9911796707
TMI Blog2024 (5) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... of income for AY. 2014-15 on 30.11.2014 declaring total income of Rs. 1,12,28,840/-. Later, on based on information from the DDIT (Inv.) Unit 7(4), Mumbai, the case of the assessee was re-opened by issuance of notice u/s 148 of the Act (after recording reasons for reopening). The AO noted in the reasons recorded for re-opening the assessment that on 05.02.2016, search operation was conducted in the case of Shri Vipul Vidur Bhatt and other related entities; and in that event, Shri Vipul Vidur Bhatt's statement was recorded on 09.02.2016, wherein he accepted that he was providing accommodation entry to beneficiaries through more than 300 paper companies; and Assessing Officer further noted that in the relevant assessment year the assessee had shown to have transaction with two entities namely (i) M/s. Shipra Fabrics Pvt. Ltd (hereinafter "M/s. Shipra") and (ii) M/s. Lunkad Textile Pvt. Ltd (hereinafter "M/s. Lunkad") which were paper companies operated by Shri Vipul Vidur Bhatt. According to the AO, the assessee had shown to have taken loan amounting to Rs. 77 Lakhs from M/s. Shipra and Rs. 40 Lakhs from M/s. Lunkad (total of Rs. 1,17,00,000/-) which loan according to the AO were me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d bogus loan]. Aggrieved by the aforesaid action of the Ld. CIT(A), the assessee is before us. 5. We have heard both the parties and perused the records. Since the assessee has not challenged the re-opening of the assessment u/s 147 of the Act, ground no. 1 in both the appeals stands dismissed. 6. Coming to the merit of the additions sustained by the Ld. CIT(A), we note that the assessee is an individual, who is engaged in construction business, and has shown income from construction as well as rental income, commission/brokerage and short term capital gain from sale of land. The assessee had filed return of income showing total income of Rs. 1,12,28,840/- which was processed u/s 143(1) of the Act. Later, on receipt of information from DDIT (Inv.), Mumbai, the case of the assessee was re-opened. The information was that during search conducted in the case of Shri Vipul Vidur Bhatt [and other related entities] in Feb, 2016, books pertaining to 347 paper companies were discovered; and he admitted that he was controlling these entities either as a Director or through his dummy Directors. And that he was mainly engaged in providing accommodation entries to beneficiaries. And since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the transaction, creditworthiness of the creditors and identity of the creditors in respect of credit entry to the tune of Rs. 1.17 cr credited in his books. Therefore, he disbelieved the contention of the assessee that the nature of the amount in question was loan taken from these two entities and therefore, added the same (Rs.1.17 cr) u/s.68 of the Act, and also disallowed the interest paid to the tune of Rs. 4.80 Lakhs. On appeal, the Ld. CIT(A) dismissed the appeal of the assessee. The main issue is regarding the nature and source of Rs. 1.17 Crs. which the AO noted to have been credited in the books of the assessee and when called upon by the AO to prove the "nature and source" of the same, the assessee brought to his notice that nature of the amount was loan taken from two entities (i) M/s. Shipra (Rs.77 Lakhs) and (ii) M/s. Lunkad (Rs.40 Lakhs). In order to prove the identity of M/s. Shipra Fabrics Pvt. Ltd, the assessee filed the return of income of M/s. Shipra which is found placed at page no. 1 to 12 of PB, which reveals that the PAN of M/s. Shipra is AAACS5527M and that it is a Pvt. Ltd Company which falls in the jurisdiction of Central Circle-39, Mumbai and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness and genuineness of the transaction to the tune of Rs 1.17 Cr. Moreover, it was also pointed out to the Ld. CIT(A)/AO that the TDS on the interest paid by assessee been duly deducted; and the loan has been repaid to M/s. Shipra on 24.10.2016 which fact is revealed from page no. 40 & 41 of PB. And M/s. Lunkad was re-paid the loan on 24.10.2016 which fact is revealed from perusal of page no. 37 & 38 of PB. Thus, according to the Ld. AR, the assessee has discharged the burden to prove the "nature and source" of the loan taken from M/s. Shipra as well as M/s. Lunkad. However, the AO was not satisfied with the documents filed by the assessee. According to the AO, Shri Vipul Vidur Bhatt had admitted during search that M/s. Shipra as well as M/s. Lunkad were his paper companies and were indulging providing accommodation entries. Even though, the assessee brought to the notice of the AO that Shri Vipul Vidur Bhatt has retracted the admission alleging duress and coercion on the part of the search team, the AO brushed it aside by pointing out that the DDIT (Inv.) report did not mention anything about the purported retraction. According to the AO, therefore loan shown by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act cannot be sustained. Moreover, the only material on the basis of which Assessing Officer has taken adverse view against assessee was the untested statement of Shri Vipul Bhat, who admittedly has not been allowed to be cross-examined by assessee, so in view of retracted statement (Affidavit), it would be unsafe to draw adverse view against assessee. Therefore, the additions made deserves to be deleted. For taking such a view, we rely on the decision of the jurisdictional High Court in the case of PCIT v. Paradise Inland Shipping (P.) Ltd., reported in [2017] 84 taxmann.com 58 (Bom.), and direct deletion of the addition to the tune of Rs 1.17 Cr. and it would be gainful to refer to the decision of the Hon'ble High Court in the case of PCIT v. Paradise Inland Shipping (P.) Ltd., as reproduced under: "5. We have given our thoughtful considerations to the rival contentions of the learned Counsel and we have also gone through the records. The basic contention of the learned Counsel appearing for the Appellants revolves upon the stand taken by the Appellants whether the shareholders who have invested in the shares of the Respondents are fictitious or not. In this connection, the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under the guise of the substantial question of law, this Court in an Appeal under Section 260A of the Income Tax Act cannot re-appreciate the evidence to come to any contrary evidence. Considering that the authorities have rendered the findings of facts based on documents which have not been disputed, we find that there are no substantial question of law which arises in the present Appeal for consideration. 8. The Apex Court in the case of Orissa Corpn. (P.) Ltd. (supra), has observed at Para 13 thus: - "13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were income- tax assessee's. Their index number was in the file of the revenue. The revenue, apart from issuing notices under S. 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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