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TMI Blog2025 (5) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... dences to prove identity and creditworthiness of the lender company and genuineness of the transactions. 2. On the facts and in the circumstances of the appellant's case and in law, the Ld Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 1,00,00,000/- ignoring the fact that the loans taken stood duly repaid in subsequent years much before the date of search which proves fact that loans taken were genuine. 3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 1,00,00,000/- on account of unsecured loans without there being any evidence of cash paid at the time of receipt of alleged non-genuine unsecured loans and without there being any evidence of cash received at the time of repayment of alleged non-genuine unsecured loans from / to M/s Vinam Finance Pvt. Ltd. 4. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 1,00,00,000/- by holding the above-mentioned companies as paper /shell/non-genuine entity even though the company was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234B & 234C of the Income Tax Act, 1961. 11. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961. 12. The appellant craves leave to add to, alter, amend, modify and /or delete all or any of the foregoing grounds of appeal. 2. Briefly stated facts of the case are that assessee is an individual and filed her return of income for the assessment year under consideration on 15.10.2016 declaring total income at Rs. 10,22,160/-. Subsequently, a search and seizure operation u/s 132 of the Income-tax Act, 1961 (in short 'the Act') was carried out on the premises of the Dodhia group of cases including the premises of the assessee on 27.11.2019. Consequently, notice u/s 153A of the Act was issued for the year under consideration asking the assessee to file return of income. In response, the assessee filed return of income on 28.01.2021 declaring total income at Rs. 10,22,160/-, i.e. the income which was declared in the original return of the income. Subsequently, statutory notices under the Act were issued and the assessee was aske ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the AO has reproduced these statements in relevant assessment orders. One of such assessment orders was issued in the case of M/s Dodhia Chemtax Private Limited (AY 2016-17) wherein the AO has extensively discussed the findings of search w.r.t. accommodation entries received from M/s Vinam Finance Pvt Limited. 10. The statement of Shri Minesh Dhodia and Shri Bhavik Jhkharia clearly suggest that they were dummy directors and did not have any knowledge about the company. Furthermore, the said company was earlier managed by Shri Sushil Goel, a known accommodation entry operator and the shares of M/s. Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The statement of Shri Bhadresh Dhodia was also recorded u/s. 132(4) of the Act wherein in reply to question no. 70, Shri Bhadresh Dodhia accepted that Dodhia Group was having cash available from various sources which was routed to books of accounts of various entities, through M/s. Vinam Finance Pvt. Ltd. In reply to question no. 72, Shri Bhadresh Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. 11. The above discussion clearly suggests that incriminatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating material found from the premises of the assessee nor any statement of assessee u/s 132(4) of the Act has been recorded in relation to allegation of the accommodation entry of loan received from the Vinam Finance Pvt. Ltd. The Ld. counsel therefore accordingly relied on the decision of the Hon'ble Supreme Court in the case of PCIT v. Abhisar Builwell Pvt. Ltd. 149 taxmann.com 399 (SC) and submitted that no addition can be made qua the year under consideration in respect of unexplained cash credit in absence of any incriminating material found. 6. We have heard rival submissions of the parties and perused the relevant materials on record. The Hon'ble Delhi High Court in the case of Kabul Chawla [2016] 380 ITR 573 (Delhi) held that in case of unabated assessments, no additions could have been made without the aid of the incriminating material. In the case of the assessee search was conducted on 27.11.2019. The original return of income in the case for year under consideration was filed on 15.10.2016 and therefore, notice u/s 143(2) of the Act for selection of the case could have been issued up to 30.09.2017 and since no such notice was issued therefore, limitation for issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation. 21. A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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