Munni Entertainment P. Ltd., Panchkula V. DCIT, Central Circle , Noida

CO 51/DEL/2020

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3624 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-02-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 20-02-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 12-07-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT KUMAR
• Keywords: Accommodation entries; Bogus
• Section: 68; 208

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA No.3763/DEL/2018 [Assessment Year: 2015-16] DCIT, Central Circle, Noida, Uttar Pradesh Vs M/s Munni Entertainment P. Ltd. 686, Sector-6, Panchkula, Haryana-134109 PAN-AAGCM6628P Revenue Assessee Cross Objection No.51/Del/2020 (Arising out of ITA No.3763/DEL/2018) [Assessment Year: 2015-16] M/s Munni Entertainment P. Ltd. 686, Sector-6, Panchkula, Haryana-134109 Vs DCIT, Central Circle, Noida, Uttar Pradesh PAN-AAGCM6628P Assessee Revenue Revenue by Shri Ved Jain, Adv. & Shri Amit Kumar, CA Assessee by Shri Subhra Jyoti Chakraborty, CIT-DR Date of Hearing 21.02.2024 Date of Pronouncement 28.02.2024 ORDER PER SHAMIM YAHYA, AM, This appeal by the Revenue is directed against the order of the ld. CIT (Appeals)-IV, Kanpur, dated 07.02.2018 fo r the assessment year 2015-16. 2. The grounds of appeal raised by the Revenue reads as under:- 2 ITA No.3763/Del/2018 i. Whether in the facts and circumstances of the case, the Ld CIT(A) was erred in law &e failed to appreciate the merit of the case that loans is not properly explained by the assessee and the bank statement doesn't show financial strength of the nature that such person could have made deposits/investment in the form of unsecured. ii. That the Ld CIT(A) failed to appreciate that merely filing of confirmation, copy of ITR is not enough to prove the genuineness & creditworthiness of the transaction, as the creditworthiness must also be proved and the transactions should invite confidence of normal business principles of profit. iii. The Ld CIT (A) failed to appreciate that when the account of the assessee company and the transaction are doubted by the A.O. then to prove the genuineness of such transactions; the assessee has to go some steps further of its own to prove the genuineness of the transactions by direct and corroborative evidence and must establish the capacity to invest / advance such funds by such persons. iv. The Hon'ble Apex court in the case of Roshan De Hatti Vs CIT (SC) 107 ITR 938 held that in case of credits in the name of third parties, it is the duty of the assessee to prove identity or credits, capacity of creditor to advance money and genuineness of transaction. In the instant case capacity of creditor could not be proved. Mere filing of confirmation (CIT Vs Korlay Trading co. Ltd (Cal ) 232 ITR 820) or transaction through cheques (CIT Vs Precision Finance P Ltd (Cal) 208 ITR 465) is not enough to prove the genuineness of cash credit and it can be assessed. v. That the order of the Ld CIT(A) being erroneous in law and on facts which needs to be vacated and the order of the AO be restored.” 3. Brief facts of the case are that the assessee has taken unsecured loan of Rs.1,56,50,000/- from following entities:- i. M/s Gevapur Water Purification Pvt. Ltd. Rs.60,00,000/-, ii. M/s Maggi Impex Pvt. Ltd. Rs.50,00,000/- and iii. Mr. Sanjeev Jain Rs.46,50,000/- 3 ITA No.3763/Del/2018 4. The Assessing Officer noted that the assessee has given explanation and details but he made general observation that the companies which provided loans are not doing any business and that no interest has been charged. He observed that it is a bogus case of rotation of money. Hence, he made the addition. 5. Against the above order, the assessee appealed before the Ld. CIT(A). 6. The Ld. CIT(A) noted that the assessee has filed confirmation letter, the copy of the ITR of the lender, audited balance sheet and profit & loss accounts and the bank statement of the creditors. The Ld. CIT(A) further noted that the assessee has discharged its onus and has also established the source of source. He observed that all loans were returned to the creditors through banking channel in the relevant assessment year. Hence, the ld. CIT(A) deleted the addition. We may gainfully refer to the order of the Ld. CIT(A) hereunder:- “It is seen that the appellant has discharged the initial burden of proof u/s 68 of the Act by producing the confirmation letter, ITR, audited accounts and bank statement of the creditors by the appellant. Copy of the bank statement of the creditor was also submitted to establish the source of the source. In facts all the loans were returned to the creditor through banking channel in this relevant assessment year only. Therefore, It Is concluded that all the three vital ingredients of the cash credit relating to identity, creditworthiness of the creditor and the genuineness of transaction is proved by the appellant, the contention of the AO that appellant is the beneficiary of alleged cash credits, stands unsustainable due to the simple facts that loans are squared up in this relevant assessment year. The AO has not brought out any material on record to show that these are accommodation entries or the companies from whom the credits have been taken are non-genuine entities. 4 ITA No.3763/Del/2018 6.5 During the course of this appeal proceedings Ld AR of the appellant has relied upon the following case laws: 1) The Hon'ble Apex Court in the case of CIT Vs Orissa Corp. (P) Ltd. [1986] ITR 78/25 Taxmann 80F (SC) b) CIT Vs M/s. Creative World Telefilms Ltd. (in ITA No. 2182 of 2009) c) Hon'ble Calcutta High Court in CIT Vs Precision Finance Pvt. Ltd (1994) 208 ITR 465 (Cal.) d) Kale Khan Mohammad Hanif Vs CIT [1963] 50 TTR 1 (SC), Roshan Di Hatti Vs CIT (1997] 107 ITR (SC) e) Gujarat High Court in the case of DCIT Vs Rohini Builders [2002] 256 ITR 360 (Guj) f) Commissioner of Income Tax, Meerut Vs Avant Grade Carpets Ltd. IT Appeal No. 141 of 2014 August 11, 2014 High Court of Allahabad. Above cited case laws also strengthens the case of the appellant. Therefore, in view of the fact that the appellant has discharged the initial burden of prove das required u/s 68 of the Act and AO has not substantiate his plea of non- genuineness, addition made by the AO is hereby deleted and the appeal of the appellant is allowed. ” 7. Against the above order, the Revenue is in appeal before us. 8. We have heard both the parties and perused the material available on record. We note that the ld. CIT(A) has given finding that the assessee has discharged its onus with confirmation letter of the parties along with their ITR, audited accounts and bank statement of the creditors were provided. Further, the ld. CIT(A) has given finding that the assessee has returned all the loans to the creditors in the relevant assessment year itself. Hence, the observations of the Assessing Officer are non-specific and general. The ld. CIT(A) has passed a reasonable order, therefore, it does not need any interference on our part. Hence, we uphold the same. 5 ITA No.3763/Del/2018 9. The learned counsel for the assessee submitted that he will not pressing the cross objection filed by the assessee. Hence, the cross objection filed by the assessee is dismissed as not pressed. 10. In the result, the appeal of the Revenue as well as cross objection of the assessee is dismissed. Order pronounced in the open court on 28 th February, 2024. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 28.02.2024. ff^ ff^ff^ ff^? ?? ? Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi