TMI Blog2024 (4) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... hat impugned credits stood subjected to tax and covered by Settlement application. Except for mere allegations, the remand report is unable to controvert all these findings. In such a situation, we see no reason to interfere in the impugned order. Decided against revenue. - Hon ble Shri Manoj Kumar Aggarwal, Am, And Hon ble Shri Manomohan Das, Judicial Member For the Appellant : Shri AR.V.Sreenivasan (Addl.CIT) - Ld. Sr. DR For the Respondent : Shri Poonam Jain (CA) - Ld.AR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2009-10 arises out of order of an order passed by learned Commissioner of Income Tax (Appeals)-18, Chennai [CIT(A)] on 05-10-2021 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 27-12-2011. The grounds taken by the revenue read as under: - 1. The order of the Id. Commissioner of I.T. (Appeals) is erroneous on facts of the case and in law. 2.2 The Id. CIT(A) erred in deleting the addition of Rs. 2.47 Crores made towards unexplained credits, without appreciating that the assessee failed to prove the genuineness of the credit transactions. 2.2. The Id. CIT(A) failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee Company as below: Commission received from Kawaral sons (group concern of the assessee) by Umed Investments Marketing Co Pvt Ltd on 3/11/2008 (reflected in bank statement) Rs. 2,83,09,632/- Commission received from Kawarlal Sons (group concern of the assessee) by Kesaria Marketing Pvt Ltd on 3/11/2008 Rs. 97,53,700/- The above commission amounts were transferred to the concerns run by Shri Umed Mehta, the Kartha of C. Umedmal - HUF as follows. From Umed Investment vide Cheque No.932791 Rs.1,00,00,000/- From Umed investment vide Cheque No.932792 Rs. 2,00,000/- From Kesaria Marketing Vide cheque no.805523 Rs. 23,00,000/- Rs.1,25,00,000/- This amount of Rs. 1,25,00,000/- has gone back from C. Umedmal HUF to the assessee Company (which is also one of the Kawaral Sons group company). However, the assessee has shown outstanding amount as Rs. 1,30,00,000/- including interest payable of Rs. 8,32,876/- after reducing Rs. 3,32,876/- as loan repaid from M/s Umedmal HUF which is nothing but the amount diverted from the Company itself. 2. Unsecured loan received from M/s.Chakra Exports: The assessee Company has received a sum of Rs. 75,00,000/- from M/s Chakra Exports (one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n unexplained money into the account. The entire transaction was a sham transaction since assessee's money was routed through different accounts and was received back as unsecured loan. Pursuant to survey operation in Umed Mehta's group of companies, it was admitted by Shri Umed Mehta that he had floated various companies / proprietary concerns in his name and in the name of his family members to accommodate the receipts from M/s. Kawarlal Sons. The assessee used circular route to receive the loan on its account and the same was merely a device being used to evade taxes and accordingly, the amount of loan was brought to tax in the hands of the assessee. Aggrieved as aforesaid, the assessee preferred further appeal before Ld. CIT(A). Appellate Proceedings 4.1 The assessee drew attention to the fact that a settlement application was preferred by Shri Umed Mehta wherein he surrendered an additional income of Rs. 970.02 Lacs towards transactions with the concerns of Umed Mehta group. The Ld. AO made impugned addition in the hands of the assessee on account of unsecured loans received from concerns of Shri Umed Mehta out of commission paid to the assessee s group concerns viz. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 towards the loan from M/s. Chakra Exports, it is noticed that in the order u/s 245(D)(4) of the Act passed by the Hon'ble ITSC, Chennai dated 31.05.2016 in the case of the appellant and other related parties it is noticed that Rs. 1,25,84,178 [as shown in Table 1 in para 6.2 supra] was expended by D.K. Enterprises [Prop: Ramlal Jain, HUF] towards commission expenditure that has been expended in the manner as shown in Table 6 of the appellant's submission, it is correlated and noticed that the payment of commission and interest which was in turn purported to have been given back to the appellant in the form of unsecured loans has been taxed in the hands in the appellant's group concern at the source itself on incurrence of expenditure. 8.3. The AO has added Rs. 42,00,000 said to be loan from M/s. Pranav enterprises which is also reckoned as a transaction routed through the concerns of Umed Mehta out of the commission and expenditure claimed by the appellant's group and has the appellant's group has offered the entire sum of money as commission and expenditure from concerns of Umed Mehta, that is evident from the table supra, I am of the view that the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l amounts have been paid to Umed Mehta group of concerns in November, 2008 only as below: S.No. Name of concern of the assessee group that made payment Name of concern of Umed Mehta Group to which payment was made Amount Paid Date of payment 1. M/s. Kawarlal Sons Umed Investments Marketing Co.P.Ltd 2,83,09,632 03.11.2008 2. -do- Kesaria Marketing Pvt.Ltd 97,53,700 01.11.2008 3 D.K. Enterprises -do- 51,00,570 01.11.2008 Total 4,31,63,902 6. It has been submitted during appeal proceedings by the assessee vide appeal paper book-I dated 27.03.2023 that the above concerns of Umed Mehta group transferred the amounts so received to the concerns run by Shri Umed Mehta, the Kartha of C. Umedmal (HUF) and thereafter out of the same, a sum of Rs. 1,25,00,000/- was transferred to the assessee company as unsecured loans. 7. Similarly, it has been submitted that out of the sum of Rs. 1,48,54,270/- transferred to M/s Kesaria Marketing Pvt. Ltd. from the amounts received from Kawarlal Sons and M/s D.K. Enterprises, sum of Rs. 1,25,00,000/- was diverted to M/s Vim Mines Minerals. It has been further submitted that out of this amount only a sum of Rs. 75,00,000/- was transferred to M/s Chakra Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns made in the assessment order have to be restored. 6. Regarding contention of the assessee that the aforesaid amounts have been transferred by concerns of Umed Mehta Group, Ld. AO has alleged that these are mere claims of the assessee in the appeal proceedings and the assessee has not proved the fund flow from one concern to the other concern, chronologically to prove that the amount of additional income declared by the group concerns of the assessee in their settlement applications before the Hon'ble ITSC is the ultimate source for the unsecured loans received by it. However, we find that these submissions run contrary to the very basis of Ld. AO making impugned addition in the assessment order. In the assessment order, the Ld. AO has noted the chain of flow of funds and finally rendered a finding that unsecured loan as received by the assessee was nothing but device adopted by the assessee to introduce its own unexplained money into the account. The entire transaction was a sham transaction since assessee's money was routed through different accounts and was received back as unsecured loan. It was the admission during survey operation that Shri Umed Mehta had floated va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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