TMI Blog2022 (5) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee. - ITA NO. 6744/MUM/2018 ITA.NOs. 7274 & 7300/Mum/2019 - - - Dated:- 22-4-2022 - SHRI AMARJIT SINGH , HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , HON'BLE ACCOUNTANT MEMBER Assessee by : Shri A. K. Tibrewal Department by : Shri R. A. Dhyani ORDER PER S. RIFAUR RAHMAN ( AM ) 1. These appeals are filed by the revenue against order of the Learned Commissioner of Income Tax (Appeals)-8, Mumbai [hereinafter in short Ld.CIT(A) ] dated 24.09.2018 for the A.Y. 2007-08 and ITA.Nos. 7274 and 7300/Mum/2019 are filed against different orders Learned Commissioner of Income-tax (Appeals) 9, Mumbai dated 16.09.2019 for the A.Y. 2008-09 and 2009-10. 2. Since the issues raised in all the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. We are taking ITA.No. 6744/MUM/2018 for Assessment Year 2007-08 as a lead case. 3. Revenue has raised following grounds in its appeal: - A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Sh. Harsh Dalmia (Director of the assessee company) in ITA No.7459/Mum/2016 dated 17.10.2017 and decision of CIT(A)-20, Kolkata in the case of M/s Basant Marketing Pvt Ltd dated 30.01.2015 gave relief to the assessee by deleting the addition made by the Assessing Officer holding as genuine loan transaction. 6. Aggrieved revenue is in appeal before us. 7. At the time of hearing, Ld.DR filed written submissions which is reproduced below:- 2. All the above three appeals by the Department came up for hearing before the Hon'ble Bench today (i.e. 17/3/2022). During the course of hearing the cases were heard and the Hon'ble Bench desires to have written submissions from the DR. 3. In this connection, it is stated that these cases were re-opened u/s. 147 of the Act on the specific information CBI-ACB office, Mumbai. The CBI conducted investigation in the case of Shri Arun Dalmia and Shri Harsh Dalmia and their dummy concerns. The CBI Anti-Corruption Branch, Mumbai, vide letter dated 21/12/2010, addressed to the DGIT(Inv.), Scindia House, Ballard Pier, Mumbai, sent a detailed report in RC No. 06/2010-Mum, regarding Accommodation Bills/Accommodation ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The CBI, ACB, searched the business premises of Sri Arun Kumar Dalmia and his son Sri Harsh Dalmia on 24.02.2010. The search action was not related to income tax matters but was conducted in a different context. The CBI had taken away all the documents, books of accounts, supporting documents for the transactions entered into with various companies, bank statements, computers etc. from the business premises of Sri Arun Kumar Dalmia and Sri Harsh Dalmia. 2.1 Thereafter, the Joint director of CBI sent a note to the income tax investigation Wing vide letter dated 05.03.2010 advising it to investigate Shri Arun Kumar Dalmia and Sri Harsh Dalmia and their group companies for possible evasion of tax. The CBI thereafter hired the services of a chartered accountant to analyse the books of accounts, supporting documents for the transactions entered into by various companies, bank statements, etc not related to income tax matter but in connection with the investigation conducted by them in another matter. The chartered accountant in his report allegedly stated that All these transactions appear to be false sale and purchase transactions. 2.2 It is worth to mention that neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XXVIII, Kolkata forwarded information to the respective AO of the companies with whom the said M/s BMPL was having Loan transactions to take appropriate action in accordance with law. On receipt of the said information, the respective AOs reopened the assessments by issue of Notice u/s 148 of the Act to all the assessees having transactions with BMPL, including the assessee company being Indian Galvanics Cyrium Foils Ltd. In pursuance to such information the AO assessing the respondent assessee company herein issued Notices u/s 148 of the Act for the Assessment Years 2007-08 to 2009-10. The AO of the Respondent Assessee herein was swayed by the information received by him from Investigation Wing and the report of the CBI, ACB, concluded that the aforesaid amounts referred to in Para 1 herein above, were not genuine being in the nature of accommodation entry, although he was satisfied about the identity of M/s BMPL. Please refer to Para 9 and 10 of the impugned assessment order for the AY 2007-08. The AO therefore arrived at the belief that by acceptance of the said credit amounts, the income to that extent had escaped assessment. Consequently, in the assessment proceedings, on that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odation entry. 3.2 Further, the Ld. CIT(A), Mumbai, while deleting the addition made u/s 68 of the Act, in the last para of Page 14 of his order, also referred to and relied on the Appellate Order in the case of Loan Creditor M/s BMPL in Appeal No. 22/CIT (A)20/CC-2(2)/2009-10 dated 30th January 2015 wherein the Ld.CIT(A)-20, Kolkata, in that case, reversed the decision of the AO and accepted both the existence and activities of BMPL. The copy of the said Appellate Order is enclosed in the paper book for Assessment Year 2007-08 at page nos.33 to 58. 3.2.1 The Ld. CIT (A) also took note of the fact that the decision of the CIT (A) in the case of M/s BMPL was accepted by the department both on merits as well as low tax implications and therefore the observations made by the AO of BMPL no longer remained relevant. The copy of the departmental communication stating that no further appeal has been undertaken by the revenue in the case of BMPL is enclosed at Page No.59 of the Paper Book of AY 2007-08. 3.3 The Ld. CIT(A) also relied on the order of the Ld. CIT(A) in the case of Sri Harsh Dalmia, who is one of the persons mentioned in the CBI report as well as one of the Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Venktesh Securities Ltd (ITA 1498 to 1501/Mum/2017) wherein similar addition was made relating to transaction with BMPL and in that case also revenue filed the appeal, the bench decided the issue as under: - 6. On appraisal of the above mentioned finding, we noticed that the AO has raised the addition in sum of Rs.1,70,37,750/- on account of non-genuine company of M/s. Basant Marketing Pvt. Ltd. The Commissioner appeals has already held in case of group company concerned M/s. Watermark Systems (India) Pvt. Ltd. for the A.Y. 2008-09 in Appeal No. CIT(A)-8/IT-407/14-15 as genuine company. The finding has been extracted by the CIT(A) in his order which has been mentioned above. The company has also been held as genuine company by the CIT(A)-20 Kolkata in his order of the A.Y. 2010-11 in case of M/s. Basant marketing Pvt. Ltd. The identity is not in dispute and in its books of account sufficient fund has been reflected. The bank statement also established its credit worthiness. The CIT(A) has relied upon number of cases mentioned in his order and arrived at this conclusion that the assessee has proved the identity, genuineness and credit worthiness of transaction, therefore, ..... 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