GOODLUCK METAL CORPORATION,MUMBAI V. ASSESSING OFFICER, MUMBAI

ITA 1771/MUM/2025

AI Insights

The case involves Goodluck Metal Corporation, which appealed against the order of the Additional/Joint Commissioner of Income-tax (Appeals) - 2, Ahmadabad, for the assessment year 2009-10. The primary contention was regarding the reopening of the assessment under section 147 based on a statement from Shri Bhanwarlal Jain, which was later retracted. The assessee argued that the addition of Rs. 35,00,000 as unexplained cash credit under section 68 was unjustified as they had provided sufficient evidence to prove the genuineness of the loan from M/s Rose Impex. However, the Tribunal upheld the addition, citing the lack of credible evidence to substantiate the claims of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793396 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2025
• Other Referred Cases: Orient Trading v. CIT, Precision Finance Pvt. Ltd. v. CIT, P. Mohan Kala v. CIT, Sumati Dayal v. CIT, Pr. CIT Vs Swati Bajaj, Rajesh Jhaveri Stock Brokers Pvt. Ltd v. ITO, Raymond Woolen Mills Ltd. v. ITO & Others, Nathu Ram Premchand v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: SANJIV SHAH
• Keywords: Set aside; Additional evidence; Reassessment proceedings; Question of law; Unexplained cash credit; Bogus purchase; Retraction; Reopening of assessment; Principle of natural justice; TDS; Search and seizure; Accommodation entries; Reason to believe; Tangible material; Borrowed satisfaction; Bogus
• Section: 147; 148; 132; 131; 133(6); 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 1771/MUM/2025 Assessment Year: 2009-10 Goodluck Metal Corporation, 98, Khetwadi Main Road, Mumbai-400 004. Vs. Assessing Officer Circle 19(1), Piramal Chamber, Mumbai-400012. PAN NO. AAAFG 1441 R Appellant Respondent Assessee by : Mr. Sanjiv Shah, Adv. Revenue by : Mr. Asif Karmali, Sr. DR Date of Hearing : 03/07/2025 Date of pronouncement : 22/09/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 17.01.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 2, Ahmadabad [hereinafter shall be referred as ‘Ld. CIT(A)’] for assessment year 2009-10, raising following grounds: 1. On the facts and in law, and without prejudice to ground no. 1 above the Ld. CIT (A) erred in upholding the reopening of assessment proceeding u/s 147 merely on the basis of generalized statement of Shri Bhanwarial Jain without any other material available on record. Printed from counselvise.com 2. On the facts and in law, the Ld CIT (A) erred in not appreciating the fact that appellant was not given an opportunity to cross examine or r Bhanwarial Jain, especially when his statement was retracted by filing an affidavit and the said statement was the only basis on which the addition was made. 3. On the facts and in law, the Ld. CIT (A) erred in upholding addition of same as unexplained cash credits us 68 on the basis of statement of Shri Bhanwarlal Jain without appreciating the fact that identity, genuineness and creditworthiness of the said loan was proved by filing n evidences. 4. On the facts and in law, the Ld. CTT (A) erred upholding the disallowance of interest of Rs. 6904 on loan received from Rose Impex by treating the said loan as non 5. Appellant prays for leave to add, amend or delete ground/s of appeal on or before the final date of hearing. 6. On the facts and in law, the Ld. CIT(A) erred in upholding and not taking into consideration the f action u/ for assessin of the Income Tax Act, rather than invoking reassessment 2. Briefly stated, facts of the case are that the assessee filed its return of income electronically on 30.09.2009 declaring total loss of Rs.29,49,289/. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’). 2.1 Subsequently, information and seizure action carried out by the Income case of Shri Bhawarlal Jain received accommodation entry of Rs.35 lakhs from M/s Rose Impex who was an entity operated and managed by Shri Bhawarlal Jain and his sons for providing accommodation entries. In view of information, the Assessing Officer recorded reasons to believe that Goodluck Metal Corporation ITA No. 1771/MUM/2025 On the facts and in law, the Ld CIT (A) erred in not appreciating the fact that appellant was not given an opportunity to cross examine or rebut the statement of Shri Bhanwarial Jain, especially when his statement was retracted by filing an affidavit and the said statement was the only basis on which the addition was made. On the facts and in law, the Ld. CIT (A) erred in upholding addition of unsecured loans of Rs. 35,00,000 by treating the same as unexplained cash credits us 68 on the basis of statement of Shri Bhanwarlal Jain without appreciating the fact that identity, genuineness and creditworthiness of the said loan was proved by filing necessary documentary evidences. On the facts and in law, the Ld. CTT (A) erred upholding the disallowance of interest of Rs. 6904 on loan received from Rose Impex by treating the said loan as non-genuine. Appellant prays for leave to add, amend or delete ground/s of appeal on or before the final date of hearing. On the facts and in law, the Ld. CIT(A) erred in upholding and not taking into consideration the fact that once a search action u/s 132 forms the foundation of a case, the Revenue, for assessing the total income, must proceed u/s 153A/153C of the Income Tax Act, rather than invoking reassessment u/s 147/148 Briefly stated, facts of the case are that the assessee filed its return of income electronically on 30.09.2009 declaring total loss of s.29,49,289/. The return of income was processed u/s 143(1) of tax Act, 1961 (in short ‘the Act’). information was received on the basis of search and seizure action carried out by the Income-tax Department in the Bhawarlal Jain/Sh. Rajendra Jain received accommodation entry of Rs.35 lakhs from M/s Rose Impex who was an entity operated and managed by Shri Bhawarlal Jain for providing accommodation entries. In view of essing Officer recorded reasons to believe that Goodluck Metal Corporation 2 ITA No. 1771/MUM/2025 On the facts and in law, the Ld CIT (A) erred in not appreciating the fact that appellant was not given an ebut the statement of Shri Bhanwarial Jain, especially when his statement was retracted by filing an affidavit and the said statement was the only basis on which the addition was made. On the facts and in law, the Ld. CIT (A) erred in upholding unsecured loans of Rs. 35,00,000 by treating the same as unexplained cash credits us 68 on the basis of statement of Shri Bhanwarlal Jain without appreciating the fact that identity, genuineness and creditworthiness of the ecessary documentary On the facts and in law, the Ld. CTT (A) erred upholding the disallowance of interest of Rs. 6904 on loan received from genuine. Appellant prays for leave to add, amend or delete any ground/s of appeal on or before the final date of hearing. On the facts and in law, the Ld. CIT(A) erred in upholding act that once a search s 132 forms the foundation of a case, the Revenue, g the total income, must proceed u/s 153A/153C of the Income Tax Act, rather than invoking Briefly stated, facts of the case are that the assessee filed its return of income electronically on 30.09.2009 declaring total loss of s.29,49,289/. The return of income was processed u/s 143(1) of received on the basis of search tax Department in the /Sh. Rajendra Jain that assessee received accommodation entry of Rs.35 lakhs from M/s Rose Impex, who was an entity operated and managed by Shri Bhawarlal Jain for providing accommodation entries. In view of essing Officer recorded reasons to believe that Printed from counselvise.com income escaped assessment and accordingly issued notice u/s 148 of the Act on 28.03.2016. The Assessing Officer disposed off objection raised by the assessee to and thereafter commenced reassessment proceedings. During the reassessment proceedings, the Assessing Officer brought to the knowledge of the assessee the factual observations made during the course of search on Shri Bhawarlal Jain concerns controlled and operated by Shri Bhawarlal Jain/Rajendra Jain for name sake/dummy director made, (ii) those directors members of Shri Bhawarlal Jain/Rejendra Jain and including Shri Sachin Pareek and Shri Manish Jain and Anup Jain, (iii) the examination on oath partners, proprietors Bhawarlal Jain/Shri Rajendra Jain and were looking after from miscellaneous office w handing over parcels to clients control and management of all those forms were in the hands of Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, partners etc. were not h carried out in the respective entities, (v) all those persons were in respect of salary mostly in cash (vi) those persons were not having any contact with the importers from whom the diamonds had been shown as imported directors/partners also admitted in the statement recorded u/s Goodluck Metal Corporation ITA No. 1771/MUM/2025 income escaped assessment and accordingly issued notice u/s 148 of the Act on 28.03.2016. The Assessing Officer disposed off objection raised by the assessee to the notice u/s 148 of the Act mmenced reassessment proceedings. During the reassessment proceedings, the Assessing Officer brought to the knowledge of the assessee the factual observations made during the course of search on Shri Bhawarlal Jain interalia controlled and operated by Shri Bhawarlal Jain/Rajendra sake/dummy director, partnes/proprietors were made, (ii) those directors; partners and proprietors were family members of Shri Bhawarlal Jain/Rejendra Jain and chin Pareek and Shri Manish Jain and Anup Jain, (iii) the examination on oath of name sake/dummy directors proprietors revealed that they were em Shri Rajendra Jain and were looking after from miscellaneous office work like depositing cheques in banks, handing over parcels to clients, making data entry etc. The real control and management of all those forms were in the hands of Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, partners etc. were not having any knowledge of the business activity carried out in the respective entities, (v) all those persons were in respect of salary mostly in cash (vi) those directors/partners etc persons were not having any contact with the importers from whom nds had been shown as imported. (vii) Those name sake directors/partners also admitted in the statement recorded u/s Goodluck Metal Corporation 3 ITA No. 1771/MUM/2025 income escaped assessment and accordingly issued notice u/s 148 of the Act on 28.03.2016. The Assessing Officer disposed off notice u/s 148 of the Act mmenced reassessment proceedings. During the reassessment proceedings, the Assessing Officer brought to the knowledge of the assessee the factual observations made during the interalia; (i) in various controlled and operated by Shri Bhawarlal Jain/Rajendra /proprietors were and proprietors were family members of Shri Bhawarlal Jain/Rejendra Jain and relative chin Pareek and Shri Manish Jain and Anup Jain, name sake/dummy directors, that they were employees of Shri Shri Rajendra Jain and were looking after from ork like depositing cheques in banks, making data entry etc. The real control and management of all those forms were in the hands of Shri Bhawarlal Jain/Rejendra Jain (iv) those name sake directors, aving any knowledge of the business activity carried out in the respective entities, (v) all those persons were in directors/partners etc persons were not having any contact with the importers from whom Those name sake directors/partners also admitted in the statement recorded u/s Printed from counselvise.com 132(4) of the Act that they were merely dummy directors (viii)Shri Rejendra Jain in his statement u/s 132(4) of the Act dated 05.10.2013 himself admitted that all those entities were and controlled by him and those persons were employees and shown as director and partners. at the registered office of the dummy directors/ Rejendra Jain. (x) The employees of Shri Rajendra Jain reveal during statement recorded u/s 132(4) of the Act that those entities were used mainly for giving accommodation entries, bogus purchases and loans and advances to various beneficiaries. 2.2 In view of above observation order sheet entry dated 04.11.2016 asked the assessee to produce the relevant party M/s Rose Impex for verification al justification of identity transaction. In response, the assessee filed a copy of the bank statement, income-tax acknowledgement, balance sheet, profit and loss account etc of said party retracting the statement by Shri Bhawarlal Jain. In view of above, the assessee submitted that identity, genuineness and creditworthiness of the loan given by the party was duly explained but the Ld. Assessing Officer rejected the contention of th keeping in view the observation during the course of search of Shri Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he Goodluck Metal Corporation ITA No. 1771/MUM/2025 132(4) of the Act that they were merely dummy directors Shri Rejendra Jain in his statement u/s 132(4) of the Act dated mself admitted that all those entities were and controlled by him and those persons were employees and shown as director and partners. (ix) No stock of diamond was found at the registered office/ business premises or residential premises of the dummy directors/partners and proprietors including Shri The employees of Shri Rajendra Jain reveal during statement recorded u/s 132(4) of the Act that those entities were used mainly for giving accommodation entries, bogus hases and loans and advances to various beneficiaries. In view of above observations, the Ld. Assessing Officer vide order sheet entry dated 04.11.2016 asked the assessee to produce the relevant party M/s Rose Impex for verification al identity, creditworthiness and genuineness of the transaction. In response, the assessee filed a copy of the bank tax acknowledgement, balance sheet, profit and etc of said party. The assessee also filed an a retracting the statement by Shri Bhawarlal Jain. In view of above, the assessee submitted that identity, genuineness and creditworthiness of the loan given by the party was duly explained but the Ld. Assessing Officer rejected the contention of th keeping in view the observation during the course of search of Shri Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he Goodluck Metal Corporation 4 ITA No. 1771/MUM/2025 132(4) of the Act that they were merely dummy directors/partners. Shri Rejendra Jain in his statement u/s 132(4) of the Act dated mself admitted that all those entities were managed and controlled by him and those persons were employees and No stock of diamond was found business premises or residential premises partners and proprietors including Shri The employees of Shri Rajendra Jain revealed during statement recorded u/s 132(4) of the Act that those entities were used mainly for giving accommodation entries, bogus hases and loans and advances to various beneficiaries. , the Ld. Assessing Officer vide order sheet entry dated 04.11.2016 asked the assessee to produce the relevant party M/s Rose Impex for verification along with , creditworthiness and genuineness of the transaction. In response, the assessee filed a copy of the bank tax acknowledgement, balance sheet, profit and . The assessee also filed an affidavit retracting the statement by Shri Bhawarlal Jain. In view of above, the assessee submitted that identity, genuineness and creditworthiness of the loan given by the party was duly explained but the Ld. Assessing Officer rejected the contention of the assessee keeping in view the observation during the course of search of Shri Bhawarlal Jain and statement of Shri Bhawarlal Jain wherein he Printed from counselvise.com admitted that M/s Rose Impex was a concerns by him and was used for purchase/sales and loans 2.3 Regarding the documents of M/s Rose Impex submitted by the assessee, the Assessing Officer noted that said party was having returned income of nearly Rs.2.08 lakhs as against loans given of Rs.1.02 crores. Copy of ret filed by the assessee was also rejected by the Assessing Officer that same was filed after a considerable delay or coercion during recording of statement further relied on the decision of the Hon’ble Bombay High Court the case of Orient Trading v. CIT (supra) Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) and decision of Hon’ble Supreme Court in the case of P. Mohan Kala v. CIT (supra). Accordingly, the Assessing Officer treated the loan of Rs.35 lakhs shown from the said party in the books of accounts for the assessee as unexplained cash credit in terms of section 68 of the Act and made addition accordingly. 3. On further appeal, the Ld. CIT(A) upheld the addition observing as under: “7.3 In this case, the appellant has taken unsecured loan amounting to Rs.35,00,000/ the assessment proceedings, the AO has issued summoned to the M/s. Rose Impex for substantiating the claim of genuineness of loan. The M/s. Rose Impex neither attended nor submitted any details. The primary onus is on the appellant to prove the identity, Goodluck Metal Corporation ITA No. 1771/MUM/2025 M/s Rose Impex was a concerns which was controlled by him and was used for providing accommodation e and loans. egarding the documents of M/s Rose Impex submitted by the assessee, the Assessing Officer noted that said party was having income of nearly Rs.2.08 lakhs as against loans given of Rs.1.02 crores. Copy of retraction statement by Shri Bhawarlal Jain filed by the assessee was also rejected by the Assessing Officer that same was filed after a considerable delay without any proof of threat or coercion during recording of statement. The Assessing Officer lied on the decision of the Hon’ble Bombay High Court the case of Orient Trading v. CIT (supra); decision of Hon’ble Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) and decision of Hon’ble Supreme Court in the case of P. Mohan v. CIT (supra). Accordingly, the Assessing Officer treated the loan of Rs.35 lakhs shown from the said party in the books of accounts for the assessee as unexplained cash credit in terms of section 68 of the Act and made addition accordingly. er appeal, the Ld. CIT(A) upheld the addition 7.3 In this case, the appellant has taken unsecured loan amounting to Rs.35,00,000/- from the M/s. Rose Impex. During the assessment proceedings, the AO has issued summoned to the Impex for substantiating the claim of genuineness of loan. The M/s. Rose Impex neither attended nor submitted any details. The primary onus is on the appellant to prove the identity, Goodluck Metal Corporation 5 ITA No. 1771/MUM/2025 which was controlled accommodation entry of egarding the documents of M/s Rose Impex submitted by the assessee, the Assessing Officer noted that said party was having income of nearly Rs.2.08 lakhs as against loans given of raction statement by Shri Bhawarlal Jain filed by the assessee was also rejected by the Assessing Officer that without any proof of threat . The Assessing Officer lied on the decision of the Hon’ble Bombay High Court in decision of Hon’ble Kolkata High Court in the case of Precision Finance Pvt. Ltd. (supra) and decision of Hon’ble Supreme Court in the case of P. Mohan v. CIT (supra). Accordingly, the Assessing Officer treated the loan of Rs.35 lakhs shown from the said party in the books of accounts for the assessee as unexplained cash credit in terms of section 68 of the Act and made addition accordingly. er appeal, the Ld. CIT(A) upheld the addition 7.3 In this case, the appellant has taken unsecured loan from the M/s. Rose Impex. During the assessment proceedings, the AO has issued summoned to the Impex for substantiating the claim of genuineness of loan. The M/s. Rose Impex neither attended nor submitted any details. The primary onus is on the appellant to prove the identity, Printed from counselvise.com creditworthiness and genuineness of the transactions. Since, the Rose Impex did not attended in physical manner to verify the genuineness of loan transaction especially when the finding was passed after detailed investigation being conducted by the directorate of Investigation, Mumbai. Further, the appellant has relied on the statement given to the investigation wing. But, since the investigation has been carried out in detailed manner covering large number of premises and conclusion has been drawn on the basis of evidence as wel various person including Mr. Bhanwarlal Jain. The A.O has also pointed that retracement has been made much later as an afterthought and with a view of avoid the legal consequences. In view of this, the retracement of t Jain cannot be considered as significant legal consequences. Hence, the A.O concluded that submission given by the assessee doesn’t have force to satisfy the condition of the identity, creditworthiness and genuineness of the needs to be added to the income of the appellant. I agree with the view of the A.O that considering the detailed examination being conducted by the investigation wing, evidence unearthed in the course of search and subsequent stat non-genuine and accommodative nature of transaction which cannot be established to be genuine by merely retracement of statement of Shri Bhanwarlal Jain. The physical appearances was not found and hence mere documentary trail a the genuineness of the loan transaction. In such circumstance, it would be very relevant and apt to rely on the judgment of Hon’ble Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], support the use of surrounding circumsta evidence in arriving at a conclusion. It would also be relevant to rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in its landmark judgment has dealt about onu cases wherein detailed investigation was carried out and how evidences and circumstantial finding holds key. 7.4 Based on the above findings, it is clear that the assessee has not been able to discharge the burden of proving the and creditworthiness of the loan transaction and hence the addition of Rs.35,00,000/ upheld. Accordingly, ground no. 1 is dismissed. 4. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 148. The Ld. counsel for the assessee Goodluck Metal Corporation ITA No. 1771/MUM/2025 creditworthiness and genuineness of the transactions. Since, the pex did not attended in physical manner to verify the genuineness of loan transaction especially when the finding was passed after detailed investigation being conducted by the directorate of Investigation, Mumbai. Further, the appellant has relied on the fact that Shri Bhanwarlal Jain has retracted the statement given to the investigation wing. But, since the investigation has been carried out in detailed manner covering large number of premises and conclusion has been drawn on the basis of evidence as well as statement recorded under oath of various person including Mr. Bhanwarlal Jain. The A.O has also pointed that retracement has been made much later as an afterthought and with a view of avoid the legal consequences. In view of this, the retracement of the statement of Mr. Bhanwarlal Jain cannot be considered as significant legal consequences. Hence, the A.O concluded that submission given by the assessee doesn’t have force to satisfy the condition of the identity, creditworthiness and genuineness of the transactions and hence it needs to be added to the income of the appellant. I agree with the view of the A.O that considering the detailed examination being conducted by the investigation wing, evidence unearthed in the course of search and subsequent statement recorded reflected the genuine and accommodative nature of transaction which cannot be established to be genuine by merely retracement of statement of Shri Bhanwarlal Jain. The physical appearances was not found and hence mere documentary trail also don’t establish the genuineness of the loan transaction. In such circumstance, it would be very relevant and apt to rely on the judgment of Hon’ble Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], support the use of surrounding circumstances and material evidence in arriving at a conclusion. It would also be relevant to rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in its landmark judgment has dealt about onus of proof especially in cases wherein detailed investigation was carried out and how evidences and circumstantial finding holds key. 7.4 Based on the above findings, it is clear that the assessee has not been able to discharge the burden of proving the and creditworthiness of the loan transaction and hence the addition of Rs.35,00,000/- made by the A.O under Section 68 is upheld. Accordingly, ground no. 1 is dismissed.” Before us, the Ld. counsel for the assessee filed a Paper Book ing pages 1 to 148. The Ld. counsel for the assessee Goodluck Metal Corporation 6 ITA No. 1771/MUM/2025 creditworthiness and genuineness of the transactions. Since, the pex did not attended in physical manner to verify the genuineness of loan transaction especially when the finding was passed after detailed investigation being conducted by the directorate of Investigation, Mumbai. Further, the appellant has fact that Shri Bhanwarlal Jain has retracted the statement given to the investigation wing. But, since the investigation has been carried out in detailed manner covering large number of premises and conclusion has been drawn on the l as statement recorded under oath of various person including Mr. Bhanwarlal Jain. The A.O has also pointed that retracement has been made much later as an afterthought and with a view of avoid the legal consequences. In he statement of Mr. Bhanwarlal Jain cannot be considered as significant legal consequences. Hence, the A.O concluded that submission given by the assessee doesn’t have force to satisfy the condition of the identity, transactions and hence it needs to be added to the income of the appellant. I agree with the view of the A.O that considering the detailed examination being conducted by the investigation wing, evidence unearthed in the ement recorded reflected the genuine and accommodative nature of transaction which cannot be established to be genuine by merely retracement of statement of Shri Bhanwarlal Jain. The physical appearances was lso don’t establish the genuineness of the loan transaction. In such circumstance, it would be very relevant and apt to rely on the judgment of Hon’ble Supreme Court in Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], nces and material evidence in arriving at a conclusion. It would also be relevant to rely on judgment of Calcutta High Court in case of Pr. CIT Vs Swati Bajaj 139 Taxmann.com 352 (Calcutta) wherein Hon’ble court in s of proof especially in cases wherein detailed investigation was carried out and how 7.4 Based on the above findings, it is clear that the assessee has not been able to discharge the burden of proving the genuineness and creditworthiness of the loan transaction and hence the made by the A.O under Section 68 is Before us, the Ld. counsel for the assessee filed a Paper Book ing pages 1 to 148. The Ld. counsel for the assessee also Printed from counselvise.com filed the documents at serial No. 13 to 18 comprising of proof evidencing subsequent repayment of the loans to M/s Rose Impex , claiming that same were submission filed before the Ld. CIT(A) but were not filed before those authorities. 5. As far as ground No. 1 of the appeal is concerned same was not raised before the Ld. CIT(A) ground but no objection was raised by the Ld Representative (DR) therefore, same was admitted as additional ground being a purely legal ground going to root of matter of fresh facts, therefore, same was admitted as for adjudication. 5.1 Challenging the ground No. 1 of the appeal, the Ld. counsel for the assessee submitted that reasons have been recorded borrowed satisfaction Assessing Officer. The Ld. coun even nature of the transaction has not been specified by the Assessing Officer in the reasons recorded. He submitted that there was no tangible material to reopen the assessment no live link of the material submitted that basis on which reasons for the recorded statement of Shri Bhawarlal Jain which has already been retracted by him. Goodluck Metal Corporation ITA No. 1771/MUM/2025 the documents at serial No. 13 to 18 of the paperbook comprising of proof evidencing subsequent repayment of the loans , claiming that same were referred in the written ssion filed before the Ld. CIT(A) but were not filed before As far as ground No. 1 of the appeal is concerned same was not raised before the Ld. CIT(A). It was in the nature of additional no objection was raised by the Ld Representative (DR) for admitting same by way of oral plea, therefore, same was admitted as additional ground being a purely going to root of matter and not requiring investigation therefore, same was admitted as additional ground Challenging the ground No. 1 of the appeal, the Ld. counsel for the assessee submitted that reasons have been recorded borrowed satisfaction and without application of he Ld. counsel for the assessee submitted that even nature of the transaction has not been specified by the Assessing Officer in the reasons recorded. He submitted that there no tangible material to reopen the assessment the material and the reasons recorded. Further, he submitted that basis on which reasons for the recorded statement of Shri Bhawarlal Jain which has already been retracted by him. Goodluck Metal Corporation 7 ITA No. 1771/MUM/2025 of the paperbook comprising of proof evidencing subsequent repayment of the loans referred in the written ssion filed before the Ld. CIT(A) but were not filed before As far as ground No. 1 of the appeal is concerned same was in the nature of additional no objection was raised by the Ld. Departmental for admitting same by way of oral plea, therefore, same was admitted as additional ground being a purely and not requiring investigation additional ground Challenging the ground No. 1 of the appeal, the Ld. counsel for the assessee submitted that reasons have been recorded on without application of mind by the sel for the assessee submitted that even nature of the transaction has not been specified by the Assessing Officer in the reasons recorded. He submitted that there no tangible material to reopen the assessment and there was and the reasons recorded. Further, he submitted that basis on which reasons for the recorded statement of Shri Bhawarlal Jain which has already been retracted by him. In Printed from counselvise.com view of these submission, the ld Counsel contended that reassessment proceedings are 5.2 On the contrary, the Ld. DR submitted that the Assessing Officer has recorded reasons on the basis of information available with him which was relevant to the case of the assessee and on the basis of which had assessment. He submitted that in view of observation noticed during the course of search action Jain and their statement application of the mind by the Assessing Officer. T Officer has particularly referred to the name of the entity which has given loans to the assessee. Thus there is specific information related to the assessee. 5.3 We have heard rival submissions of the parties the relevant materials on record the Assessing Officer are reproduced as under: Name of the assesse PAN Status Asst. Year Reasons for re Act. The assessee has file return of loss of Rs.29,49,289/ the year under consideration which was been processed u/s. 143(1) of the I.T. Act. Goodluck Metal Corporation ITA No. 1771/MUM/2025 view of these submission, the ld Counsel contended that reassessment proceedings are liable for setaside as void On the contrary, the Ld. DR submitted that the Assessing Officer has recorded reasons on the basis of information available which was relevant to the case of the assessee and on the which had made requisite belief that income escaped assessment. He submitted that in view of observation noticed during the course of search action of Shri Bhawarlal Jain statements, reasons have been recorded after proper mind by the Assessing Officer. T Officer has particularly referred to the name of the entity which has given loans to the assessee. Thus there is specific information related to the assessee. We have heard rival submissions of the parties the relevant materials on record. The relevant reasons recorded by the Assessing Officer are reproduced as under: “Annexure Name of the assesse M/s. GOODLUCK METALS 98 Khethwadi Main Road. Mumbai 400004. AAAFG1441R Firm 2009-10 Reasons for re-opening of the assessment u/s. 147 of the Income Tax, The assessee has file return of loss of Rs.29,49,289/- on 30.09.2016 for the year under consideration which was been processed u/s. 143(1) of Goodluck Metal Corporation 8 ITA No. 1771/MUM/2025 view of these submission, the ld Counsel contended that liable for setaside as void ab-intio. On the contrary, the Ld. DR submitted that the Assessing Officer has recorded reasons on the basis of information available which was relevant to the case of the assessee and on the that income escaped assessment. He submitted that in view of observation noticed Shri Bhawarlal Jain/Rajendra have been recorded after proper mind by the Assessing Officer. The Assessing Officer has particularly referred to the name of the entity which has given loans to the assessee. Thus there is specific information We have heard rival submissions of the parties and perused The relevant reasons recorded by M/s. GOODLUCK METALS 98 Khethwadi Main opening of the assessment u/s. 147 of the Income Tax, on 30.09.2016 for the year under consideration which was been processed u/s. 143(1) of Printed from counselvise.com 2. Search & Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on 03.10.2013. During the course of search/survey action, it was revealed that these group concerns are merely providing accommodation through various benami concerns operated and managed by Shri. Bhanwarlal Jain and his Son. It was found that these concerns are indulged in fraudulent transactions of issuing accommodation/hawala entries which purportedly shows transaction of purc materials and bogus unsecured loans and advances. 3. On the basis records of the assessee, it has been noticed that the above mentioned assessee has availed accommodation entries from the sai Concerns during the year under consideration. 4. Details of the hawala entities from whom the assessee has obtained accommodation entries for the year under consideration are given as under: Sr.No. Name of the hawala entities 1. ROSE IMPEX TOTAL 5. On the basis of the aforesaid information available .with the undersigned, I have reason to believe that income chargeable to tax, as indicated above, to the tune of Rs. 35,00,000/ chargeable to tax which comes to my notice subsequently in the course of proceedings for re meaning of section 147 of the IT Act 1961. The assessee has, therefore, failed to disclose true and complete particulars of inco under consideration. Accordingly, the case is re Income Tax Act for A.Yr. 2009 6. As per the Proviso to Sec. 151(2) of the Income tax Act 1961, permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai is hereby sought to re issue of notice u/s. 148 of the Income tax Act 1961. Put up for kind perusal and sanction please.” 5.4 As held by the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock the reassessment proceedings, the reasons recorded should be based on the relevant material on the basis of which a reasonable Goodluck Metal Corporation ITA No. 1771/MUM/2025 Search & seizure action has been carried out by the DGIT (Inv.), Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on 03.10.2013. During the course of search/survey action, it was revealed that these group concerns are merely providing accommodation through various benami concerns operated and managed by Shri. Bhanwarlal Jain and his Son. It was found that these concerns are indulged in fraudulent transactions of issuing accommodation/hawala entries which purportedly shows transaction of purchase and sale of materials and bogus unsecured loans and advances. On the basis of information received and also on perusal of the records of the assessee, it has been noticed that the above mentioned assessee has availed accommodation entries from the sai Concerns during the year under consideration. Details of the hawala entities from whom the assessee has obtained accommodation entries for the year under consideration are given as under:- Name of the hawala entities Amount involved ROSE IMPEX 35,00,000/ TOTAL 35,00,000/ On the basis of the aforesaid information available .with the undersigned, I have reason to believe that income chargeable to tax, as indicated above, to the tune of Rs. 35,00,000/- or any other income to tax which comes to my notice subsequently in the course of proceedings for re-assessment, has escaped assessment within the meaning of section 147 of the IT Act 1961. The assessee has, therefore, failed to disclose true and complete particulars of income for the year under consideration. Accordingly, the case is re-opened u/s. 147 of the Income Tax Act for A.Yr. 2009-10. As per the Proviso to Sec. 151(2) of the Income tax Act 1961, permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai hereby sought to re-opon the case of the assessee for A.Y. 2009 issue of notice u/s. 148 of the Income tax Act 1961. . Put up for kind perusal and sanction please.” As held by the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd 291 ITR 500 the reassessment proceedings, the reasons recorded should be based on the relevant material on the basis of which a reasonable Goodluck Metal Corporation 9 ITA No. 1771/MUM/2025 seizure action has been carried out by the DGIT (Inv.), Mumbai in the case of Shri Bhanwarlal Jain and his Group Concerns on 03.10.2013. During the course of search/survey action, it was revealed that these group concerns are merely providing accommodation entries through various benami concerns operated and managed by Shri. Bhanwarlal Jain and his Son. It was found that these concerns are indulged in fraudulent transactions of issuing accommodation/hawala hase and sale of ceived and also on perusal of the records of the assessee, it has been noticed that the above mentioned assessee has availed accommodation entries from the said Group Details of the hawala entities from whom the assessee has obtained accommodation entries for the year under consideration are Amount involved 35,00,000/- 35,00,000/- On the basis of the aforesaid information available .with the undersigned, I have reason to believe that income chargeable to tax, as or any other income to tax which comes to my notice subsequently in the course of assessment, has escaped assessment within the meaning of section 147 of the IT Act 1961. The assessee has, therefore, me for the year opened u/s. 147 of the As per the Proviso to Sec. 151(2) of the Income tax Act 1961, permission of the Jt. Commissioner of Income tax, Range 19(1), Mumbai opon the case of the assessee for A.Y. 2009-10 by As held by the Hon’ble Supreme Court in the case of ACIT v. 291 ITR 500 for validity of the reassessment proceedings, the reasons recorded should be based on the relevant material on the basis of which a reasonable Printed from counselvise.com person could make a req Court in the case of (1999) 236 ITR 34 (SC) sufficiency or the correctness of the material was not to be seen 5.5 In the light of above basis of information/observation Bhawarlal recorded that accommodation entry to the assessee recorded reasons to believe that income escaped assessment. in our opinion, the Assessing after proper application of the mind observations noted during of Shri Bhawarlal Jain recorded. Further, as far as available before the Assessing Officer while recording reasons to believe and therefore, no into consideration by the Assessing Officer while recording reasons to believe. 5.6 In view of above discussion, the ground No. 1 of the appeal of the assessee is accordingly dismissed. 6. The ground Nos the addition. Goodluck Metal Corporation ITA No. 1771/MUM/2025 person could make a requisite belief. Further Hon’ble Supreme Court in the case of Raymond Woolen Mills Ltd. v. ITO & Others (1999) 236 ITR 34 (SC) held that at the stage of recording reasons sufficiency or the correctness of the material was not to be seen n the light of above settled principles, we find that on the ormation/observations and the statement of Shri recorded that M/s Rose Impex mmodation entry to the assessee, the Assessing Officer recorded reasons to believe that income escaped assessment. in our opinion, the Assessing Officer has reopened the assessment after proper application of the mind. The material in the form of noted during the course of search and the statement of Shri Bhawarlal Jain are having live link with the reasons recorded. Further, as far as retraction is concerned same was not available before the Assessing Officer while recording reasons to believe and therefore, not a relevant material which could be taken into consideration by the Assessing Officer while recording reasons In view of above discussion, the ground No. 1 of the appeal of the assessee is accordingly dismissed. s. 3 and 4 of the appeal relates Goodluck Metal Corporation 10 ITA No. 1771/MUM/2025 urther Hon’ble Supreme Ltd. v. ITO & Others held that at the stage of recording reasons sufficiency or the correctness of the material was not to be seen. principles, we find that on the and the statement of Shri M/s Rose Impex had provided , the Assessing Officer recorded reasons to believe that income escaped assessment. Thus, Officer has reopened the assessment he material in the form of the course of search and the statement having live link with the reasons retraction is concerned same was not available before the Assessing Officer while recording reasons to a relevant material which could be taken into consideration by the Assessing Officer while recording reasons In view of above discussion, the ground No. 1 of the appeal of to the merits of Printed from counselvise.com 6.1 The Ld. counsel for the assessee mainly submitted that by way of filing documents containing acknowledgement of return, balance sheet etc. assessee has discharged its onus u/s 68 of the Act justifying identity, creditworthiness and genuineness of transactio 6.2 The Ld. counsel for the assessee also submitted that the loans obtained from M/s Rose Impex were returned back in the subsequent year and once, the loans have been returned back no addition u/s 68 of the Act is justified. The Ld. counsel referred to the Paper Book page 108 to 114 to support it contention that loans received were returned back to M/s Rose Impex. 6.3 On the contrary, the Ld. DR submitted that merely filing such documents was not sufficient in the light of observation information unearthed premises of Shri Bhawarlal Jain group and therefore, the assessee was asked to produce those parties for verification of the identity, creditworthiness and genuineness of the transaction but the assessee failed in doing so. 6.2 We have heard rival submissions of the parties and perused the relevant materials on record lakhs from M/s Rose Impex under consideration. During the course of se premises of Shri Bhawarlal Jain that M/s Rose Impex was one of the entities operated and managed by them for providing accommodation entries Goodluck Metal Corporation ITA No. 1771/MUM/2025 he Ld. counsel for the assessee mainly submitted that by way of filing documents containing acknowledgement of return, balance sheet etc. assessee has discharged its onus u/s 68 of the Act creditworthiness and genuineness of transactio The Ld. counsel for the assessee also submitted that the loans obtained from M/s Rose Impex were returned back in the subsequent year and once, the loans have been returned back no addition u/s 68 of the Act is justified. The Ld. counsel referred to the Paper Book page 108 to 114 to support it contention that loans received were returned back to M/s Rose Impex. On the contrary, the Ld. DR submitted that merely filing such documents was not sufficient in the light of observation unearthed during the course of the search at the premises of Shri Bhawarlal Jain group and therefore, the assessee asked to produce those parties for verification of the identity, creditworthiness and genuineness of the transaction but the led in doing so. We have heard rival submissions of the parties and perused the relevant materials on record. The assessee shown loan of Rs.35 lakhs from M/s Rose Impex in its books of accounts for the year under consideration. During the course of search action at the premises of Shri Bhawarlal Jain/Rajendra Jain group it was found that M/s Rose Impex was one of the entities operated and managed for providing accommodation entries Goodluck Metal Corporation 11 ITA No. 1771/MUM/2025 he Ld. counsel for the assessee mainly submitted that by way of filing documents containing acknowledgement of return, balance sheet etc. assessee has discharged its onus u/s 68 of the Act creditworthiness and genuineness of transaction. The Ld. counsel for the assessee also submitted that the loans obtained from M/s Rose Impex were returned back in the subsequent year and once, the loans have been returned back no addition u/s 68 of the Act is justified. The Ld. counsel referred to the Paper Book page 108 to 114 to support it contention that loans On the contrary, the Ld. DR submitted that merely filing such documents was not sufficient in the light of observations and during the course of the search at the premises of Shri Bhawarlal Jain group and therefore, the assessee asked to produce those parties for verification of the identity, creditworthiness and genuineness of the transaction but the We have heard rival submissions of the parties and perused . The assessee shown loan of Rs.35 books of accounts for the year arch action at the group it was found that M/s Rose Impex was one of the entities operated and managed for providing accommodation entries. The various Printed from counselvise.com observations noted by the authorized officer durin search in the case of Shri Bhawarlal Jain have referred in earlier paragraph directors, partners of the entities controlled by Shri Bhawarlal Jain that they were only dummy directors not having business activity mentioned in respective books of accounts and no stock of any goods traded were found at the business or residential premises. In the light of above observation to support the contention that the Impex was a genuine loan confirmation, copy of the return of income, bank statement and balance sheet and profit and loss account of M/s Rose Impex. But in the light of the observation made during action and statement of Shri Bhawarlal Jain, the Assessing Officer asked the assessee to produce M/s Rose Impex for identity, creditworthiness and genuineness of the transaction. But the assessee miserably failed i part of the assessee made. In said circumstances, the Assessing Officer held the said loan as unexplained Before the Ld. CIT(A), Jain retracted his statement and therefore, same cannot be relied on making addition in the hands of the assessee. Goodluck Metal Corporation ITA No. 1771/MUM/2025 observations noted by the authorized officer durin case of Shri Bhawarlal Jain have referred in earlier paragraphs including the statement of the directors, partners of the entities controlled by Shri Bhawarlal Jain that they were only dummy directors not having any knowledge of business activity mentioned in respective books of accounts and no stock of any goods traded were found at the business or residential In the light of above observations, the assessee was asked to support the contention that the loan received from M/s Rose Impex was a genuine loan. The assessee filed copy of the confirmation, copy of the return of income, bank statement and balance sheet and profit and loss account of M/s Rose Impex. But in the light of the observation made during the course of the search action and statement of Shri Bhawarlal Jain, the Assessing Officer asked the assessee to produce M/s Rose Impex for identity, creditworthiness and genuineness of the transaction. But the assessee miserably failed in producing so. No part of the assessee for issue of any summon to the said party . In said circumstances, the Assessing Officer held the said cash credit in terms of section 68 of the Act. Before the Ld. CIT(A), the assessee submitted that M/s Bhawarlal Jain retracted his statement and therefore, same cannot be relied on making addition in the hands of the assessee. Goodluck Metal Corporation 12 ITA No. 1771/MUM/2025 observations noted by the authorized officer during the course of case of Shri Bhawarlal Jain have already been including the statement of the directors, partners of the entities controlled by Shri Bhawarlal Jain, any knowledge of business activity mentioned in respective books of accounts and no stock of any goods traded were found at the business or residential , the assessee was asked loan received from M/s Rose he assessee filed copy of the confirmation, copy of the return of income, bank statement and balance sheet and profit and loss account of M/s Rose Impex. But the course of the search action and statement of Shri Bhawarlal Jain, the Assessing Officer asked the assessee to produce M/s Rose Impex for verification of identity, creditworthiness and genuineness of the transaction. But o request on the any summon to the said party was . In said circumstances, the Assessing Officer held the said cash credit in terms of section 68 of the Act. the assessee submitted that M/s Bhawarlal Jain retracted his statement and therefore, same cannot be relied Printed from counselvise.com 6.3 We are of the opinion that it is the assessee who has produced the copy of the affidavit whom the assessee is alleged to have for verification of identity of M/s Rose Impex, the assessee to produce alongwith shri Bhanwarlal statement. Merely filing a copy of retraction period after the date of recording evidence of duress or authenticity of statement circumstances, the claim of the assessee statement by Shri Bhawarlal Jain is accordingly rejected. 6.4 Further, the Ld. counsel for the assessee befo that loan received from M/s Rose Impex therefore, no additions made in the hands of the assessee. Counsel referred to the documents supporting return of loan. Those documents though referred before the lower authorities in written submission however same were not filed and therefore constitute in the nature of additional evidence.. 6.5 Taking accommodation entry of giving cash payment) is one part of transaction and returning of said loan entry( by way of cheque and receive cash) is the other part of transaction of accommodation entry. Therefore, i opinion, what is important is th Goodluck Metal Corporation ITA No. 1771/MUM/2025 We are of the opinion that it is the assessee who has produced affidavit of retraction of Shri Bhawarlal Jain through is alleged to have received loan and therefore, for verification of identity of M/s Rose Impex, the onus was on the assessee to produce concerned proprietor of M/s Rose Impex alongwith shri Bhanwarlal jain for verification of retraction of his Merely filing a copy of retraction affidavit date of recording statement that too of duress or coercion, is not sufficient enough to of statement recorded u/s 132(4) of the Act. In such circumstances, the claim of the assessee based on Bhawarlal Jain is accordingly rejected. Further, the Ld. counsel for the assessee befo that loan received from M/s Rose Impex was retuned back and therefore, no additions made in the hands of the assessee. to the documents supporting return of loan. Those documents though referred before the lower authorities in written submission however same were not filed and therefore constitute in the nature of additional evidence.. Taking accommodation entry of loan (by way of cheque against giving cash payment) is one part of transaction and returning of said loan entry( by way of cheque and receive cash) is the other part of transaction of accommodation entry. Therefore, i opinion, what is important is the Explanation for nature of source Goodluck Metal Corporation 13 ITA No. 1771/MUM/2025 We are of the opinion that it is the assessee who has produced traction of Shri Bhawarlal Jain through received loan and therefore, onus was on the of M/s Rose Impex jain for verification of retraction of his affidavit after a long statement that too without any enough to dilute recorded u/s 132(4) of the Act. In such based on retraction of Bhawarlal Jain is accordingly rejected. Further, the Ld. counsel for the assessee before submitted retuned back and therefore, no additions made in the hands of the assessee. The ld to the documents supporting return of loan. Those documents though referred before the lower authorities in written submission however same were not filed and therefore loan (by way of cheque against giving cash payment) is one part of transaction and returning of said loan entry( by way of cheque and receive cash) is the other part of transaction of accommodation entry. Therefore, in our nature of source Printed from counselvise.com of the credit received during the year under consideration and returning of the credit not discharge the liability of the assessee of explaining identity, creditworthiness and genuineness of the transaction particularly when the director, partners of those entities including M/s Rose Impex admitted they were engaged in providing accommodation entries. When the assessee has taken loan and which is appearin onus is on the assessee to produce such party identity, creditworthiness and genuineness of the transaction. 6.6 Further, the Assessing Officer has also taken into consideration, the financia creditworthiness and also various observation made during the course of the search at the premises of Shri Bhawarlal Jain which shows that the creditor was only a dummy entity without any stock of the goods and onl also pointed out that the return of income shown by the assessee was not commensurate with the loan of more than Rs.10 crores appearing in the books of accounts of the said entity. The Ld. DR referred to Paper Book page 17 which is balance sheet of M/s Rose Impex on perusal of which we find that on the said loans and advances of Rs.100,237,864/ sundry creditor of Rs.249,326,675/ Goodluck Metal Corporation ITA No. 1771/MUM/2025 of the credit received during the year under consideration and credit in the subsequent year, which in any way not discharge the liability of the assessee of explaining identity, nd genuineness of the transaction particularly when the director, partners of those entities including M/s Rose Impex admitted they were engaged in providing accommodation the assessee has taken loan from M/s Rose Impex appearing in the books of accounts of assessee, the assessee to produce such party for identity, creditworthiness and genuineness of the transaction. Further, the Assessing Officer has also taken into consideration, the financial statement of creditor for rejecting the creditworthiness and also various observation made during the course of the search at the premises of Shri Bhawarlal Jain which shows that the creditor was only a dummy entity without any stock of the goods and only paper entity. Further, the Assessing Officer also pointed out that the return of income shown by the assessee was not commensurate with the loan of more than Rs.10 crores appearing in the books of accounts of the said entity. The Ld. DR Book page 17 which is balance sheet of M/s Rose Impex on perusal of which we find that on the said loans and advances of Rs.100,237,864/- is appearing whereas on the liability sundry creditor of Rs.249,326,675/- are appearing. Thus there was Goodluck Metal Corporation 14 ITA No. 1771/MUM/2025 of the credit received during the year under consideration and not year, which in any way do not discharge the liability of the assessee of explaining identity, nd genuineness of the transaction particularly when the director, partners of those entities including M/s Rose Impex admitted they were engaged in providing accommodation M/s Rose Impex of assessee, the for verification of identity, creditworthiness and genuineness of the transaction. Further, the Assessing Officer has also taken into l statement of creditor for rejecting the creditworthiness and also various observation made during the course of the search at the premises of Shri Bhawarlal Jain which shows that the creditor was only a dummy entity without any stock y paper entity. Further, the Assessing Officer also pointed out that the return of income shown by the assessee was not commensurate with the loan of more than Rs.10 crores appearing in the books of accounts of the said entity. The Ld. DR Book page 17 which is balance sheet of M/s Rose Impex on perusal of which we find that on the said loans and is appearing whereas on the liability are appearing. Thus there was Printed from counselvise.com no actual creditworthiness with the assessee for extending loans to the assessee. 6.7 On verification of the Paper Book page 14 the confirmation by M/s Rose Impex, we find that same is not signed by the proprietor and it has been signed by Mr. R.K. Jain claiming to be his authorized signatory, which confirms the observation made during the course of the search t was managed and operated by the Bhawarlal Jain and Rajendra Jain. 6.8 Further, in the profit and loss account (PB-17) and other documents the name of the proprietor of M/s Rose Impex is appearing as acknowledgement of return of income (PB as Sh. Gautam Pokhraj Mehta. A documents filed by the assessee 6.9 The retraction statement of Shri Bhawarlal Jain available on Paper Book page 35 onward refer to entities other than M/s Rose Impex and therefore, said statement is also not relevant to the facts of the assessee. 6.10 Before us, the Ld. counsel for the assessee relied in the decision of the Hon’ble Supreme Court in the cas Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant finding of the Hon’ble Supreme Court is reproduced as under: Goodluck Metal Corporation ITA No. 1771/MUM/2025 ditworthiness with the assessee for extending loans to On verification of the Paper Book page 14, which is a copy of the confirmation by M/s Rose Impex, we find that same is not signed by the proprietor and it has been signed by Mr. R.K. Jain his authorized signatory, which confirms the observation made during the course of the search t was managed and operated by the Bhawarlal Jain and Rajendra Further, in the profit and loss account (PB-16)/ balance sheet and other documents the name of the proprietor of M/s Rose Impex is appearing as Sh. Gautam Pokharaj Jain whereas in acknowledgement of return of income (PB-15) he has been referred Sh. Gautam Pokhraj Mehta. All these facts doubt credential of documents filed by the assessee The retraction statement of Shri Bhawarlal Jain available on ok page 35 onward refer to entities other than M/s Rose Impex and therefore, said statement is also not relevant to the facts Before us, the Ld. counsel for the assessee relied in the decision of the Hon’ble Supreme Court in the cas Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant finding of the Hon’ble Supreme Court is reproduced as under: Goodluck Metal Corporation 15 ITA No. 1771/MUM/2025 ditworthiness with the assessee for extending loans to which is a copy of the confirmation by M/s Rose Impex, we find that same is not signed by the proprietor and it has been signed by Mr. R.K. Jain his authorized signatory, which confirms the observation made during the course of the search that this entity was managed and operated by the Bhawarlal Jain and Rajendra 16)/ balance sheet and other documents the name of the proprietor of M/s aj Jain whereas in he has been referred ll these facts doubt credential of The retraction statement of Shri Bhawarlal Jain available on ok page 35 onward refer to entities other than M/s Rose Impex and therefore, said statement is also not relevant to the facts Before us, the Ld. counsel for the assessee relied in the decision of the Hon’ble Supreme Court in the case of Ld. CIT v. Orissa Corpn. (P.) Ltd. [1986] 25 Taxman 80F (SC). The relevant finding of the Hon’ble Supreme Court is reproduced as under: Printed from counselvise.com “13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge revenue that the said creditors were the income Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenu not examine the source of income of the said alleged creditors to find out whether they were credit advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, t assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. which a conclusion could be arrived at, no question of law as such 6.11 In above case, no efforts were made by issuing notice u/s 131 of the Act to analyze the financial of the creditor but in the instant case, the Assessing Officer has duly analyzed the financial and observed the said creditor was than Rs.100 crores extended above case does not apply over the facts of the instant case. 6.12 The Ld. counsel for the assessee also relied on the decision of the Hon’ble High Court of Allahabad in the case of Nathu Ram Premchand v. CIT 49 ITR 561 (Allahabad) where Assessing Officer to exercise the authority under the Civil Procedure Code for enforce appearance of witness but in the instant case no current address of the said party was made for issuing any summon. Goodluck Metal Corporation ITA No. 1771/MUM/2025 13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge revenue that the said creditors were the income-tax assessees Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenu 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 called alleged creditors. In those circumstances, t assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of such arises.” no efforts were made by the Revenue other than issuing notice u/s 131 of the Act to analyze the financial of the creditor but in the instant case, the Assessing Officer has duly the financial and observed that return of income filed by was not sufficient to explain the loans of more extended by said entity. Thus, does not apply over the facts of the instant case. The Ld. counsel for the assessee also relied on the decision of High Court of Allahabad in the case of Nathu Ram Premchand v. CIT 49 ITR 561 (Allahabad) wherein it is held that the Assessing Officer to exercise the authority under the Civil Procedure Code for enforce appearance of witness but in the instant case no t address of the said party was provided nor any request was made for issuing any summon. Goodluck Metal Corporation 16 ITA No. 1771/MUM/2025 13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the tax assessees Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 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 worthy or were such who could advance the alleged loans. There was no effort made to pursue called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of the Revenue other than issuing notice u/s 131 of the Act to analyze the financial of the creditor but in the instant case, the Assessing Officer has duly return of income filed by not sufficient to explain the loans of more the ratio of the does not apply over the facts of the instant case. The Ld. counsel for the assessee also relied on the decision of High Court of Allahabad in the case of Nathu Ram in it is held that the Assessing Officer to exercise the authority under the Civil Procedure Code for enforce appearance of witness but in the instant case no provided nor any request was Printed from counselvise.com 6.13 Before us, the Ld. counsel for the assessee also relied on the decision of the Tribunal in the case of M/s Reliance Corporation in ITA No. 1069 to 1071/Mum/2017 dated 12.04.2017 wherein M/s Rose Impex and Megha Gems have been accepted as genuine. The relevant finding of the Tribunal is reproduced as under: “8. We have heard the rival contentions perused the material placed before us including the orders of authorities below and orders relied upon by the parties. We find that undisputedly the assessee h borrowed money by way of loan from three aforesaid three parties i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to Rs.1,29,04,231/-. The case of the assessee was re receiving the and other three appeals information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Mr.Bhanwarlal Jain and group. We find from the record that the assessee filed during the course of assessment proceedings all the details like loan confirmation letters from the creditors, PAN of the creditors, bank statements og the creditors and the assessee, form no.16 qua TDS on interest and loss account and balance sheet including the ledger account of the creditors, and ITR etc. appeared before the AO in compliance to the notice issued under section 133(6) the AO that loans were actually given to the assessee these details and facts on record, we find that the assessee has discharged its onus cast upon it by filing all the necessary details as called for by the AO to corroborate the transactions of borrowing the money and thereby satisfied all the th creditworthiness of the creditors, genuineness of the transactions and identity of the creditors by filing all the details as discussed above which proved that the identity of the creditors, genuineness of the transactions and cre established by the assessee. So much so that the loan creditors in response to the notice issued under the AO and confirmed the that loans to the assessee on which TDS have been deducted and paid and form no.16A issued to the loan creditors also filed before the Goodluck Metal Corporation ITA No. 1771/MUM/2025 Before us, the Ld. counsel for the assessee also relied on the decision of the Tribunal in the case of M/s Reliance Corporation in ITA No. 1069 to 1071/Mum/2017 dated 12.04.2017 wherein M/s Rose Impex and Megha Gems have been accepted as genuine. The relevant finding of the Tribunal is reproduced as under: 8. We have heard the rival contentions perused the material placed before us including the orders of authorities below and orders relied upon by the parties. We find that undisputedly the assessee h borrowed money by way of loan from three aforesaid three parties i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to . The case of the assessee was re-opened upon receiving the and other three appeals information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Mr.Bhanwarlal Jain and group. d from the record that the assessee filed during the course of assessment proceedings all the details like loan confirmation letters from the creditors, PAN of the creditors, bank statements og the creditors and the assessee, form no.16 qua TDS on interest and loss account and balance sheet including the ledger account of the creditors, and ITR etc. Moreover, the loan creditors also appeared before the AO in compliance to the notice issued ction 133(6) of the Act and filed confirmations before the AO that loans were actually given to the assessee these details and facts on record, we find that the assessee has discharged its onus cast upon it by filing all the necessary details as called for by the AO to corroborate the transactions of borrowing the money and thereby satisfied all the three main ingredients i.e. creditworthiness of the creditors, genuineness of the transactions and identity of the creditors by filing all the details as discussed above which proved that the identity of the creditors, genuineness of the transactions and creditworthiness of the creditors have been established by the assessee. So much so that the loan creditors in response to the notice issued under section 133(6) appeared before the AO and confirmed the that they have given interest bearing loans to the assessee on which TDS have been deducted and paid and form no.16A issued to the loan creditors also filed before the Goodluck Metal Corporation 17 ITA No. 1771/MUM/2025 Before us, the Ld. counsel for the assessee also relied on the decision of the Tribunal in the case of M/s Reliance Corporation in ITA No. 1069 to 1071/Mum/2017 dated 12.04.2017 wherein M/s Rose Impex and Megha Gems have been accepted as genuine. The relevant finding of the Tribunal is reproduced as under: 8. We have heard the rival contentions perused the material placed before us including the orders of authorities below and orders relied upon by the parties. We find that undisputedly the assessee has borrowed money by way of loan from three aforesaid three parties i.e M/s Laxmi Trading Company, M/s Rose Impex and Megha Gems from whom the assessee borrowed the money and total outstanding including the interest as on 31.3.2010 were amounting to opened upon receiving the and other three appeals information from DGIT(Inv), Mumbai that the assessee was one of the beneficiary of the said accommodation entries provided by Mr.Bhanwarlal Jain and group. d from the record that the assessee filed during the course of assessment proceedings all the details like loan confirmation letters from the creditors, PAN of the creditors, bank statements og the creditors and the assessee, form no.16 qua TDS on interest ,profit and loss account and balance sheet including the ledger account of Moreover, the loan creditors also appeared before the AO in compliance to the notice issued of the Act and filed confirmations before the AO that loans were actually given to the assessee. From all these details and facts on record, we find that the assessee has discharged its onus cast upon it by filing all the necessary details as called for by the AO to corroborate the transactions of borrowing the ree main ingredients i.e. creditworthiness of the creditors, genuineness of the transactions and identity of the creditors by filing all the details as discussed above which proved that the identity of the creditors, genuineness of ditworthiness of the creditors have been established by the assessee. So much so that the loan creditors in appeared before they have given interest bearing loans to the assessee on which TDS have been deducted and paid and form no.16A issued to the loan creditors also filed before the Printed from counselvise.com AO. Once the assessee has filed all and other three appeals the necessary documents before t department to disprove the stand of the assessee, which department has failed to do so in the present case. The AO has merely proceeded and relied on the information received from the DGIT(Inv), Mumbai that the assesse accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings. No cross examination was allowed to the asse against the assessee causing violation of natural justice. The FAA dismissed the appeal of the assessee ex the ld.AR. …………………………………………………. In our considered view the facts of the assessee case are squarely covered by the ratio ,therefore , in view of our observations and the ratio laid down by the various decisions are inclined to set aside the order of CIT(A) and direct he AO to delete the additions of Rs. 1,29,04,231/ have decided the issue of addition the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. 3,45,000/- is also ordered to be deleted. In result the appeal of the assessee is allowed 6.14 However, we find that in appeared before the Assessing Officer in compliance to notices u/s 133(6) of the Act, whereas in the instant case no such compliance has been made and therefore, the ratio in the said cannot be imported to the facts of the instant case. Accordingly, the contention of the assessee is rejected. 6.15 In view of aforesaid discussion, we do no order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same. Goodluck Metal Corporation ITA No. 1771/MUM/2025 AO. Once the assessee has filed all and other three appeals the necessary documents before the AO then the onus is shifted to the department to disprove the stand of the assessee, which department has failed to do so in the present case. The AO has merely proceeded and relied on the information received from the DGIT(Inv), Mumbai that the assessee is one of the beneficiary of the accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings. No cross examination was allowed to the assessee and information was used against the assessee causing violation of natural justice. The FAA dismissed the appeal of the assessee ex- parte for non attendance of …………………………………………………. In our considered view the facts of the assessee case are squarely ratio laid down in the decisions referred to above ,therefore , in view of our observations and the ratio laid down by the various decisions are inclined to set aside the order of CIT(A) and direct he AO to delete the additions of Rs. 1,29,04,231/ d the issue of addition u/s 68 in favour of the assessee, the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. is also ordered to be deleted. In result the appeal of the is allowed.” However, we find that in above case, the loan creditors before the Assessing Officer in compliance to notices u/s whereas in the instant case no such compliance has been made and therefore, the ratio in the said cannot be imported to the facts of the instant case. Accordingly, the contention of the assessee is rejected. In view of aforesaid discussion, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly Goodluck Metal Corporation 18 ITA No. 1771/MUM/2025 AO. Once the assessee has filed all and other three appeals the he AO then the onus is shifted to the department to disprove the stand of the assessee, which department has failed to do so in the present case. The AO has merely proceeded and relied on the information received from the DGIT(Inv), e is one of the beneficiary of the accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings. No cross ssee and information was used against the assessee causing violation of natural justice. The FAA parte for non attendance of In our considered view the facts of the assessee case are squarely referred to above. We ,therefore , in view of our observations and the ratio laid down by the various decisions are inclined to set aside the order of CIT(A) and direct he AO to delete the additions of Rs. 1,29,04,231/-. Since we in favour of the assessee, the addition as sustained by the ld CIT(A) u/s 69C of the Act of Rs. is also ordered to be deleted. In result the appeal of the se, the loan creditors before the Assessing Officer in compliance to notices u/s whereas in the instant case no such compliance has been made and therefore, the ratio in the said cannot be imported to the facts of the instant case. Accordingly, the t find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly Printed from counselvise.com 6.16 The ground No. 3 and 4 of the appeal of the assessee are accordingly dismissed. 7 As far as ground No Ld. DR objected that same were not adjudicated by the Ld. CIT(A) and therefore, same were in the nature of the Ld. counsel for the assessee in support of those grounds and therefore, those ground are dismissed as infructuous. 8. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 22/09/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Goodluck Metal Corporation ITA No. 1771/MUM/2025 The ground No. 3 and 4 of the appeal of the assessee are accordingly dismissed. As far as ground Nos. 2 and 6 of the appeal of the assessee the Ld. DR objected that same were not adjudicated by the Ld. CIT(A) and therefore, same were in the nature of the addition ground. The Ld. counsel for the assessee also did not advanced in support of those grounds and therefore, those ground are dismissed as infructuous. In the result, the appeal of the assessee is dismissed. ounced in the open Court on 22/09/2025. - Sd/ RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Goodluck Metal Corporation 19 ITA No. 1771/MUM/2025 The ground No. 3 and 4 of the appeal of the assessee are . 2 and 6 of the appeal of the assessee the Ld. DR objected that same were not adjudicated by the Ld. CIT(A) addition ground. The advanced any arguments in support of those grounds and therefore, those ground are In the result, the appeal of the assessee is dismissed. /09/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "