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TMI Blog2024 (6) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... brought to my notice that the appeal filed by me is delayed by 437 days. In this connection I would like to state as under for favor of your kind consideration and necessary action 1) That the order of CIT(A) was communicated to me on 28/07/2021 and the appeal before your honors should have been filed within 60 days of receipt of the order of CXIT(A) but the same could not be done. 2) That the main reason for delay was COVID 19 pandemic which prevented me in filing the appeal. In this connection I am enclosing herewith a copy of the order of Apex Court dated 10th January, 2022 and as per the said order the Para III and Para IV has extended the limitation. 3) I filed the appeal online on 6th May, 2022 but could not file the same physically to the Income Tax Appellate Tribunal as I was under the believe that once I have filed the same online it is presumed by me that I have fulfilled the requirement but later on when I appointed new CA and I came to know that I should have also filed the physical copies of all the documents and accordingly the same were filed on 6.12.2022 which resulted in delay of 437 days out of which the delay as stated in Para 2 above is to be excluded. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on oath of Mr. Nilesh Bharani recorded u / s 132(4) of the IT Act, 1961 unearth an undisclosed activity of money lending and borrowing in unaccounted cash being operated at the premises of M/s Evergreen Enterprises by Mr. Nilesh Bharani. On the basis of documents found and seized at the premise M/s. Evergreen Enterprises during the course of search u/s. 132 of the Income Tax Act, 1961 and statements recorded on oath u/s. 132(4) of the Income Tax Act, 1961 of Mr. Nilesh Bharani, one of the partner of M/s Evergreen Enterprises and Mr. Jagdish T Ramani, Ashwin Enterprises), several individuals and business concerns, who have borrowed cash loans from / through M/s. Evergreen Enterprises are identified by the DDIT (Inv). Further, it was observed that the borrowers ledger / documents seized and statement recorded during the course of search action on Evergreen Enterprises contains details like name, mobile number and in some cases incomplete residential or business addresses. 3. Analysis of Information received- The return was downloaded and other information available in the ITBA/ITD system also perused. The enclosures sent in were also perused. The return of income for A.Y 2012-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year and has even repaid the cash loan. Accordingly, he observed that the Competent Authority will levy penalty u/s. 271 D and 271E in violation of provisions on Section 269SS and 269T. From the seized documents, he found that the assessee has paid interest amount and brokerage/commission on these loans. Based on these impounded documents he has noted the details of cash loan received, cash loan repaid, date of loan and repayments, days for calculation of interest and interest and commission amount on the loan. These details have been noted at page 4 and 5 of the assessment order which is based on scanned copies of Annexure-A (20 pages) which was information received from Investigation Wing. Accordingly, he calculated interest payment including commission at the rate of 20% of interest amounting to Rs. 37,00,314/- which has been added u/s. 69C. 6. The ld. CIT(A) has confirmed the said order of the AO. 7. Before us the learned Counsel for the assessee submitted that here in this case no addition have been made on account of alleged cash loan taken from Shri Nilesh Bharani / M/s. Evergreen Enterprises and even the scanned copies of the documents annexed with the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o it is not the case of ld. AO that cash loans are added u/s. 68 and that is for the reason that he has not made any addition on amount of cash loan. Once the very basis on which reasons have been recorded, i.e., cash loan of Rs. 2,45,00,000/- which has been stated to be chargeable to tax in the hands of assessee is not found to be taxable by the ld. AO, then the entire basis of re-opening gets vitiated. Exactly on similar preposition, Hon'ble Bombay High Court in the case of Sanjeev Amritlal Chedda (supra), had quashed the reasons based on borrowed cash loan. The relevant observations and the order of the Hon'ble Bombay High Court: "1. Petitioner was served with a notice dated 28th March, 2019 under Section 148 of the Income Tax Act, 1961 (the Act) for the Assessment Year 2012-13 in which the Jurisdictional Assessing Officer (JAO) has stated "Whereas I have reasons to believe that your income chargeable to tax for the Assessment Year 2012-13 has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961.........This notice is being issued after obtaining the necessary satisfaction of the Pr. CIT 30, Mumbai." 2. We have seen the reasons for re-opening unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material facts but does not say that 'there is escapement of income chargeable to tax that has escaped assessment'. 3. Moreover, even in the Assessment Order dated 4th December, 2019 respondents accept the total income as per the return of income declared by petitioner of Rs. 7,87,370/- and the whole basis in the assessment order is only to justify respondents' allegations that petitioner had contravened the provisions of Section 259SS of the Act. Since the notice under section 148 of the Act is issued only where there is income that has escaped assessment, notice as impugned in the petition could not have been issued. If respondents felt that they have information that petitioner had taken cash loan of Rs .16,30,000/- and there has been contravention of the provisions under Section 269SS of the Act and petitioner was liable to penalty under Section 271D of the Act for failure to comply, then respondents could have commenced action or proceedings towards imposition of penalty under Section 271D of the Act. Once respondent proceeds on the basis that petitioner had accepted cash loan of Rs. 16,30,000/- that loan could never be considered as income and therefore there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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