TMI Blog2022 (11) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Mukesh Choksi or any other person, which has been relied upon by the AO and also to examine the audited financials of M/s Talent Infoways Ltd. to determine the creditworthiness of the said entity. Since this issue is remanded for adjudication afresh, the assessee shall be at liberty to adduce any other evidence to support its case. AO shall also have the liberty to call for or examine any other documents/detail as may be necessary for complete adjudication of this issue. We order accordingly. As a result, ground No. 1 raised in assessee‟s appeal is allowed for statistical purpose. Addition towards interest on long-term loan with Shamrao Bank - HELD THAT:- As per the assessee, the amount towards interest on term loan with Shamrao Bank, which is pertaining to financial year 2003 04, was debited to its profit and loss account under the head prior period adjustments. Since, it forms of adjustments below the line of profit/loss before tax, therefore, the assessee has not claimed the said expenses while calculating the taxable income as the assessee has started the computation of business income/loss by considering profit/loss before tax and before the said prior period adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior period adjustment. Thus, the addition made on account of the same is bad in law and must be deleted. 3. The issue arising in ground No. 1, raised in assessee‟s appeal, is pertaining to addition of Rs. 5,00,000, made by the Assessing Officer ( AO‟) under section 68 of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is engaged in the business of manufacturing and job work of electrical and JFTC cables. For the year under consideration, the assessee e-filed its return of income on 24/09/2007 declaring total loss of Rs. 4,79,624. Information was received from Addl. DIT (Investigation), Mumbai, that during the search action conducted in the case of M/s Mahasagar Securities Private Ltd, it was found that M/s Mahasagar Securities Private Ltd., and its related group of around 36 companies run by Shri Mukesh Choksi, were engaged in business of providing bogus speculation profit/loss, short/long term capital gain/loss, share application money, commodities profit/loss on commodity trading. It was further found that M/s Talent Infoway Ltd, which was part of the group run by Shri Mukesh Choksi, had provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ksey that it is a mere accommodation entry. The modus operandi is already described in para no.03 above. The assessee failed to establish credit worthiness of M/s. Talent Infoway Ltd. and genuineness of transaction. 7. .......... 8. In view of the above, the explanation of the assessee claiming genuineness of the receipt of Share Application Money as well as the Securities Premium from M's Talent Infoway Ltd. is not accepted. These transactions and the ensuing utilization of resources of M/s Talent Infoway Ltd. run by Shri. Mukesh Choksi whose admission on Oath proved that these entities were utilized by him only in the business of providing bogus Share Application Money leave no doubt that the assessee had utilized their own resources and of Shri. Mukesh Choksi operated M/s Talent Infoway Ltd. for routing back its undisclosed and unaccounted income of Rs.5,00,000/- (in the form of Share Application Money and Securities Premium) and accordingly, I have no constraint in treating the same as unexplained cash credit u/s 68 of the previous year as per the terms of the said section as the explanations furnished by the AR in connection with the said credit is not satisfacto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties were furnished, who had also contributed in share capital of the assessee with premium, however, audited financials of M/s Talent Infoways Ltd could not submitted by the assessee during the reassessment proceedings and therefore, the AO made the addition in respect of share application money received from M/s Talent Infoways Ltd alleging it to be an unexplained cash credit under section 68 of the Act. It was further submitted that assessee vide various letters asked for copy of the recorded statement of Shri Mukesh Choksi, however, the same was not provided to the assessee and accordingly, Shri. Mukesh Choksi, could not be cross-examined. Learned AR further submitted that the assessee is not a group entity of Shri Mukesh Choksi, and share Applicant is part of Mukesh Choksi group. 7. On the other hand, learned Departmental Representative submitted that Shri Mukesh Choksi and the company is run by him have been held to be an accommodation entry provider. Since, M/s Talent Infoways Ltd., is a part of Shri Mukesh Choksi group, therefore, the transaction of the assessee with the said entity is not genuine. 8. We have considered the rival submissions and perused the material a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that they were engaged in providing accommodation entries to its beneficiaries, however, the statement recorded of Shri Mukesh Choksi, was not provided to the assessee despite various requests. Further, it is the plea of the assessee that in absence of the aforesaid statement no cross examination could be done of Shri Mukesh Choksi. Since the additional evidence now filed before us was not examined by the AO and statement on the basis of which the reassessment proceedings were initiated was also not furnished to the assessee despite its requests, we deem it appropriate to remand this issue to the file of the AO for de novo adjudication. We direct the AO to provide the copy of statement of Shri Mukesh Choksi or any other person, which has been relied upon by the AO and also to examine the audited financials of M/s Talent Infoways Ltd. to determine the creditworthiness of the said entity. Since this issue is remanded for adjudication afresh, the assessee shall be at liberty to adduce any other evidence to support its case. Further, the AO shall also have the liberty to call for or examine any other documents/detail as may be necessary for complete adjudication of this issue. We ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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