TMI Blog2023 (9) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... he preceding part of the judgement, when part of the loans taken from the same lender Shri Hariom Enterprise has been accepted by the Assessing Officer as genuine, then it is not understandable as to why the balance loan taken from the same lender should be treated as non-genuine on the ground that no confirmation from the said the lender has been filed. It has also been accepted that part of the loan has been repaid back to the aforesaid lender as well in the very same year. Accordingly, looking into the facts of the instant case, we are of the considered view that Ld. CIT(Appeals) has erred in facts and in law in confirming the addition made by the AO u/s 68 - Appeal of the assessee is allowed. - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Parimalsinh B. Parmar, A.R. For the Respondent : Shri Ashok Kumar Suthar, Sr. D.R. ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, (in short Ld. CIT(A) ), Ahmedabad Appeal No. CIT(A)-5/ITO. Wd.5(3)(3)/238/2017-18 vide order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number, ledger account, postal address, bank statement of the assessee etc. in support of the aforesaid unsecured loan. However, the Assessing Officer observed that the assessee had not furnished confirmation of the lender and accordingly, held that the genuineness of the aforesaid loan was in doubt. Accordingly, the Assessing Officer made addition of Rs. 58,85,190/- under Section 68 of the Act by treating unsecured loan taken from Hariom Enterprise as being non-genuine. 4. In appeal, the assessee furnished further submissions/details before the Ld. CIT(Appeals), however, he confirmed the additions made by the Assessing Officer with the following observations: 4.6. The only effective ground to addition of Rs. 58,85,190/- u/s. 68 of the Act. 4.7. I have carefully considered the assessment order, submission of the appellant, remand report from the AO and rejoinder of the appellant. It is seen that during the assessment proceedings the AO called for the details of unsecured loan alongwith PAN, copy of return, confirmation and documentary evidence to prove identity, creditworthiness and genuineness of the person who has given the loan, After examining the submission o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for various financial manoeuvres. A shell entity, by itself, is not an illegal entity but it is their act of abatement of, and being part of, financial manoeuvring to legitimise illicit monies and evade taxes, that takes it actions beyond what is legally permissible. These entities have every semblance of a genuine business- its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets it apart from a genuine business entity is lack of genuineness in its actual operations. The operations carried out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or, with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the I.T.A. No.2447/Ahd/2016 Assessment years: 2007-08 financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arranged through a broker, there was no direct contact with the lender and hence, confirmation could not be placed on record. Further, the assessee filed additional evidences like ledger of the lender in the books of AG Brothers (proprietary concern of Shri Lalit Kumar), bank statement of AG Brothers and acknowledgement of return of income of Shri Lalit Kumar. Further, it was submitted before us that in the Remand Report issued by the Assessing Officer (at pages 6-8 of Ld. CIT(Appeals) order), no adverse comment has been given by the Assessing Officer on the additional evidence furnished by the assessee before Ld. CIT(Appeals). The Counsel for the assessee submitted that out of the total loans of Rs. 83,85,330/- received by the assessee from the very same lender i.e. Hariom Enterprise, the Assessing Officer has accepted part loan of Rs. 25,00,140/- as genuine and has doubted the balance part loan of Rs. 58,85,190/-. Further, the Counsel for the assessee drew our attention to ledger of Hariom Enterprise in the assessee s books (Page 6 of the Paper Book), assessee s bank statements (Page 17-14 of Paper Book), and loans repaid to Hariom Enterprise amounting to Rs. 25,00,140/-. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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