companies. She also had information in her possession that the ITAT has held in case of one depositor company that it was engaged in providing accommodation entry only. Reading all the aforesaid information together, the Ld.CIT(A) held that the loans received by the assessee were not genuine. 7. Undeniably, the aforesaid information was not confronted to the assessee. Even the Ld. DR has admitted to the said fact and we have not been able to find anything in the order of the CIT(A) showing that the said information was confronted to the assessee. Clearly, the impugned order has been passed in gross violation of the principles of natural justice, that none should be condemned unheard. The Hon ble Delhi High Court ,while elucidating on the said principle, in a full bench ruling in the case of J.T.(India) Exports vs Union of India(2003) 262 ITR 269(Delhi), noted that notice is the first limb of this principle. That a party should be apprised of the case to be met with and adequate opportunity be given to make its representation. That it is an approved ..... X X X X Extracts X X X X X X X X Extracts X X X X
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