TMI Blog2022 (6) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee Shri Nilesh Bharani denied of giving any cash loan to the assessee or his concerns. When the issue-in-dispute is in respect of the receipt of loan and source of which is already available on record, it is not understandable how the same become undisclosed income in the hands of the assessee, as source of the same, is already within the knowledge of the Income Tax Department. Addition u/s 69A - AO has on the one hand added cash loan alleged to receipt by the assessee as unexplained cash credit of the assessee as its income and on the other hand, also levied penalty u/s 271D of the Act in contravention of provision of section 269SS of the Act i.e. receipt of the loan otherwise then by account payee cheque. CIT(A) has deleted the penalty. In view of the fact that the addition u/s 69A for receipt of cash loan itself was deleted and therefore said penalty u/s 271D for receiving cash loan in violation of provision of section 269SS cannot be survive. - ITA No. 1277/MUM/2021 And ITA No. 1277/MUM/2021 And C.O. No. 12/MUM/2022 (ITA No. 1278/MUM/2021) - - - Dated:- 7-6-2022 - Shri Sanjay Garg (Judicial Member) And Shri Om Prakash Kant (Accountant Member) For the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, after making addition of Rs.3.92 crores as unexplained loan in terms of section 69A of the Act. On further appeal, the Ld. CIT(A) deleted the additions. 3. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above. 4. We have heard rival submissions of the parties on the issue-in-dispute and perused the relevant material on record. As far as facts mentioned by the Ld. CIT(A) in the impugned order, have not been disputed by the Ld. DR. The Ld. CIT(A) after details finding has deleted the additions observing as under : 6.3 APPELLATE DECISION:- I have considered the facts of the case, submissions and contentions of the assessee as also the order of the AO. Since the assessee had raised various objections, during the course of appellate proceedings, in respect of additions of Rs.3.92 crs. made as unexplained cash loans, the AO was requested to clarify his position vide this office letter dated 10.02.2021, as to why the additions were made in the case of Shri Vipul Shah, when relevant cash loans taken by M/s. Green Bird Enterprises and M/s. P.D, Construction. The AO was also asked to explain that the discrepancy in the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se an information shared by the DDIT(In.) Unit-5(4), Mumbai in the case of Shri vipul Dilipbhai Shah having PAN AAHIPS52531 vide letter dated 23.03.2018. (copy of the both letter is enclosed for your goodself ready reference.) 3. During the course of search action u/s. 132 of the Act, and statement recorded on oath u/s. 132(4) of the Act, of Mr. Nilesh Bharani, one of the partner of M/s. Evergreen Enterprises, where Shri Nilesh Bharani admitted that he had raised loan in cash to several individuals and business concerns. 4. One information have below mention details pertain to Vipul D Shah as under: Hence, it is seen that Shri Vipul D Shah has borrowed cash loan of Rs. 50.00.000/- in the F.Y. 2010-11. 5. Second information have the below mention details pertain to Vipul D. Shah as under:- Hence, it is seen that Shri Vipul D Shah has borrowed cash loan of Rs.3,42,00,000/- in the F.Y. 2010-11. 6. Therefore, the addition of Rs. 3,92,00,000/- (Rs. 50,00,000/- + Rs. 3,42,00,000/-) was made on the basis of two information shared by the office of DDIT Unit-5(4), Mumbai vide dated 23.03.2018. (copy of both information is annexed for your good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilesh Bharani in which he has denied naming your appellant or any other party. He has mentioned that he has retracted his statement recorded on oath at the time of search on 11/10/2017 vide letter dated 14/10/2017 as the statement was given under pressure. He has stated that the answers were dictated by search team and these answers are not correct. He has stated that he has not done any cash transaction. Further, he has stated that many Annexures were prepared by search team and statement was not recorded in presence of witnesses. Further, the statement was signed at 5 am and he has signed without understanding as he was in very disturbed state of mind. He has stated that he has not received copy of all seized material In view of the above, the statement qiven by Mr. Nilesh Bharani on 11/10/2017 cannot be relied upon to make addition of Rs.3,92,00,000/- in the hands of your appellant. 2.) In view of the above, your appellant submits that the Report dated 18/02/2021 of the Additional CIT, Central Range-2, Mumbai fully supports the submissions made earlier by your appellant before your Honors that there is no basis for making addition of R$.3,92,00,000/- in hands of your a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 1 to 540. Q.72 Please comment about the content of the said red colour borrower ledger book (Khata vahi) (ound and seized from this premises as mentioned in question 71. Sir, the said book is maintained as borrower ledger account which reflects the borrower-wise loan details given to various borrowers. Sir, on the top of each ledger the name of the borrower along with rate of interest and total amount (in thousands of rupees) lent to the borrower is written. Below this details of all lenders and the amount (in thousands of rupees) lent by lender, code of lender and the date till which interest is paid is maintained. Q.73 Please tell me till when this borrower ledger book as mentioned above is updated till. ANS. Sir the borrower ledger book is updated will 05.10.2017. Q.74 Please stated the name of the persons/borrowers whose ledger accounts are maintained in this borrower ledger book which is found and seized as annexure-A-2 at this premises. Ans. Sir, I am providing a list of names of borrower parties, along with their contact details which is maintained in the above mentioned borrower ledger as Annexure-2 to this statement. 6.7 However, later Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment proceedings. 6.10 As the assessee was insisting for cross examination of Nilesha Bharani the A summoned Shri Nilesh Bharani during the assessment proceedings and recorded his statement on oath on 26.12.2018. In the said statement of Shri Nilesh Bharani denied of giving loans to the ssessee group or to Vipulbhai and also stated that statement as on 11.10.2017 was given under pressure and contradicted statement as on 11.10.2017. The relevant portion of his statement is reproduced as under:- Q.3 Please confirm that this statement dated 11.10.2017 was recorded on oath and you were made aware of the consequence of giving false statement on the oath. Yes, I confirm the same. Q.4 Please comment on the contents of the statement. Ans. Answer of the several questions were given in the pressure states of mind. If you allow me I can state those questions. Q.5 Please go through the answer to the question no.2 of the statement recorded on 11.10.2017 which contradicts you answer to above question no.4. Ans. I got distressed after the answer I was giving to the search team that was not acceptable to them. Till then I was in stable state of mind. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement in stable state of mind without any pressure or coercion. Q.11 Please confirm that you have stated in end of statement recorded on 11.10.2017 that whatever stated in the statement is true to the best of your knowledge and statement was recorded as per your says. You understood the content of the statement and signed. You also stated that the statement was made in sound state of health and mind. No coercion threat inducement or undue influence brought to bear on you for making that statement recorded on 11.10.2017. Ans. Sir, let me inform some fact. Search operation started at my home on 06.10.2017 and lasted till 11.10.2017. During this time search operation was also going on at my business premises. At home I was literally idle, whereas I am running the company who knows major work and process at my office was not taken to office until the afternoon of 11.10.2017. After reaching to office I came to know from my staff that they were not allowed to go home at first two night of search process. One of my staff person Jagdish Ramani who stays at Dombivali missed last train yet he was compelled to be present next morning at 9 a.m. Some stays at Dombivali missed last tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore 28.12.2018 directly to the office of the DCIT-CC- 2(3), Mumbai or you can mail on email id MUMBAI.DCIT.CEN2.3@IINCOMETAX.GOV.IN. Please confirm. Ans. Sir, right now my wife in hospital and tomorrow I am going out of town, it is really difficult to comply this matter within two days but I will try my level best to reply regarding the matter of Vipul D Shah and Group. 6.11 Subsequently, cross examination of Shri Milesh Bharani was done by Shri Vipul Shah , wherein loan given in cash by him to assessee group was confronted. However, Shri Nilesh Bharani denied of giving any loan to the present assesse or to his group concerns. Thereafter, specific transactions in the name of Greenbird of Rs.50 lacs and P.D. Constructions of Rs.3.42 crs were asked to him. However, once again Shri Nilesh Bharani denied of giving any loan to the present assessee or his group entities. For clarity, the relevant portion of cross examination is reproduced as under: - Q.1. You have stated in the statement qiven on oath before the Income Tax Authorities that you are in the business of giving/arranging loans. Is is correct, please confirm? (Asked by Vipul D. Shah) Ans. Yes, I am fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Vipulbhai was only mentioned as contact person and not as recipient. It appears that some further information of similar nature was gathered in the case of M/s. P.D. Construction Pvt. Ltd. another entity of the assessee group. Needless, to say that both M/s. Greenbird Pvt. Ltd. and M/s. P.D. Construction Pvt. Ltd. are assessed with the same AO. So, it is not clear as to why the AO chose to proceed against the present assessee and not against the recipient entities. In fact even whatever Nilesh Bharani stated at the time of search, as is reproduced in the foregoing paras was retracted by him three days later and further during the assessment proceedings also he had denied of giving any loan to Vipul Shah or his group entities, when his statement was recorded. 6.14 It is further relevant to mention over here that seized records in this case are not readily available either with the present AO or the AO of Shri Nilesh Bharani/Evergreen, where these evidence were said to have been seized. In fact the A0 has communicated in his Remand report that he had not received any seized material pertaining to M/s. Evergreen Enterprises, on the basis of which these additions were propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee or his concerns. (v) When the issue-in-dispute is in respect of the receipt of loan and source of which is already available on record, it is not understandable how the same become undisclosed income in the hands of the assessee, as source of the same, is already within the knowledge of the Income Tax Department. 4.2 In view of the above discussion, we do not find any error in the order of the Ld. CIT(A) on the issue-in-dispute and accordingly, we uphold the same. The grounds raised by the Revenue are accordingly dismissed. 5. Now we take up the appeal of the Revenue in ITA No. 1277/Mum/2021. The grounds raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), erred in deleting the addition of Rs.3,92,00,000/- made in the hand of Mr. Vipul D. Shah u/s 271D of the Income Tax Act, 1961 without appreciating the fact that assessee did not discharge its duty to explain the fact that Rs.3,92,00,000/- were duly accounted and offered for tax. 6. We find that the Assessing Officer has on the one hand added cash loan alleged to receipt by the assessee as unexplained cash credit of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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